Mexican pawnshop operator Prendamex and Mexico’s National Pawnshop Association (Asociación Nacional de Casas de Empeño – ANACE) are drafting a proposal for regulation of pawnshops in Mexico, according to a report in today’s El Financiero.  

Prendamex’s CEO, Roberto Alor, said in the report that Mexico’s pawnshops must be regulated to maintain the integrity of the market, which consists of approximately 4,500 pawnshops nationwide.  He also said that regulations should obligate pawnshop operators to maintain insurance and post an irrevocable bond to ensure that they will honor their obligations to customers. 

Interest rates on pawn loans issued by Mexican pawnshops that are ANACE members generally fluctuate between 4% and 8% percent per month, according to Aldolfo Venez, President of ANACE, who was quoted in the report.  The report said that neither ANACE nor Prendamex indicated when the proposed regulations would be released.

A pawn loan is a loan of money to a consumer borrower secured by personal property of the borrower.  In Mexico, pawn loans are typically documented by a short-form loan and pledge agreement (contrato de mutuo con garantia prendaria).