Oklahoma also had 240 percent as the maximum annual rate, but for loans of $1 to $150
The pawnshop industry has long been an extensively regulated activity. States determined the process to be followed in applying for a pawnshop license, what records had to be maintained and whether the local police could inspect them or whether transactions had to be reported to local law enforcement officials, how old a customer must be to be served, and “ What hours the business could be open. States also established the range of loan amounts and the maximum annual service charge for each range. In Texas, for example, in 1997, the most a pawnshop could charge was 240 percent per annum, and that only for loans of $1-$132. Loans in that state could not exceed $25,000, with a maximum annual rate for that amount of 36 percent. Other states, including Florida and Georgia, allowed a maximum of 25 percent of the loan for each 30-day period of the transaction, with no breakdown by loan amount.
Growing Fast, 1990-95
By 1990, Cash America was operating 123 company-owned locations. That year the company was listed on the New York Stock Exchange and the stock split 3 for 2. In 1992, a 4.6 million stock offering raised $45 million, the stock split 2 for 1, and the company opened its 200th store, in Mission, Texas. It was at this point that Daugherty decided to take his company international. He acquired Harvey & Thompson, a U.K. chain with over 100 years in the pawnshop business. Harvey & Thompson was based in London and had 26 locations in England and Scotland. The pawnshop business in the United Kingdom was essentially the same as that in the United States. However, pawn loans generally were secured only by jewelry and gold or silver items and the average loan was larger, approximately $120. Additionally, for loans larger than about $40, unredeemed items were sold at auction. Finally, the Consumer Credit Act of 1974 prohibited pawnbrokers from entering into “ extortionate credit bargains ” with customers and Cash America charged a rate of around 6 percent per month.
The company continued to expand in the United States as well, opening more stores, buying the 18-store Express Cash chain and entering Alabama and Missouri in 1993. At the end of the year the chain operated 280 locations. In 1994, Cash America opened its 300th store and had over 1,800 employees. That same year it bought shares in Mr. Payroll, a check cashing franchise operation and also acquired the 10-store Svensk Paantel a ning, one of the oldest operating pawnshop chains in Sweden. As in the United Kingdom, the pawnshops in Sweden handled primarily jewelry and precious metals, catering to a more affluent customer. Under a new pawnbroking act passed in 1996, loan terms were not to exceed one year, but the act set no maximum interest rates for pawn loans and did not authorize local boards to regulate those rates as the statute had in the past. Also as with Harvey & Thompson payday loans in the state of Ohio, unredeemed merchandise was sold at public auction, although pawnbrokers could sell items they purchased at auction to the public from their pawnshop. The average loan amount in Sweden was approximately $300. In both Sweden and the United Kingdom, loans generally were outstanding for 180 days or less and forfeiture rates were one-third less than in the United States. At the end of 1994, the company had gross revenues of $221.9 million and $15 million in net profits.