Tuesday, February 21, 2006

We rob the poor by proxy.

I wonder if these lawmakers ever wonder where this money comes from?

Georgia is one of only two states that do not regulate title pawn lending. Every other lender in this state can charge no more than 60 percent interest under Georgia's criminal usury statutue. Title lenders charge as much as 300 percent. Georgia is the only state that allows title pawn lenders to repossess a borrower's car, sell it and keep all of the proceeds.

In the state House, the three lawmakers with the most power to make or break title pawn lending regulation are also the top three recipients of campaign contributions from the industry: House Speaker Glenn Richardson (R-Hiram), Rep. James Mills (R-Gainesville) and Rep. Earl Ehrhart (R-Powder Springs). The state's top two elected officials, Gov. Sonny Perdue and Lt. Gov. Mark Taylor, have accepted more than $20,000 each from these companies.

When bills to regulate were on the table, the title pawn industry lavished lawmakers such as Ehrhart, who drafted last week's substitute legislation, with flights on their corporate jets and enormous campaign contributions. In fact, the industry gave $328,310 to lawmakers with the power to kill or weaken laws that would affect their business, more than twice what was given in the previous two years.

These legislators are now carrying forward a substitute bill on behalf of the title pawn industry, allegedly to provide consumer protections. In truth, this will cement the industry's stranglehold on low-income, hard-working Georgians who are paying 300 percent interest, the highest in the nation, to borrow money using their car titles as collateral. They are attempting to create regulatory oversight of these loans in the Department of Banking and Finance, not the Office of Consumer Protection.

The current substitute eliminates any regulatory oversight by local governments and does not just fail to address the interest rates, but also arguably eliminates the 300 percent cap on rates.