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How large is the pawn industry? How are pawnbrokers and

10k pawn transactions regulated? According to the 9k 2010 U.S. Economic The pawn industry is the most heavily Census, there were 8k approximately 8,600 7k regulated provider of consumer financial pawn establishments 6k services. (NAICS Code 5k 522298) in the U.S. At the Federal level, pawnbrokers and pawn transactions are 4k governed by more than 13 statutes and regulations, including Pawn or collateral 3k the consumer protection and anti-money laundering loans are the core 2k laws that apply to other providers designated as financial of a pawnbroker’s 1k institutions. business. 2007 2010 The federal statutes include, among others:

3 Privacy provisions of the Gramm-Leach-Bliley Financial who owns pawn stores? Services Modernization Act of 1999 3 USA PATRIOT Act 81% of pawn stores are independently owned 3 Service Members Civil Relief Act of 2003 small businesses or small regional chains. 3 Bank Secrecy Act and Internal Revenue Code provisions requiring reporting of certain cash transactions 3 Truth in Lending Act 3 Fair and Accurate Credit Transactions Act of 2003 and the 81% Fair Credit Reporting Act Independently Owned 3 Unfair, deceptive and abusive acts and practices authority Small Businesses of the Federal Trade Commission and Consumer Financial Protection provisions of the Dodd-Frank Act of 2010

State and local laws govern other aspects of pawn 19% transactions, including the interest rate, loan duration and Publicly Owned grace period, redemption method, record-keeping, and Pawn Stores transaction reporting requirements.

Independently Owned Pawn Stores Publicly Owned Pawn Stores

The pawn industry has only four publicly traded corporations: Cash America International, Inc.; EZCORP, Inc.; First Cash Financial Services, Inc.; and Dollar Financial Group. Publicly traded companies are not members of the NPA. For up-to-date information about the pawn industry, please visit: PawnShopsToday.com

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What is a pawn loan? Pawn Regulations

Pawnbrokers help families through challenging economic 1. Are pawnbrokers licensed and examined? times by providing non-recourse, short-term, collateral-based Yes. Pawnbrokers are licensed by state and local governments loans that have no effect on a consumer’s credit history. that also conduct examinations to insure compliance with laws that govern every aspect of pawn transactions, including all As evidenced by the relatively low national average loan fees and charges, loan durations and grace periods, record- amount of $150, pawn customers only borrow what they keeping, and transaction reporting requirements. need. Furthermore, pawn customers repay their loans and redeem their collateral at a high average national redemption 2. Do pawnbrokers require customer identification? rate of 85 percent. Yes. Pawnbrokers’ customer identification programs mandated by state and local laws are more comprehensive than the USA Pawn customers tend to be more disciplined in their borrowing Patriot Act requirements. For every transaction pawnbrokers than consumers using other forms of credit. Pawn loans do require the consumer’s valid, government issued picture not cause consumers to overextend their use of credit and, because they are non-recourse, are not factors in filings for agencies at the state and local levels. Our nationwide estimate bankruptcy protection. of property ownership disputes is as few as 10 items out of 10,000.

Pawn loans are: 3. How many federal laws apply to pawn transactions? A total of fourteen federal laws govern pawn transactions, Non-recourse: No pawnbroker can demand including the Truth in Lending Act, Gramm-Leach-Bliley Act, repayment of funds advanced. Service members Civil Relief Act, and the USA Patriot Act.

Collateral-based: No credit checks on customers 4. Do pawnbrokers report cash transactions of $10,000 or or reporting to consumer credit agencies. more? Yes. Pawnbrokers report cash transactions on IRS Form 8300. Typically small-dollar advances: Average loans We can use the same Form 8300 to report suspicious activity. nationally are around $150.

Who is the customer? Pawn customers come from all walks of life and they include Americans with regular jobs as well as business owners. Pawn customers support their communities, our country, and the economy by working in health care and hospitals, building homes, teaching our children, and working in government. • Close to 1 in 4 U.S. households are unbanked or underbanked. • Approximately 40 percent of unbanked and underbanked households have used pawn stores. • Around 7.4 percent of all U.S. households have used pawn stores.

Source: FDIC, National Survey of Unbanked and Underbanked Households

NATIONAL PAWNBROKERS ASSOCIATION (888) 808-7296 NationalPawnbrokers.org