PAWNBROKERS (AMENDMENT) BILL

Order for Second Reading read.

3.00 p.m.

The Minister for Home Affairs (Mr Ong Pang Boon): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Explanatory Statement to the Bill mentions briefly all the amendments which are being proposed. The main intention of the Bill is to give members of the public, especially the poorer classes who patronise the pawnshops, the benefit of cheaper pawnshop facilities.

The opportunity is also taken to alter the constitution of the Pawnbrokers Licensing Board.

Clause 2 of the Bill amends the membership of the Board. At present, of the six members who comprise the Board, the Chairman and one other person are appointed by the Minister. One member is the Commissioner of Police or his representative, and three persons are appointed by the Justices of the Peace from among their own number.

The new Government considers, however, that in view of the constitutional changes, it would be more appropriate that all appointments other than those of the Commissioner of Police or his representative should be made by the Minister.

Clause 3 extends the redemption period of the pledge from three months to six months. This will benefit pawners, especially the poorer ones, who would have a better chance of not losing their pledges to the pawnbrokers.

Clause 4 now makes it necessary for pawnbrokers to take out insurance cover, not only against fire as at present, but also for loss by theft, robbery, etc.

The police have drawn attention to a case early this year where a pawnshop was robbed of $50,000 worth of pledges. Pawners would suffer if the pledges were not insured against such loss.

Clause 5 reduces the interest rate from the present maximum rate of 2 per cent per mensem or 24 per cent per annum to 1 per cent per mensem or 12 per cent per annum on the amount of the loan. This reduction will bring the interest rate into line with the new Moneylenders Ordinance in that 12 per cent per annum has been fixed for secured loans. This reduction would afford financial relief especially to the poorer classes of pawners, who pawn their belongings, often belongings they cannot afford to do without, in order to get money quickly for one urgent reason or another.

Despite the fact that they have pledged their belongings, they still have to pay 24 per cent interest for the money they get as against 12 per cent under the Moneylenders Ordinance for seizure of loans.

In their business, pawnshop owners do not depend entirely on the interest payable by pawners. Pawnbrokers also get the benefit from the sale of unredeemable pledges.

Representations have been made by the Pawnbrokers Association that the proposed reduction of the present interest rate by half would seriously affect the pawnshop business to the extent of virtually having to run them at a loss, leading possibly to the closing down of the business. They pointed out that the interest rate had just been reduced from 3 or 4 per cent to 2 per cent in September 1958.

It should be pointed out, however, that the purpose of abolishing the previous tender system and instituting the present licensing system was to encourage more pawnbrokers into the field. However, this seemed to have failed, and the pawnbroker business is very much of a monopoly in the hands of four or five families.

In view of this and the representations made, I shall, at the end of the Second Reading, move that the Bill be committed to a Select Committee.

Clause 6 makes the necessary amendments to those sections and Schedules of the Ordinance where it is proposed that all unredeemed articles exceeding $50 instead of $100 as at present should be disposed of by public auction. At present, any pledge pawned for $100 or under, if not redeemed within the time allowed by the Ordinance, shall, at the end of the redemption period, become the pawnbroker's absolute property. Any article pawned for an amount exceeding $50 must be something of value, and disposal by public auction would at least give the pawner a last opportunity to get it back by bidding for it, though whether he does it or not is another matter. Mr Speaker, Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Select Committee consisting of Mr Speaker as Chairman and seven other Members to be nominated by the Committee of Selection. - [Mr Ong Pang Boon].