From Napoleon III’s mistress to cash-strapped modern-day bankers, Parisians have for centuries stored their jewels and secrets in a discreet building not far from the Seine: the public pawnbroker.
Set up in the 17th century in response to usurious moneylenders, the non-profit Credit Municipal has a new task — helping Parisians weather the economic crisis with traditional loans and cutting-edge financial services.
In the ornate rooms where Auguste Rodin once pawned a hand from one of his sculptures to raise cash, immigrant mothers with toddlers line up to pledge their dowry gold or secure a low-cost loan.
Not all clients are poor. Aristocrats from the elegant 16th arrondissement regularly turn up with heirlooms.
“We are a bit like the emergency room in a hospital,” director Bernard Candiard said in the labyrinthine headquarters in the medieval Marais district. “Most of our clients are from a modest background, but there are also ladies in fur coats who are tightening the purse strings a bit.”
Last year, client numbers rose by 30 percent to more than 500 a day. This year, several bankers quietly pawned some paintings, using the loans to pay their taxes.
Credit Municipal last year also started accepting more unusual collateral, such as fine wine and photographic art. Clients can borrow between 50 percent and 70 percent of the value.
“We told ourselves, in the end it’s 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,” Candiard said.
UMBRELLA PLEDGE
In an age of Internet banking and online currency speculation, Credit Municipal feels quaintly and reassuringly old-fashioned.
Its storage vaults are stuffed with close to a million objects, mainly jewelry, but also art works, books, stamps, fur coats and an umbrella that has been there for about 50 years.
Former aristocratic client, seafarer and bon vivant Prince de Joinville peers from a 19th-century portrait outside Candiard’s office. He pawned his watch to pay gambling debts and told friends he had left it at his aunt’s. The phrase “chez ma tante” is now a French euphemism for pawning.
With 74 million euros (US$96 million) in loans last year, up from 63 million euros in 2007, and an average loan of 1,100 euros, Credit Municipal is much smaller than a commercial bank.
At the same time, its basic principles, such as a strong relationship with clients and conservative lending practices, hold important lessons for the future of banking.
In the past few years, France has not experienced the kind of rocketing household debt seen in the US and Britain.
However, GDP figures for the first quarter of the year, due to be published next month, are expected to show the economy has contracted by 1.2 percent, a Reuters poll found. Analysts say France could face a long downturn.
Jean-Pierre Rochette, the director of CMP-Banque, the part of Credit Municipal that deals with debt restructuring, expects to see greater demand for his services.
“There’s more need and the banks turn people away,” he said.
He believes reckless lending, often via the Internet, is partly to blame for people taking on too much personal debt.
Staff at his unit meet applicants and give them budget advice before repackaging their debt at lower interest rates.
In a new micro-credit section, retired Bank of France officials help arrange loans for the poorest clients.
PAWNING THE MATTRESS
Few other countries have institutions like Credit Municipal, founded as in 1637 in response to usurers demanding interest rates of between 100 and 300 percent.
Today, clients pay between 4 percent and 14 percent interest and can extend the loan for as long as they wish.
The record is held by a Parisian woman who brought in a necklace when she was 18. On her granddaughter’s 18th birthday 54 years later, she took the girl to Credit Municipal, redeemed the necklace and gave it to the teenager.
If she had chosen instead to default on the debt, the necklace would have been sold and she would have been paid the profit, minus a sales charge and interest. This happens in about 7 percent of cases.
To qualify, clients must live in Paris, but need not be French. About 15 percent are Sri Lankan immigrants who pawn gold belts, rings and necklaces to pay for weddings.
Their nationality may be a relative novelty in this old Parisian neighborhood, but the practice of using the pawnbroker as a quick bank is as French as Camembert.
In the 19th century, Napoleon III’s mistress, the Countess di Castiglione, would bring in her jewelry in the morning and borrow it back for parties in the evening.
About the same time, poor Parisians would visit the pawnbroker twice a day. They pawned their mattresses in the morning, used the cash to trade vegetables and redeemed the loan before bedtime.
Hard to believe? The evidence is there: A mattress-cleaning machine from the period is still displayed in the building.
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