ATLANTA (CBS46) — A consumer advocacy group is pushing for Georgian lawmakers to pass a law the group says will prevent lenders from taking advantage of consumers.
A representative from Georgia Watch, a statewide consumer advocacy group, testified Monday at the Georgia State Capitol to urge lawmakers to pass the Motor Vehicle Title Loan Act, SB329.
According to Georgia Watch, the law, if enacted, will close a loophole and protect consumers from high-interest car title loans.
“Some smaller lenders prey on financially insecure consumers by offering fast, high-interest cash loans that trap consumers in a cycle of debt.
Georgia’s usury law caps the interest rate on most small consumer loans, but a legal loophole allows car titles to be ‘pledged’ at interest rates of up to 300% , rates that would otherwise be considered usurious,” according to a press release from the advocacy group.
Georgia Watch reported that closing the legal loophole would protect Georgians by:
• Ensure that money loaned in exchange for a car title is treated as a “loan” rather than a “pawn”
• Align securities lending with current small loan industry standards
• Level the playing field for Georgians by leveling title loans across the state.