HB300: HB300 Professions and businesses; pawnbrokers to exclude motor vehicle certificates of title from pawn transactions; revise provisions

25 LC 55 0421 House Bill 300 By: Representatives Dubnik of the 29th, Bonner of the 73rd, Hawkins of the 27th, Dunahoo of the 31st, Camp of the 135th, and others A BILL TO BE ENTITLED AN ACT To amend Titles 43 and 44 of the Official Code of Georgia Annotated, relating to professions1 and businesses and property, respectively, so as to revise provisions relating to pawnbrokers2 to exclude motor vehicle certificates of title from pawn transactions; to remove provisions3 stating that possession of a motor vehicle certificate of title by pawnbrokers is deemed to be4 possession of the motor vehicle; to remove references to pawnbr okers repossessing motor5 vehicles; to remove the ability of pawnbrokers to charge fees relating to registering liens on6 motor vehicle certificates of title and repossessing motor vehicles; to remove requirements7 relating to the disclosure of such fees; to revise definitions; to provide for related matters; to8 repeal conflicting laws; and for other purposes.9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:10 SECTION 1.11 Title 43 of the Official Code of Georgia Annotated, relating to professions and businesses,12 is amended in Code Section 43-47-2, relating to definitions relative to used motor vehicle13 and used motor vehicle parts dealers, by revising subparagraph (A) of paragraph (17) and14 division (v) of subparagraph (B) of paragraph (17) as follows:15 H. B. 300 - 1 - 25 LC 55 0421 "(17)(A) 'Used motor vehicle dealer,' 'used car dealer,' or 'licensee' means any person16 who, for commission or with intent to make a profit or gain of money or other thing of17 value, sells, exchanges, rents with option to purchase, offers, or attempts to negotiate18 a sale or exchange of an interest in used motor vehicles or who is engaged wholly or19 in part in the business of se lling used motor veh icles, whether or not such motor20 vehicles are owned by such person. A motor vehicle wholesaler and a motor vehicle21 broker shall be deemed to be a used motor vehicle dealer or a u sed car dealer for the22 purposes of this chapter. Any independent motor vehicle leasin g agency which sells23 or offers for sale used motor vehicles shall be deemed to be a used motor vehicle dealer24 o r a u s e d c a r d e a l e r f o r t h e p u r p o s e s o f t h i s c h a p t e r . A n y m o tor vehicle auction25 company selling or offering for sale used motor vehicles to independent motor vehicle26 dealers or to individual consumers shall be deemed to be a used motor vehicle dealer27 or used car dealer for the purposes of this chapter except as o therwise provided in28 division (x) of subparagraph (B) of this paragraph. Without li miting any of the29 foregoing, the sale of five or more used motor vehicles in any one calendar year shall30 be prima-facie evidence that a person is engaged in the business of selling used motor31 vehicles. A pawnbroker who disposes of all repossessed motor vehicles by selling or32 exchanging his or her interest in such motor vehicles only to l icensees under this33 chapter shall not be considered a used motor vehicle dealer under this chapter as long34 as such pawnbroker does not otherwise engage in activities which would bring him or35 her under the licensing requirements of this chapter."36 "(v) Financial institutions when the financial institution sells its repossessed or leased37 motor vehicles. Finance companies, for purposes of this chapter, shall not include a38 pawnbroker as defined in Code Section 44-12-130;"39 H. B. 300 - 2 - 25 LC 55 0421 SECTION 2.40 Said title is further amended in Code Section 43-47-3, relating to the State Board of41 Registration of Used Motor Vehicle Dealers and Used Motor Vehic le Parts Dealers, by42 revising paragraph (9) of subsection (a) as follows:43 "(9) One member shall be a pawnbroker as defined in Code Sectio n 44-12-130 who is44 in the business of pawning automobile titles motor vehicles and is licensed as a used car45 dealer; and"46 SECTION 3.47 Title 44 of the Official Code of Georgia Annotated, relating to property, is amended in Code48 Section 44-12-130, relating to definitions relative to pawnbrokers, by revising paragraph (5)49 as follows:50 "(5) 'Pledged goods' means tangible personal property, including, without limitation, all51 types of motor vehicles or any motor vehicle certificate of tit le, which property is52 purchased by, deposited with, or otherwise actually delivered i nto the possession of a53 pawnbroker in connection with a pawn transaction. However, for purposes of this Code54 section, possession of any motor vehicle certificate of title w hich has come into the55 possession of a pawnbroker through a pawn transaction made in a ccordance with law56 shall be conclusively deemed to be possession of the motor vehicle, and the pawnbroker57 shall retain physical possession of the motor vehicle certifica te of title for the entire58 length of the pawn transaction but shall not be required in any way to retain physical59 possession of the motor vehicle at any time. 'Pledged goods' Such term shall not include60 choses in action, securities, or printed evidences of indebtedness, or any motor vehicle61 certificate of title."62 H. B. 300 - 3 - 25 LC 55 0421 SECTION 4.63 Said title is further amended in Code Section 44-12-131, relati ng to duration of pawn64 transactions, lease-back of motor vehicles prohibited, taking possession of motor vehicles,65 restrictions on interest, fees, or charges, action to recover excessive or undisclosed charges,66 and consequences of excessive charges, by revising subsection (a) as follows:67 "(a)(1) All pawn transactions shall be for 30 day periods but m ay be extended or68 continued for additional 30 day periods.69 (2) A pawnbroker shall not lease back to the seller or pledgor any motor vehicle during70 a pawn transaction or during any extension or continuation of the pawn transaction.71 (3) Unless otherwise agreed, a pawnbroker has upon default the right to take possession72 of the motor vehicle. In taking possession, the pawnbroker or his agent may proceed73 without judicial process if this can be done without breach of the peace or may proceed74 by action Reserved.75 (4)(A) During the first 90 days of any pawn transaction or extension or continuation76 of the pawn transaction, a pawnbroker may charge for each 30 day period interest and77 pawnshop charges which together equal no more than 25 percent o f the principal78 amount advanced, with a minimum charge of up to $10.00 per 30 day period.79 (B) On any pawn transaction which is continued or extended bey ond 90 days, a80 pawnbroker may charge for each 30 day period interest and pawnshop charges which81 together equal no more than 12.5 percent of the principal amoun t advanced, with a82 minimum charge of up to $5.00 per 30 day period.83 (C) In addition to the charges provided for in subparagraphs ( A) and (B) of this84 paragraph, in a pawn transaction or in any extension or continu ation of a pawn85 transaction involving a motor vehicle or a motor vehicle certif icate of title, a86 pawnbroker may charge the following:87 H. B. 300 - 4 - 25 LC 55 0421 (i) A fee equal to no more than any fee imposed by the appropriate state to register88 a lien upon a motor vehicle title, but only if the pawnbroker actually registers such a89 lien;90 (ii) No more than $5.00 per day in storage fees, but only if a n actual repossession91 pursuant to a default takes place on a vehicle which was not al ready in the92 pawnbroker's possession and only for each day the pawnbroker must actually retain93 possession of the motor vehicle; and94 (iii) A repossession fee of $50.00 within 50 miles of the offi ce where the pawn95 originated, $100.00 within 51 to 100 miles, $150.00 within 101 to 300 miles and a fee96 of $250.00 beyond 300 miles, but only if an actual repossession pursuant to a default97 takes place on a vehicle which was not already in the pawnbroke r's possession98 Reserved.99 (D) If a pledgor or seller requests that the pawnbroker mail o r ship the pledged item100 to the pledgor or seller, a pawnbroker may charge a fee for the actual shipping and101 mailing costs, plus a handling fee equal to not more than 50 pe rcent of the actual102 shipping and mailing costs.103 (E) In the event the pledgor or seller has lost or destroyed the original pawn ticket, a104 pawnbroker may, at the time of redemption, charge a fee equal to not more than $2.00.105 (5) No other charge or fee of any kind by whatever name denominated, including but not106 limited to any other storage fee for a motor vehicle, shall be made by a pawnbroker107 except as set out in paragraph (4) of this subsection.108 (6) No fee or charge provided for in this Code section may be imposed unless a109 disclosure regarding that fee or charge has been properly made as provided for in Code110 Section 44-12-138.111 (7)(A) Any interest, fees, or charges collected which are undi sclosed, improperly112 disclosed, or in excess of that allowed by this subsection may be recovered by the113 pledgor or seller in an action at law in any superior court of appropriate jurisdiction.114 H. B. 300 - 5 - 25 LC 55 0421 (B) In any such action in which the pledgor or seller prevails, the court shall also award115 reasonable attorneys' fees, court costs, and any expenses of litigation to the pledgor or116 seller.117 (C) Before filing an action under this Code section, the pledgor or seller shall provide118 the pawnbroker with a written notice by certified mail or statutory overnight delivery,119 return receipt requested, that such an action is contemplated, identifying any fees or120 charges which the pledgor or seller contends are undisclosed, improperly disclosed, or121 in excess of the fees and charges allowed by this Code section. If the court finds that122 during the 30 days following receipt of this notice the pawnbroker made a good faith123 offer to return any excess, undisclosed, or improperly disclosed charges, the court shall124 award reasonable attorneys' fees, court costs, and expenses of litigation to the125 pawnbroker.126 (D) No action shall be brought under this Code section more than two years after the127 pledgor or seller knew or should have known of the excess, undisclosed, or improperly128 disclosed charges."129 SECTION 5.130 Said title is further amended in Code Section 44-12-138, relati ng to restrictions on131 advertising and disclosure tickets or statements, by revising subsection (b) as follows:132 "(b) Every pawnbroker in every pawn transaction shall present the pledgor or seller with133 a written disclosure ticket or statement in at least nine-point type, appropriately completed,134 with no other written or pictorial matter except as provided in subsection (c) of this Code135 section, containing the following information:136 (1) Information identifying the pawnbroker by name and address;137 (2) A statement as follows:138 H. B. 300 - 6 - 25 LC 55 0421 'This is a pawn transaction. Failure to make your payments as described in this139 document can result in the loss of the pawned item. The pawnbroker can sell or keep140 the item if you have not made all payments by the specified maturity date.';141 (3) If the pawned item is a motor vehicle or motor vehicle certificate of title, a statement142 as follows:143 'Failure to make your payment as described in this document can result in the loss of144 your motor vehicle. The pawnbroker can also charge you certain fees if he or she145 actually repossesses the motor vehicle.';146 (4) A statement that the length of the pawn transaction is 30 days and that it can only be147 renewed with the agreement of both parties and only for 30 day incremental periods;148 (5) The annual percentage rate, computed in accordance with th e federal Truth in149 Lending Act and regulations under the federal Truth in Lending Act, for the first 30 days150 of the transaction, computed as if all interest and pawnshop charges were considered to151 be interest;152 (6) The annual percentage rate, computed in accordance with th e federal Truth in153 Lending Act and regulations under the federal Truth in Lending Act, for each 30 day154 period in which the pawn transaction might be continued or extended, computed as if all155 interest and pawnshop charges were considered to be interest. For purposes of156 identifying the annual percentage rate after the second continuation or extension, a single157 statement which identifies an annual percentage rate for each p ossible 30 day period158 thereafter shall meet the requirements of this Code section;159 (7) A statement in dollar amounts of how much it will cost the seller or pledgor to160 redeem the merchandise in the first 30 day period of the transaction;161 (8) A statement in dollar amounts of how much it will cost the seller or pledgor to162 redeem the merchandise in any 30 day period after the first 30 day period of the pawn163 transaction, provided that all fees and charges have been kept current;164 (9) A statement of the specific maturity date of the pawn transaction;165 H. B. 300 - 7 - 25 LC 55 0421 (10) A statement of how long, the grace period, the pledged go ods may be redeemed166 after the specific maturity date and the dollar amount which will be required to redeem167 the pledged goods after the specific maturity date;168 (11) A statement that after the grace period the pledged goods become the property of169 the pawnbroker;170 (12) If the pawn transaction involves a motor vehicle or motor vehicle certificate of title,171 a statement that the pawnbroker may not charge a storage fee for the motor vehicle unless172 the pawnbroker repossesses the motor vehicle pursuant to a default;173 (13) If the pawn transaction involves a motor vehicle or motor vehicle certificate of title,174 a statement that the pawnbroker may charge a storage fee for a repossessed motor vehicle175 not to exceed $5.00 per day, but only if the pawnbroker actually repossesses and actually176 must store the motor vehicle Reserved;177 (14) If the pawn transaction involves a motor vehicle or motor vehicle certificate of title,178 a statement that the pawnbroker may charge a repossession fee, not to exceed $50.00, but179 only if the pawnbroker actually repossesses the motor vehicle Reserved;180 (15) If the pawn transaction involves a motor vehicle or motor vehicle certificate of title,181 a statement that the pawnbroker may charge a fee to register a lien upon the motor vehicle182 certificate of title, not to exceed any fee actually charged by the appropriate state to183 register a lien upon a motor vehicle certificate of title, but only if the pawnbroker actually184 places such a lien upon the motor vehicle certificate of title Reserved;185 (16) A statement that any costs to ship the pledged items to the pledgor or seller can be186 charged to the pledgor or seller, along with a handling fee to equal no more than 50187 percent of the actual costs to ship the pledged items; and188 (17) A statement that a fee of up to $2.00 can be charged for each lost or destroyed pawn189 ticket."190 H. B. 300 - 8 - 25 LC 55 0421 SECTION 6.191 Said title is further amended in Code Section 44-14-403, relati ng to lien of pawnbroker,192 action for interference, grace period on pawn transactions, ext ension or continuation of193 maturity date, and redemption of goods after maturity date, by revising paragraphs (1) and194 (4) of subsection (b) as follows:195 "(b)(1) There shall be a grace period on all pawn transactions. On pawn transactions196 involving motor vehicles or motor vehicle certificates of title, the grace period shall be197 30 calendar days; on all other pawn transactions the grace peri od shall be ten calendar198 days. In the event that the last day of the grace period falls on a day in which the199 pawnbroker is not open for business, the grace period shall be extended through the first200 day following upon which the pawnbroker is open for business. The pawnbroker shall201 not sell the pledged goods during the grace period."202 "(4) Any attempt to circumvent the interest rates and charges a s specified in Code203 Section 44-12-131 shall be null and void. A pawn transaction shall be considered to have204 been extended or continued unless:205 (A) All charges, fees, and the principal have actually been pa id or repaid on the206 previous pawn transaction;207 (B) The pledged goods in the previous transaction, including but not limited to a motor208 vehicle certificate of title, have actually been restored to the possession of the pledgor209 or seller; and210 (C) The pledged goods in the previous transaction have been re moved from the211 business premises of the pawnbroker and, in the case of a motor vehicle certificate of212 title, any lien on the motor vehicle certificate of title has been removed or released."213 SECTION 7.214 All laws and parts of laws in conflict with this Act are repealed.215 H. B. 300 - 9 -