Committee hears testimony from pawnbrokers who back small increases to fees, shorter loan term

The Consumer Protection & Business Committee held a public hearing Jan. 21 on House Bill 1269, a bill that would change pawnbroker loan rules by shortening loan terms, increasing certain fees and allowing online payments for renewals.

Megan Mulvihill, staff to the committee, summarized the bill: current statutory loan terms of 90 days would decrease to 60 days; the interest rate for loans of $100 or more would increase from 4% to 5% for each 30‑day period; the document preparation fee for loans of $50 or more would be set at a flat 15% (removing the current sliding scale that decreases the percentage as loan size increases); and the 30‑day storage fee would rise from $5 to $10 for general items, with firearms subject to the same additional $10 fee. HB 1269 would also permit pawnbrokers to accept online payments when rewriting a loan period, where current law limits that to in person or by mail.

Representative David Hackney, the bill’s prime sponsor, described pawn loans as “nonrecourse short term collateral loans” used by customers who lack access to other credit. He said the industry has not changed its statutory interest rate or recourse period in 10 years and is seeking a modest increase so shops can keep up with operating costs.

Industry witnesses — including Tamara Ranke of the Washington State Pawnbrokers Association, Karen Strickland of Pawn 1 Inc., Carly Carlson (a third‑generation pawnbroker and owner of Axles Pawn Shop), Michael Transtu of Cash America Pawn, Nika Mihailov of Kittitas County Trading Company, and Sam Lacks of Pawn 1 — described pawn shops as small, community‑based businesses that serve “unbanked” or cash‑based customers. Testimony said the average pawn transaction in Washington is about $100–$200 and that many loans are redeemed within roughly 45 days.

Karen Strickland said the average pawn loan has increased from about $100 to roughly $180 over the last decade and that rising labor and operating costs have put pressure on shops. Industry witnesses said a 60‑day recourse period aligns with when most redemptions occur and would reduce inventory holding costs for pawnbrokers. Several witnesses emphasized that pawnbrokers register pawned items in databases for law‑enforcement checks and described the transactions as “nonrecourse” (no credit reporting or collection actions when an item is forfeited).

Committee members asked for data on rewrite and redemption rates; witnesses said they would provide shop‑level statistics after the hearing. The committee closed the hearing on HB 1269; no committee vote was recorded on Jan. 21.