For the first time in 82 years, Bartholomew County pawnbrokers are allowed to issue same-day loans to customers who use handguns as security.
In years past, a seven-day wait was required while background checks were performed through the mail. Violators could be charged with a Class B misdemeanor punishable by up to six months and jail and a maximum $1,000 fine.
But no Hoosier has been charged, much less convicted, under the former statute in recent years, according to the nonpartisan Legislative Services Agency.
What never made sense to the Indiana Pawnbrokers Association, which backed the change, is that it has been permitted to loan on long guns for several years without such hassles, association board member Scott Brown said.
“Handguns were the only thing we are not allow to loan on,” said Brown, owner of Columbus Pawn Shop, 21 South National Road.
But both technology and the implementation of the National Instant Criminal Background Check System has now made using handguns for a same-day collateral loan feasible.
Background checks can be done over the phone or Internet within minutes, which allows pawnbrokers to treat handguns essentially the same way they handled rifles and shotguns, Brown said.
Since the death of State Street pawnbroker Steven Von Hoene last summer, Brown’s business and Gold Nugget Pawn Shop, 344 Jackson St., Hope, are the only two pawn shops licensed to engage in firearms loans in Bartholomew County.
From their perspectives, guns are exceptional collateral because they hold their value far longer than items such as DVDs and laptop computers, Gold Nugget owner Jackie Robb Tallent said.
Brown said he can’t remember a business day when a customer didn’t ask to use some type of firearm as collateral on a loan.
“Sometimes, that’s the only thing of value they own,” he said.
According to state law, a customer must complete paperwork providing identification information such as height, weight and date of birth, to obtain a firearm loan.
Such information helps create a paper trail on a particular weapon that can be turned over to law enforcement if needed, Brown said.
But if that person tries to get their weapon back, it’s like they are buying it for the first time. New paperwork and a criminal background check is required, he said.
“If we find out they shouldn’t legally have that gun, they don’t get it back,” Brown said.
In contrast, handguns frequently are sold between individuals who typically do not do background checks or keep records, Tallent said.
“When you think about it, wouldn’t you rather have someone like me do the checks and keep the paperwork?” Tallent said.
For her customers, temporary loans are preferred when a gun is part of a treasured collection or a family heirloom, Tallent said.
Nearly 80 percent of her firearm loan clients pay back the loan and get the gun back, Tallent said.
Beginning their effort to repeal the handgun loan ban last summer, the Indiana Pawnbrokers Association began talking to law enforcement officials to gauge their thoughts on the subject, Brown said. Efforts included attending a conference sponsored by the Indiana Association of Chiefs of Police, he said.
As state lawmakers debated the matter earlier this year, Brown said he and other board members attempted to attend to answer as many questions as possible.
Senate Bill 13 was one of seven proposals introduced in the Indiana General Assembly this year that have been frequently described as pro-gun in nature.
Although one controversial measure that would have allowed Hoosiers to carry handguns without a permit died in committee, few objections were voiced against Senate Bill 13.
As it made its way through the legislative process, the measure garnered three authors, six co-authors and four sponsors, according to the Indiana General Assembly website. The bill also was endorsed by the National Rifle Association, Brown said.
In February, the measure passed the Indiana Senate 49-1, and the Indiana House with an 88-7 vote in March. Signed into law April 13 by Indiana Gov. Eric Holcomb, the measure went into effect July 1.