A small Georgia bank is going where few banks have gone before: the pawning business.

Citizens Bank of Vienna, Ga., plans to open Exchange Pawn later this year to fill a niche its chief executive officer said was missing in the local loan market.

"There was no type of pawn shop in our community," said CEO J. Daniel Speight Jr. "It's another way for people to borrow money."

The $99 million-asset bank hopes to dispel notions of the tacky pawn shop portrayed in the movies with a high-end business that gives customers a chance to borrow cash quickly.

It's part of Citizens Bank's strategy to boost its loans by creating different levels of lending in its rural town of 2,708 residents. The bank has already opened a stand-alone consumer loan division that handles loans as small as $50.

"I think it shows what banks are doing-how they're getting into these new industries," said Brannon Cashion, director of the fund industry group at Addison Whitney, a corporate image and identity firm in Charlotte, N.C. "Banks are becoming like other firms."

At a pawn shop, a customer can borrow cash against the value of a television, diamond ring, or any other valuable item. If the person doesn't pay back the loan, the pawn shop can take possession of the collateral and sell it off. Interest rates on pawn shop loans are typically higher than bank loans but usually for very short terms, with annualized rates as high as 360%, one expert said. (In Georgia, there's a cap on interest rates and fees of 25% per loan period.)

"What they've come to be considered are fringe banks-banks for people who probably don't have credit cards," said Charlene Komar Storey, editor and chief of Today's Pawnbroker, a quarterly magazine based in New York.

Citizens, which got the go-ahead from Georgia regulators to open the pawn shop, didn't need Federal Deposit Insurance Corp. approval because the move was legal under national bank regulations, said an FDIC spokesman. However, the agency reviewed the request, along with examiners of the Office of the Comptroller of the Currency.

But Thomas E. Hitselberger, managing director of Professional Consulting Associates in Timonium, Md., found the concept a bit disconcerting.

"That's like building airplanes and cars at the same time," Mr. Hitselberger said. "Why not buy a hog farm?," he asked facetiously. "Pawn shops handle money, that's certainly true, but it's a different business."

However, Mr. Speight sees the shop as a natural extension of his recent efforts to make lending less intimidating.

For instance, he opened a consumer loan division last December in a converted gas station. "It's a totally different atmosphere than a bank," he said.

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