ATLANTA — A new bill proposed this week at the General Assembly would tighten regulations on title pawn companies in Georgia.
Right now, because they claim to be pawn shops and not lenders, title pawns are exempt from the state’s rules and laws regulating lending and capping interest rates consumers can be charged.
Dekalb County resident Mary Glass, 80, has already paid nearly $5,000 back towards the $6,000 she borrowed from Title Max last year.
But her debt has only grown. Her interest rate is 152%. She now owes Title Max more than $11,000.
“I know I have to pay them. I don’t mind paying what I borrowed. But it just keeps growing. I’ll be owing these people until I die,” Glass told Channel 2 consumer investigator Justin Gray.
Liz Coyle is the executive director of the consumer advocacy group Georgia Watch. For years, they have fought for tougher regulations for title pawn operations in Georgia.
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“You’re paying almost none of the principal, so you’re virtually guaranteed of never getting out,” Coyle said.
House Bill 300 was introduced this week at the state capitol. It would require title pawn operators to treat cars like any other item in a pawn shop. They hold onto a watch or piece of jewelry if you pawn it, but only the title for a car. The proposed law would change that.
“If you insist that this is a pawn and not a loan, then you’ve got to possess the car just like you do other items in the pawn shop,” Coyle said.
Under the proposed law, if the pawn shops only possess the title, then they would be regulated like any other lender and would be limited in the amount of interest they can charge by Georgia’s usury law, which caps it at 60%.
When Mary Glass filed a complaint with the Consumer Financial Protection Bureau, Title Max said in its response that she has “only paid a total of $0.76 towards the principal owed. Should the Complainant wish to lower the principal, timely payments must be made and be over the amount of the outstanding pawnshop charges.”
In her latest payment in December, Glass gave Title Max more than $1,400. But her amount due still increased.
“I’m paying you 1,000 and some dollars. And that’s not even put a dent in my balance,” Glass said.
There have been several failed efforts to regulate title pawns in recent years in the General Assembly.
Channel 2 Action News reached out to Title Max for comment on this story but has not received a response.
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