For years, gun owners could secure a loan at a pawn shop with a long gun, such as a rifle or shotgun, but handguns were a different story. Beginning July 1, that changes.
INDIANAPOLIS (Statehouse File) – For years, gun owners could secure a loan at a pawn shop with a long gun, such as a rifle or shotgun, but handguns were a different story.
“People would bring them in and pawn them for money and come and retrieve them,” Sen. James Tomes, R-Wadesville, said. “But they couldn’t do that with a handgun and it really didn’t make sense why a handgun was excluded.”
Beginning July 1, that changes.
The Indiana Pawnbrokers Association approached Tomes, who agreed to author the law that makes it legal to use a handgun to secure a loan at a pawn shop.
Pawn shops provide an alternative way for people to get quick cash by putting their belongings up as collateral. Items are usually held for no less than 30 days and the individual can return to repay the loan and collect their items. If the loan remains unpaid, the items are sold.
When a gun is pawned the individual must complete paperwork providing identification information such as height, weight and date of birth. When the individual comes to pick the gun up and pay the loan back, it’s like buying the gun for the first time. The person must again fill out paperwork and a criminal background check is conducted to ensure the person is legally allowed to own a gun.
“Let’s just say someone who beats up on their spouse has charges against them. If they pawn a gun to get a loan on it and they come back to pick it up, they’ll be denied,” Greg Engstrom, president of the Indiana Pawnbrokers Association, said.
Engstrom said far from everyone pawning a gun is a criminal but the association wants to be sure shops are taking precautions.
“What’s probably more important is that you have a consumer who has some sort of financial problem and if they pawn their handgun it removes the possibility of other bad things happening,” Engstrom said, “somebody who might be desperate for money.”
The law will also help to create a paper trail with information on the owners of a particular gun, which can be turned over to law enforcement if needed.
“A lot of guns are bought and sold between individuals and there’s, a lot of times, no paperwork at all. And that’s actually legal,” Engstrom said. “I could essentially, or somebody could buy a gun from you and you could sell it to somebody else and on it goes, but there’s never really a tracking of where that gun has been or where it’s at.”
Pawn shops aren’t required to accept handguns and Huntington Gun and Pawn Manager Derek Noble said his store hasn’t made any decisions yet.
“I know other states do it. It’s something that we’ve never really looked into,” said Noble. “So, not really sure where we stand on it.”
Engstrom said he expects people will take advantage of this change in state law at participating shops because guns are typically worth more than other items such as electronics and tend to hold their value.
“They’re a good, solid piece of collateral,” said Engstrom.
This article is one in a series of stories produced by our partners at TheStatehouseFile.com – a news service powered by Franklin College – about new laws about to take effect, most of them on July 1.
