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Message from the GRC Team Chair
HELLO FROM TEAM GRC
THIS IS MY FIRST GRC UPDATE, so first, I’d like to introduce myself. My name is Billy Dawson. I am CEO and President of LDPM, Inc. We operate 8 pawn stores named Picasso Pawn in Raleigh and Durham, North Carolina. I have been in the pawn business for 30 plus years. As you probably already know, the Legislative Conference scheduled for September has been postponed until the spring as another strain of COVID-19 interferes with business as usual. Business is not as usual for many reasons.
We are all confident the COVID-19 crisis will soon be a thing of the past; however, another more serious long-term threat to our business looms large. A 36% interest rate cap on specifically named types of lending passed early this year in Illinois. IF it is found applicable to pawn transactions, the pawnbroker business, as we know it, will cease to exist in Illinois. Your National Pawnbrokers Association joined with other organizations to clarify this issue in the courts. We are extremely concerned that any successful implementation of laws such as this will have a domino effect in other states.
As I write this there have been two federal bills introduced in the U. S. Senate that would apply the MLA 36% APR cap nationally. Even pawnbrokers in what some call, “low interest” states will be affected because these bills are all-inclusive. Any additional state-allowed fees would be included in the rate cap calculation. Origination charges, lost ticket charges, reporting, state-imposed fees, insurance, storage, etc., etc., … everything! We all understand that originating a pawn transaction costs money. If we were constrained by a 36% rate cap, most all our transactions would result in a loss.
We must communicate to our Members of Congress the real effect these bills would have on the public. Who serves the underbanked when they need emergency funds? It will not be pawnbrokers if these bills become law. Even the banks that don’t have the same costs that we do, have expressed their dissatisfaction with the language in these bills. As always, the NPA and Team GRC are working hard to protect our industry.
Less than 15% of the pawnbrokers in this country belong to the NPA. Why do they not see the value in membership? If the NPA doesn’t lead the charge to defend our industry, who will? The answer is no one. It is very important that we all do our part. Joining the NPA is part of it. Another important part is to communicate with your individual Members of Congress. If you haven’t already, let your U. S. Representative and Senators know who you are and the services to consumers that you provide. Contribute and communicate.
We have resources to help you facilitate communicating with your lawmaker.
Sincerely, Bill Dawson
