Opinion Number

Dear Representative Donelon:

We received your request for an opinion regarding the applicability of Louisiana's Used Motor Vehicle Dealers' law to pawnbrokers. Specifically, you inquire:

Can a pawnbroker sell a vehicle which is mortgaged or pledged to him without having a used motor vehicle dealer license?

La. R.S. 32:771, et seq. makes it unlawful for any person, firm, association, corporation or trust to act as a used motor vehicle dealer or used motor vehicle salesman without first obtaining a license to do so. However, La. R.S. 32:771(16)(b)(iv) provides that a mortgagee or secured party who sells a vehicle which is the collateral on a mortgage or security agreement is not considered a used motor vehicle dealer.

A pawn transaction, as defined in La. R.S. 37:1782(10), is the lending of money on a deposit, pledge or other security agreement, such as a mortgage, for money advanced. A pawn transaction is a loan. La. R.S. 37:1783

Thus, it is our opinion that a pawnbroker is indeed a lender who, by the very definition of a pawn transaction, enters into a security agreement whereby he obtains a privilege or secured interest on movable property which is given to him in exchange for money. A secured party is not deemed to be a used motor vehicle dealer. Accordingly, a pawnbroker who has a security agreement in which a motor vehicle is the collateral may exercise his privilege by means of selling the vehicle without being a licensed used motor vehicle dealer.

We trust that this adequately responds to your request. Should you have any questions or comments or need additional information, please do not hesitate to contact us. With kindest regards, I am

Very truly yours

RICHARD P. IEYOUB Attorney General

By: TINA VICARI GRANT Assistant Attorney General

RPI/TVG/dra

Honorable James J. Donelon Louisiana State Representative District 88 P.O. Box 6993 Metairie, LA 70009

Date Received: Date Released: March 9, 2000

Tina Vicari Grant, Assistant Attorney General