Pawnshop History

 
Ancient world

In the west, pawnbroking existed in the ancient Greek and Roman Empires. Most contemporary Western law on the subject is derived from the Roman jurisprudence. As the empire spread its culture, pawnbroking went with it.

Likewise, in the East, the business model existed in China 3000 years ago no different than today, through the ages strictly regulated by Imperial or other authorities.

Middle Ages

In spite of early Roman Catholic Church prohibitions against charging interest on loans, there is some evidence that the Franciscans were permitted to begin the practice as an aid to the poor.

In England the pawnshop came in with William the Conqueror, with an Italian name, Lombard. In 1338 Edward III pawned his jewels to the Lombards to raise money for his war with France. King Henry V did much the same in 1415.

The Lombards were not a popular class and Henry VII Tudor harried them a good deal. In the very first year of James I Stuart an Act against Brokers was passed and remained on the statute-book until Queen Victoria had been on the throne thirty-five years. It was aimed at the many counterfeit brokers in London. This type of broker was evidently regarded as a fence.

Modern time

The Chinese conditions are decidedly favorable to a borrower. He may, as a rule, take three years to redeem his property, and he cannot be charged a higher rate than 3% per annum.

In the United Kingdom typical high street pawn interest rates vary between 5% to 12% gross per month and the average annual equivalent rate is 85%.

The pawnbroker in the United States is generally subject to considerable legal restriction. Each state has its own regulations regarding pawnbrokers, generally regulating the amount of interest that is allowed to be charged on a collateral loan. In Massachusetts, a 2007 Boston Globe investigation suggested 10% monthly interest was not uncommon. In the state of New York, interest at pawnshops is limited to 4% per month.