I was 21 years old when I was elected the founding President of the Nevada Pawnbrokers Association. Hmm that was in 1979. I would travel around the State of Nevada to find every pawnshop around with the help of the Yellow Pages and beg for a $200 check and to join our State Association. I ended up collecting $2,000.00 after a week of flying around and driving and personally spending over $800.00. I was humbled at this very early age to learn on how our political candidates would do this for months. This was a pivotal part of Nevada Pawn brokering history as this initiative catapulted our legislative agenda.
After attending over 25 National Conventions, this year felt different as no other. Pawnbrokers were more serious. Pawnbrokers are very concerned. Pawnbrokers are walking around with last years profits greatly reduced.
Since the Gold Bonanza started in 2006 and National awareness about what we do and who we are with the reality TV shows, for better or for worse, the Federal Government has enacted a law through the Department of Defense that will for ever start a change to our Industry. The dramatic regulatory requirement will shut down many Pawnshops that depend on Military Personal and their dependents. (Federal Law only allows a maximum of 3% per month.) But that may only affect around 5 - 10% of the existing stores in the United States.
The real friction is in how the Department of Defense is requiring every transaction you conduct be checked and validated at their website. https://mla.dmdc.osd.mil/welcome.xhtml
Now you will have to enter the Customers Name, Date of Birth, and Social Security Number into the MLA website. Once this is completed and validation has been made, the Pawnbroker then saves the PDF as a image to a file that you must keep forever to validate that you followed the Federal Law. FOR EVERY LOAN.
What is your National Pawnbrokers Association doing? They are doing a lot. The Pawnbrokers that are on the committee are top notch led by Jordan Tabach-Bank.
But what is a lot? There is a law suit supported by one of the big 3 - Public Companies. This is the first time one of the public companies has reached out to the NPA as a partner in this way. This is serious threat to them, every pawnbroker needs get serious.
I hope the independent pawnbrokers don't rest your laurels on the Public Companies to flip the bill and effort. This is a massive undertaking and requires many strategies to curtail and solve this attempt to shut down the Pawn Industry. Yes, even if this is not an intentional assault on the Pawn Industry, the collateral damage will take it down.
If I was running the show at the NPA, I would divert all resources and attention to this matter. The National Pawn Association needs to go on a fund raising campaign and raise funds for a legal campaign that will probably take 3 - 5 years. It will also require a intensive and professional managed State by State coordinated legislative awareness effort. We will need every effort from every pawnbroker.
What struck me as to the serious nature of this legislative action was how many pawnbrokers were talking about it accurately. Seeing what may happen next as this is only the start of further regulation as we have seen with the Payday Industry.
Gold & Diamonds
Gold and Diamonds today represent sub 25% of the total Pawn portfolio Nationwide. Since the gold rush of 2005 where pawnshops had an average of 70% of their portfolios, guns and general merchandise has taken over.
Many pawnbrokers were discussing lowering their interest rate and extending the length of their loans. I believe a wise choice in the long term.
New Store Growth
The Payday Advance industry continues to open new stores as well converting their Pay-Day stores to Pawn. Many multi-unit operators had projects in motion.
If you have stories to share please forward them my way, we have over 2000 readers and we can never have enough to say about Pawn.
Steve Mack
