ATLANTA (CBS46)—A consumer advocacy group is pushing for Georgia's elected officials to enact a law the group feels will prevent lenders from taking advantage of consumers.
A representative from Georgia Watch, a statewide consumer advocacy group, testified at the Georgia State Capitol on Monday urging legislators to pass the Motor Vehicle Title Loan Act, SB329.
According to Georgia Watch, the law, if enacted, will close a legal loophole and will protect consumers from high-interest car title loans.
“Some small-dollar lenders prey on financially insecure consumers by providing high-interest quick cash loans that trap consumers in a cycle of debt.
Georgia usury law caps the interest rate on most small consumer loans, but a legal loophole allows car titles to be "pawned" at interest rates as high as 300%, rates that would otherwise be considered usurious”, according to a press release from the advocacy group.
Georgia Watch reported closing the legal loophole would protect Georgians by:
• Ensuring that cash loaned in exchange for a car title is treated as a "loan" rather than a "pawn"
• Bringing title lending into compliance with current small-dollar loan industry standards
• Leveling the playing field for Georgians by bringing uniformity to title loans across the state.