Georgia Title Pawn & Title Loans
How to open a car title loan business in Georgia
Governments move links often. If you encounter any broken links, start your research here: http://dbf.georgia.gov/
The state of Georgia refers to car title loans as title pawn transactions.
Georgia Vehicle Registration: http://dor.georgia.gov/vehicle-registration
Georgia Title Loan legislation specifically authorizes “title pawns” as a type of pawn transaction.
A Georgia pawn broker may:
- Charge interest and charges of up to 25% of the principal amount for each 30 day period during the first 90 days of a title loan.
- Transactions extended beyond 90 days may be charged for each 30 day period interest and pawnshop charges which together equal no more than 12.5% of the principal amount advanced with a minimum charge of $5.00 each 30 days.
Georgia lawmakers passed the current title pawn bill authorizing lenders to charge an annual percentage rate that amounts to as much as 300 percent.
A quote from the Georgia Department of Banking & Finance:
“Some consumers turn to pawnshops and title lenders when they are in need of emergency cash or a short-term loan. It should be noted that the Georgia Department does not regulate these types of businesses.
Depending on jurisdiction, city or county ordinances outline specific requirements for licensing and supervision of pawnshops in Georgia. Local police departments/public safety departments are typically responsible for supervision of pawnshops in their jurisdiction and often handle the licensing process as well.
One of the primary purposes behind handing supervision of the Georgia title loan industry over to law enforcement agencies is to allow them to review pawn data for stolen property.
Section 44-12-136 of the Official Code of Georgia Annotated (O.C.G.A.) provides for the supervision and licensing of pawnbrokers by municipalities.
Again, in Georgia, the interest rate car title loan companies are allowed to charge is capped by law at 25 percent monthly (300 percent annually) for the first three months and 12.5 percent monthly after that (150 percent annually). This means a combined maximum yearly interest rate of 187.5 percent.
In the case of title pawn, Georgia law [O.C.G.A. Section 44-12-138(b)(3)] requires the pawnbroker to provide title loan borrowers the following written statement when a borrower pawns their vehicle: “Failure to make your payment as described in this document can result in the loss of your motor vehicle. The pawnbroker can also charge you certain fees if he or she actually repossesses the vehicle.”
Again, the Georgia Department of Banking and Finance DOES NOT license or have any jurisdiction over car title loan lenders, pawnbrokers or pawn transactions.