SPRINGFIELD, Ill. — Jazmine was laid off during the pandemic and needed money to pay her rent. So she got a loan from a pawn shop using her cameras and Macbook Air as collateral.
“Not only did they give me $800, but they also gave me a little trick because I had to come back two days later, and I got another loan, both at high APR rates of 150% , which I had no knowledge of, they never broke down what would happen,” said Jazmine, a social media influencer and digital content creator.
In 2021, the State past the Predatory Loan Prevention Act (PLPA), which caps the interest rate on consumer loans at 36%. But the law does not apply to pawnbrokers.
After the PLPA was passed, pawnbrokers petitioned the courts for a injunction so that the law does not apply to them and they received one.
“I was paying for my items monthly thinking I would eventually get my stuff back but that quickly turned into I was only paying $200 a month and my items are still in the pawnshop plus they got the money that I was paying every month,” Jazmine said.
Now lawmakers are considering legislation to close the loophole and that’s what brought Jazmine to the state capitol.
“I’m also advocating that these pawn shops shouldn’t be able to have such a high triple-digit APR,” Jazmine said.
His story is not isolated. Lunden Harris, a serviceman, volunteered for a experience managed by an economic institute in Chicago.
Pawnshops are accused of giving high interest rates to active duty personnel.
Despite the injunction, federal law is supposed to cap interest rates for the military, and every store is supposed to ask customers if they’re serving.
Harris said that of the three pawnshops he visited, only one asked if he was an active-duty military member.
“First, they did indeed ask me if I was an active duty military member,” Harris said. “They even made me sign a piece of paper saying I was, and then charged the exorbitant rate of 243% anyway.”
After that experience, Harris said it opened her eyes to the issue.
“It’s easy for someone to say, ‘They’re doing us an injustice’, but for me to go through it myself and see it, it really helped a lot. [to] clear my mind,” Harris said.