Washington Pawnbrokers support House Bill 1269 for rate adjustments amid rising costs

The Senate Business, Financial Services & Trade Committee convened on March 13, 2025, to discuss House Bill 1269, which aims to adjust the interest rates for pawn shops in Washington State. The meeting featured testimonies from several representatives of the Washington State Pawnbrokers Association, highlighting the financial pressures faced by small, family-owned pawn businesses.

Janelle Morhardt, president of the association and co-owner of Ponder's Pawnbrokers, opened the discussion by emphasizing the importance of pawn shops as a regulated financial service for individuals and families. She noted that the last rate adjustment occurred in 2015, while inflation and operational costs have significantly increased since then. Morhardt urged support for the bill to ensure pawn shops can continue to provide essential services to their communities.

Tamara Rancor, also representing the association, echoed Morhardt's sentiments, stating that pawn transactions are unique and do not perpetuate a cycle of debt. She pointed out that the current fee structure has not been updated in a decade, which hampers the ability of pawn shops to remain viable amidst rising costs. Rancor highlighted the importance of pawn shops in serving unbanked individuals who often rely on quick, collateral-based loans.

The committee heard from additional panelists, including Carly Carlson and Nika Mihalov, who reiterated the need for modernization in the pawn industry, such as allowing online payments. Mihalov emphasized that many customers depend on pawn shops for emergency financial needs, and the current fee structure is unsustainable.

Sam Lacks, COO of Pawn 1 Inc., shared insights on the demographic of pawn shop customers, noting that many are young adults seeking short-term loans to cover immediate expenses. He stressed the importance of House Bill 1269 for maintaining employment and operational viability in the pawn industry.

Karen Strickland, with over two decades in the industry, highlighted the community aspect of pawn shops, stating that they serve as vital resources for local residents. Michael Tranzo, representing Cash America, reinforced the notion that pawn shops are community businesses, providing essential services to those in need of non-recourse loans.

The committee concluded the panel discussions without immediate resolutions but acknowledged the significance of the testimonies presented. The discussions underscored the critical role pawn shops play in providing financial services to underserved populations in Washington State, as well as the urgent need for legislative support to adapt to changing economic conditions. The committee is expected to deliberate further on the implications of House Bill 1269 in upcoming sessions.