For decades, Edwin Pierce’s Springfield business has flourished by helping cash-strapped people borrow money, but he fears he will soon be shutting down if legislation before the Illinois General Assembly passes.
The legislation would cap interest rates that pawn shops can charge at a 36% annual percentage rate.
“Pawnbrokers are not shy about exploiting a loophole that allows them to make predatory loans to our veterans as well as all other Illinoisans,” state Sen. Jacqueline Collins, D-Chicago, said in a prepared statement. “I’m asking my colleagues in the legislature to close this loophole by voting for my bill.”
The legislation she is sponsoring is Senate Bill 4241.
But Pierce, who owns Monster Pawn locations in Springfield, Bloomington, Normal and Peoria, said lawmakers just don’t understand the economics of the industry or who pawn shops serve.
“People come to us when they have an emergency. They may have tapped out their relatives and have nowhere else to turn,” he said.