(a) The General Assembly finds that the State of Arkansas recognizes and desires to protect the unique nature of a pawn transaction and the legitimate business purpose of the pawn industry.

(b) The General Assembly declares that:

(1) The pawn industry provides a valuable service to the citizens in the State of Arkansas that is not available in type, character, or convenience in the financing or banking industries;

(2) Most customers of the pawn industry are not able to engage in transactions in the financing and banking industries;

(3) The unique characteristics of a pawn include the following:

(A) A pawn is a non-recourse transaction in which the pawn customer pledges and delivers into the possession of the pawnbroker items of tangible personal property that secure the advancement of funds;

(B) Pawn transactions are personal, face-to-face, and seldom take more than ten (10) minutes;

(C) Because there is no obligation on the part of the pawn customer to redeem the item of tangible personal property pledged, pawnbrokers do not have debt to collect or obligation to enforce, and the pawnbroker's sole recourse if the customer elects not to redeem the tangible personal property is retention and disposal;

(D) Pawnbrokers do not obtain reports from credit reporting agencies and do not report customer experiences, so pawn transactions do not affect customers' credit scores either as credit inquiries or as credit history whatsoever; and

(E) Customers receive reasonable value for the item or items pledged as evidenced by the large number of customers who utilize the pawn model;

(4) Substantial and recurring overhead expense is required by persons in the pawn industry to be able to offer pawn service, and pawnbrokers must maintain, secure, and insure the property delivered throughout the time it remains in their possession; and

(5) The pawn industry substantially assists in the recovery of stolen property and is helpful to law enforcement agencies against those persons looking to capitalize on stolen property through the pawn model.

(c) Although the pawn industry's existence predates Arkansas, the pawn industry has modern challenges that need to be regulated for the common protection and interest of the pawn industry and the citizens of the State of Arkansas.

(d) It is the intent of the General Assembly to legislatively modernize the pawn industry, protect the citizens of the State of Arkansas, protect the ability of the pawn industry to operate in the State of Arkansas, recognize the distinction between persons in the pawn industry from persons engaged in financing and banking transactions, and encourage and facilitate the return of stolen property.