HARTFORD, Conn. – The Connecticut Supreme Court has ruled that state law limits how much interest pawn shops can charge consumers who agree to buy back items they sold to the shops in exchange for loans.
Continue Reading Below
The court ruled Monday that the law caps interest on "repurchase agreements" at 12 percent a year.
The ruling came in a 2008 lawsuit by Westport resident Bess Gilmore, who died in 2009, against Pawn King in Stratford. Gilmore's lawsuit says the shop charged her 20 percent interest a month in her repurchase deal.
Pawn King argued state law on pawn shops doesn't specifically cover repurchase deals, but justices ruled another state law on loans covers those deals.
State law on traditional pawn shop deals above $50 caps interest rates at 2 percent a month.