Possible tighter restrictions for title pawn shops
March 2, 2006
Albany-- You see those title pawn shops all over town. Soon they may have new rules to follow but they'll still be able to charge extremely high interest rates.
The state senate passed a bill to tighten restrictions on title lenders. They would have to return any money left over after they repossess or sell a borrower's car. They'd also have to report the number of loans they make and cars they repossess each year. The Dougherty District Attorney likes the bill but says it doesn't go far enough.
"Unfortunately, there are people because of credit issues cannot get traditional lending. But still when you're finding title pawn and payday lenders charging 3,4,5, 800, 900 percent, you're preying on people who are unsophisticated borrowers," says Ken Hodges.
The bill does not address interest rates. Hodges says he monitors title pawn businesses to make sure they treat consumers fairly. That bill now moves to the House.