Auto title lenders, whose practices are aligned with those dealing in payday loans, furniture leases, and cheaply made wheel-and-tire rentals, may soon be able to profit off of Michigan consumers should a bill in the state senate be passed.
The Detroit News reports a bill sponsored by Senate Majority Leader Randy Richardville of Monroe, Mich. — with an identical bill led by Rep. John Walsh of Livonia in the state House — would add a loophole to a century-old pawnbroker law to allow those affected to charge a 20 percent monthly "usage fee" to consumers, instead of the 3 percent charged now.
The state's pawnbrokers are among those opposed to the bill, stating that such an increase would only lead to more defaults, affecting consumers "in an adverse way," according to American Jewelry and Loan vice president Seth Gold.
As for who is in favor, two opposing lobbyists have found Georgia-based Select Management Resources to be the primary backer of Michigan Senate Bill No. 1138/House Bill No. 5954.
Should the bill go through, auto title lenders could act as pawnbrokers in Michigan, going around a ban of that business model in so doing. Further, a loan of $1,000 would go from accumulating a manageable $360 in interest over 12 months, to an insane $2,760 over the same period.
The post Michigan Bills Could Open Door To Auto Title Lenders appeared first on The Truth About Cars.
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