A bill in the U.S. Senate would cap interest rates at 36% yearly. One industry says the cap could put them out of business. Pawn shops make short term loans and use people's property as collateral. The owners say that, while 36% seems high, most of the loans they make are short term, and putting a 36% limit on them would make a lot of their small loans unprofitable for them.
"We can always still buy and sell stuff. But this is going to force customers to sell their stuff when they want to get it back," said Rob Vangronigen of the Fresno Hock Shoppe.
Vangronigen says if this bill gets approved, it would cut down 60% of his business. And his business relies on three things; buying items from customers, selling it back or offering loans with items used as collateral.
"You know every dollar counts right now," said Chris Dorian who brought in his gun to sell.
The shelves are filled with power tools. This is indicative of the slowdown in the building industry. Vangronigen expects to sell these tools soon as the economy starts to turn around.
Also on the shelves are musical instruments, flat screen tvs, and hundreds of pieces of jewelry. The shop owner says the market is great for gold.
But right now the future success of pawn shops hang in the balance as the senate debates a pro-consumer bill.
TXT 24
Twitter
Facebook