NPA Members in Texas Donate to the East Dallas Boys and Girls Club

The National Pawnbrokers Association held its 1st annual Musical Instrument Gift Day on December 6th.  Pawn shops in 14 states across the country joined forces this holiday season to provide underprivileged children with over 300 musical instruments. Inspiration for the national charity drive came from the example set by St. Nicholas, patron saint of pawnbroking, who was famed for secretly throwing 3 bags of gold into his neighbor’s window in hopes that the neighbor’s daughters would be spared from a life of servitude.  In the spirit of this generosity, Gift Day strives to put musical instruments into the hands of those who need them the most.
Pawnbrokers have a history of giving back to their local communities.  Over the past 8 years, the National Pawnbrokers Association has donated $19,000 to C.O.P.S. (Concerns of Police Survivors), an organization dedicated to providing scholarships to survivors of police officers who’ve fallen in the line of duty.    In San Jose California, pawnbrokers have been coming together to furnish their local public schools’ music departments with instruments.  When the NPA announced the new Gift Day event, they received an outpouring of enthusiasm from its members, who, already actively involved in community outreach, were swift to mobilize.  www.GiftDay.org, the official website where pawnbrokers registered to participate, received eager responses from shop owners from all over the US. 
The Gift Day team immediately took action, helping pawnbrokers tap resources and social connections, helping them pinpoint the organizations in their communities who were seeking assistance, and coordinating with charities to organize donations.  Donation events were being organized in 14 states, at local schools, Boys and Girls Clubs, churches, Veterans Affairs Medial Facilities, and instrument donation organizations, all designed to funnel the instruments directly into the children’s hands. Many pawnbrokers bundled their donations for better impact, but several pawn stores held their own donation events. The effort was calling the attention of local and state legislators, who, if not able to attend the event personally, sent representatives. 

In Georgia, Dave Adelman, the immediate past President of the NPA was able to assemble a superb team of pawnbrokers.  Charles Williams of Chuck’s Gun and Pawn was able to contact Governor Sonny Perdue and arrange a donation event at the Governor’s office.  Students, teachers, and pawnbrokers eagerly listened as the Governor announced he had chosen Drew Charter School to receive the more than 60 instruments contributed.  The event reached the pinnacle of success when a proclamation was issued from the Governor’s office declaring December 6th, 2009, Pawnbrokers Day. 

Lou Tansky, President of the Ohio Pawnbrokers Association, rallied with pawn shops in his state to donate a collection of instruments to a Veteran’s Affairs medical facility that uses music therapy in its treatment program.
 Pappy Clarke of Pappy’s Pawn in Knoxville, Tennessee made an individual donation to his local school district that struggles to provide instruments for students due to a lack of sufficient state funding.  Pappy wrote an original song for Gift Day and performed it on his evening television news channel.

In South Carolina, pawnbrokers banded together and donated an impressive assortment of instruments to a school for the deaf and blind.  Musical instruments had been on the school’s wish list for quite some time, and the event was held in conjunction with the local Lions Club annual benefit ceremony.  Similar events were held nationwide, often catching the attention of the media, who were swift to cover the story.

Photos of donation events began pouring in to Gift Day team members’ email boxes.  “Being able to see those kids’ faces light up when they got their new instruments was the greatest reward I could have ever hoped for,” said Dave Crume, President of the National Pawnbrokers Association. Crume’s enthusiasm for Gift Day was a motivating force.  Due to the huge success of this year’s event, the National Pawnbrokers Association will be sponsoring the event next year.  Many pawnbrokers found the experience to be so rewarding, they will continue to hold their own donation drives throughout the year. 

For more information, photos of donation events, and links to Gift Day media coverage, visit www.GiftDay.org 

On December 1, Governor Sonny Perdue met with pawnbrokers from around the state to take part in the National Pawnbrokers Association’s Musical Instrument Gift Day.  At least 8 Georgia pawn shop owners pledged over 70 instruments to donate to the Charles R. Drew Charter School. Governor Perdue selected the school at an event in his office with students, faculty and members of the local businesses making the donations. The school is a part of a successful initiative to redevelop the community of East Lake and will use the musical instruments to build a strong music program. Georgia native Dave Adelman, former President of the National Pawnbrokers Association, spear-headed the effort with the Governor.




This effort is part of a larger program held in honor of St. Nicholas Day – Patron Saint of Pawnbroking - and National Pawnbrokers Day, December 6.  Pawn shops across the country are organizing donation drives to supply badly needed musical instruments to local charity organizations and schools who, due to drastic budget cuts in state education funds, can’t supply enough instruments to form a small band.  Businesses in Warner Robins, LaGrange, Conyers, Kingsland, Norcross, Fort Valley and Macon took part in Gift Day donations. Pawn shops traditionally have a history of donating musical instruments and awarding scholarships to support the young members of their communities. For more information on this effort, visit www.GiftDay.org.

For digital photographs & press release of the Governors Gift Day ceremony: www.giftday.org/gagov.html

 

Georgia Governor Sonny Perdue will be participating in the National Pawnbrokers Association's Musical Instrument Gift Day on December 1st.  In just over two weeks, pawnbrokers from across the state of Georgia have come together to raise more than 70 musical instruments to donate to needy schools.  Governor Perdue will meet with store owners and students at his offices, where he will announce which Atlanta school he has chosen as the recipient of the donation.  Dave Adelman, who is helping to coordinate the donation drive, has also selected a DeKalb county school and Unidos Elementary School to receive instruments.

The effort is part of a national event sponsored by the National Pawnbrokers Association, in celebration of Saint Nicholas Day - Patron Saint of Pawnbroking - and National Pawnbrokers Day, December 6.  Pawn stores nationwide are being mobilized in a grassroots effort to donate musical instruments to local charity organizations and public school music programs.  Gift Day's goal is to put musical instruments in the hands of children who need them the most.   

The NPA has seen an enthusiastic response from its members who are eager to make donations, with some members donating as many as 18 musical instruments at a time.  That's enough to start a small concert band.  And with music education budgets being slashed on state levels, the Gift Day is a timely donation drive that strives to improve childrens' educations across the United States. 

Governor Perdue's office is also excited about the program and was quick to respond to pawnbrokers with support.

The National Pawnbrokers Association, Keller, TX, recently donated $8,000 to Concerns of Police Survivors’ (C.O.P.S.) Scholarship fund, nearly doubling the total amount of their contributions to C.O.P.S.  The National Pawnbrokers Association’s total contribution over the past 8 years is $19,000 and that money has been given to surviving children and spouses of law enforcement officers killed in the line of duty.



Since 1994 C.O.P.S. has given $981,241 in scholarships to 291 survivors of fallen officers who do not receive tuition-free education as a state death benefit.  Additionally, C.O.P.S. provides scholarships to survivors who may no longer meet their state’ eligibility for assistance.  These scholarships would not have been possible without support from organizations like the National Pawnbrokers Association. These scholarships are not a loan and no repayment is necessary. Concerns of Police Survivors does not charge for any of the programs or services that it provides to the more than 15,000 surviving family members; they have paid a high enough price.

Eight survivors received scholarships this year that were made possible through National Pawnbrokers Association’s contribution:

Carrie Burkeen is a student at Columbia State Community College, IN, where she is working towards a degree in business administration. Carrie is the daughter of Officer Alan Ragsdale, Hohenwald Police Department, TN, End of Watch 11/27/2000.

Nicholas DeMutiis is a student at Syracuse University, NY, where he is working towards a bachelor’s degree. Nicholas is the son of Officer Nicholas DeMutiis, New York Police Department, NY, End of Watch 1/24/1994.

Le’Amber Dunn is a student at Spelman College, Atlanta, GA, where she will be working towards a degree in education. Le’Amber is the daughter of Corrections Officer Lee Dunn, of the Florida Department of Corrections, End of Watch 1/24/2000.

Tiffany Gort-Mejia is a student at Wor-Wic Community College, Salisbury, MD, where she is working toward a degree in radiology. Tiffany is the daughter of Detective Evelyn Gort, Metro Dade Police Department, FL, End of Watch 10/30/1993.

Shala Shores is a student at American River College, Sacramento, CA, where she is working toward a degree in natural resources/wildlife biology. Shala is the daughter of Detective Dave Miller, Sacramento County Sheriff’s Office, Sacramento, CA, End of Watch 1/2/1983.

Renald-Riel Stephens is attending DeKalb Technical College, Clarkston, GA, where he is working toward a degree in drafting. Renald is the son of Deputy Marshall Randy Stephens, Territorial Court of the Virgin Islands, St. Thomas, VI, End of Watch 2/16/1998.

Jamie Van Horn is a student at University of Washington, Seattle, where she is working toward a degree in pre-medicine/science. Jamie is the daughter of Sergeant Steven Van Horn, Municipal Law Enforcement Police Department, CA, End of Watch 11/16/1997.

Stacie Villegas is a student at the University of New Mexico, Albuquerque, where she is working toward a degree in psychology. Stacie is the daughter of Deputy Sheriff Manuel Villegas, Riverside County Sheriff’s Office, CA, End of Watch 3/19/2007.

For the Spring 2010 semester, C.O.P.S. recently awarded a total of $46,598 in scholarships to 31 surviving children and 3 surviving spouses of law enforcement officers killed in the line of duty. It is the belief of the C.O.P.S.’ National Board that higher education should not be put in jeopardy or disrupted because of the unforeseen tragedy that has befallen on the family. National Pawnbrokers Association has played a role in making that happen.

Applicants seeking financial assistance for education purposes can receive up to $1,500 per semester, and total scholarship awards to one individual can run as high as $12,000 maximum lifetime. C.O.P.S. scholarships are awarded three times annually for fall semester, spring semester, and summer semester. All applicants must be surviving spouses or children of officers who are determined to be killed in the line of duty according to Federal criteria.  A complete application is required for consideration for each semester; C.O.P.S. Scholarship application forms can be found online at www.nationalcops.org/serv05.htm.

Since 1984 Concerns of Police Survivors (C.O.P.S.) mission has been to “rebuild shattered lives” of the surviving family members and affected co-workers of law enforcement officers who have died in the line of duty.  C.O.P.S. helps the officers’ survivors by providing emotional support and healing programs needed to cope with a sudden, violent death.  C.O.P.S. is a national organization with 50 chapters throughout the United States.  C.O.P.S. is a not-for-profit, 501(c)3 organization.  The national membership includes 15,000 surviving families and, unfortunately, that membership continues to grow as 140-160 law enforcement officers are killed every year in the line of duty.

The old saying, “a friend in time of need is a true friend”, is certainly the occupation description of the community’s local pawnshop.
When a person is down, lost their job, behind on their house payment, and their credit cards charged up to their max, what bank will give you a loan?  What bank would even waste their time for you to complete the multi-page application for that loan?  What hope is there to be able to buy food for the family?  A pawnshop is the one place in the community you can always go and get the money regardless of the job, credit rating, or loan approval!  The pawnshop of your community is the helping hand in time of need.

How do I know this?  I have personally lived it!  Now only 17 years later, my entire life revolves around the close-knit pawn community as all my true friends are pawnbrokers and all I own is due to the helping hand of my town’s local pawnshop.

In 1992, I had lost my job due to one insurance company purchasing another and the new company’s staff replaced me.  The day prior I had purchased and paid cash for my new Cadillac.  Only 7 months later I was sitting in a parking lot applying for food stamps.  My house payment was behind, my credit cards were at their limit and my payments were behind.  I did not have a job, or any prospects for a job, and was unable to get a bank loan because of bad credit and jobless. 

I walked into my first pawnshop in Round Rock, Texas called Action Pawn and owned by Dale H.  I carried a large box of jewelry and asked the sweet lady behind the counter to loan me enough to make my house payment.  Her name was Melba L. and she could tell I was about to burst out in tears and said to me with such a sweet voice, “Honey how much do you need?”  I told her what my house payment was and she chose the pieces of jewelry that would enable her to make that loan. 



During my monthly visits to pay the “interest” on my loan, I overheard Melba on a cold, solicitation call from someone obviously wanting to sale Action Pawn health insurance.  After Melba hung up from the phone call, I shared with her that I had begun my own insurance agency.  I asked if she would allow me to provide her a quote on health insurance for Action.  Melba agreed to allow me to quote and I was able to put in 5 products for the price she was paying for only 1.  In addition I was able to insure all her employees instead of the 12 that was on the policy at that time. 

Shortly thereafter, Dale had a horrible wreck.  He was transported to an out-of-network hospital and was in the intensive care unit for almost a month.  As his insurance agent, I was able to get the insurance company to code his hospital claim as “in-network”.  I was  even able to get his cancer insurance company with an intensive care rider to send him a check for each of the days he was an intensive care patient!

While Dale was still recovering he sent word to Jim S., the TPBA Executive Director at that time, that he should discuss with me the possibility of my insurance company handling the Association’s health insurance.  To make a long story short, we talked and not only do I handle the Association’s health insurance but many pawnbrokers now have health insurance.  I also began handling the pawnshop’s commercial package policy as well. 

Jim S. retired and moved to Colorado.  I purchased his log cabin in a very remote area on the side of the Santa de Cristo Mountains at 9,000 ft. as my mountain retreat.  After only 17 years from my first pawn loan, my insurance agency has blossomed, my home & my cabin have no mortgage.  I was able to purchase a home for my handicapped son and it is also on the way to being paid off. 

Through all I have accomplished and earned to the employees that I am able to employ, this all generate taxes that keep the American economy running.  It all leads back full circle…to my first pawnshop visit where I made my first pawn loan. 

So, what is the pawnshop’s place in your community?  The pawnshop is the community!  The helping hand when you need it the most, giving the community the chance to grow!

Sharon A Cobb, LUTCF, RHU
Professional Texas Ins.
Pflugerville, TX 78691

Why is the proposed Consumer Finance Protection Agency placing
national banks in line to receive millions of new customers at the
expense of community banks and other regulated lenders currently
servicing minorities, immigrants and non-banked Americans?

The proposed Consumer Finance Protection Agency is being considered as one of the
most important elements in the Obama administration’s finance reform policy. It would
impose strict federal regulations on small and non-bank lenders designed to protect
consumers against predatory lending practices and usurious interest rates, and would
closely monitor banking regulators. Despite reports earlier this month that lawmakers
would adjourn further discussion on the agency, House Bill 3126 - Consumer Financial
Protection Agency Act - is currently under heavy debate in Congress.  Legislators are calling
new attention to the need for a government entity that would tightly regulate non-bank
lenders on a federal level, citing payday loans and sub-prime mortgages as one of the
many causes of the financial downfall.

As members of Congress tout the virtues of the CFPA and the protections it would grant consumers, serious questions are being raised as to the long term effects it will have on non-bank
lenders and the millions of un-banked and struggling families that rely on their services to
make ends meet. The pawn industry, for example, an already heavily regulated business
at the local, state, and federal levels, is concerned that the addition of new regulations
would seriously jeopardize the services that pawnbrokers currently provide to their local
communities. Furthermore, Senate Bill 500 which is also circulating in Congress proposes a
36% APR rate cap on all loans that might put the industry out of business entirely.
Details of the issues at hand can be found at www.PawnShopsToday.com.

David Crume, President of the National Pawnbrokers Association, is concerned that
lawmakers mistakenly equate the pawn industry with payday loan companies, and that
these laws will severely limit the services pawnbrokers can offer. “Pawn stores offer
collateral loans that are small dollar, short term, and pose no negative credit effects if
unpaid. Pawn and Payday,” he says, “are two very different products. Payday loans
require repayment and could affect a consumer's credit if left unpaid. The average pawn
transaction is $80, and is a non-recourse loan.” Crume says that banks simply don’t offer
these types of loans, making the pawn industry such a vital part of the financial system.
According to Crume, the new legislation will reduce pawn stores to buy/sell
establishments. With diminishing credit accounts and banks unwilling to extend loans in
small dollar amounts, many consumers are flocking to these non-bank lenders in order to
close the financial lapses that occur when bills are due but paychecks haven’t arrived.

America’s small banking sector has also expressed uneasiness about the CFPA. In a
letter from Senator Mary L. Landrieu of Louisiana on September 25, 2009 to Senator
Chris Dodd, Chairman of the Senate Committee on Banking, Housing, and Urban Affairs,
Landrieu reports significant concerns from community banks in her state. “Although
community banks did not offer the types of products that caused the financial crisis,” she
writes, “many are concerned the administration’s proposal could result in additional
regulatory burdens and costs to their institutions.”

Who, then, will really benefit from the CFPA? In February of this year, the FDIC
reported as many as 28 million un-banked and 44 million under-banked Americans,
citing lack of liquidity to carry account balances and bank fees, bad prior experiences,
lack of sufficient identification, and unfamiliarity or distrust of banks as the most
common reasons why people are un-banked. According to Melissa Koide, Deputy
Director of the Asset Building Program for the New America Foundation, many of the
un-banked consist of lower income families that operate at the margins and can’t afford
to wait several days for checks to clear. Another large portion of the under-banked
community is made up of immigrants who use remittance services to send money to their
families in their home countries. Her statistics show that the under-banked spend 25
billion dollars a year, with 6 billion spent on credit, and 4.6 billion on payment and
remittance services. The hefty regulations and new fees the CFPA seeks to impose, could
create a major fall-out in the non-banking sector, leaving millions of under-banked
Americans with few alternatives.

The wide sweeping nature of the CFPA would target the institutions that did not
introduce the toxic components leading to the financial meltdown. Smaller financial
institutions and non-banks, such as community banks and pawn stores would be
overburdened with new regulations and forced to pay for the very agency that could run
them out of business. In the end, where will the millions of un- and under-banked be
forced to turn? That’s right, to the national banks, the same ones that offered sub-prime
mortgages to millions of Americans, triggering the biggest financial downturn in decades.
With the resulting weakened competition, major banks stand to gain billions in new
accounts at the expense of the American consumer.

March 25, 2009 – The Collateral Loan and Secondhand Dealers Foundation (CLSD Foundation; 501c(3) in process) is a philanthropic organization founded by the Collateral Loan and Secondhand Dealers Association of California.  CLSDA encourages its extensive network of California pawnbrokers to take part in the CLSD Foundation through both donations and hands-on involvement. 

Recently, CLSDA members donated a variety of musical instruments to the CLSD Foundation. As a direct result of their generosity, the CLSD Foundation completed its first distribution of musical instruments to the students of Lincoln High School in San Jose, CA. 

This was the first step in their ultimate goal of a statewide outreach program collecting and then furnishing underprivileged California schools, grades K-12, with quality musical instruments.

According to CLSDA Board President Robert Verhoeff, Lincoln High School was an ideal candidate for the program. “The school recently had most of its band instruments stolen and had no funds to replace them,” he said. “It was fortunate that through our Foundation we were able to rally the California pawn community to provide more than 24 quality instruments to the school.”

Lincoln High School music teacher Kate Meyer said in all of her years of teaching this is the most extraordinary thing she has ever seen. “We are very grateful to the CLSD Foundation for its efforts.”

 “While pawnbrokers have always been actively involved in their community through business and social organizations, we felt we could utilize our industry’s knowledge and individual members’ love for music to provide badly needed support for various musical programs,” Verhoeff said. “We see this as just the beginning of how our industry and its members can give back to our communities through this Foundation.”

For more information, please contact:
CLSDA Executive Director Kim Andosca
209-786-5115
209-786-5114
kandosca@caltel.com




About CLSDA

For the past 53 years, the Collateral Loan and Secondhand Dealers Association (CLSDA) has been serving the pawn industry in California through programs, education, information and legislative advocacy.

The Importance of Music Education

Respondents of a recent Harris Poll cite skills they learned in music as helping them in their careers today. Seventy-two percent of adults with music education agree that it equips people to be better team players in their career and nearly six in ten agree that music education has influenced their creative problem solving skills. Many also agree music education provides a disciplined approach to problem solving, a sense of organization and prepares someone to manage the tasks of their job more successfully
Other studies show the value of music programs to our future generations:
    •    Students in top quality music programs scored 22 percent higher in English and 20 percent higher in math on standardized tests mandated by the No Child Left Behind Act (University of Kansas).

    •    In 2006, SAT takers with coursework in music performance scored 57 points higher on the verbal portion of the test and 43 points higher on the math portion (The College Board, Profile of College-Bound Seniors National Report for 2006).

Dave Matthews has been writing about the legal struggles of pawnbrokers in a wealthy suburb of Chicago for quite some time. On October 2, 2009, his parent company Suburban Publications (Elmhurst Press) published an article titled "Resident, pawn lobby questions turning away pawn shops, payday loan stores"

The City council in Elmhusrt, IL has focused it's attention on restricting pawn shops for, among other factors, acting as “catalysts forneighborhood decline.” To debate the issue, National Pawnbrokers Association President and pawn store owner, Dave Crume and Fran Bishop, Chairwoman of the NPA Government Relations Committee took part in the interview.

To read the full article, please follow the link below:

http://www.mysuburbanlife.com/elmhurst/newsnow/x1991998643/Resident-pawn-lobby-questions-turning-away-pawn-shops-payday-loan-stores

In our continuing effort to provide a voice for today's pawn industry, we offer our latest installment of That's Not Quite Right !

NPR WAMU 88.5 American University Radio

http://thekojonnamdishow.org/shows/2009-09-28/our-regions-underbanked-communities

In a radio broadcast that aired on public radio’s Kojo Nnamdi Show, the host, Kojo, made a stark comparison between check-cashing stores and pawn shops.  In his interview with Manny Hidalgo, William Campos, and Melissa Koide, Kojo made the statement that,  “…Check cashing stores have become analogous to pawnshops or strip clubs…when you start seeing a lot of them around you know that you may not be in the best part of town any more.”

That’s Not Quite Right!

http://seattle.bizjournals.com/seattle/stories/2001/02/05/smallb1.html
http://www.newser.com/story/46618/pawn-shops-attract-upscale-clientele.html

“The emergence of upscale, suburban pawn shops reflects a shift in the public perception of the pawnbroker business,”  according to Rob Robinson, president of the Washington State Pawnbrokers Association, as quoted in the Puget Sound Business Journal.  In today’s sagging economy, the new upscale business model is attracting a chic, white-collar clientele in need of small dollar short-term loans.  With pawn stores situated in some of the country’s wealthiest communities like Beverly Hills and Society Hill, middle and upper class customers are relying on the pawn industry now more than ever.  The Newser.com reported that, “Business owners have increasingly used pawn shops to cover their expenses as it becomes more difficult or costly to get bank loans, and first-time clients are up 10%.”  The antiquated, seedy view of pawn stores simply doesn’t hold true anymore.  


Prince George County Police

http://www.gazette.net/stories/10012009/prinnew121546_32522.shtml

The local police of Prince George County Maryland were cited in the local news journal accusing pawn shops of contributing to a rise in criminal activity.  The article states that, “police blame a rise in burglary and petty theft on the prevalence of pawnshops willing to take in the stolen goods.”

That’s Not Quite Right!

According to the National Pawn Brokers Association, less than 0.5% of items found in pawn stores are identified as stolen.  Pawnbrokers work closely with local and state authorities and require positive identification from anyone pawning items.  Richard Sussman, president of the Maryland Pawnbrokers Association, argued in The Washington Post that pawn store owners are deterred from buying stolen items because of the financial losses they would suffer.  “It is in the stores' interest to keep them out, because any money from them would be lost if police learned of the item,” he said.  Pawnbrokers work to serve the un- and under-banked members of the community, as well as people from all walks of life, not indigents or thieves.  

Learn more at www.PawnShopsToday.com

That’s Not Quite Right: Pawnshops Fight Back

The Pawn Industry has taken a beating in the media recently.  With consumer finance legislation on the horizon, the pawn advocacy website, PawnShopsToday.com, takes an aggressive stance to dispel myths and unfair or incorrect reporting. PawnShopsToday.com takes reporters and media outlets to task with its new “That’s Not Quite Right” webpage. 

MSNBC’s The Today Show

http://today.msnbc.msn.com/id/26184891/#32670513

On the September 3rd edition of MSNBC’s The Today Show, Lester Holt in an interview with Money Magazine’s Donna Rosado cited going to Pawn Shops as a factor that would lower your credit score. During the show’s Today’s Money segment entitled, “What’s hurting your credit score”, Holt was surprised that credit companies may be looking for signs of financial distress stating that, “going to a pawn shop… is a flag in their minds.”

That’s Not Quite Right!

http://www.creditcards.com/credit-card-news/how-shopping-can-affect-credit-1282.php
 
According to the NPA, a short term collateral loan can be met with no credit check or legal consequences if the loan is not repaid. Since the item pawned is used as collateral, pawn brokers already consider the loan paid-in-full when the cash is lent. Even though credit cards companies can mine their own data to determine consumer spending habits, pawn or collateral loan transaction information is in no way available to credit companies as they have been excluded from the process. This means no impact on credit scores whatsoever. 


The Huffington Post

http://www.huffingtonpost.com/elizabeth-warren/real-change-turning-up-th_b_276887.html

The Huffington Post published an article on September 3 rd by Elizabeth Warren, in which she states, “non-bank lenders contributed significantly to the financial crisis,” citing negligent regulatory enforcement as a major contributing factor.  In her article, Real Change: Turning Up the Heat on Non-Bank Lenders, she insists that, “the U.S. has never made a sustained, systemic effort to regulate non-bank lenders.”

That’s Not Quite Right!


http://pawnshopstoday.com/Journalists.html

The pawn industry is a heavily regulated provider of consumer financial services. In addition to state licensure requirements and laws concerning the terms and conditions of pawn loans, pawnbrokers are subject to 12 federal laws, including The Patriot Act, Truth in Lending Act, Equal Credit Opportunity Act, as well as Data Privacy and Safeguard of consumer information as part of the Federal Trade Commission (FTC) Rules. These federal, state, and, in some instances, local laws govern every aspect of pawn transactions including interest rates, loan duration, redemption methods, record-keeping and transaction reporting requirements.  Pawn shops that deal in firearms are regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).  Pawn shops may also be Federal Firearms License holders. 

Prince George’s Pawn Shop Task Force

http://www.gazette.net/stories/08132009/clinnew185241_32523.shtml

Robert Liberati, who heads up Prince George’s Pawn Shop Task Force in Maryland, was cited by the online newspaper, Gazette.net, as saying that he estimates that the majority of county pawnshops knowingly take in stolen items. “Some pawnshops do reject items they believe to be stolen and report all items they take in to police, as they are legally required to…We're trying to stop this open market for stolen goods."

That’s Not Quite Right!

Less than half of one percent of all pawned merchandise is identified as stolen goods. That’s because customers must provide positive identification and a complete description of the merchandise. This information is then regularly transmitted to law enforcement, which dramatically decreases the likelihood that a thief would bring stolen merchandise to a pawn store.  This same online article cites Richard Sussman, president of the Maryland Pawn Association, saying that “the amount of stolen property has always been ‘extremely low’ because thieves know the strict regulations pawnshops face.”


Pawn Shops and Property Values

http://www.mcherald.com/apps/pbcs.dll/article?AID=/20090811/NEWS/908110302/Pawn--tattoo-businesses-facing-moratorium

http://www.mcherald.com/apps/pbcs.dll/article?AID=/20090813/OPINION/908130308/1005

The Board of Alderman of Ridgeland, Mississippi accused pawn shops of having a “blighting effect” on cities. In the same article, published by MCHerald.com, Ridgeland mayor, Gene McGee, was quoted as saying that pawn shops, “complicate redevelopment efforts that are critical to property values.” In a similar article from La Grange Today, small business owner shop owner, Michael Lapidus said that a pawn shop “…does not bring the shoppers and consumers we need to fill our stores and restaurants…will in fact have a long term reverberating affect on our property values… and will never, no matter how ‘upscale’ it looks, be a business others will look at positively.”

That’s Not Quite Right!

http://online.wsj.com/article/SB123059909346041273.html
http://www.ezcashofpanamacity.com/faq2.html
http://everythinglagrange.typepad.com/the_daily/2009/06/stunned-by-villages-about-face-on-business-approval-pawnbroker-wants-chance-to-prove-shops-value-.html

The Wall street Journal reported that, “People Pulling Up to Pawn shops Today Are Driving Cadillac’s and BMWs.”  In a rebuttal to Lapidus’ tirade, Andy Grayson says that an upscale pawn shop is even,“…a magnet for affluent shoppers, featuring mostly jewelry of high quality, along with high-end electronics such as flat-screen televisions, sports equipment and the occasional well maintained power tool.”

Neighborhood property values are impacted by the appearance and care given to the properties. There is no factual basis to support a claim that an eye-pleasing pawnshop negatively impacts values. On the contrary, if they attract customers, they enhance the opportunities for other merchants and the community.  Indigents and derelicts have no assets to use as collateral. No one builds a business around these people. According to Pawnshopstoday.com, the average pawn customer is 36 years old and has an average household income of $29,000.  80% of pawn customers are employed, 82% have a high-school diploma or GED, and 33% own a home.  Pawn customers come from all walks of life, are of either sex, and represent all ethnicities. They occasionally need short term cash for an unexpected bill such as a medical expense or car repairs and the average amount borrowed is $80. The typical pawnshop retail customer is a bargain hunter, either by need or desire. Most pawnshop customers are repeat customers.

Senate Struggles with Rate Cap

http://wcco.com/consumer/pawn.shops.economy.2.1012162.html

Senator Dick Durbin of IL was quoted in a WCCO online article advocating Senate Bill S. 500, which proposes a 36% APR rate cap on fees and interest charged by a lender.  “These excessive rates are often hidden and can have crippling effects on those individuals who can afford it least," Durbin said.  "Congress must enact protections against predatory lending."

That’s Not Quite Right!

Pawn transactions are small-dollar, short term loans with no hidden charges, According to Pawnshopstoday.com.  Pawn transactions have no negative impact on consumers’ credit.  Compare this to bank insufficient funds fees, merchant bounced-check fees, credit card late payment fees, and late utility/reconnection fees, which can all generate a negative credit report.  More importantly, consumers aren’t trapped in a debt cycle, as can occur when fees pile up in a financial crisis.  Weighed against the alternatives, a short-term collateral loan can have rewarding rather than crippling effects that allow families to overcome unexpected financial emergencies.  A 36% APR rate cap would likely put a majority of pawn shops out of business.  This example from savemypawnshop.com shows how the rate cap would make a $100 loan an unsustainable source of revenue:   With this cap, pawnshops can charge a maximum of $0.10/day for every $100 loaned, and the average pawnshop loan amount is less than $100. Assuming someone borrows $100 and repays the loan 20 days later, a pawnshop could only charge $2.00 in interest and fees for this loan. $2.00 isn't enough to cover employee wages for the time spent writing the loan, not to mention all the other costs associated with running a pawnshop.  Compare a proposed 36% rate cap with other commonly accepted interest rates:

IRS Failure to File: 182.5% APR

California Vehicle Registration Renewal Late Fees: 365% APR

Bank Overdraft Loans: up to 3,500% APR

Loans Secured by Expected Tax Refunds: 50-500% APR

Credit Card Fees: 50% APR


For up-to-date “That’s Not Quite Right!” reporting please visit www.pawnshopstoday.com/tnqr.html