From a Blog Entry on Pawn Shops Today
The World Bank recognized in it’s report, “Key Principles of Microfinance”, that it costs much more to make small loans unless Microfinance Lenders can charge interest rate and fees that are
well above banks. “When governments regulate interest rates they usually set them at levels too low to permit sustainable Microfinance loans” (7) Senate Bill 500/HR 1608, as written, will in effect close the doors on 13,500 pawn/ retail businesses – that means another loss of 100,000
good paying jobs gone forever. The worst effect, it will close the only door 56,000,000 Americans will ever have to make small loans.
Under Senate Bill 500, Section 141.(2) tolerances should define pawn shop owners as micro finance lenders and allow for storage expense of pawned items. Every American has in some way benefited from pawn brokers, whether it was when Queen Isabella of Spain was turned down by her treasury to finance Christopher Columbus’ voyage to the new world and had to pawn her royal jewelry (8) or when we made a $300.00 loan to keep a small lawn service business in operation and off the rolls of the unemployed. Many Americans have never known the need for a $20.00 loan to buy a tank of gas or put food on the table so you can make it to the next payday. We have always had an important role in our country’s micro finance. Pawn brokers as a whole recognize the need for financial reforms, however as the Bill is written it will close down the good along with the greedy.
Robert G. Whitten, II
Chairman of the Board
