Palatine considers allowing collateral loans at jewelry store

More than two years after Palatine officials rejected Kelly Swisher’s proposed pawnshop, the council is considering a similar — albeit scaled-back — operation.

The Palatine Jewelry and Watch Shoppe owner wants to provide collateralized loans at his business, meaning customers could get a short-term loan in exchange for bringing in a piece of jewelry or watch and paying a service fee.

After a lengthy discussion, the council tabled the issue until Monday, March 21, so the village attorney could research whether Palatine can impose a minimum age for a borrower to 21 years instead of the state-required 18 years.

Officials lauded Palatine Jewelry and Watch, located at 293 N. Northwest Highway in the Village Green Shopping Center, for its good reputation and security measures. But they expressed skepticism with allowing an operation tantamount to a pawnshop.

Under the proposal, a customer would bring in a piece of jewelry or watch — no other items would be permitted — and agree to the amount Swisher is willing to loan. The patron’s identification is scanned and digital photo taken. All transactions are reported to police.

The item is stored at the business until the customer pays back the loan, plus interest as high as 19.72 percent. The more valuable the item, the lower the interest. If the customer doesn’t pick up the item within 60 days, it becomes property of the shop.

The owner of a licensed Arlington Heights pawnshop, Swisher’s proposal to open a pawnshop in Palatine was rejected back in 2008.

Councilman Aaron Del Mar, who owns a jewelry store in Palatine and intends on recusing himself from a future vote, said he’s struggling with the idea of bringing a pawn operation to the village.

“It preys on people that are desperate for money at the time,” he said.

Swisher responded that many of his customers are thankful to have a short-term loan alternative because banks usually aren’t an option. They’re otherwise forced into selling the items all together, he said.