Save My San Diego Pawn Shop

June 28, 2009 by Administrator 


The Macon County News has just reported on a situation that concerns pawn shops in every state and the people these pawn shops serve. What is causing all the concern, and indeed anger, is U.S. Senate Bill 500, which would virtually wipe out the pawn business. The name of the bill is “Protecting Consumers from Unreasonable Credit Rates Act of 2009, ” and it will force pawnbrokers to limit interest rates on the short-term loans they provide to 36 percent, an amount that won’t sustain their business.

Macon News reporter Tony Wheeler interviewed pawnbroker Danny Green, who had the following to say: “It’ll put us out of business and the employees will be out of a job. It will hurt the community. We help people in ways that no one else will. You can’t walk in a bank and tell them you need $5, or $10 or $50. They’d laugh at you. But if you have anything of value I can help you out.”

According to Green, the problem with the bill is that loans would be considered at an annual interest rate, when the overwhelming majority of the collateral loans pawn shops issue are short-term. It will basically cause pawn shops to make a profit of only $2 for every $100 they loan, which isn’t even enough to cover the rent.

The bill was created to stop predatory lending practices, especially in the payday loan industry. It sets the maximum yearly interest rate on consumer loans at 36 percent, including all fees. Normally, 36 percent is a fairly high interest rate cap. However, when dealing with short-term, high-risk consumer loans, 36 percent is actually unsustainably low.

The website provided the following example:

A pawn shop extends a $100 loan to a customer. At the 36 percent rate cap, the maximum daily interest charge for that loan is $0.10 (($100 x 36 percent) / 365). The customer returns to the pawn shop 20 days later to repay the loan. The maximum the pawnshop can charge the customer for the collateral loan is $2 (20 x $0.10). It costs pawnshops a lot more than $2 to service this short-term loan. Pawn shops have to pay for employees, supplies, storage space, retail space and more. The employee’s salary alone for the 30 minutes spent servicing the loan will cost more than $2.

For more information on how to save your local San Diego pawnshop, go to

San Diego Pawn Shops, Gold Buyers, Gold Refineries, & More


Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!