Today’s Atlanta Journal Constitution published a front page expose about title pawn loans in Georgia. The article tells the story of a small business owner short on cash who borrowed $2,000 from a title pawn broker using the title to his wife’s car as collateral. When he missed his payments, the vehicle was repossessed and sold.
Unlike other States, Georgia law allows title lenders to keep all of the proceeds from a repo sale. In other words, a Georgia consumer could borrow $1,000 on a $20,000 vehicle and if the vehicle is repossessed and sold, the title lender can pocket the entire $20,000.
Georgia state legislator Rich Golick promises to introduce a bill in the 2009 Georgia legislature to close the loophole that allows title pawn brokers to keep repossession sale proceeds in excess of their claim. Previous attempts by Georgia legislators to change the law have not made it to the Governor’s desk.
