Pawn shops have become the latest part of the lending industry to see favorable new laws.
What is that?
The bill increases the amounts of payments and fees instituted in pawn shops. The previous law stipulated that the loan establishment fee could not exceed $ 7.50 or 3.5% of the loan amount, and could not exceed $ 30. Under AB 1186, it was increased to $ 7.50 or 3.3% of loan, not to exceed $ 90.
The fee for handling firearms would drop from $ 4 to $ 20, while the fee for pawned items would climb from $ 3 to $ 5.
The additional handling and storage charges have also been increased as part of the new invoice.
Who supported him?
MP Jose Medina (D-Riverside) was behind the bill, bringing it to the assembly earlier this year. Assembly member Medina drafted the bill after calls from owners of pawn shops about how other areas of the lending industry, such as payday lending and title lending, have been doing it. chipped away at the profits of pawn shops.
“AB 1186 brings about changes that allow the pawn shop industry to remain financially viable in today’s lending market,” MP Medina said shortly before the Assembly’s vote on the project. of law.
Pawn shops and debt groups have backed the bill, which wants pawn shops not to be squeezed out by larger lending sectors and remain an option for those in need of a loan.
Despite the threat of equalizing income with other lending places, there has been no real opposition to AB 1186.
The absence of any opposition made AB 1186 an exceptionally swift bill. Passed from a bill to a law in less than 6 months, AB 1186 did not bring in critics from the Assembly or the Senate. While this is about raising fees in a well-used industry in California, no amendments were added to the bill, with no known debate on the bill either.
The vote was unanimous both in the Assembly and the Senate, surprising those who expected the credit industry to get involved.
Signed in law.
Governor Gavin Newsom promulgated AB 1186 on August 30, when it immediately became law. All of the higher fees in pawn shops are currently in place statewide.