So far, the only people who have said much about bill S. 500 are the politicians who support it. We started this site to educate the public and make people aware of the detrimental effects this bill will have on the neediest segments of America.

Many people think pawnshops are havens of criminal activity and that their clients are derelicts. That simply isn't true. Many different types of people from all walks of life use pawnshops for different reasons. Some are facing a crisis. Others are looking for a bargain. All in all, pawnshops serve a very important purpose in society, and have been serving that purpose for over 3000 years.

The best way to understand pawnshops and the role they play in society is to visit one. If you'd like to visit a pawnshop, please contact us directly at Contact@SaveMyPawnshop.com. Let us know where you're located, and we'll put you in touch with a pawnshop in your area.

Bill S. 500 was supposedly created to stop predatory lending practices, especially in the payday loan industry. It sets the maximum yearly interest rate on consumer loans at 36%, including all fees.

Normally, 36% is a fairly high interest rate cap. However, when dealing with short-term, high-risk consumer loans, 36% is actually unsustainably low. Consider this example:

A pawnshop extends a $100 loan to a customer. At the 36% rate cap, the maximum daily interest charge for that loan is $0.10 (($100 x 36%) / 365). The customer returns to the pawnshop 20 days later to repay the loan. The maximum the pawnshop can charge the customer for the loan is $2.00 (20 x $0.10).

This probably sounds great to everyone outside the pawn industry - lower interest rates mean customers will be saving money, right? Well actually, it costs pawnshops A LOT more than $2.00 to service this short-term loan. Pawnshops have to pay for employees, supplies, storage space, retail space, and more. The employee's salary alone for the 30 minutes spend servicing the loan will cost more than $2.00.

When businesses can't make enough money to cover costs, they close. And when pawnshops close, needy Americans have one less borrowing option available (and they didn't have many to begin with).

It's hard to say for sure what the consequences will be. Most needy Americans don't have access to many types of loans others take for granted:

• Credit Cards: If you're a needy American with bad credit or no credit, it's essentially impossible to get a credit card, especially in today's economy. Access to credit cards is an option many people (like politicians) take for granted, but it's not a reality for a large portion of society.
• Banks: Banks are barely lending to people with good credit and assets. They are definitely NOT lending to people who they consider risky in any way.
• Payday loans, tax advance loans, title loans, etc.: These loan types will also be wiped out by bill S. 500.
• Friends and family? If this bill passes, this is basically the only place low-income, high-risk borrowers will be able to go when they need cash.

So where will people who need cash in an emergency (health problem, automobile breakdown, layoff, pay cut, etc.) turn for help? Maybe petty theft...possibly illegal loan sharks...there really aren't very many options.

You may be surprised to learn that fees and interest charged by the government in various cases is WELL above 36%:

• Maximum annual interest rate (including all fees) pawnshops will be allowed to charge under bill S. 500:
  36%.

• IRS Failure-to-File Penalty - 5% per month (or partial month):
  Example: Jane Doe owes the IRS $100 in taxes this year. She forgets to file her tax return until April 25th, 10 days after it was due. She now owes the IRS the original $100 in taxes plus $5 is penalty fees ($100 x 5%), for a total of $105. If we do the math, we see that Jane is paying fees at a rate of 0.5% per day (5% / 10 days = 0.5% per day). If you multiply that out over 365 days, the penalty Jane pays is equal to an annual interest rate of:
  182.5% - wow!

• California Vehicle Registration Renewal Late Fees - 10% of yearly fee when 1 - 10 days late:
  Example: Jane Doe is 10 days late paying her vehicle registration renewal fee in California. The original renewal fee was $100. Jane Doe now owes $110 (original $100 fee + 10% of $100 = $110). It's easy to see that Jane is paying at a rate of 1% per day (10% / 10 days = 1%), which is equivalent to an annual interest rate of:
  365% - ouch!

There are many more examples of excessive government fees that are equivalent to well more than the 36% annual interest rate cap proposed for businesses. If businesses are expected to survive under a 36% rate cap, the government should also be able to operate under this cap.