Fox 2 Detroit: Proposed state law for pawn shops could mean higher fees

By December 9, 2014Uncategorized

DETROIT (WJBK) – See full article here. A proposed bill in the state senate could mean big changes for pawn shops across the state.

Some pawnshop owners say it’s just another way to tax the poor.

Preston Hightower needs money so he’s pawning a ring to get the cash he needs now

“You know money is low, Christmas time is coming up,” he said. “Got to do what I have to do.”

Hightower has 90 days to get the ring back but if he decides to use it before that time, he would pay a usage fee under the existing pawnbrokers law.

“Three-percent a month plus a dollar a month if we allowed you to use the merchandise,” said Les Gold, owner of American Jewelry & Loan.

But proposed legislation that would allow high cost car title loans in the state of Michigan, would send those fees skyrocketing.

Senate Majority Leader Randy Richardville (R-17th District) says he introduced the bill to make Michigan law more consistent with other states.

“If someone wanted to pawn a TV and we let them use their TV, there would be a 20 percent a month interest charge,” Gold said.

Les Gold says he knows the pawn business, his grandfather and father were in it, and now he is too. He and his pawn business are featured in the reality television show Hardcore Pawn.

“The key to being a successful pawn broker is hard work,” Gold said. “Not over-charging interest.”

If the bill passes people who use pawn shops like this say it could push them further into debt.

“I pray to God it don’t happen,” said Hightower, a Detroit resident.

“I think it’s pretty stupid that they do something like that,” said Joan Wilder of Farmington Hills. “We’re already out of ways to get money so when you come to a pawn shop to look for another way out, they are trying to stop that as well.”

“It’s a circle of debt and that’s the problem,” Gold said.

Gold says under the existing law people can afford to get their items back.

“In other words 90-percent of those who pawn their items pick them up,” Gold said. “What we understand about title loan, one out of 10 pick it up”

In a statement to FOX 2 Richardville wrote:

“We are currently in the process of reviewing this legislation and working with representatives in the pawnbroker industry as well as financial institutions to address concerns raised about this legislation.”

Gold’s message is simple for lawmakers in Lansing.

“Leave the law the way it is,” he said. “Three-percent a month, a $1 a month storage and if these companies want to come in and use the law we’ve implemented for almost 100 years, be my guest.”

Link to original post: http://www.myfoxdetroit.com/story/27589773/proposed-state-law-for-pawn-shops-could-mean-higher-fees