{"id":36372,"date":"2022-11-14T12:01:10","date_gmt":"2022-11-14T12:01:10","guid":{"rendered":"https:\/\/www.brandon.ddtest.info\/multisite-test\/how-title-lenders-trap-georgia-residents-in-debt-propublica\/"},"modified":"2022-11-14T12:01:10","modified_gmt":"2022-11-14T12:01:10","slug":"how-title-lenders-trap-georgia-residents-in-debt-propublica","status":"publish","type":"post","link":"http:\/\/www.brandon.ddtest.info\/multisite-test\/how-title-lenders-trap-georgia-residents-in-debt-propublica\/","title":{"rendered":"How Title Lenders Trap Georgia Residents in Debt \u2014 ProPublica"},"content":{"rendered":"

\n<\/p>\n

\n\t <\/p>\n
\n
\n\t\n\t\t<\/div>\n
\n\n\n\n\n\n
Max Pawn Term<\/strong><\/td>\nOpen-ended<\/td>\n<\/tr>\n
Max Interest Rate<\/strong><\/td>\n187.5% annually<\/td>\n<\/tr>\n
Max Pawn Amount<\/strong><\/td>\nNo limit<\/td>\n<\/tr>\n
Repossession Rules<\/strong><\/td>\nIf vehicle is sold for more than the debt, the lender keeps all proceeds; if sold for less, lender cannot pursue any remaining balance<\/td>\n<\/tr>\n<\/table><\/div>\n<\/p><\/div>\n

\t\t<\/p>\n

\n
\n\t\n\t\t<\/div>\n
\n\n\n
\n

\n\t\t\tNevada
\n\t\t<\/h3>\n<\/td>\n

\n

Medium Restrictions<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/table><\/div>\n

\n\n\n\n\n\n
Max Loan Term<\/strong><\/td>\n210 days, including any extensions<\/td>\n<\/tr>\n
Max Interest Rate<\/strong><\/td>\nNo limit, but must consider the borrower’s ability to repay the loan<\/td>\n<\/tr>\n
Max Loan Amount<\/strong><\/td>\nValue of the car<\/td>\n<\/tr>\n
Repossession Rules<\/strong><\/td>\nIf vehicle is sold for more than the debt, the lender must return any surplus; if sold for less, lender cannot pursue any remaining balance<\/td>\n<\/tr>\n<\/table><\/div>\n<\/p><\/div>\n

<\/p>\n

\n
\n\t\n\t\t<\/div>\n
\n\n\n
\n

\n\t\t\tIllinois
\n\t\t<\/h3>\n<\/td>\n

\n

High Restrictions<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/table><\/div>\n

\n\n\n\n\n\n
Max Loan Term<\/strong><\/td>\n181 months<\/td>\n<\/tr>\n
Max Interest Rate<\/strong><\/td>\n36% APR, monthly payments cannot exceed 22.5% of the borrower’s gross monthly income<\/td>\n<\/tr>\n
Max Loan Amount<\/strong><\/td>\n$40,000<\/td>\n<\/tr>\n
Repossession Rules<\/strong><\/td>\nIf vehicle is sold for more than the debt, the lender must return any surplus; if sold for less, lender can pursue remaining balance\n<\/td>\n<\/tr>\n<\/table><\/div>\n<\/p><\/div>
\n


\n Credit: <\/span>
\n Graphic by Anna Donlan. Source: Georgia Pawnbroker Act, Nevada Revised Statutes, Illinois Compiled Statutes, Illinois Administrative Code
\n <\/span><\/p>\n<\/figcaption>

The increased regulations coincide with a growing body of evidence about the harm that subprime lenders like title-lending companies have on local communities and economies.<\/p>\n

Illinois\u2019s path to regulating the industry is instructive. In 2012, when TMX Finance executives identified the state as a growth market, regulators were already putting into place rules that mandated reporting from subprime lenders like title-lending companies working in the state.<\/p>\n

In 2020, Illinois church groups and state lawmakers reviewed nearly a decade\u2019s worth of data and became alarmed. High interest rates and fees charged by title lenders were exacerbating pockets of poverty, especially in minority neighborhoods, according to Brent Adams, the then-state official who helped devise the reporting regulations. Individual families were more indebted, and fees they paid were largely going to out-of-state lenders, leaving less money to be spent in local businesses. Moreover, customers who couldn\u2019t keep up with their payments to title lenders would lose a working family\u2019s most important asset: their vehicle. Without a car, a parent could be unable to hold down a job or get children to doctors or school, he said.<\/p>\n

\u201cIt is difficult to craft a data argument for these products. Practically everyone you talk to pays three times the amount of the loan to get out of a title loan,\u201d said Adams, who is now senior vice-president for policy and communications for the Woodstock Institute, an Illinois-based economic think tank. \u201cSome people will say they had a good experience, but the percentage of people who report an abusive relationship with title lenders is so much higher. The disparities are extreme.\u201d<\/p>\n

In early 2021, the Illinois legislature passed a 36% interest rate cap, dismissing arguments from TitleMax and its industry that such a move would put them out of business. That year, TMX Finance stopped making new loans in the state. Virginia and California passed similar interest rate caps, moves that led TitleMax to close operations in those states as well, according to state officials and the company\u2019s website.<\/p>\n

A similar attempt in Georgia in 2020 died after TMX Finance\u2019s then-chief legal officer testified at a state senate committee hearing that TitleMax needed to charge high interest rates given the risk profile of its customers. State senators did not press the company for more detail, nor did any senator offer up dissenting data.<\/p>\n