Michigan Pawn Regulation: Act 273 of 1917
Michigan regulates pawnbrokers under Act 273 of 1917, which has been amended multiple times, most recently in 2002, 2018, and with pending legislation in 2024-2025 . The act establishes comprehensive requirements for licensing, transaction records, police reporting, interest rates, and forfeiture.
Licensing — §446.201 & §446.202
MCL §446.201 requires every pawnbroker to obtain a license from the local governmental unit (city, village, or township) before conducting business. Internet drop-off stores are specifically exempt from licensure.
MCL §446.202 establishes that licenses are issued for one-year terms, are not transferable, and require a $250 bond . Local units may impose additional fees and requirements.
Local licensing: Pontiac requires compliance with Act 273 and local ordinances before obtaining a city license . St. Louis requires both state and local compliance with additional bond and application requirements.
PPSS is a recordkeeping tool only. The software does not track licenses, bonds, or renewal dates. You are responsible for obtaining and maintaining your local pawnbroker license and bond.
Transaction Records — §446.205
MCL §446.205 establishes the core recordkeeping requirements for Michigan pawnbrokers . Every transaction must be recorded at the time of receipt and include:
- Description of the article
- Sequential transaction number
- Amount of money loaned
- Name, residence, and general description of the person
- Driver license number, state ID number, or government identification number
- Day and hour when the article was received
The record must be made on a form that substantially complies with the form described in subsection (4), which is an 8.5" x 11" form with specific fields for article description, serial numbers, model numbers, trade name, color, size, jewels, material, stones, inscriptions, purchase price/loan amount, dealer, city, date, ticket number, and on the back: operator's license/ID number, customer name, address, employer, age, height, weight, race, sex, time received, and rolled print of the right thumb.
PPSS can generate transaction records that substantially comply with the statutory form. You are responsible for ensuring your forms meet local requirements.
48-Hour Police Reporting — §446.205(3) & §446.206
MCL §446.205(3) requires pawnbrokers to retain a record of each transaction and within 48 hours after the property is received, send one copy of the record of transaction to the local police agency.
MCL §446.206 adds that at the time of making the report, the pawnbroker shall make a statement that the articles received are not to the pawnbroker's knowledge stolen or misappropriated.
PPSS can generate and export reports for submission to local police agencies. You are responsible for submitting reports within the 48-hour window.
Interest & Fees — §446.209
MCL §446.209 establishes Michigan's fee structure:
- Interest rate: 3% per month (recent legislation proposes increasing to 5% with $3 storage fee)
- Storage charge: $1 per month (proposed $3 in pending legislation)
- Usage fee: $1 per month if the pawnbroker is granted use of the property in writing
- Minimum charge: 50 cents minimum interest
- No interest in advance: Interest cannot be collected in advance
- No compounding: Interest calculation cannot be compounded
- Prohibited fees: Examination fees are prohibited
PPSS can be configured to calculate Michigan's fee structure. You are responsible for setting rates that comply with current law and monitoring legislative changes.
3-Month Forfeiture — §446.210
MCL §446.210 establishes the forfeiture timeline. If the debt is not repaid within 3 months, the pawn becomes the property of the lender. However, even after 3 months, if the borrower pays all amounts due, payment reinvests the pawner with title and right of possession.
PPSS can track the 3-month forfeiture period. You are responsible for applying the correct forfeiture rules under Michigan law.
Prohibited Transactions
Minors — MCL §750.137: A pawnbroker who purchases any article from a minor without the written consent of the parent or guardian is guilty of a misdemeanor.
Defaced property — §446.213: Pawned property may not be destroyed or defaced; serial numbers or insignia must remain visible.
Intoxicated persons — §446.214: Pawnbrokers may not accept property from persons under the influence.
Sunday operations — §446.217: Transaction of business on Sunday is unlawful.
PPSS helps you track these prohibitions with date of birth fields and notes, but you are responsible for compliance.
Penalties — §446.218
MCL §446.218 establishes penalties for violations. Recent legislation (HB 4115, 2025) proposes updating civil sanctions for interest rate violations.
Local Ordinances — Pontiac, St. Louis & Others
Pontiac §26-976: Requires compliance with Act 273 and local ordinances before obtaining a city license.
St. Louis Article VI: Comprehensive local requirements including :
- License required with application, fee, and bond (§34-100)
- State pawnbroker license required for certain practices (§34-101)
- State precious item license required for certain practices (§34-102)
- Posting name of licensee and maintaining records (§34-103)
- Holding periods and tagging articles (§34-104)
- Hours of operation; purchases from certain persons prohibited (§34-105)
- Thumbprints of customers required (§34-106)
- Computerized reporting of transactions (§34-107)
Note: St. Louis explicitly requires thumbprints of customers, consistent with the state's right thumbprint requirement .
Other jurisdictions: Many Michigan cities and towns have local pawnbroker ordinances. You must verify requirements with your city or county clerk.
PPSS is a recordkeeping tool. It does not track local licenses, bonds, or ordinances. You are responsible for obtaining and maintaining all required local licenses and complying with local requirements.
