In this economy where jobs are lost quickly through downsizing or outsourcing, where banks either can't or won't lend cash to people trying to make ends meet, it's pawn shops with collateral-based loans that are meeting the basic financial needs of those struggling.
"There are a lot of people out of work," said Dave Springett, owner of Frisco Jewelry and Loan. "Our customer base is growing."
Count Ted Laughlin among the customers. Laughlin is a trucker in an economy that's jackknifed.
"I'm just not making as much money -- no overtime, not as many sales. The economy is slow," said Laughlin.
Laughlin occaisionally finds himself needing quick cash loans from pawn shops to meet daily financial burdens.
"Sometimes you need cash on the spot," said Laughlin. "Got to have food on your table and gas in your car."
Loans, specifically predatory lending that's created a global financial crisis, is priority one these days for Washington politicians. U.S. Senate bill 500 would cap the interest rate on loans at 36 percent.
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Springett said the interest rate sounds generous until you read the fine print, which allows borrowers to pay off loans early -- which is frequently the case for pawn shops.
"I loan them a $100 on an item ... if they come in and pick it up within 20 days, under this proposed legislation, the interest on that is $2."
The $2 profit isn't worth the paper the loan was written on. It also means there's no profit for pawn shops in lending. Take away the profit and the quick-loan industry is dead.
A Web site, savemypawnshop.com, is gathering information about Senate bill 500 and organizing a lobbying campaign against it's passage.
Springett said he understands the intent of Congress to regulate lending but believes it's banks with the ability to loan large sums of money, not pawn shops who specialize in small cash loans, that deserve regulating.
Caught in the middle of this loan debate are people like Laughlin. Borrowers, many of them in a financial crisis by the time they decide to part with something precious in exchange for a cash loan at a pawn shop.
The idea of the one place where collateral is the only requirement to get cash being regulated out of business is a frightening proposition in a struggling economy.
"I think it's a bad deal," said Laughlin. "It's going to basically put them out of business. That's going to affect a lot of people. A lot of people."
