That's Not Quite Right- Pawn Shops Today
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
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Follow Pawn Shops Today on Facebook and Twitter
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
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Posted by Pawn Shops Today at 9/28/2009 1:50 PM 
Categories: Pawn Industry News
Tags: 36 percent Annual interest rate cap upscale pawn shop credit score Bank Overdraft Fee APR pawn PawnShopsToday pawnbroker National Pawnbrokers Association NPA non-bank lenders That's Not Quite Right IRS Late fee
Categories: Pawn Industry News
Tags: 36 percent Annual interest rate cap upscale pawn shop credit score Bank Overdraft Fee APR pawn PawnShopsToday pawnbroker National Pawnbrokers Association NPA non-bank lenders That's Not Quite Right IRS Late fee
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