NYT: Title Pawns Charge 500 Percent Interest, Buy $17.5M Private Jets
They call it vampire capitalism: corporate loan sharks preying on the poor and having them thrown in jail when they can’t pay interest rates often in excess of one thousand percent. The newest and most distasteful face of vampire capitalism is the title pawn provider. Although TTAC has discussed the issue in the past, I’m embarrassed to note that we’ve failed to be as aggressive as we could be in discussing the evils of the title pawn business, in part because this site was previously affiliated with a contributor who had strong ties to that industry.
Not to worry, I suppose; what we were unwilling to do, the New York Times has ably accomplished.
“They are everywhere, like liquor stores” a customer-slash-victim of title pawns tells the Times, and if you, like me, live nearly six miles away from the nearest liquor store, you know what that means. Thousands of title pawn agencies have opened across the country. The shamelessness of the industry will amaze you; like payday loan providers, title pawns use the law to persecute the debtors drawn in by deceptive advertising and math that they are often simply unable to understand.
As with payday loans, the title pawns can afford to outspend consumer advocates in the Kumite of state-by-state lobbying expenditures, meaning that it may be years or even decades before their practices are curbed in any meaningful way. While we’re often accused of being excessively libertarian here at TTAC, there are some aspects of unfettered capitalism that are enough to make even us throw down our copy of Atlas Shrugged long enough to call for a bit of socialist oversight. Until that oversight arrives, the party will continue for the title pawn providers, one of which has managed to acquire a corporate jet. Is it really possible to recycle 1994 Oldsmobiles into Gulfstreams? Apparently it’s possible for the vampires.
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