Being Pawned By Congressman John Kline

It's really an amazing coincident that Congressman John Kline's big show (his hosting of a job fair) reads like his donor list...er...well lets take a look at the relationship Kline has with one of the job fair participant and major donor to Rep. John Kline re-election campaign...Pawn America (CEO Brad Rixmann) which contributed $10,100 .

For those not acquainted with pawn shops, they make money by giving short term loans of one to three months to customers based on the items they put up for collateral such as jewelery, electronics, musical instruments, hand tools... Loans are steep, usually asking 10-20% service fees monthly making them pricier than bank loans or credit cards, and if the fee isn't meet, they can sell the item. A 10-20% fee translates into an annual percentage rate exceeding 300%.

Additionally, many feel with pawn shops "comes an increase burglaries and break-ins. A pawnshop might give the addicts who regularly buy their drugs on that corner ready access to cash for their habit. A pawnshop might make it hard to woo more respectable businesses to that part of the south side; lower property values; increase gunfire; drive families away"

Pawn America has a majority of  the pawn-shop business in Minnesota, both with stores and a variety of spin off subsidiaries such as Payday America, Pal Card Minnesota, Gunbroker.com and Cash Pass Network. Each carries a service fee for their 'services'. Business is really good.

"Loans are up 20% to 25%," estimates David Crume, president of the National Pawnbrokers Association. Because of the GOP ideology of 'no government interference' and the subsequent banking melt down, pawn shops have experienced a mega boom. Because of this pawn shops also want to overcome any obstacles to their doing a profitable business and that means being able to have legislators lobby on their behalf against legislation.

Gold, as in jewelery, is the biggest item for pawn shops. In recent years, more people are pawning jewelery, not meeting the jacked up service fees, and pawn shops reap the reward. But with Washington taking a look at lending practices in the fallout of the banking bailout, pawn shops see their biggest obstacle to business at that potential reform legislation. According to Time:

More worrisome to investors is the potential power of a Consumer Financial Protection Agency, part of the financial-reform bill recently passed by the House and under consideration in the Senate. Under the current versions of the bill, the agency would not have the power to set interest rates. But public anger with America's financial industry is rising, and that raises the possibility that extremely high interest-rate charges could ultimately be subject to federal limits.

When we talk about financial reform that means extremely high interest-rate charges like those charged by pawn shops could ultimately be subject to federal limits. To Pawn America a 9.5 percent service fee for two weeks works out to be an annual percentage rate higher than 200 percent. Not bad for a few minutes of work! It is also the reason Pawn America contributes to John Kline's campaign.

Rep. John Kline has consistently fought against any legislation that would limit high interest rates. Kline has made no secret that he's against any government regulations or over sight of any business sector including loan sharks and pawn shops. That's why in the eight years of John Kline being in office, we've seen the wall street crash and the banking industry melt down. Kline's 'drill baby drill' mentality, and his adherence to 'no government oversight, regulations, or interference', has made John Kline a Pawn American poster child.

Isn't it past time to tell Kline he works for us and not Pawn America?