It would become 10 times more costly to open and operate a pawnshop or secondhand dealership in the Town of Babylon if proposed changes to the town code, designed to protect consumers, are approved next week.
The town wants to increase the bond amount to secure a general license for such a store from $2,000 to $20,000, while annual license fees will surge from $250 to $2,500. For a management license, the bond amount will jump from $10,000 to $30,000 and the license fee will climb from $250 to $2,500. The town said regulations for pawnshops haven't been touched in 32 years and new rules are needed to protect consumers.
There are no pawn or secondhand dealers, which the town defines as consignment shops, currently licensed in the town, said spokesman Tim Ruggeri. The code applies only to pawn and consignment shops, not thrift stores or antique dealers, he said.
"If you're really a serious business, it's not a big deal," said Babylon Town attorney Paul Margiotta. "If you're going to open a business, $2,500 is nothing and a $20,000 bond is really nothing, that's a really cheap bond," he said, adding proprietors would only have to put up a portion of the amount.
The move is not the result of any specific complaint about illegal pawn operations, he said, but comes as the town has been going through codes and updating them. It was then he realized the pawn store code was "so cheap and loose," Margiotta said.
Such shops need to be monitored because they could be dealing in stolen property, he said. "We want to really keep track of where these places are," he said. "That's what the bond is for, so we have them on the hook."
Margiotta said someone could sell an item to a pawnshop and then the shop shuts down, taking the item with them. Similarly, someone could buy an item from a shop, then later have it taken away by police because it's stolen; meanwhile the shop owner takes off, he said. "This will weed out the shady ones, someone who wants to jump in and jump out," he said.
Rules on pawnshops in other towns vary. In North Hempstead, pawnshops are not allowed to operate in unincorporated areas. The Town of Oyster Bay requires pawnshops to pay a $250 annual license fee and a $10,000 bond. In Islip, there is a $250 license fee, plus a $75 fingerprint fee. In Brookhaven, pawnshops are required to have county permits, but there is no permit on the town level. Huntington also does not have regulations at the town level, although a spokesman said it is working on legislation that would formalize the licensing process for collateral loan brokers and would include a licensing fee.
Babylon will hold a public hearing on the proposed code changes at 3:30 p.m. Wednesday at town hall in Lindenhurst. If adopted, the new fees will take effect in January.
With Emily Dooley, Paul LaRocco, Jennifer Maloney, Deborah S. Morris, Patrick Whittle