The Facts: Bill S. 500 - 36% Rate Cap and Pawn Stores
CALL TO ACTION ! We need your help to support a strong position on several proposed Bills, such as Bill S. 500 that are potentially harmful to the Pawn industry. These proposed Bills are trying to control financial businesses that have gone unregulated until now, like Check Cashing and Payday Loan centers and indirectly Pawn Stores.
The Pawn industry is regulated by Federal and State agencies, and we consider a Pawn business to be very different at it's core than the others.
•Pawn businesses have interest rates that are regulated by State agencies
•Pawn stores lend to anyone and use collateral to secure a loan, they don’t sell money
•Most loans are small, short-term loans
The new legislation will limit all Pawn store loans to 36% annual interest rate cap. Did you know cash-strapped consumers already pay on average:
- 400 percent annual interest for payday loans
- 300 percent annual interest for car title loans
- Up to 3,500 percent for bank overdraft loans
- 50 to 500 percent annual interest for loans secured by expected tax refunds
-Higher than 50 percent annual percentage interest for credit cards that charge junk fees
Congress encourages that “alternatives to predatory lending that encourage small dollar loans with minimal or no fees, installment payment schedules, and affordable repayment periods should be encouraged.” With state regulated interest rates far lower than the above listed, what better way to describe a Pawn store?
If you feel strongly that the American consumer should have the right to borrow money based outside of the banking, credit card and Payday Loan businesses, answer the CALL TO ACTION ! and find out how you can make a difference.
Visit www.PawnShopsToday.com for more information
Follow Pawn Shops Today on Facebook and Twitter
The Pawn industry is regulated by Federal and State agencies, and we consider a Pawn business to be very different at it's core than the others.
•Pawn businesses have interest rates that are regulated by State agencies
•Pawn stores lend to anyone and use collateral to secure a loan, they don’t sell money
•Most loans are small, short-term loans
The new legislation will limit all Pawn store loans to 36% annual interest rate cap. Did you know cash-strapped consumers already pay on average:
- 400 percent annual interest for payday loans
- 300 percent annual interest for car title loans
- Up to 3,500 percent for bank overdraft loans
- 50 to 500 percent annual interest for loans secured by expected tax refunds
-Higher than 50 percent annual percentage interest for credit cards that charge junk fees
Congress encourages that “alternatives to predatory lending that encourage small dollar loans with minimal or no fees, installment payment schedules, and affordable repayment periods should be encouraged.” With state regulated interest rates far lower than the above listed, what better way to describe a Pawn store?
If you feel strongly that the American consumer should have the right to borrow money based outside of the banking, credit card and Payday Loan businesses, answer the CALL TO ACTION ! and find out how you can make a difference.
Visit www.PawnShopsToday.com for more information
Follow Pawn Shops Today on Facebook and Twitter
Powered by 3 CLiCk Media
Posted by Pawn Shops Today at 7/8/2009 7:45 PM 
Categories: Senate Bill 500 and H.R. 1608
Tags: Pawn Shops Today short-term loans Pawn shop IRS APR Pawn store 36% apr rate cap Senate Bill 500 Credit Card APR Bank Overdraft APR Payday Loans APR National Pawnbrokers Association Bill S. 500 Car Title APR payday
Categories: Senate Bill 500 and H.R. 1608
Tags: Pawn Shops Today short-term loans Pawn shop IRS APR Pawn store 36% apr rate cap Senate Bill 500 Credit Card APR Bank Overdraft APR Payday Loans APR National Pawnbrokers Association Bill S. 500 Car Title APR payday
Does anyone know when this bill goes before Senate for a vote? It would be great if there was a link here to connect to our Senators.
Reply to this
This S.400 is just one of many bills that have been thrown into the 'I'm from the government and here to help you' financial arena mix by Legislators that have not taken the time to understand what really happens on main street. Main street did not cause the Wall Street big banks & lenders problems. There's another 'let us fix it' in the form of a proposed "Consumer Financial Protection Agency" that's come straight from the White House. Just what we need, another government agency....NOT!!
Reply to this
You can count on the government to screw something up... I know everyone's not happy with the way credit card agencies and check cashing places operate, but I've never heard anything negative about the Pawn Shops. How did they get tied into all of this.
Reply to this
I've known friends who've use pawn shops before and it was nothing like those check cashing places. They basically sold the items so I don't get how pawn shops are being lumped in with these other credit crooks.
Reply to this
Been watching 'Pawn Stars' and haven't seen them do anything but buy....that is not the norm in the pawn biz. But I'm sure 'Hollywood' doesn't find anything real sexy about a mother needing to borrow $25 - $50 to take her child to get vaccinated for school...because she had to use the money she'd put back for that to keep groceries on the table. So she PAWNs her wedding ring to cover it and then comes back later & picks it back up.
Reply to this
There's a great statement from the President of the National Pawbrokers Association about the bill at
www.nationalpawnbrokers.org
Reply to this
I can't believe that pawn shops may actually have to shut down! They do a lot of good for a lot of people. Especially with the economy the way it is, we need pawn shops to stay open and in business. Let's throw out SB 500!!!
Reply to this
I just saw that there's a new Senate bill that may force pawn shops to close. As long as their not committing a crime, why should they be forced out of business? Charging interest is a part of every loan. Why should pawn shop owners be punished for trying to make a living like the rest of us?
Reply to this
I don't know what I'd do if pawn shops had to close. I just sold my husband's power drill to get gas money. On top of our paycheck, the pawn shop is the only way to make ends meet.
Reply to this
Hey, pawn shops have been around forever without complaint and specialize in small loans, so why try and fix something that ain't broke? Doesn't the gov have enough to do with health care and the economy? If they feel the need to rehaul something, what about the health insurance field? Or better yet, their own government spending?
Reply to this
Here's hoping the Convention is a success for you and that you get Pawn Shops removed from s.500!
Reply to this
First of all just so you know i am against the bill affecting pawn shops because i use them in the manner described by many to make ends meet when something out of the ordinary comes up like im sick and miss a day of work and now am short for gas in my car to make it back and forth to work to get the full paycheck. Now that being said Pawn shops charge an enormous interest rate of $120% APR on average. Compared to the 400% and upwards of the payday loan shops is nothing. I don't have a problem paying pawn interest because it tunes to approx less than $10.00 on most of what i have to pawn in the first place. In my opinion If this stupid bill comes into place then the stores will no longer be pawn shops they will become "Loan and Storage" shops which is what they are to begin with they just combine the total cost of the interest with the cost of storage in one lump sum. If they would use a 36% rate for the interest and break down the cost of storage, regulatory fees and even add a recovery fee to include the time it may have to remain in the store on the shelf waiting to be sold if the loan becomes default. These can be broken down in a manor that can be legal and law abiding even if the bill is passed. The interest and fees may be broken down as follows. 36% interest, 36% storage fee, 24% regulatory fees and 24% recovery fees. Which figures at 3% interest, 3% storage fee, 2% reg fee and 2% recovery fee. All of this add up to the same 120% APR and the monthly break down of 10% at the pawn shops I have used in my past and currently using. Thats the easiest thing i can come up with but im sure there is a better way to get around the political red tape BS but thats my 2cents. Hope you enjoy.
Reply to this
Rammer,
Sorry to say but that won't work as the bill makes you include any and all fees into the calculation of the interest. However the outrageous bounced check fees and overdraft fees are exempt from the bill. The people that the bill says it will protect are the ones it will affect the most. Currently pawn shops are the only lending institution that does not affect you credit in any way nor do we come to collect on a defaulted loan. This bill will affect over 13,000 small businesses and 34-39 MILLION people in a time of tight credit.
Reply to this