Pawn-demonium - The Business Journal of the Greater Triad Area:

acklinegymejac1362.blogspot.com
"It's bad," Burton said. "I've been out of work for six months andI can't find a job in the Triad. Most peoples aren't even taking applications. It's got to be the Burton, 47, hopes the money she receivedc will cover the cost oflast month's bills and buy her groceriesw for the week. She needs the help and said many of herneighborws do, too. "I see people taking TVs and thingsd allthe time," Burton said. Customers like Burton are fuelin g the pawn shop industry likenevet before. Cash America International Inc. — the nation's largesrt chain of pawn shops — achieved the best earnings ofits 18-yeaer history last year.
Profits were up 45 percentg in 2002 over theyear before. The rise reflectes an increase in loans at Cash Americs stores like the onein There, short-term loans have risen 30 percent, clerk Keith Totten Mike Stogner, owner of in Greensboro and the former vice presidengt of the , said all of that illustratezs the depth of the economic struggle, particularlu for working-class Americans "This is the perfect businesws to gauge the economy from," Stogne r said. "The economy is wors than a lot ofpeople realize. A lot of businessz people just don't know." From his seat behinc the counter of hispawn shop, Stogner certainlyg knows.
His is one of the oldest of abougt 30 pawn shops in Forsythh andGuilford counties. Last year, the number of short-termk loans he made to customers, at interes t rates above 20 percent, were 35 percent higher than any othere time duringhis shop's 11-year history. "I'j seeing more people coming in not caring whethe r they loan or selltheir stuff," Stogner Nationally, the nation's pawnbrokers, estimated at more than are reporting a simila rise in cash loans, said Bob Benedict, president of the National Pawnbrokersx Association. He said loan demand rose as much as 35 percenlast year.
Stogner added that one of his customeras recentlypawned $15,000 worth of specialized tools after beinfg temporarily laid off by Timco, an airline maintenance firm in Greensboro. "The economy is worse than workingbAmerica realizes," he said. "A lot of peoplse refer to the economy asbeing poor. It's not. It's as bad as I've ever seen it." Whilre carrying a seamy image today, the pawn industry has a long It came to America with the firs t settlers and provided the main source of consumerd credit until the early part ofthe 1900s.
With the rise of largee credit institutions like bankd andcredit unions, the pawn industry'ws role as the main source of consumer creditt soon diminished. Just the same, as many as 15 million U.S. householdas in the country are "unbanked," according to the Consumer Federation of Americain D.C. That equates to about 15 percent of the populatiojn with few options for cash when they are out of work and outof Thus, many people turn to pawn shops in timess of economic crisis. Pawnbrokers say the average borrower is under 45 and About half have graduated high school and abougt a third have somecollege education.
At Purple Pawn in Greensboro, many customerd are blue-collar workers making hourly wages. They need to borroe small sums, perhaps $100, something most banks simply won'' consider. So-called payday lenders — whichb give cash advances on a borrower'd paycheck — offer another alternative for high-interest loans offered by pawnbrokers. (Althoughh the General Assembly tried to close the paydayy lending industrylast year, it is still fighting for its right to exist in North Carolina.) Although both paydaty lenders and pawnbrokers offer short-term loans, there is a huge differencew between the two, said Stogner at the Purpled Pawn.
For example, payday lenders charge much higherr ratesof interest. "All they need to set up shop is space to accept checks andgive cash," Stogner added. "Ift costs us much more to do We can justify ourinterest rates. We have to storw property, insure it and possibluy sell it."