HB 1269
In CommitteeHouse
Pawnbroker fees, int. rates
Concerning pawnbroker fees and interest rates.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill updates how much pawnbrokers in Washington can charge for loans, including interest, document fees, and storage fees—especially raising fees for larger loans and firearms—and shortens the loan term from 90 to 60 days. It also improves transparency by requiring clearer loan terms and expanding options for loan renewals.
- Increases interest rates for loans of $100 or more from 4% to 5% per 30-day period.
- Raises the loan document preparation fee for loans of $50 or more from 15% to 15% of the loan amount (no change in percentage, but removes tiered discounts for larger loans).
- Doubles the storage fee from $5.00 to $10.00 per 30-day period, and doubles the firearm storage fee from $5.00 to $10.00.
- Shortens the standard loan term and redemption period from 90 days to 60 days.
- Requires clearer loan documentation, including the total amount due if the loan runs the full 60 days, the annual percentage rate (APR), and the right to redeem at any time.
- Allows loan rewrites (extensions) to be processed by mail or online, not just in person.
Who is affected
- Pawnloan customers — People who use pawnbrokers to get short-term loans by pledging personal items as collateral; they may face higher costs due to increased fees and interest rates, especially for loans of $50 or more.
- Pawnbrokers — Pawnbroker businesses must adjust their pricing, recordkeeping, and loan terms to comply with new fee and interest caps, and update loan documentation and signage.
- Firearm owners who pawn guns — Gun owners who pawn firearms may pay more due to a higher firearm-specific storage fee ($10 instead of $5).
- Low-income Washington residents — Low-income residents who rely on pawn loans for emergency cash may be affected by the increased fees and interest, especially on loans of $50 or more.
Pro/Con Analysis
Stronger case for concerns
Potential Benefits (3)
Allows loan rewrites to be processed by mail or online, improving convenience and access for rural, disabled, or time-constrained borrowers—though this benefit is modest, as many pawn customers are already accustomed to in-person transactions and may lack reliable internet access.
consumer protectionLean peopleRef: Sec. 2(4)Standardizes document fees across all loan sizes of $50+, reducing administrative complexity for pawnbrokers and potentially lowering compliance costs—though this likely benefits larger pawn shops with more sophisticated systems more than small, independent operators.
Business & EmploymentRef: Sec. 1(2)(k)Requires disclosure of the annual percentage rate (APR) and total repayment amount on loan documents, enhancing consumer understanding—though APRs for these loans will still exceed 100% annually, limiting the practical benefit for financially distressed borrowers.
consumer protectionRef: Sec. 2(3)
Potential Concerns (5)
Increases interest rates for loans of $100 or more from 4% to 5% per 30-day period (12% to 15% nominal annual rate), raising the cost of borrowing for middle- and high-income consumers who can access larger pawn loans—many of whom use pawnbrokers as an alternative to high-cost installment or payday lenders, but who still face significantly higher effective APRs than traditional credit options.
FinancialIndustryRef: Sec. 1(1)(l)Eliminates tiered discounts on document preparation fees for loans of $50 or more, replacing them with a flat 15% fee—effectively increasing fees for loans over $50 (e.g., a $200 loan goes from $20 to $30 in document fees), disproportionately burdening middle-income borrowers who need larger short-term loans and lack access to mainstream credit.
FinancialIndustryRef: Sec. 1(2)(k)Doubles storage fees from $5 to $10 per 30-day period—and doubles firearm-specific storage fees—increasing the cost of holding collateral, which is passed on to borrowers, especially gun owners and those pawning higher-value items (e.g., electronics, jewelry) that require longer storage or special handling.
FinancialIndustryRef: Sec. 1(3)(a)-(b)Shortens the loan term from 90 to 60 days, compressing the repayment window and increasing the effective cost per day of borrowing; this pressures borrowers—especially low-income households—to repay faster or face earlier forfeiture of collateral, limiting flexibility during income volatility.
FinancialIndustryRef: Sec. 2(1)-(2)Mandates clearer loan documentation—including APR, total due at term end, and redemption rights—which improves transparency, but the bill does not cap APRs or fees at levels that would meaningfully reduce the high cost of pawn loans; thus, while informed consent improves, the underlying financial burden remains high for vulnerable borrowers.
consumer protectionPeopleRef: Sec. 2(3)
Who Is Most Affected
Low-income residents who rely on pawn loans for emergency cash face higher effective costs and shorter repayment windows, increasing risk of losing valuable collateral (e.g., vehicles, tools, firearms).
Pawnbrokers face higher compliance burdens and may see reduced loan volumes due to higher prices, but larger pawn shops with economies of scale may absorb costs more easily than small operators.
Gun owners who pawn firearms face a 100% increase in storage fees ($5→$10), which may discourage pawning guns or lead to earlier forfeiture—especially impactful for rural residents or those with limited alternative cash sources.
Middle-income borrowers using pawn loans for larger amounts ($100+) face significantly higher APRs and fees, potentially pushing them toward even costlier alternatives like credit cards or title loans if credit is unavailable.