A bipartisan group of Georgia lawmakers last week submitted a bill to reform how the industry operates. If passed, the legislation would bring title pawn companies under the oversight and regulation of the state’s Department of Banking and Finance and end the loophole that allows those businesses to charge triple-digit annual interest rates to customers — rates that are illegal for any other financial service.
The lead sponsor of the House Bill 342, Rep. Josh Bonner, a Republican from Peachtree City, told The Current’s editor in chief, Margaret Coker, that he sees the current situation, in which title pawn lenders obscure the true cost of their products, as “predatory.” He wants Georgia law to hew closer to what other states have done to protect consumers from this type of subprime lending.
The day he filed the bill, Rep. Bonner, who also chairs the Defense and Veterans Affairs Committee in the state House, says he got his first call from the top lobbyist from Savannah-based TitleMax, the nation’s largest title lender. The lobbyist asked for a meeting. Still, he’s hopeful that his bill will pass a full floor vote and ultimately prevail to become Georgia law — unlike previous attempts to change state law to even the regulatory playing field. The bill has been assigned to the House Banks & Banking Committee for consideration.
“Getting sponsors to sign up for the bill was easy. We have several Republicans and Democrats who are behind this. We aren’t trying to do anything drastic. We just want to have them work the same way other financial companies do. Have common sense oversight and give consumers more protection and support,” Rep. Bonner said.
The Current has spent the last year unraveling and revealing the scope and scale of the title-pawn industry in Georgia and the ways that this homegrown industry systematically exploits those in lower-income communities, entrapping them in crushing cycles of debt.
The Tide brings news and observations from The Current’s staff.