Monte de Piedad: the bank of the people
By Jesús Ibarra, Sept 1, 2006

Editor’s note: Jesús Ibarra reports on a Mexican institution that continues an age-old European tradition: the national pawnshop. This is the first in a series of three articles.

The crowded Zócalo (main square) in Mexico City is known not only for its large and majestic old buildings but also for its wealth of goods for sale. Rare books, photographic equipment, jewelry and wedding dresses are but a tiny sampling of the diverse items on offer in the Zócalo, both in established businesses and from itinerant vendors hawking their wares on pushcarts.

One of the most picturesque places in the Zócalo is the Nacional Monte de Piedad (the bank of mercy), the country’s oldest and most renowned pawnshop. About 10,000 people patronize the pawnshop each and every day to trade their possessions for much-needed pesos.

The main office is located in the historic center, opposite the Zócalo and to one side of the Metropolitan Cathedral, occupying the site of the palace of Aztec emperor Axayácatl. After the conquest, Hernán Cortés constructed an elaborate palace that became, after several modifications, the home of Monte de Piedad. The building occupies a city block, and there are several entrances: the main entrance on Monte de Piedad 7, the pawnshop’s administrative offices on Calle Cinco de Mayo, and the retail area called almonedas on calle Palma.

The Nacional Monte de Piedad is a 231-year-old, nonprofit, private philanthropic institution that currently has 140 branch offices in Mexico that perform 19 million transactions a year. There are four branch offices in the state of Guanajuato: two in León, one in Celaya and one in Irapuato. 

History of mercy

 

The name “Monte de Piedad” means Bank of Mercy. Monte is an Italian word for bank. This type of institution appeared in Italy during the 15th century and was dedicated to the Madonna of Mercy.

In Mexico, the founder of Monte de Piedad was Pedro Romero de Terreros, born in Spain in 1710. Romero de Terreros, accompanying his uncle, Juan Vázquez de Terreros, arrived in New Spain in the city of Querétaro, when he was 20 years old. After his uncle’s death a few years later, the young man went to Real del Monte, in the state of Hidalgo, where he made his fortune mining gold. Eventually, he grew to be the richest man in the country. In 1768, he was given the title Count of Regla.

In 1743, Pedro, inspired by the first Monte de Piedad in Italy, decided to fund an institution to help people in economic need, in the form of a pawnshop. He sought permission from the King of Spain, Carlos III, to create a pawnshop just like the one already established in Madrid’s court. On June 2, 1774, Carlos III approved the project through the Cédula Real of Aranjuez. 

The Sacro y Real Monte de Piedad de Ánimas—as it was originally called—opened its doors on Saturday, February 25, in 1775 in the old College of Saint Peter and Saint Paul, a Jesuit property located on San Ildefonso Street behind the Metropolitan Cathedral.

In an interview with Atención San Miguel, Gustavo Méndez Tapia, Monte de Piedad’s official spokesman and an expert on the history and operation of the pawn brokerage, said that during its first year of operation Monte de Piedad had as its customers 17,000 families, one quarter of the population of Mexico City at that time. 

In the first accounts book of the brokerage one can read, written in sepia ink, the register of first object pawned at Monte de Piedad by a “good-natured old fat man” named Juan Caravantes, who pawned a diamond ornament for which he got 40 gold pesos, a large sum at that time. That Saturday in 1775, 25 items were pawned and about 500 gold pesos were lent. 

In 1821, when Mexico became independent of Spain, Monte de Piedad moved to the Convent of Santa Brígida, on the corner of Avenida Madero and Eje Central, opposite Bellas Artes. The location, however, was too small, so the administrative council agreed to buy a building large enough to handle its burgeoning business.

In 1836, Monte de Piedad bought the old palace of Axayácatl for 100,000 pesos from the Duc de Monteleone, heir to Hernán Cortés. The transaction was overseen by the famous historian Lucas Alamán, Monteleone’s executor. From that time on, the Palace of Hernán Cortés has housed the main office of Nacional Monte de Piedad and its administrative offices.

A pawnshop with a heart

Méndez Tapia said that Monte de Piedad, as a nonprofit, philanthropic institution, has three principal objectives. The first is to loan cash, without hassle and at the country’s lowest interest rate, to those who need money. The client is only obligated to pay a fee equivalent to 2 percent of the loan and 1 percent of the total value of the object.

These modest fees are used to cover the business overhead, such as salaries, insurance premiums (all the objects pawned at Monte de Piedad are insured), expansion and maintenance of facilities. Any remaining funds are used to support other private institutions that give aid to groups such as indigenous peoples, the ill, handicapped and elderly, and orphans (eg, Telethon). This philanthropic donating of money fulfills the second objective of the instiution. During the last 10 years, Monte de Piedad has donated more than 2 million pesos. 

The third objective is to support small artisans by selling their goods in its stores, called almonedas (a Spanish word for “cash”; in the beginning, only cash was accepted). All these goods must meet the institution’s quality standards. The main office of the brokerage houses two almonedas, on calle Palma. One sells jewelry and the other antiques and art. A third shop, which also sells jewelry, is located on the corner of calle Monte de Piedad and Cinco de Mayo.

Jewelry and watches make up 95 percent of the pawned objects. The remaining 5 percent cover a wide range of items—anything from a CD to a car or even a house. “Because it is an assistance institution, Monte de Piedad accepts objects with commercial value of at least 30 pesos. There is no upper limit,” said Méndez Tapia. “Monte de Piedad has become a loan center for all sectors of the community.” He added that loans on houses are capped at 300,000 pesos. 

Monte de Piedad accepts all kind of objects, but each branch office specializes in specific goods. The main office specializes in jewelry. In Mexico City’s Zona Rosa district, an office specializes in art and antiques; one in the northern part of the city specializes in cars; another in the southern part of the city specializes in the pawning of houses.

Dealing with such large quantities of cash and merchandise requires strict security. Customers are filmed while pawning their objects, and they are required to show official identification, so it is very difficult for someone to pawn an object considered property of the nation. 

One of the strangest objects pawned recently was, according Méndez Tapia, a shark’s jaw in which the teeth were connected by strings from a violin or other musical instrument. This strange instrument was pawned in Veracruz by a “fat man with curly hair, wearing a flowered shirt,” who made a living by playing music with his instrument. 

Another notable transaction was that of a young man who brought in a small sack filled with ashes. He explained to the appraiser that they were his mother’s ashes, the most valuable thing he had, and that he needed the money to buy medicine for his ill brother. The impressed appraiser registered the ashes as “sand clock without a case” and lent him a 1,000 pesos. 

A third case is that of a little old woman who brought an anafre (a kind of rustic grill made of tin) made of car plates. The appraiser, from his own pocket, gave the woman two bills. She exclaimed: “Only one please! It is only to eat today.”

Ninety-six percent of the pawned objects are retrieved by their owners. The remaining four percent are sold in the almonedas, together with new articles from the artisans supported by Monte de Piedad. 

More stories about Monte de Piedad next week.