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Pawn industry urges lawmakers to raise fees and allow online payments as costs climb; committee hears House Bill 1269
Summary
Owners of small and multi-store pawn businesses testified in favor of House Bill 1269, which would shorten pawn-loan terms from 90 to 60 days, raise interest and storage fees, cap document-preparation fees, and allow online repayments; committee discussion centered on consumer protections and business viability.
Clint McCarthy, committee staff, briefed House Bill 1269 on March 13. The bill would: reduce the statutory pawn-loan term from 90 days to 60 days; increase the maximum interest rate for loans of $100 or more from 4% per 30-day period to 5% per 30-day period; raise storage and firearm-storage fees from $5 to $10 per 30-day period; cap loan-document-preparation fees at 15% for loans of $50 or more; and permit borrowers to repay pawn loans through online services.
Committee members asked staff to display existing fee schedules and to clarify how preparation fees are calculated (the bill would replace the existing graduated percentage schedule with a flat cap of 15% for loans of $50 or more). Staff explained that under current law the document-preparation fee scales down as loan size increases (for example, 15% on smaller loans down to 6% for loans of $2,000 or more); the bill would eliminate that inverse relationship by instituting a 15% cap.
Pawnshop owners and association representatives provided extensive public testimony in support. Witnesses included Janelle Morhardt Levy, second-generation owner of Ponder’s Pawnbrokers and president of the Washington State Pawnbrokers Association; Tamara Brancour, representing the state pawnbrokers association; Carly Carlson, owner in Spokane; Niko Mihailov of Kittitas County Trading Company in Ellensburg; Sam Lacks, chief operating officer of PondOne (27 locations across several states); Karen Strickland of PondOne; and Michael Tranzo of Cash America (operator of 29 Washington shops).
Speakers said pawnshops provide short-term, nonrecourse loans to underserved and unbanked customers; they described the industry as a community financial service that has not had a statutory rate adjustment since 2015 while operating costs and wages have risen. Owners asked for modest statutory increases to remain viable, to preserve local jobs and to allow modernization such as online payments. Several testified that pawnbrokers have low incidence of stolen-property sales and work closely with law enforcement using electronic reporting systems such as Leeds Online.
Committee members asked practical questions about fee calculation, the interplay of storage fees and loan terms, and the effect of a 15% cap on higher-value loans; staff and witnesses explained that a 15% cap would increase some larger-loan preparation fees compared with the current 6% cap at higher amounts and that extension or refinancing creates a new origination event under current statute. The committee did not take a final vote in the transcript; public testimony concluded at the end of the session.
