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Presentation of the institution
THE ORIGINS OF THE PAWNBROKERS
Pawnbrokers originated from Italy in the XVth century, but pawnbroking is probably practiced for a very longer time before. Actually as soon as man created money people felt the need to exchange temporarily usual consumption goods against money.The usurers understood quickly that by maintaining the scarcity of money they can make very big profits with this business. So in order to struggle against the rapacity of usurers who proliferated at that time and who ruined the populations by demanding sometimes more than 130 % interest rates, a monk, Barnabé de Terni, thought to create a social institution which would lend money against pledge. According to historians this institution was created in Perouse in 1462 in the centre of the Italian peninsula. It was called « Mont-de-Piété ».
THE « MONT-DE-PIETE » OF BRUSSELS
It is well known that reputations shape reactions. And yet, snuggled up in the centre of Brussels, to just a stone's throw from the Sablon and the Law Court, a huge building, a bit austere it is right, accomodates a public institution which is making strenous efforts since 1618 to refute this famous saying.Actually in the beginning of the 17th century the misery was everywhere, the public charity nearly non-existent or very badly organised and the usurers who have runned away from Italy where the pawnbrokers have developed, invaded gradually our regions.
Wenceslas Cobergher who was at the same time a painter, an architect, an engineer and even a diplomat, was interested in any new idea and coming back from a study trip in Italy, enriched with what he saw there, he proposed to our governors the Archduke Albert and his wife the Infanta Isabelle who were level-headed and enlightened, the creation in our regions of pawnbroking institutions like those he saw in Italy. The opening of a pawnbroker in Brussels is decided and the charters were granted.
The establishment will open to public on 28 September 1618 and will never close.
Because of all this, it is more than probably one of the oldest if not the oldest official and financial institution which is still working in Belgium today.
EVOLUTION AND DEVELOPMENT
As in Italy the pawnbrokers developed very quickly in most cities in Belgium. Historians count more than twenty of them but for different reasons amongst which the most important one is management difficulties due to a nearly non-existent financing from the organizing power, each of them disappeared except the Brussels one which after being the first one is now the last pawnbroker in Belgium.From time to time some people, who are probably badly informed, are still proclaiming loudly that pawnbrokers are ancestral institutions which do not have today anymore reasons to be in a developed country as ours, some continually rising operation figures prove if necessary the essential role such an institution is still playing today in the financial landscape.
Against deposit of jewels, silverwares, or objects of art and decoration articles 120,400 loans are granted or renewed each year for more than 24 billion EURO.(figures on 31/12/2005)
This kind of lending is probably the simplest and the most flexible way even today to allow everybody to have if necessary important liquid assets very quickly (most frequently within a few minutes) giving the possibility either to face an urgent expiry or to seize an opportunity without being forced to sell one's goods.
Moreover, contrary to a very wide idea, more than 91 % of pledging loans are payed off by the borrowers who get back the jewels or objects they have left as a guarantee. Consequently only 9 % of the objects are not reclaimed by the depositors and must thus be put up for public sale. Nevertheless in this case the « Mont-de-Piété » pays to the borrower the balance of the public sale product after having recovered the lent amount, the interests and the charges. That is the « profit ». (Percentages on 31/12/2005)
REGULATION AND MANAGEMENT
The « Mont-de-Piété » in Brussels is governed by the law of 30 April 1848 and by an organic regulation decided by the Town Council of Brussels City on 19 December 1994 and approved by the Region of Brussels-Capital on 06 February 1995.Under the authority of a Board of Directors chosen by the Town Council and of which the Burgomaster of Brussels City is President by right, a Director takes on the general direction of the personnel and the different activities of the institution.
MONOPOLY OF THE PAWNBROKING
In Belgium the activity of pawnbrokers is in accordance with the law, a monopoly reserved to the « Mont-de-Piété » and the running of a private pawnbroking house is severely punished. (Penal Code art.306 & 307)AN INTERNATIONAL ASSOCIATION
If Belgium has only one « Mont-de-Piété », there are other institutions like that in many cities in a lot of countries and most of them are members of the International Association of Pledging Credit Establishments.