ATLANTA (CBS46) —A consumer group is pushing Georgian elected officials to pass a law the group says will prevent lenders from taking advantage of consumers.
A representative for Georgia Watch, a statewide consumer advocacy group, testified before the Georgia State Capitol on Monday, urging lawmakers to pass the Motor Vehicle Title Loan Act, SB329.
According to Georgia Watch, the law, if enacted, will fill a legal loophole and protect consumers from high-interest auto loans.
“Some low dollar lenders are preying 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 said closing the legal loophole would protect Georgians by:
• Ensure that money lent in exchange for a car title is treated as a ‘loan’ rather than a ‘pawn’
• Bring securities lending in line with current standards of the small loan industry
• Level the playing field for Georgians by standardizing securities lending across the state.