House Bill 5050 and Senate Bill 2833 were introduced in November. Both have landed in committee and are well on their way being put to the vote soon.

 Packaged as a step towards consumer protection, they broadly lump pawnshops together with other alternative lenders. Why? Most lawmakers simply do not understand the difference between pawnshops and other alternative lenders like title loans and payday advances. They may also fail to understand that without access to pawnshops, customers may be forced into options that can ruin their credit and cost them their job.

 H.R. 5050 and S.2833 would extend the MLA’s 36% APR cap to loans offered to all consumers, not just active-duty service members and their families. Notably, the bill also employs MLA’s method for calculating APR. As a result, every pawnshop in the country would be impacted, including those who live in states known as “3% states” like Rhode Island, Massachutes, and Michigan. Additional fees, even for storage, setup, lost tickets, firearms, or late payments would be eliminated.

 Instead, pawnshops would only be allowed to collect a straight 3% interest that would be charged at a daily rate of .0985%. That means a $100 loan would pay back a maximum of $3 a month. If your customer borrowed $100 for a week, the pawnshop would get a return of seventy-five cents. 

 “Let that sink in,” says Griffiths.

 The effects of this change would be far-reaching beyond the pawnshop owner/operator.

There are an estimated 50,000 individuals whose livelihood depends on the pawnbroking industry and another 30 million who use their services.

 Facing the realization that your business is on the line is fearful and overwhelming. How, then, should Pawn Leaders face their fears brought about by these changing laws?

Joost Janssen is a former member of the Navy SEALs who is well known for his work as a military advisor in numerous Hollywood productions. He spoke to pawnbrokers attending the PL100 event about turning fear into an asset.

Pawnbrokers should, therefore, channel their fears into preparing, visualizing, and working towards the goal of combating them.

Janssen recommends identifying the variables that are in your control and the ones that are not. Nothing good comes from fretting over things that are entirely out of your control.

“Make your decisions before things get hard. Then trust your decision.”

For Pawn Leaders, it boils down to making the decision to take epic action to produce an epic result.

Knowing your motivation or identifying your ‘why’ is important, he notes, but motivation alone won’t get you through the tough stuff. “Motivation is important, but it’s fleeting. Your motivation isn’t going to be there when things get hard. So you have to go back to your original decision and your character. Start building a pattern with small decisions and stick

with them. Don’t be that person that lies to yourself.”

He recommends asking yourself, ‘Who are you? Who are you becoming?’ It’s what he calls defining an identity. Next, ask how a person who lives in this identity responds to things and write down those characteristics. Then, you look for people to emulate who live according to that identity already. 

 “Navy SEALs have an earned identity. If it’s your goal to become one, then you have a clear picture in your head of what the end looks like and what the rules of the road are. You can start living by those rules before you become one.”

 Following this example, pawnbrokers can take on the identity of a Pawn Leader, taking actions now that will help ensure their future instead of sitting back and waiting for someone else to take the lead or hoping that the issue dies in committee.

Janssen is a well known military advisor for Hollywood productions.

Jay Bernstein, owner of Valley Pawn in Albuquerque, New Mexico, can relate to the sort of misery that comes about as a result of legislators impacting his business. The Albuquerque City Council introduced regulations requiring photos and fingerprints of each customer and pawn loan payouts in the form of checks mailed to the customer’s home three days after the transaction. Had these laws passed, the results would have been devastating to Valley Pawn and the customers they serve. 

 “You have to get out and meet with the politicians,” he shared. After joining forces with other local pawnshops, he opened up a dialogue with the community and, most importantly, invited all of his city council members to come to his shop for a tour. “They had no idea what it is that pawnbrokers do,” he adds, “because none of them had ever been in a pawnshop.” 

 In the end, Bernstein’s efforts paid off. When asked about the secret to beating the legislation, he noted that it boiled down to one thing—educating the lawmakers. “So much of their opposition to pawnbroking had no real grounds other than the stigmas and bad information,” he said.

The same is true for the state and federal level of government “Legislators across the board are largely ignorant of how the pawnbroking industry fits into the grander scheme of things,” Griffiths adds. Many simply do not understand the business model and the fact that pawn loans are the only available alternative lending solution that doesn’t impact the customer’s future ability to borrow money. “Without considering cause and effect, they blindly pass laws that will have a devastating impact on literally millions of people.”

 Where should you, as a Pawn Leader, begin? Start by showing up. Joost Janssen says that showing up is the most critical step towards success. “Once you show up, you’re on the way. There’s no way that you can get any opportunities until you get out there. You’ve got to be around the places where opportunities happen.”

Take ACTION!

Here are six ways Pawn Leaders can harness the fear of changing legislation:

1. GET INVOLVED

The National Pawnbrokers Association monitors legislation and engages with an industry lobbyist in addition to hosting an Annual Legislative Conference in Washington. Becoming an NPA member, getting involved, and familiarizing yourself with the talking points and other materials that they provide at nationalpawnbrokers.org is the critical first step. Next, you need to support your state or regional pawn association. But you cannot stop there.

2. UNDERSTAND HOW LAWS ARE MADE

Laws at every level of government start with an idea. That idea can come from anyone. Oftentimes, a law begins when one or more citizens contact their elected officials to share their ideas and concerns. The lawmaker introduces a bill. Then, other elected officials will have an opportunity to weigh in, even if their understanding of the issues is limited to their personal experience or even just a Google search. This is why the public perception of pawnbroking, which is often formed in the media, matters so much.

3. CONNECT WITH YOUR LAWMAKERS

Begin with identifying legislators in your city, state, as well as in Washington. Check out their websites for calendars and find out when and where they are holding public meetings or other opportunities to meet. Once you have their names and contact information, make a plan for establishing contact with them (an example of a plan is provided on p. 14) that includes mail, email, social media posts, phone calls, and in-person conversations. Show up persistently and encourage others to do the same. Political awareness is the new reality for pawnbrokers; the issue is not going away, so focus on building a long-term relationship.

4. BE PROACTIVE IN YOUR APPROACH

On the day that lawmakers are scheduled to vote on legislation that impacts your business, it will be too late to make your case to them effectively or to build a network that can rally behind your cause. That’s why it’s essential to set aside some time starting NOW to actively work on ways that you, your employees, and your customers can take action. Even if these particular bills were to die in committee, the central issue is not likely to go away and lawmakers need ongoing reminders of the important role pawnshops play in the lives of their communities and stakeholders.

5. GET PERSONAL

Instead of a form letter, send handwritten notes that share relatable stories about ways that the pawn industry affects the lives of your customers and their families, your employees, your stakeholders, and the community. Follow up with telephone calls and emails. Don’t stop there. It’s also essential to build relationships with other business owners and leaders in your community, many of whom have political influence of their own. Show up at local networking events, including your Chamber of Commerce. Help them understand your point of view by inviting them, as well as lawmakers and other influencers, to visit your pawnshop.

6. SPREAD THE GOOD

Your communication with email subscribers, social media followers, website visitors, and even foot traffic shouldn’t be limited to promoting your products and services. Your voice in your online and offline community should also be used to protect your reputation and the reputation of your industry. Focus on generating and sharing content that demonstrates the value that pawnbrokers provide to the community. Work with your local media to create positive news stories about your pawnshop. When you see positive news stories about other pawnshops, share them! By channeling your fears into actions, you have a genuine opportunity to ensure the future of pawnbroking.