Cliff Notes: Rate-Cap Action

NPA IN ACTION IN WASHINGTON, D.C.

Summer is Heating Up and Rate Cap Action is Starting to Sizzle

THE TASK AT HAND...

IT WAS GREAT TO SEE so many friendly pawnbroker faces in Texas at the NPA Pawn Expo in July! While there were many smiles, it was clear that rate cap is, not surprisingly, on everyone’s minds.

At that event, we witnessed a tremendous turnout for a Team GRC panel discussion about rate cap legislation at the federal and state levels. We shared that the NPA has been actively engaged in Washington, D.C. all year long with the new Congress, providing education about the pawn industry and explaining the devastating impact that an all-in 36% APR cap would have on the business and its customers. We shared with attendees that we knew the debate would be heating up with legislation being imminent, and now, as most folks know, legislation has been introduced in the Senate. In the Senate, S. 2349 and S. 2508 were introduced in late July. These bills impose an onerous 36% APR cap that would not allow many pawnbrokers to stay in business. We expect companion legislation to be introduced in the

House in September by Rep. Garcia (D-IL). On a positive note, the balance of power in the

House and the Senate is such that it will be hard to pass rate cap legislation, but certainly not impossible.

In fact, Democratic leaders fully intend to push for passage of a bill. To be clear, this rate cap debate has been escalating for years, and I believe this is one of the highest probability levels of advancing legislation that we have seen heretofore. There has been a growing movement comprised of consumer groups and a new group of fintech lenders, among others, who are pushing hard for enactment. So our task at hand is continued outreach to lawmakers to educate them about pawn and request that we be exempt from any legislation. We are unique. We are non-recourse. We are safety-net.

We are highly regulated at federal and state levels.

We have few complaints. We help consumers when others won’t. We do not put customers in a cycle of debt. We were exempt from the CFPB small dollar rule under the Obama Administration. We are bipartisan and have always worked well with

Democrats and Republicans. Team GRC needs the help of NPA members to make constituent connections with your federal

Senators and Representatives to tell the pawn story and to underscore the severity of an all-in federal rate cap. The NPA has talking points and information about setting up meetings with your elected officials, so please reach out to the home office. The time is now to build relationships with lawmakers because a storm is coming. We need all hands on deck! Please stay tuned for GRC Legislative and

Regulatory Alerts. For more information, go to www. nationalpawnbrokers.org. Cliff Andrews

Cliff Andrews Capacity Advocates, LLC

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