III

106TH CONGRESS

2D SESSION H. CON. RES. 312

IN THE SENATE OF THE UNITED STATES

JUNE 28, 2000

Received and referred to the Committee on Banking, Housing, and Urban

Affairs

CONCURRENT RESOLUTION

Expressing the sense of the Congress that the Federal Government and the States should engage in greater oversight of title loan and title pawn transactions, work

cooperatively to address the problem of abuses in title

loan and title pawn transactions through effective legislation at both the Federal and State level, as necessary,

and ensure that any Federal legislative effort preserves

the ability of the States to enact stronger protections

for consumers with respect to such transactions.

Whereas title loan lenders make title loans and title pawns

to consumers by attaining the consumer’s automobile title

as collateral;

Whereas these loans and pawns are often offered at unscrupulously high rates of interest;

Whereas in many cases borrowers are forced to pay interest

rates of up to 300 percent per year;
2

HCON 312 RFS

Whereas many of these borrowers are unaware of applicable

rates and are forced into deeper and deeper debt to pay

the initial lien;

Whereas this industry takes advantage of uneducated and

poor consumers through usurious and exploitive lending

practices;

Whereas title loans and title pawns threaten the ability of

consumers to hold a job since default on the loan or

pawn will result in repossession and sale of their car,

which is often their only means of transportation to and

from work;

Whereas this industry is expanding rapidly throughout the

United States;

Whereas both the Federal Government and States have traditionally acted within their respective jurisdictions to protect citizens from usurious lending and abusive credit

practices;

Whereas the spread of abusive lending practices, including

those often characteristic of title loan and title pawn

transactions, have recently resulted in heightened Federal

interest, at the congressional, executive, and regulatory

levels, in curbing predatory lending practices;

Whereas, as the result of extensive field hearings, a task

force established by the Secretary of the Treasury and

the Secretary of Housing and Urban Development has

just underscored the need for Federal legislation to curb

predatory lending;

Whereas the title loan and title pawn transaction problem is

particularly acute in Alabama, Georgia, Idaho, Illinois,

Minnesota, Mississippi, Missouri, Montana, Nevada, New
3

HCON 312 RFS

Hampshire, New Mexico, Oregon, South Carolina, South

Dakota, Tennessee, and Utah; and

Whereas this problem has the potential to spread to other

States that currently do not closely regulate the title loan

and title pawn industry: Now, therefore, be it

1 Resolved by the House of Representatives (the Senate

2 concurring), That it is the sense of the Congress that the

3 Federal Government and the States should—

4 (1) engage in greater oversight of title loan and

5 title pawn transactions;

6 (2) work cooperatively to address the problem

7 of abuses in title loan and title pawn transactions

8 through effective legislation at both the Federal and

9 State level, as necessary, including by prohibiting

10 title pawn transactions and prohibiting usurious in11 terest rates in title loan transactions; and

12 (3) ensure that any Federal legislative effort

13 preserves the ability of the States to enact stronger

14 protections for consumers with respect to such

15 transactions.

Passed the House of Representatives June 27, 2000.

Attest: JEFF TRANDAHL,

Clerk.