By Ross Terrell – WABE (Listen Now)
New federal regulations will crack down on the title pawn industry that’s big in Georgia.
The regulations come from the Consumer Financial Protection Bureau and will require title pawn lenders to determine if the borrower can pay the loan back in full before issuing it.
Liz Coyle, the executive director of consumer advocacy group Georgia Watch, said the new rule is a good start.
“We’d like to see Georgia strengthen what we have so that interest rates caps apply also to these title pawn loans,” she said. “We’d like to see the usury laws in Georgia apply.”
According to Georgia Watch, car title lenders are the only lenders in the state allowed to charge more than 60 percent of the state’s usury cap on loans.
Coyle said borrowers currently have little protection if they can’t make payments.
“In Georgia, if they lose the car, the title pawn lender can actually keep the full amount if they sell the car, even more than you owe with the loan,” she said.
There are some 400 title pawn lending locations in the state, and the industry has historically had a strong lobbying presence in Georgia.
Title Max has its headquarters in Savannah.
WABE called several of the title pawn outlets, but none of them wanted to comment on the new federal rule.
It goes into effect in two years.
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Source: WABE