Pawn Shop charged more than 240% APR on pawn loan to active-duty servicemember

For Immediate Release:

June 8, 2023


Brent Adams | | (773) 844-5544

*Interviews available upon request*

SPRINGFIELD – The State’s chief regulatory agency, the Illinois Department of Financial and Professional Regulation (IDFPR), today handed down disciplinary action to an Illinois pawnbroker that violated federal law by issuing a loan with a 240+% interest rate to an active-duty service member.

The Military Lending Act (MLA) protects active-duty military with a 36% rate cap on consumer loans. Despite this federal law, consumer advocacy group Woodstock Institute uncovered two pawn shops in Illinois charging 243.3% APR to an active-duty service member in the week leading up to Veterans Day 2022. Woodstock’s investigation showed that Illinois pawnbrokers are failing to inquire about the borrower’s military status and overcharging active-duty servicemembers with triple-digit interest rates.

Leonard’s Pawnshop in Champaign was issued a $500 fine for failing to inquire as to a borrower’s military status and for charging a predatory interest rate to an active-duty service member. They have agreed to stop these predatory practices, refund the interest overcharge to the borrower, and enhance their training and policies to ensure they adhere to the MLA. 

The following is a statement from Horacio Mendez, president and CEO of Woodstock Institute:

“Woodstock Institute applauds today’s action by the State of Illinois to hold Illinois pawnbrokers accountable for financial abuse toward an active-duty service member. A coalition of consumer advocates looks forward to collaborating with IDFPR and the State of Illinois to stop pawnbrokers from making predatory loans to Illinois servicemembers. In addition, no lender in Illinois should be permitted to charge any consumer an interest rate of 243%, but the stakes are especially high when the borrower is tasked with protecting our country and when there’s a federal law in place to protect them. We encourage IDFPR and the State of Illinois to pay close attention to pawnbrokers who prey on consumers.”


Woodstock Institute advances economic and racial justice within financial systems through research and advocacy across Illinois and the United States. Among our areas of focus are predatory lending, access to banking, debt collection, and municipal fines and fees.