[Title 25 CFR 141]
[Code of Federal Regulations (annual edition) - April 1, 2002 Edition]
[Title 25 - INDIANS]
[Chapter I - BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR]
[Subchapter G - FINANCIAL ACTIVITIES]
[Part 141 - BUSINESS PRACTICES ON THE NAVAJO, HOPI AND ZUNI RESERVATIONS]
[From the U.S. Government Printing Office]
25INDIANS12002-04-012002-04-01falseBUSINESS PRACTICES ON THE NAVAJO, HOPI AND ZUNI RESERVATIONS141PART 141INDIANSBUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIORFINANCIAL ACTIVITIES
PART 141--BUSINESS PRACTICES ON THE NAVAJO, HOPI AND ZUNI RESERVATIONS--Table of Contents
Subpart A--Interpretation and Construction Guides
Sec.
141.1 Purpose.
141.2 Scope.
141.3 Definitions.
141.4 Interpretation and construction.
Subpart B--Licensing Requirements and Procedures
141.5 Reservation business license required.
141.6 Approval or denial of license application.
141.7 Bond requirement for a reservation business.
141.8 License period for reservation businesses.
141.9 Application for license renewal.
141.10 License fees for reservation businesses.
141.11 Tribal fees, taxes, and enforcement.
141.12 Peddler's permits.
141.13 Amusement company licenses.
141.14 Trade in livestock restricted.
141.15 Consent to jurisdiction of Hopi and Zuni tribal courts.
Subpart C--General Business Practices
141.16 Price marking.
141.17 Health and sanitation requirements.
141.18 Availability of employee authorized to transact business.
141.19 Check cashing.
141.20 Payment for purchase of Indian goods or services.
141.21 Trade confined to premises.
141.22 Subleasing prohibited.
141.23 Posted statement of ownership.
141.24 Attendance at semi-annual meetings.
141.25 Withholding of mail prohibited.
141.26 Trade in antiquities prohibited.
141.27 Trade in imitation Indian crafts prohibited.
141.28 Gambling prohibited.
141.29 Political contributions restricted.
141.30 Retaliation prohibited.
141.31 Trade by Indian Affairs employees restricted.
Subpart D--Pawnbroker Practices
141.32 Reservation pawnbroker license required.
141.33 Fees for pawnbroker license.
141.34 Pawnbroker records.
141.35 Pawnbroker disclosure requirements.
141.36 Maximum finance charges on pawn transactions.
141.37 Prepayment.
141.38 Pawn loans, period, notice and sale.
141.39 Sale and redemption of pawn.
141.40 Proceeds of sale.
141.41 Refinancing transaction.
141.42 Lost pawn receipts or tickets.
141.43 Outstanding obligations owed to pledgee.
141.44 Insurance on pawn.
Subpart E--Consumer Credit Transactions Other Than Pawn
141.45 Consumer credit applications.
141.46 Credit disclosure statements.
141.47 Monthly billing statement.
141.48 Translation of disclosure statements.
141.49 Usury prohibited.
Subpart F--Enforcement Powers, Procedures and Remedies
141.50 Penalty and forfeiture of merchandise.
141.51 Authority to close unlicensed reservation businesses.
141.52 Revocation of license and lease and recovery on bond.
141.53 Cease and desist orders.
141.54 Periodic review of performance.
141.55 Price monitoring and control.
141.56 Show cause procedures.
141.57 Procedures to cancel liability on bond.
141.58 Records, reports, and obligations of reservation business owners.
141.59 Customer complaint procedures.
Authority: 5 U.S.C. 301; 25 U.S.C. 2, 9.
Source: 40 FR 39835, Aug. 29, 1975, unless otherwise noted.
Redesignated at 47 FR 13327, Mar. 30, 1982.
Subpart A--Interpretation and Construction Guides
Sec. 141.1 Purpose.
The purpose of the regulations of this part is to prescribe rules
for the regulation of reservation businesses for the protection of
Indian consumers on the Navajo, Hopi and Zuni Reservations as required
by 25 U.S.C. 261, 262, 263, and 264.
Sec. 141.2 Scope.
The regulations of this part apply to all non-members of the Navajo,
Hopi and Zuni Tribes, who engage in retail businesses on the above
respective reservations. These regulations do not apply to businesses
that are wholly
[[Page 387]]
owned and operated by either the Navajo, Hopi or Zuni Tribes, or by
individual tribal members within their respective reservations.
[45 FR 64906, Oct. 1, 1980. Redesignated at 47 FR 13327, Mar. 30, 1982]
Sec. 141.3 Definitions.
For the purposes of this part--
(a) Annual percentage rate means the annual percentage rate of
finance charge determined in accordance with 12 CFR 226.5, which defines
annual percentage rates.
(b) Consumer credit transaction means a grant of credit or a loan
that is made by a person regularly engaged in the business of making
loans or granting credit primarily for a personal, family, household, or
agricultural purpose.
(c) Draft means a writing that is a direction to pay that:
(1) Identifies the person to pay with reasonable certainty;
(2) Is signed by the drawer;
(3) Contains an unconditional order to pay a sum certain in money
and no other promise, order, obligation or power given by the drawer;
(4) Is payable on demand or at a definite time; and
(5) Is payable to order.
(d) Finance charge means the cost of credit determined in accordance
with 12 CFR 226.4, which defines ``finance charge''.
(e) Firm means a corporation or a partnership.
(f) Gross receipts include the following:
(1) All cash received from the conduct and operation of the
licensee's business at the premises described in the application for
license.
(2) Receipts from both wholesale and retail transactions.
(3) Receipts resulting from transactions concluded off the
reservation that originate from the conduct and operation of the
licensee's business on the reservation.
(4) The market value of all property taken in trade on the date when
received and either held by the licensee for purposes other than resale
or credited on any account in payment for merchandise.
(5) Proceeds from the sale of any goods bought from Indians
regardless of where the sale takes place.
(6) Finance charge received on loans, but not the return of
principal.
(g) Open end credit means consumer credit transactions made on an
account by a plan under which:
(1) The creditor may permit the customer to make purchases or obtain
loans, from time to time, directly from the creditor or indirectly by
use of a credit card, check, or other device, as the plan may provide;
(2) The customer has the privilege of paying the balance in full or
in installments; and
(3) A finance charge may be computed by the creditor from time to
time on an outstanding unpaid balance.
(h) Pawnbroker means a person whose business includes lending money
secured by personal property deposited with the lender.
(i) Peddler means a person who offers goods for sale within the
exterior boundaries of the Hopi, Navajo or Zuni Reservations, but does
not do business from a fixed location or site on any of those
reservations.
(j) Person includes a natural person, a corporation, trust, estate,
partnership, cooperative or association.
(k) Replacement value means the present cost to the owner of
replacing an item with one having the same quality and usefulness.
(l) Reservation business means a person that engages at a fixed
location or site within the exterior boundaries of the Navajo, Hopi or
Zuni Reservations in the sale or purchase of goods or services or in
consumer credit transactions with Indians and is not a bank, saving
bank, trust company, savings or building and loan association or credit
union operating under the laws of the United States or the laws of New
Mexico, Arizona or Utah, a business on the Hopi Reservation that is
wholly owned and operated by members of the Hopi Tribe, or a business on
the Zuni Reservation that is wholly owned and operated by members of the
Zuni Tribe.
[[Page 388]]
Sec. 141.4 Interpretation and construction.
(a) Area Director refers to the Area Director of the Bureau of
Indian Affairs or the Administrator of the Joint Use Area of the Bureau
of Indian Affairs who has jurisdiction over the land on which a person
does business or intends to do business with Indians.
(b) Commissioner refers to the Commissioner of Indian Affairs or a
person to whom the Commissioner of Indian Affairs has delegated
authority under this part or under 25 U.S.C. 261, 262, 263, or 264.
(c) Superintendent refers to the Superintendent of the Bureau of
Indian Affairs who has jurisdiction over the land on which a person does
business or intends to do business with Indians.
(d) Tribe refers to the tribe that has jurisdiction over the land on
which a person does business or intends to do business with Indians.
Subpart B--Licensing Requirements and Procedures
Sec. 141.5 Reservation business license required.
(a) No person may own or lease a reservation business without a
license issued under the provisions of this subpart.
(b) The applicant shall apply in writing on a form provided by the
Commissioner setting forth the following:
(1) The full name and residence of the applicant.
(2) Three (3) responsible references.
(3) The firm name and the name of each member of the board of
directors if the applicant is a firm.
(4) Satisfactory evidence as to the character, experience and
business ability of the applicant and the employees of the applicant.
(5) Satisfactory evidence of the general fitness of the applicant
and employees of the applicant to reside on the Indian reservation.
(c) Upon the request of the Commissioner, the applicant shall
furnish the following:
(1) The capital invested or to be invested and, of this, the amount
of capital owned and the amount borrowed or to be borrowed.
(2) The name of the lender of any borrowed capital, the date due,
the rate of interest to be paid, and the names of any endorsers and
security.
(3) A copy of any contract or trade agreement whether oral or
written with creditors or financing individuals or institutions,
including any stipulations whereby financing fees are to be paid.
(d) Information that if released might adversely affect the
competitive position of the applicant shall remain confidential.
[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976.
Redesignated at 47 FR 13327, Mar. 30, 1982]
Sec. 141.6 Approval or denial of license application.
(a) The Commissioner shall approve or deny each license application
and notify the applicant no later than thirty (30) days after receipt of
a completed application.
(b) No application is complete until any clearance or tribal council
approval required by tribal or Federal regulations has been obtained.
(c) The Commissioner may not deny a license to an applicant for the
purpose of limiting competition.
(d) If the application is approved the license shall be issued on a
form provided by the Commissioner.
(e) If the Commissioner denies the license application the applicant
may appeal under the provisions of part 2 of this title no later than
thirty (30) days after the date on which notice of denial of the
application was sent.
Sec. 141.7 Bond requirement for a reservation business.
(a) An applicant for a license or renewal of a license to operate a
reservation business shall at the time the application is submitted
furnish a bond on a form provided by the Commissioner in the name of the
applicant in the amount of ten thousand dollars ($10,000) or such larger
sum as the Commissioner may designate, with two (2) on more sureties
approved by the Commissioner or with a guaranty company qualified under
the Act of August 13, 1894 (28 Stat. 279; 6 U.S.C. 6-13). The bond shall
be for the same period covered by the license. No licensee may
[[Page 389]]
trade without a bond. Except as provided in paragraph (d) of this
section, no surety may be released from liability until the license
expires.
(b) The bond shall be in favor of the United States for the benefit
of the United States and any customer of the licensee who recovers a
judgment for damages resulting from violation of any law or regulation
affecting or relating to reservation businesses. Any customer who
recovers such a judgment may bring suit on the bond in his or her own
name. The bond shall be conditioned on payment by the licensee of all
judgments for damages resulting from violations of the regulations of
this part.
(c) Any surety for a reservation business on the Hopi or Zuni
Reservation shall agree in writing to submit itself voluntarily to the
jurisdiction of the tribal court for the purpose of adjudicating any
claim arising under the bond.
(d) Any surety on the bond of a licensed reservation business may be
relieved from liabilities by complying with the provisions of
Sec. 141.57 of this title.
[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 22937, June 8, 1976.
Redesignated at 47 FR 13327, Mar. 30, 1982]
Sec. 141.8 License period for reservation businesses.
A license to operate a reservation business may not be issued unless
the applicant has a right to use the land on which the business is to be
conducted. The license period shall correspond to the period of the
lease held by the licensee. The license period in no event may exceed
twenty-five (25) years.
Sec. 141.9 Application for license renewal.
(a) An applicant for renewal of the license to trade shall file an
application on a form provided by the Commissioner with the Area
Director not less than three (3) months prior to the expiration of the
existing license. The Area Director shall report in writing to the
Commissioner on the record the applicant has made as a reservation
business owner and the applicant's present fitness to reside on the
Indian reservation.
(b) The Commissioner may issue a temporary permit for three (3)
months pending consideration of application for license renewal.
(c) Prior to expiration of the existing license or, if issued, the
temporary permit, the Commissioner shall approve or deny the application
for license renewal and notify the applicant.
(d) No license may be renewed until any clearance or tribal council
approval required by tribal or other federal regulations has been
obtained.
(e) If the Commissioner denies the application for renewal, the
applicant may appeal under the provisions of part 2 of this title.
Sec. 141.10 License fees for reservation businesses.
(a) Prior to the issuance of an initial license, each licensee who
is not a member of the Navajo tribe shall pay the following amount:
(1) If the license is issued before July 1, the licensee shall pay
fifty dollars ($50).
(2) If the license is issued on or after July 1, the licensee shall
pay twenty-five dollars ($25).
(b) Each licensed business owner who is not a member of the Navajo
tribe shall pay on or before January 10 of each year an annual license
fee determined as follows based on the licensee's most recent annual
report:
(1) If the licensee's gross receipts are less than one hundred
thousand dollars ($100,000) for the year or the licensee has not yet
been required to file its first annual report, the license fee is fifty
dollars ($50).
(2) If the licensee's gross receipts for the year are at least one
hundred thousand dollars ($100,000) but not more than four hundred and
ninety-nine thousand nine hundred and ninety-nine dollars ($499,999) the
fee is one hundred dollars ($100).
(3) If the licensee's gross receipts for the year are at least five
hundred thousand dollars ($500,000) but not more than seven hundred and
forty-nine thousand nine hundred and ninety-nine dollars ($749,999), the
fee is two hundred dollars ($200).
[[Page 390]]
(4) If the licensee's gross receipts for the year are seven hundred
fifty thousand dollars ($750,000) or more, the fee is three hundred
dollars ($300).
(c) The Navajo Area Director shall determine the annual license fee
payable by licensees who are enrolled members of the Navajo Tribe. The
license fee for an enrolled member of the Navajo Tribe may not be less
than twenty percent (20%) nor greater than one hundred percent (100
percent) of the amount the licensee would be required to pay if the
licensee were not a tribal member.
(d) All fees are payable to the Area Director and shall be deposited
to the credit of the account ``Special Deposits.''
[40 FR 39835, Aug. 29, 1975, as amended at 59 FR 54502, Oct. 31, 1994]
Sec. 141.11 Tribal fees, taxes, and enforcement.
(a) The regulations in this part do not preclude the Hopi, Navajo,
or Zuni tribal councils from assessing and collecting such fees or taxes
as they may deem appropriate from reservation businesses.
(b) Nothing in the regulations of this part may be construed to
preclude tribal enforcement of these regulations or consistent tribal
ordinances.
[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976.
Redesignated at 47 FR 13327, Mar. 30, 1982]
Sec. 141.12 Peddler's permits.
(a) Except as provided in paragraph (b) of this section, no peddler
may offer goods for sale within the exterior boundaries of the Hopi,
Navajo, or Zuni reservations without a peddler's permit. The permit
shall state on its face the class of goods that may be offered for sale.
No peddler may offer for sale any class of goods other than those listed
on the face of the permit.
(b) No peddler who is an enrolled member of a federally recognized
Indian tribe is required to obtain a peddler's permit for offering to
sell the following items:
(1) Coal and wood for non-commercial use,
(2) Homegrown fresh products,
(3) Meat products raised locally by the peddler, or
(4) Arts and crafts made by the peddler or the peddler's family.
(c) The applicant shall apply for a permit in writing on a form
provided by the Commissioner.
(d) Peddlers shall pay such fee and post such surety bond on a form
provided by the Commissioner as the Commissioner requires. The surety
bond required may not be less than five hundred dollars ($500) nor more
than ten thousand dollars ($10,000).
(e) Any surety on the bond of a peddler may be relieved of liability
by complying with the provisions of Sec. 141.57.
(25 U.S.C. 261 et seq.)
[43 FR 27826, June 27, 1978. Redesignated at 47 FR 13327, Mar. 30, 1982]
Sec. 141.13 Amusement company licenses.
(a) No person may operate a portable dance pavilion, mechanical
amusement device such as a ferris wheel or carousel, or commercial games
of skill within the exterior boundaries of the Navajo, Hopi, or Zuni
Reservations without a license from the Commissioner.
(b) The licensee shall pay such fee as the Commissioner requires.
The fee shall be not less than five dollars ($5) nor more than twenty-
five dollars ($25) per unit.
(c) The licensee shall post a surety bond on a form provided by the
Commissioner in an amount not exceeding ten thousand dollars ($10,000)
and a personal injury and property damage liability bond of not less
than five thousand dollars ($5,000) nor more than fifty thousand dollars
($50,000) as may be required by the Commissioner.
(d) The provisions of this section do not apply to amusement
companies where the contract between the tribe and the amusement company
provides for the payment of a fee to the tribe and for the protection of
the public against personal injury and property damage by bond in the
amounts specified in paragraph (c) of this section.
(e) Any surety on a bond under this section may be relieved of
liability by complying with the provisions of Sec. 141.57.
[[Page 391]]
Sec. 141.14 Trade in livestock restricted.
(a) No person other than an enrolled member of the tribe or any
association, partnership, corporation or business entity wholly owned by
enrolled members of the tribe may purchase livestock from tribal members
without a special permit issued by the Commissioner.
(b) The Commissioner shall issue a permit to each applicant who
establishes to the Commissioner's satisfaction that the applicant is a
fit person to engage in the purchase of livestock and who posts a bond
on a form provided by the Commissioner in the amount of ten thousand
dollars ($10,000). This paragraph does not require a person who has
posted a bond of ten thousand dollars ($10,000) or more under other
provisions of this part to post an additional bond to obtain a permit
under this section.
(c) Any surety on a bond under this section may be relieved of
liability by complying with the provisions of Sec. 141.57.
(d) The provisions of this section do not apply to purchases of
livestock made at an organized public auction.
[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 22937, June 8, 1976.
Redesignated at 47 FR 13327, Mar. 30, 1982]
Sec. 141.15 Consent to jurisdiction of Hopi and Zuni tribal courts.
As a condition to doing business on the Hopi or the Zuni Reservation
each applicant for license under this part shall, in accordance with the
constitutions of those tribes, voluntarily submit the applicant and the
applicant's employees or agents to the jurisdiction of the tribal court
for the purpose of the adjudication of any dispute, claim or obligation
arising under tribal ordinance relating to commerce carried out by the
licensee.
Subpart C--General Business Practices
Sec. 141.16 Price marking.
The price of each article offered for sale shall be marked on the
article, its containers or in any other manner that is plain and visible
to the customer and that affords the customer a reasonable opportunity
to learn the price of the article prior to purchase.
Sec. 141.17 Health and sanitation requirements.
(a) Each licensee shall keep both the premises and the place of
business in a clean and sanitary condition at all times and shall avoid
exposure of foodstuffs to contamination. No licensee may offer for sale
any goods that are banned for health or sanitation reasons from retail
sale by any Federal agency or by the tribe or, where not in conflict
with the tribal regulations, by the State or by any State agency. No
licensee may knowingly offer for sale any food that is contaminated.
(b) All weights and measure shall conform to standards set by the
National Bureau of Standards and to standards, if any, set by the tribe
and, if not in conflict with tribal regulations, to the standards set by
the State.
(c) If training in foodhandling is available from the Indian Health
Service, each person working in a reservation business shall complete
the foodhandler training offered by the Indian Health Service before
handling any food sold by a reservation business.
(d) Any person whom the Service Unit Director of the Indian Health
Service determines is infected with or is a carrier of any communicable
disease in a stage likely to be communicable to persons exposed as a
result of the infected employee's normal duties as a foodhandler may not
be employed by a reservation business.
(e) Each business shall comply with all Federal health regulations
and with all tribal health regulations that are consistent with Federal
regulations. Each business shall comply with State health regulations
that are consistent with tribal and Federal health regulations.
(f) Except as otherwise provided herein, nothing in this section may
be construed as a grant of enforcement powers to any agency of a State
or its subdivisions.
(g) It is the duty of the health officers of the Indian Health
Service to make periodic inspections, recommend improvements, and report
thereon to the Commissioner.
[[Page 392]]
Sec. 141.18 Availability of employee authorized to transact business.
Each licensee shall provide during normal business hours an employee
authorized in writing to engage in all business transactions that the
licensee normally offers to customers.
Sec. 141.19 Check cashing.
(a) A reservation business may give a fully negotiable check in
addition to U.S. currency when cashing a draft, check or money order. A
reservation business may not give scrip, credit or other substitute for
U.S. currency when cashing a draft, check or money order.
(b) A reservation business owner or employee may advise a customer
cashing checks, money orders or drafts of the amount due on the
customer's credit accounts, pawn accounts or any other obligation the
customer owes to the business, but in no event may the owner or employee
withhold the proceeds of the check, money order or draft from the
customer on the basis of existing credit obligations.
[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976.
Redesignated at 47 FR 13327, Mar. 30, 1982]
Sec. 141.20 Payment for purchase of Indian goods or services.
(a) A reservation business shall pay for the purchase of Indian
goods or services with cash or a fully negotiable check. A reservation
business may not pay for Indian goods or services with trade slips or
future credit. In any transaction involving the purchase of Indian goods
on the Navajo Reservation, the reservation business shall furnish a bill
of sale indicating the name of the seller, a description of the goods,
the amount paid for the goods, the date of sale, and the signature of
both parties and shall retain a copy of the bill of sales in its
business records.
(b) A reservation business owner or employee may advise a customer
selling Indian goods or services of the amount due on the customer's
credit accounts, pawn accounts or any other obligation the customer owes
to the business, but in no event may the owner or employee withhold the
proceeds of the sale from the customer on the basis of existing credit
obligations.
Sec. 141.21 Trade confined to premises.
The licensee shall confine all trade on the reservation to the
premises specified in the license, except, where permitted under
Sec. 141.14, the buying and selling of livestock and livestock products.
Sec. 141.22 Subleasing prohibited.
No licensee may lease, sublet, rent, or sell any building that the
licensee occupies for any purpose to any person without the approval of
the Commissioner and the consent of the tribe.
Sec. 141.23 Posted statement of ownership.
The licensee of a reservation business shall display in a prominent
place a notice that is legible to customers stating the form of the
business entity, the names and addresses of all other reservation
businesses owned in whole or in part by the business entity, and if the
licensee is not a corporation, the names and addresses of the owner or
owners of the business. If the licensee is a corporation the notice
shall list the names and addresses of the members of the Board of
Directors.
Sec. 141.24 Attendance at semi-annual meetings.
Upon the request of a tribal official designated by the governing
body, each licensee shall attend a semi-annual public meeting of a
tribal governing body to respond to customer inquiries.
Sec. 141.25 Withholding of mail prohibited.
No owner or employee of a reservation business may open, withhold,
or otherwise delay the delivery of mail.
Sec. 141.26 Trade in antiquities prohibited.
No licensee may knowingly buy, sell, rent or lease any artifact
created before 1930 that was removed from an historic ruin or monument.
Sec. 141.27 Trade in imitation Indian crafts prohibited.
No person may introduce or possess for disposition or sale within
the exterior boundaries of the Hopi, Navajo or Zuni Reservations any
object that is represented to be an Indian handicraft
[[Page 393]]
unless the object was produced by an Indian or Indians with the help of
only such devices as allow the manual skill of the maker to condition
the shape and design of each individual's product.
Sec. 141.28 Gambling prohibited.
No licensee may permit any person to gamble by dice, cards, or in
any way whatever, including the use of any mechanical device, on the
premises of any licensed business.
Sec. 141.29 Political contributions restricted.
No reservation business owner who is ineligible to vote in a Navajo
tribal election may grant or donate any money or goods to any candidate
for election to Navajo tribal office.
Sec. 141.30 Retaliation prohibited.
No licensee may refuse service to any customer for the purpose of
retaliating against that customer for enforcing or attempting to enforce
the regulations of this part.
Sec. 141.31 Trade by Indian Affairs employees restricted.
(a) Except as authorized in this section, no person employed by the
U.S. Government in Indian Affairs may have any interest in any trade
with an Indian or an Indian organization. Employees of the U.S.
Government may trade with an Indian or Indian organization for any
purpose other than to engage in a profit-making activity under the
following conditions:
(1) Where the amount involved is $500 or less a U.S. Government
employee may purchase goods or services from an Indian or Indian
organization.
(2) Where the amount involved is greater than $500 a U.S. Government
employee may, with the approval of the Secretary of the Interior,
purchase goods or services from any Indian or Indian organization.
(b) Lease or sale of home sites or allotments on trust or restricted
Indian land to or from Indian employees of the U.S. Government shall be
made on sealed bids, unless the Commissioner waives this requirement on
the basis of a report showing:
(1) The need for the transaction,
(2) The benefits accruing to both parties, and
(3) That the consideration for the proposed transaction is not less
than the appraised value of the land or leasehold interest unless the
Indian employee qualifies and is intending a transaction in accordance
with Sec. 152.5 (b) and (c) of this chapter or Sec. 162.5(b)(1), (2) and
(3) of this chapter.
An affidavit, as follows, shall accompany each proposed land
transaction:
I,----------------------------(Name)
----------------------------(Title)
swear (or affirm) that I have not exercised any undue influence nor used
any special knowledge received by reason of my office in obtaining the
(grantor's, purchaser's, vendor's) consent to the instant transaction.
(c) This section does not prohibit any reservation business from
contracting with the Federal Government to provide postal services to
Indian communities in which Government postal service is unavailable.
(d) Nothing in this section prohibits an Indian employee from
receiving benefits by reason of membership in a tribe or corporation or
cooperative association organized by and operated for Indians.
(e) U.S. Government employees who violate this section are liable to
a penalty of five thousand dollars ($5,000) and shall be removed from
office, see 25 U.S.C. 68.
[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976.
Redesignated at 47 FR 13327, Mar. 30, 1982]
Editorial Note: For further information concerning Federal employees
contracting or trading with Indians, see Executive Order 12328 of Oct.
8, 1981, at 46 FR 50357, Oct. 13, 1981.
Subpart D--Pawnbroker Practices
Sec. 141.32 Reservation pawnbroker license required.
(a) No person may accept pawns or pledges of personal property as
security for monies or accounts due by an Indian within the exterior
boundaries of the Navajo, Hopi or Zuni Reservations unless such person
is an agent of a bank, saving bank, trust company, savings or building
and loan association, or credit union operating under
[[Page 394]]
the laws of the United States or the laws of New Mexico, Arizona, or
Utah or unless such person--
(1) Holds a valid license to operate a reservation business,
(2) Holds a valid reservation pawnbroker license, and
(3) Posts a bond on a form provided by the commissioner in the name
of the licensee in the amount of twenty-five thousand dollars ($25,000)
or such larger sum as may be designated by the Commissioner with two (2)
or more sureties approved by the Commissioner or with a guaranty company
qualified under the Act of August 13, 1894 (28 Stat. 279; 6 U.S.C. 6-
13).
(b) An applicant for a reservation pawnbroker license shall apply in
writing on a form provided by the Commissioner.
(c) The bond required by paragraph (a) of this section shall be in
favor of the United States for the benefits of the customers of the
licensee and shall specifically indemnify all customers who have
recovered judgment against the licensee for destroyed, lost, misplaced
or misappropriated pawn or other property. Any customer recovering such
a judgment may bring suit on the bond in his or her own name. The bond
shall be for the same period as the license.
(d) Any surety on a bond under this section may be relieved of
liability by complying with the provisions of Sec. 141.57.
(e) No person may accept pawns or pledges of personal property as
security for monies or accounts due by an Indian after the effective
date of a tribal ordinance banning the acceptance of pawn on the
reservation.
[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976; 41
FR 22937, June 8, 1976. Redesignated at 47 FR 13327, Mar. 30, 1982]
Sec. 141.33 Fees for pawnbroker license.
(a) Prior to the issuance of an initial pawnbroker license, each
licensee who is not a member of the Navajo Tribe shall pay the following
amount:
(1) If the license is issued before July 1, the licensee shall pay
two hundred dollars ($200).
(2) If the license is issued on or after July 1, the licensee shall
pay one hundred dollars ($100).
(b) Each licensed pawnbroker who is not a member of the Navajo Tribe
shall pay on or before January 10 of each year an annual license fee of
two hundred dollars ($200).
(c) The Area Director shall determine the annual license fee payable
by licensees who are enrolled members of the Navajo Tribe. The license
fee for a member of the Navajo Tribe may not be less than twenty percent
(20 percent) nor greater than one hundred percent (100 percent) of the
amount the licensee would be required to pay if the licensee were not
tribal member.
(d) All fees are payable to the Area Director and shall be deposited
to the credit of the account ``Special Deposits.''
[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976.
Redesignated at 47 FR 13327, Mar. 30, 1982; 59 FR 54502, Oct. 31, 1994]
Sec. 141.34 Pawnbroker records.
Each pawnbroker shall keep a written record of the following
information:
(a) Transaction number.
(b) Name of pledgor.
(c) Address of pledgor.
(d) Census number or social security number of pledgor.
(e) Date of transaction.
(f) Replacement value of pawn.
(g) Description of pawned item.
(h) Amount loaned in cash.
(i) Amount loaned as credit.
(j) Finance charge.
(k) Amount financed.
(l) Date and amount of payments made by pledgor.
(m) Date notice of default sent to pledgor.
(n) Date pawned item sold.
(o) Name and address of purchaser.
(p) Amount received upon sale.
(q) Amount of any surplus returned to the pledgor.
(r) Such other information as the Commissioner may require.
[[Page 395]]
Sec. 141.35 Pawnbroker disclosure requirements.
In all transactions in which pawn is taken the lender shall give the
borrower a written ticket or receipt disclosing the following
information to the extent applicable:
(a) Clear identification of the property pledged.
(b) The date of the transaction.
(c) Amount of the loan.
(d) Name and social security or census number of the pledgor.
(e) Replacement value of the pawn as agreed upon by the pledgor and
pledgee.
(f) Date on which loan is due.
(g) The amount, expressed as a dollar amount, of any finance
charges.
(h) The finance charges expressed as an annual percentage rate and
computed in accordance with the provisions of 12 CFR 226.5(b).
(i) The amount, or method of computing the amount, of any charges to
be assessed after the date the loan is due.
(j) A statement of the conditions of default and the pledgor's
rights upon default, as defined by this part.
(k) Identification of the method of computing any unearned portion
of the finance charges in the event of prepayment of the obligation.
Sec. 141.36 Maximum finance charges on pawn transactions.
No pawnbroker may impose an annual finance charge greater than
twenty-four percent (24 percent) of the unpaid balance for the period of
the loan nor assess late charges or delinquency charges on any loan.
Sec. 141.37 Prepayment.
(a) Subject to the provisions of paragraph (b) of this section, the
pledgor may prepay in full or in any part the unpaid balance of a loan
at any time without penalty.
(b) When a loan is prepaid the lender may collect the earned portion
of the finance charge or may charge an administrative fee not to exceed
ten percent (10 percent) of the unearned finance charge or two dollars
($2) whichever is greater.
Sec. 141.38 Pawn loans, period, notice and sale.
(a) The proceeds of all loans secured by pawn and for which a
finance charge is imposed shall be paid only in cash or with a fully
negotiable check.
(b) The period of all such loans shall be no less than twelve (12)
months, subject to the provisions of paragraph (c).
(c) Thirty (30) days prior to the end of the loan period the pledgee
may make a declaration of intention to proceed with sale of the pawned
item by sending notice of intent to the pledgor.
(d) The notice required in paragraph (c) of this section shall be
sent to the pledgor and proof of delivery obtained and shall contain a
description of the item pawned, a statement of the principal and finance
charge owed, a statement of the intention to sell, the date of the sale,
and the procedure for redemption.
(e) Nothing in this section requires the business owner to proceed
with notice and sale if the business owner desires to hold the pawn for
a period longer than the loan period stated in the original agreement.
(f) Unless notice is given under paragraph (c) of this section, or
the loan is refinanced under the provisions of Sec. 141.41, no finance
charge may be imposed for the time the loan remains unpaid after the end
of the loan period stated on the pawn ticket.
Sec. 141.39 Sale and redemption of pawn.
(a) If the retention period has expired and notice as required under
Sec. 141.38 of this part has been sent and received, the pledgee may
proceed with the sale of the pawn.
(b) The pawn shall be sold no sooner than thirty (30) days but no
later than twelve (12) months after notice of intent to sell has been
given. The sale shall be a public sale, with notice of the time, place,
and manner to be given in a tribal newspaper of general circulation not
less than fourteen (14) days prior to the sale, or in the absence of
such a newspaper, in a commercially reasonable manner. The sale itself
shall also be conducted in a commercially reasonable manner.
(c) A pledgor may redeem pawn which has been put up for sale at any
time before the day it is to be sold by
[[Page 396]]
tendering to the pledgee the face amount of the loan, plus the finance
charge assessed on the original loan. The pledgee may also collect an
additional charge covering the period between the date due and the date
of redemption, provided that the rate of charge does not exceed the
finance charge on the original loan.
(d) The pledgee may buy at the pledgee's own sale if the collateral
is of a type customarily sold in a recognized market or which is the
subject of widely distributed standard price quotations.
(e) Pawn held for more than twelve (12) months after notice of
intent to sell has been given may not be sold, but the pledgor may
redeem the pawn at any time by tendering to the pledgee the face amount
of the loan, plus the finance charge that accrued before the end of the
sale period provided in paragraph (b) of this section.
[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976.
Redesignated at 47 FR 13327, Mar. 30, 1982]
Sec. 141.40 Proceeds of sale.
(a) The following items shall be deducted from the proceeds of the
sale of pawned items in the following order of priority:
(1) The expense of advertising and conducting the sale, not to
exceed ten percent (10%) of the amount loaned.
(2) The principal amount of the loan, plus any accrued finance
charges.
(3) The finance charge calculated at the annual percentage rate of
the original loan on the unpaid balance of the loan for the period from
the date of default to the date of sale.
(b) Within ten (10) days after the sale of the pledge under this
section, the pledgee shall send a notice to the pledgor informing the
pledgor of the date of the sale, the proceeds of the sale, the allowable
costs of the sale, any additional finance charges, and the amount of any
surplus realized. The pledgee shall obtain proof that the notice was
delivered.
(c) Any proceeds of the sale remaining after the deductions
authorized in paragraph (a) of this section are deemed to be ``surplus''
and shall be paid over to the pledgor or the pledgor's estate in U.S.
currency.
(d) The sale of pledged goods and the application of the proceeds in
accordance with this section extinguishes all rights of action of the
pledgee for any unpaid principal or finance charge on the original loan.
Sec. 141.41 Refinancing transaction.
(a) Any pawn agreement may be refinanced, either with or without an
increase in the principal amount of the loan, prior to or following the
date of expiration of the original period of the loan upon agreement
between the parties.
(b) Such refinancing constitutes a new transaction for purposes of
all disclosure and record keeping requirements of this part and requires
the issuance of a new ticket or receipt.
(c) The rate of the additional finance charge imposed as part of the
refinancing agreement may not exceed the maximum rate imposed by
Sec. 141.36.
(d) The total finance charges in a refinancing agreement may not
exceed the sum of the following amounts:
(1) The finance charge that the pledgor would have been required to
pay upon prepayment on the date of refinancing under Sec. 141.37 of this
part, except that, for the purpose of computing this amount, no minimum
finance charge or administrative fee may be included, and
(2) Such additional finance charge as is permissible on the balance
of the loan over the remaining period of the loan as extended.
(e) The default and sale procedures of this part apply to a
refinanced pawn transaction in the same manner as they apply to an
original pawn transaction.
Sec. 141.42 Lost pawn receipts or tickets.
(a) Redemption may not be denied on the sole ground that the pledgor
is unable to produce a receipt or pawn ticket, provided the pledgor
gives a reasonable description of the pawned item or makes an actual
identification of the item. The pledgee may require the pledgor to sign
a receipt for the redeemed pawn. No person other than the pledgor may
redeem pawn without a ticket.
[[Page 397]]
(b) No additional charges may be imposed for the loss of a pawn
receipt or ticket.
Sec. 141.43 Outstanding obligations owed to pledgee.
If the pledgor tenders payment to be applied toward redemption of a
pawned item, it shall be so applied by the pledgee, irrespective of
other outstanding obligations owed by the pledgor to the pledgee. The
pledgee may not deny the pledgor the right to redeem the pawn.
Sec. 141.44 Insurance on pawn.
(a) Any licensee under this part who lends money or extends credit
with personal property as security and holds such property as a pledge
shall maintain invault all risk insurance coverage running in favor of
the pledgor for such property in amounts based upon a report issued
monthly to the insurer. Such monthly report shall be an amount not less
than the total agreed replacement value of all pawned items then held by
the licensee.
(b) A copy of the insurance policy shall be available for inspection
at the licensee's place of business and a copy shall be filed with the
Commissioner.
Subpart E--Consumer Credit Transactions Other Than Pawn
Sec. 141.45 Consumer credit applications.
Any reservation business offering credit which is not secured by
pawn shall provide an application for credit to any customer requesting
credit. Within thirty (30) days of the date of application, the lender
shall act upon the application and notify the customer in writing of the
decision with the reason therefor. A business owner who reduces the
amount of credit available to a customer or terminates a credit account
shall provide written notice to the customer stating the reason for the
reduction or termination of such credit.
Sec. 141.46 Credit disclosure statements.
Upon approval of a credit application the lender shall give the
applicant the following information where applicable in a written
disclosure statement:
(a) The maximum credit limit of the account.
(b) The conditions under which a finance charge may be imposed.
(c) The period in which payment may be made without incurring a
finance charge.
(d) The method used in determining the balance on which the finance
charge is calculated.
(e) The method used to calculate the finance charge.
(f) The periodic rates used and the range of balances to which each
rate applies.
(g) The conditions under which additional charges may be made and
the method for calculating those charges.
(h) A description of any lien that may be acquired on a customer's
property.
(i) The minimum payment that must be made on each billing.
Sec. 141.47 Monthly billing statement.
On all credit accounts on which a finance charge may be imposed and
for all other credit accounts when requested by the customer, a licensee
shall issue a monthly billing statement to the customer stating the
following information where applicable:
(a) The unpaid balance at the start of the billing period.
(b) The amount and date of each extension of credit and
identification of each item costing more than ten dollars ($10).
(c) Payments made by a customer and other credits, including
returns, rebates, and adjustments.
(d) The finance charge shown in dollars and cents.
(e) The rates used in calculating the finance charge plus the range
of balances to which the finance charge was calculated.
(f) The closing date of the billing cycle.
(g) The unpaid balance at that time.
Sec. 141.48 Translation of disclosure statements.
Disclosure required by Secs. 141.46 and 141.47 shall be made in
writing regardless of the customer's ability to speak, read, or write
the English language. Disclosure to non-English speaking
[[Page 398]]
persons shall be translated orally into the appropriate language.
Sec. 141.49 Usury prohibited.
No reservation business may take or receive money, goods, or other
things of value for a loan or forbearance on a debt that exceeds in
value the principal plus twenty-four percent (24 percent) per annum
finance charge. Any reservation business contracting for, reserving, or
receiving directly or indirectly, any greater amount shall forfeit the
finance charge.
Subpart F--Enforcement Powers, Procedures and Remedies
Sec. 141.50 Penalty and forfeiture of merchandise.
Any person other than an enrolled member of the tribe who either
resides as a reservation business owner within the exterior boundaries
of the Navajo, Hopi, or Zuni Reservations or introduces or attempts to
introduce goods or to trade therein without a license shall forfeit all
merchandise offered for sale to the Indians or found in the person's
possession and is liable to a penalty of five hundred dollars ($500).
This section may be enforced by commencing an action in the appropriate
United States District Court under the provisions of 28 U.S.C. 1345.
Sec. 141.51 Authority to close unlicensed reservation businesses.
The Commissioner shall close any reservation business subject to the
provisions of this part that does not hold a valid license or temporary
permit.
Sec. 141.52 Revocation of license and lease and recovery on bond.
The reservation business owner is subject to revocation of license
and lease and recovery on the bond in whole or in part in the event of
any violation of the regulations of this part after a show cause
proceeding according to the provisions of Sec. 141.56.
[41 FR 22937, June 8, 1976. Redesignated at 47 FR 13327, Mar. 30, 1982]
Sec. 141.53 Cease and desist orders.
(a) If the Commissioner believes that violation of the regulations
in this part is occurring, the Commissioner may order the person
believed to be in violation to show cause according to the provisions of
Sec. 141.56 why a cease and desist order should not be issued.
(b) If the person accused of the violations fails to show cause at
the hearing why such an order should not issue, the Commissioner shall
issue the order.
(c) A person subject to a cease and desist order issued under this
section who violates the order is liable to revocation of license after
a show cause proceeding according to the provisions of Sec. 141.56 of
this part.
Sec. 141.54 Periodic review of performance.
(a) The Commissioner shall review licenses at ten (10) year
intervals to determine whether or not the business is operating in
accordance with these regulations and all other applicable laws and
regulations and whether the business is adequately serving the economic
needs of the community.
(b) If, as a result of the review provided in paragraph (a) of this
section, the Commissioner finds that the licensee has repeatedly
violated these regulations, the Commissioner may order the licensee to
show cause according to the provisions of Sec. 141.56 why the licensee's
license should not be revoked.
(c) If the licensee fails to show cause why the license should not
be revoked, the Commissioner shall revoke the license.
Sec. 141.55 Price monitoring and control.
(a) A reservation business may not charge its customers unfair or
unreasonable prices. To insure compliance with this section, the
Commissioner shall perform audits as provided in Sec. 141.58. In
performing those audits the Commissioner may inspect all original books,
records, and other evidences of the cost of doing business. In addition,
at least once a year the Commissioner shall cause to be made a survey of
the prices of flour, sugar, fresh eggs, lard, coffee, ground beef,
bread, cheese, fresh milk, canned fruit, and such other goods as the
Commissioner deems appropriate in all stores licensed under these
regulations and in a representative number of similar stores located in
[[Page 399]]
communities immediately adjoining the reservations. The results of the
survey shall be posted publicly, sent to each licensed business, and
made available to the appropriate agency of the tribal government.
Copies of the survey shall be available at the office of the Area
Director.
(b) If the Commissioner finds that a reservation business is
charging higher prices, especially for basic consumer commodities, than
those charged on the average based on the studies conducted under the
provisions of paragraph (a) of this section, the Commissioner may order
the business owner to show cause under the provisions of Sec. 141.56 why
an order should not be issued to reduce prices. If the Commissioner
determines that the prices charged by the business are not economically
justified, based on all of the information, then the Commissioner may
order the business to reduce its price on all items determined to be
priced too high to a reasonable price as determined by the Commissioner,
but in no event to a lower price than the cost of the item increased by
a reasonable mark-up.
Sec. 141.56 Show cause procedures.
(a) When the Commissioner believes there has been a violation of
this part the Commissioner shall serve the licensee with written notice
setting forth in detail the nature of the alleged violation and stating
what remedial action the Commissioner proposes to take.
(b) The licensee shall have ten (10) days from the date of receipt
of notice in which to show cause why the contemplated remedial action
should not be ordered.
(c) If within the ten (10) day period the Commissioner determines
that the violation may be corrected and the licensee agrees to take the
necessary corrective measure, the licensee shall be given the
opportunity to take the necessary corrective measures.
(d) If the licensee fails within a reasonable time to correct the
violation or to show cause why the contemplated remedial action should
not be ordered, the Commissioner shall order the appropriate remedial
action.
(e) If the Commissioner orders remedial action the licensee may
appeal under the provisions of part 2 of this title not later than
thirty (30) days after the date on which the remedial action is ordered.
Sec. 141.57 Procedures to cancel liability on bond.
(a) Any surety who wishes to be relieved from liability arising on a
bond issued under this part shall file with the Commissioner a statement
in writing setting forth the desire of the surety to be relieved of
liability and the reasons therefor.
(b) The surety shall mail a copy of the statement by certified mail,
return receipt requested, to the last known address of the licensee
named in the bond.
(c) Twenty (20) days after the statement required in paragraph (b)
of this section is mailed to the licensee and the statement required in
paragraph (a) of this section is filed with the Commissioner, the surety
from all liability thereafter arising on the bond.
(d) If the licensee does not have other bond sufficient to meet the
requirements of this part or has not executed and filed a new or
substitute bond within twenty (20) days after the service of the
statement, the Commissioner shall declare the license and lease void.
(e) No surety is released from liability under the bond for claims
which arose prior to the issuance of the Commissioner's order releasing
the surety.
[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976; 41
FR 22937, June 8, 1976. Redesignated at 47 FR 13327, Mar. 30, 1982]
Sec. 141.58 Records, reports, and obligations of reservation business owners.
(a) The Commissioner may, in consultation with interested persons
and agencies, promulgate a model bookkeeping system for use in
reservation businesses. Until such model bookkeeping system is
promulgated, each business owner shall keep records in accordance with
generally accepted accounting principles.
(b) Each reservation business owner shall file with the Area
Director an annual report on or before April 15 in a
[[Page 400]]
form approved by the Commissioner. Reports shall be subject to a yearly
audit. The reports shall contain the names and respective interests of
all persons participating in the business.
(c) The business owner or an employee shall record all sales and
purchases whether for cash or credit. If the business is on the Navajo
Reservation the owner or an employee shall supply the customer with a
copy of the sale transaction containing a description of the article
purchased or sold, the date of the transaction, and the price. A cash
register receipt complies with this paragraph for grocery or dry goods
purchases for cash.
(d) The licensee shall keep a duplicate copy of any writing required
by paragraph (c) of this section for a period of not less than three (3)
years and shall provide the customer or the customer's representative
one copy of those writings upon request.
[40 FR 39837, Aug. 29, 1975, as amended at 41 FR 3288, Jan. 22, 1976; 41
FR 13937, Apr. 1, 1976. Redesignated at 47 FR 13327, Mar. 30, 1982]
Sec. 141.59 Customer complaint procedures.
(a) Any customer of a licensee may file a complaint with the
Commissioner alleging that the licensee has committed a violation of
this part.
(b) Upon receipt of a customer complaint the Commissioner shall
initiate show cause proceedings under the provisions of Sec. 141.56 of
this part.
(c) If the Commissioner fails to order remedial action within forty
(40) days from the date the complaint is filed, the complainant may
appeal under the provisions of part 2 of this title not later than
seventy (70) days after the date the complaint is filed.
(d) If the Commissioner orders remedial action, the complainant may
appeal under the provisions of part 2 of this title not later than
thirty (30) days after the date on which the remedial action is ordered.