Pawning fine wine to pay the bills - Macleans.ca

Pawning fine wine to pay the bills

Parisians are flocking to a 370-year-old pawnbroker for fast cash

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Pawning fine wine to pay the billsCash-strapped Parisians are increasingly turning to the city’s publicly controlled pawnbroker to solve a money crunch. So far this year, 30 per cent more residents have shown up at Crédit Municipal, originally created by Louis XIII in 1637 to give the city a legitimate option to usurious loan sharks. And there have been some surprising items brought in: on May 11 and 12, the non-profit state firm held its first auction of grand cru wines taken from customers who defaulted on their loans.

“It is easier for someone to go into his cellar and bring us some good bottles of wine than to take down the paintings in the dining room or remove his wife’s necklace,” said director Bernard Candiard. In return for the collateral, customers can borrow up to 70 per cent of the value of their goods, paying between four and 14 per cent interest. As long as clients pay the interest, the loans will be extended indefinitely. Today, the vaults hold 900,000 items ranging from paintings, gold and couture clothes to a simple umbrella. In addition to pawnbroking, the state firm also offers debt restructuring, micro-finance for poor clients, and budget advice. As for the original owners of all that fine wine recently sold, they will get any profit from the sale, minus interest and commission, of course.

Crédit Municipal’s reputation for helping Parisians weather financial storms is legendary. Sculptor Auguste Rodin brought in his works, while Napoleon III’s mistress hocked her jewellery in the morning and then borrowed it back for evening events. Although today even aristocrats are seen bringing heirlooms to the discreet firm, most clients are of modest means. The average loan is just $1,750. Still, according to Reuters, that’s a far cry from the 19th century when the poor would pawn their mattresses each day, use the money to trade vegetables and then, hopefully, buy back the loan at night.

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