By David Harry
Staff Writer

Looking at the silk robes, greeting cards, pottery and knickknacks, it seems Coastal Trading and Gifts on Route 1 is simply a newly opened gift shop.
“This won’t be your dad’s pawnshop,” said owner Tom Bennett, who opened the store last month.
Actually, it’s not a pawnshop yet, because Bennett lacks a local pawnbroker’s license. He can’t get one until the Town Council passes an ordinance governing pawnshops, although Bennett said he has been buying gold and other items, including computer equipment.
Town Councilor Karen D’Andrea, chairman of the council ordinance committee, comprised of councilors Judith Roy and Michael Wood, said the committee will discuss such an ordinance when it meets Dec. 29.
But D’Andrea warns it will take time to create an ordinance that will allow Bennett to lend money and use items brought in by customers as collateral. She compared the process to creating an ordinance governing residential use of wind turbines enacted last summer.
D’Andrea said that ordinance went through extensive review and was returned to her committee twice for revisions.
“Just because we all love it does not mean the public will,” D’Andrea said.
 At its essence, pawnbroking is a simple proposition – customers in need of money get a loan from a broker who holds the item as collateral for a month.
If the customer pays the balance of the loan with interest in 30 days, the broker returns the item. An interest payment on the balance made in 30 days ensures the broker will hold the item for another 30 days without selling it.
If there is no loan or interest payment in 30 days, the broker can sell the item.
In Maine, pawnbrokers are regulated by the state Bureau of Consumer Credit Protection. The bureau’s Web site contains a sample ordinance for town governments to adopt locally and charts showing consumers how much interest they can be charged.
Interest on pawnshop loans is capped at 25 percent monthly, 18 percent for loans of more than $8,000.
Bennett also has the option of bypassing town licensing to lend money using a state license. He said he cannot afford the $50,000 bond and 20 percent in assets required to begin loaning money to customers.
“I’m just a little guy trying to open a business,” Bennett said.
Bennett, who moved to Scarborough from Chicago six years ago, has worked as a flooring contractor and installer. He has worked in a pawnshop and has five friends who have owned them, he said. Bennett said he is frustrated because he has been trying to begin loaning since August.
 D’Andrea said a local ordinance also may contain zoning provisions that require consideration from the zoning and planning boards before any ordinance is discussed at a public hearing.
Bennett said getting a license also will require him to report all his purchases to the Scarborough Police Department.
With gold prices high – more than $1,100 per ounce last week – customers have been looking to sell. Buying other items can be more dicey – technological advances can devalue fairly new computers quickly, Bennett said.
Ultimately, he anticipates making more money as a lender, and said he already has spent $15,000 to $20,000 getting his business started.
“Let’s get one in place,” he said of the ordinance, noting the ordinance could be changed if needed and he will still be licensed for one year at a time by the state.

Staff writer David Harry can be reached at 282-4337, ext. 219