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Pawnbroking in America: the economics of forgotten credit market

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  • John P. Caskey

Abstract

This paper surveys the role of pawnbroking in U.S. credit markets. Among the findings are: pawnshops provide very small secured loans to millions of low-income Americans excluded from bank and finance company credit. Most states regulate pawnshop finance charges, with the majority setting ceilings between 36 and 240 percent APR. Over the past century, pawnbroking has grown dramatically in the Southern and Central Mountain States, while shrinking in the Northeast. This article offers explanations for these trends as well as for the recent nationwide boom in the industry. Copyright 1991 by Ohio State University Press.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • John P. Caskey, 1989. "Pawnbroking in America: the economics of forgotten credit market," Research Working Paper 89-17, Federal Reserve Bank of Kansas City.
    • Handle: RePEc:fip:fedkrw:89-17
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    Cited by:

    1. Eoin McLaughlin & Rowena Pecchenino, 2022. "Fringe banking and financialization: Pawnbroking in pre‐famine and famine Ireland," Economic History Review, Economic History Society, vol. 75(3), pages 903-931, August.
    2. Viktar Fedaseyeu, 2012. "Debt Collection Agencies and the Supply of Consumer Credit," Working Papers 442, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    3. Robin A. Prager, 2009. "Determinants of the locations of payday lenders, pawnshops and check-cashing outlets," Finance and Economics Discussion Series 2009-33, Board of Governors of the Federal Reserve System (U.S.).
    4. Leong, Kaiwen & Li, Huailu & Pavanini, Nicola & Walsh, Christoph, 2024. "The effects of policy interventions to limit illegal money lending," Journal of Financial Economics, Elsevier, vol. 159(C).
    5. Gregory Elliehausen, 2006. "Consumers' Use of High-Price Credit Products: Do They Know What They Are Doing?," NFI Working Papers 2006-WP-02, Indiana State University, Scott College of Business, Networks Financial Institute.
    6. J. Brandon Bolen & Gregory Elliehausen & Thomas W. Miller, 2020. "Do Consumers Need More Protection From Small‐Dollar Lenders? Historical Evidence And A Roadmap For Future Research," Economic Inquiry, Western Economic Association International, vol. 58(4), pages 1577-1613, October.
    7. Isaias Lagsa Borres, 2020. "Industry Analysis of Pawnshop in the Philippine," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 6(2), pages 111-120.
    8. Leong, Kaiwen & Li, Huailu & Pavanini, Nicola & Walsh, Christoph, 2022. "The Welfare Effects of Law Enforcement in the Illegal Money Lending Market," IZA Discussion Papers 15359, Institute of Labor Economics (IZA).
    9. Robin Prager, 2014. "Determinants of the Locations of Alternative Financial Service Providers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 45(1), pages 21-38, August.
    10. Edward C. Lawrence & Gregory Elliehausen, 2008. "A Comparative Analysis Of Payday Loan Customers," Contemporary Economic Policy, Western Economic Association International, vol. 26(2), pages 299-316, April.
    11. Degenshein, Anya, 2017. "Degenshein_Strategies of Valuation," OSF Preprints 6ka29, Center for Open Science.
    12. Kelly D. Edmiston, 2011. "Could restrictions on payday lending hurt consumers?," Economic Review, Federal Reserve Bank of Kansas City, vol. 96(Q I).
    13. Pablo Cotler & Rodrigo Carrillo, 2018. "El Mercado de Préstamos Prendarios en México: Quién lo usa, cuánto cuesta y qué tanta competencia hay," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 13(2), pages 247-272, Abril-Jun.
    14. Anderson, Michael H. & Jackson, Raymond, 2021. "Option value and auto title loans," Journal of Economics and Business, Elsevier, vol. 117(C).
    15. Joshua Shackman & Glen Tenney, 2006. "The Effects of Government Regulations on the Supply of Pawn Loans: Evidence from 51 Jurisdictions in the U.S," Journal of Financial Services Research, Springer;Western Finance Association, vol. 30(1), pages 69-91, August.

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    Keywords

    Pawnbroking; Credit;

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