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Pawnbrokers reintroduce bills to raise allowable monthly charge, cite enforcement gaps
Summary
Representatives heard testimony from the Michigan Pawnbrokers Association reintroducing bills (House Bills 4115 and 4116) to raise the monthly charge cap in the pawn statute from 3% to 5% and to add consumer protections; witnesses said the current cap is outdated and has encouraged illicit resale activity.
Mark Aubrey, president of the Michigan Pawnbrokers Association, told the House Regulatory Reform Committee that his industry is reintroducing two bills—House Bills 4115 and 4116—that previously passed the Legislature but did not become law.
Aubrey said the bills, sponsored in the House by the committee chair and Vice Chair Liberati, are identical to measures that the committee previously advanced and that were on the governor’s desk in the prior session; the governor returned the legislation with a request for additional consumer protections. Aubrey said the reintroduced bills include added consumer protections and seek to increase the legally allowable monthly charge for pawnbroker loans from 3% to 5%.
Aubrey described long-term pressure on the industry from rising costs and said that Michigan’s statutory limits have not been adjusted “for over 120 years” in effect, leaving pawnbrokers with one of the lowest allowable rates in the nation. He said the low cap has contributed to an illicit market in which some resellers use resale licenses to buy and resell goods at substantially higher effective rates, which he framed as a consumer-protection and enforcement problem.
Aubrey told the committee the bills had bipartisan support in the previous session and that this is the third time the measures have been advanced through both chambers; he urged the committee to move the bills forward. Committee members asked clarifying questions about the differences between a pawnbroker license and a resale license, and about the prior action on the bills by the governor’s office.
No committee vote on HB 4115 or HB 4116 was recorded in the transcript provided; testimony concluded with Aubrey offering to answer additional questions.
Documentation: Aubrey’s testimony and committee questions are recorded in the committee transcript.
