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Federal employees turn to pawnshops amid shutdown's financial pinch

Televisions. Jewelry. Tools. At Blaine Fortner’s pawnshop in Billings, Montana, there has been a slow but steady increase in one segment of his clientele pawning these and other items in exchange for cash: employees of the federal government.
Federal employees turn to pawnshops amid shutdown's financial pinch
Federal employees turn to pawnshops amid shutdown's financial pinch

As the longest government shutdown in U.S. history continues, federal workers who are not getting paid are increasingly turning to pawnbrokers for short-term loans.

The turnout is small — a few people per day — pawnbrokers said, with similar stories emerging from places like Capitol Heights, Maryland; Alexandria, Virginia; Las Vegas; and Anchorage, Alaska. But many said they expected the numbers to increase amid the stalemate.

“They’re just bringing more and more in because they’re getting behind,” Fortner said.

About 800,000 federal workers have missed a paycheck during the nearly monthlong shutdown.

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In Billings, an average of about three federal workers walk into his shop, Yellowstone Pawn, each day, Fortner said.

Some are what Fortner calls “regulars,” federal employees with cash flow problems who have made good use of his shop before.

But there are also new faces, like the man who recently came in with high-quality Pendleton Blankets and said he had been furloughed by the Bureau of Indian Affairs. The blankets, if new, would probably cost a few hundred dollars. Fortner gave him about $50.

“He just mentioned that things were getting a little tight,” Fortner said.

A typical pawn works like this: The pawnbroker lends money to customers based, in part, on the value of collateral that they bring into the shop.

Customers pay interest on that loan, which lasts for a few months.

The customer can either repay the loan in full and get the item back, or the pawnbroker gets to keep the merchandise and sell it.

In theory, because federal employees most likely will get back pay when the shutdown ends, they should be able to recover items they pawned.

Michael Mack, owner of Max Pawn in Las Vegas, said he is seeing a similar uptick in federal workers. Mack said he was offering to waive the interest payments for furloughed federal workers for four-month loans.

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