WHO WE ARE
A Growing Need
We are the working-man’s bank. Today’s pawn store is a valued financial institution that is supported by a respected trade association. The number of families without bank accounts continues to grow in the United States. According to the Federal Reserve Bank of San Francisco, the number one reason unbanked families do not hold checking accounts is because they simply do not write enough checks. People are turning to the age-old practice of pawn loans to help them obtain funds in a safe and secure environment. The pawn industry is responsive by nature and the demand for pawn loans continues to grow. Due to gradual adjustments in bank deregulation and the evolving ways people need money, pawn stores have flourished out of need.
NPA
The National Pawnbrokers Association (NPA), headquartered in Roanoke, Texas, was founded in 1989 to support the rapidly growing number of responsible pawnbrokers in the United States. Currently, 2,480 members represent reliable and trustworthy pawnbrokers who help the unbanked in our communities. Today’s pawnbroker could be your next door neighbor. They could be your college classmate. They are primarily small business owners providing a needed service in their communities. They can also be larger, publicly traded corporations that help to bring stability and status to the industry. With the total number of pawn stores totaling about 11,000, business men and women everywhere are seeing the benefits of offering a valued service to a population in need. Pawnbrokers are licensed by state or local agencies and willingly cooperate with regulatory requirements. The NPA offers members compliance training related to the federal, state and local laws that apply to the industry.
WHO WE SERVE
Average Pawn Loan Customer
As many as 56 million adults in the United States may not have a bank account., according to the Government’s General Accountability Office. About 28% of all U.S. adults make-up this “un-banked” portion of our economy. This number does not
include those who are “under-banked” or have been denied credit by other financial institutions. Our typical customers have regular jobs, working in hospitals and home construction. They strengthen our country by working in government. They teach our children and care for our elderly. They grow the food that we eat and sell the clothes that we need. You see them every day. They have plans and dreams. They want better lives for their children and a strong sense of security. Just like you, they desire
the peace of mind of knowing they can provide for themselves and their loved ones. They also have bills and unforeseen troubles. We all know that life can throw us curveballs and it is a good idea to set aside a “rainy day fund.” But what happens when
that little bit of rain turns into a storm? According to the American Bankers Association Education Foundation, “the United States has the lowest personal savings rate of any major industrialized nation.” A large number of Americans simply do not have the available funds to save money for emergency situations. Surveys from Georgetown University’s Credit Research Center show that 31.9% if pawn customers borrow money in order to pay pressing bills. On average, a pawn store consumer borrows only twice per year to help cover unexpected expenses. By offering safe and convenient services, this strong backbone of our economy can continue to live their lives in order to enhance our communities.
US Adult Usage of Traditional
Banking Services (GAO report
02-913, Electronic Transfers,
September 2002.
_ Age: 36.5. years
_ Household income: between $15,000-$50,000
_ Time in current residence: 2.5 years
_ Lives within 2-mile radius of store
_ 80% of are employed
_ 82.9% have high school diploma or GED
_ All ethnicities
_ Bargain shopper
Filling the Gap
Alternatives to a Pawn Loan
Borrowing from friends or relatives. When we’re faced with hardships, asking loved ones for money is the hardest thing to do. To tell someone that you care about that you’re unable to provide for your family is difficult. Pawn loans give working families a hand-up when they need it, without passing judgment. Liquidation of personal assets (Swap shops, flea markets, etc.) The downside of this type of transaction is that the person just becomes a seller, not a customer. They will never see their property again. Pawn loans allow people to forfeit use of the item only for a short period of time. Non-regulated lenders. These are the lenders that give pawnbrokers and banks a bad name. Without rules and regulations, borrowing money from an unauthorized lender can be dangerous for the consumer. Short-term Credit Alternatives Fee Amount
$75.00 pawn loan @ 20% $15.00
Bank NSF fee $28.00
Merchant-bounced check fee $25.00
Credit card late fee $29.00
Utility late/reconnect fees $53.00
Pawn customers are primarily middle class consumers who need short term credit. This is a service that pawnbrokers provide when other financial institutions will not. In the past, when people claimed they lived “paycheck-to-paycheck,” we thought they were exaggerating. Not anymore. In a 2001 survey by the Consumer Federation of America, estimates show a majority of 53% of Americans live this lifestyle. And while it is possible to get by under normal circumstances, any unexpected expenses can put a family in great financial danger. When your monthly income rivals your monthly expenses, coming up with $500 on short notice to fix your car seems impossible. The Centre Daily Times reported that 66% of Americans do not pay their credit card bill in its entirety each month. The funds are not available to pay off existing bills let alone unexpected circumstances.
If you have a $2,500 balance on a credit card with 18% APR, paying the minimum balance (2.08%) each month will cause 370 months of payments. You will pay $5,599.09 in interest alone. And credit card debt is on the rise. In 2002, the average debt per household was $8,562. Many people cannot turn to credit cards to help save them money or alleviate immediate expenses without great consequence. Problems can be as simple as a vet’s bill for a pet or as extensive as a life-threatening medical condition that isnot covered by insurance. You might go to your bank, but it is closed. You may write a check to cover these expenses, but it must clear before you can receive treatment. These are not options, they are obstacles. And this is the time when a pawn store is a refuge. The convenience of a pawn store’s location and its respect for the customer attracts people to our business. Members of the NPA offer nationwide availability of funds for the 25-30 million people who use our services.