Pawn broker describes business as banker for the 'under banked & unbanked'
POSTED: Monday, September 24, 2012 - 8:00am
UPDATED: Monday, September 24, 2012 - 9:12am
NBC NATIONAL NEWS — It doesn't look like a bank or sound like a bank but pawn shop owner, Jeff Bernard, said think again.
"I am a bank," said Bernard, Palace Pawn Shop owner. "I'm a banker for the under banked and unbanked."
In the face of the country's worst recession, places like the Palace Pawn Shop are taking a bigger role in lending money.
"I'm seeing people living pay check to pay check, day to day. So they don't have the luxury like they had several years ago of having 300, 400, 500 dollars sitting in the bank so they can pay their bills," explained Bernard.
So they pay their bills by borrowing money on rings, watches, guitars, and stereos.
"Usually the small loans that I get are usually for three or four months. Not even for a month. So that's why I'm here today," said Ron, a pawn shop customer.
Ron said the banks were charging him too much to have an account and even more if he fell behind.
He said the interest rate he pays at the pawn shop is worth the quick cash.
According to the feds, seventeen million people don't have a checking or savings account.
That's why more and more are turning to Pay Day and pawn shops.
Bernard said loan amounts are up.
The average loan use to be twenty or twenty-five dollars.
Now it's seventy-five to a hundred dollars but ninety percent of his customers come back in to pay off their loans and get their valuables.
Bob Hansen reporting.