Meet Scott Oden (pictured left). He owns his own business as a brick and stone contractor and has a few employees. He lives in the Atlanta area.
The downturn in the economy has resulted in tough times for Oden. “My mortgage was due and my foreman was about to be evicted from his apartment,” said Oden in a recent story in the Atlanta Journal-Constitution.
Well, it seems Oden decided he had to take drastic measures to temporarily fix his situation and made an agreement with another company. Except now, months later, he wants to enjoy all the benefits of the agreement in a consequence-free environment. Coming to the rescue of the next “Scott Oden” is an equally misguided State Representative, Rich Golick. Between the two of them, they have demonstrated plenty of pathetic and childish whining and no understanding of how a free market economy works.
You see, because times were tight, Oden voluntarily walked into a title loan business, voluntarily told the employee he wanted a loan, voluntarily negotiated with the employee, voluntarily signed a contract (while not under duress and with an understanding of what he was doing), and walked out with $2,000.00.
His deal he made?
But he had to leave behind the title to his wife’s green 2004 Ford Expedition and agree to interest charges of 25 percent a month — which computes to an annual rate of 300 percent.
Did I mention he did this voluntarily and could have walked out of the title loan business without signing a contract if he didn’t agree to the deal they offered? I did mention it? Okay, thanks. Just to be sure it’s clear, though: Oden entered into this deal voluntarily.
So what’s the problem, then? Yup, he later decided he couldn’t pay the loan after voluntarily signing a contract and taking the money of another business…a business that actually honors its contracts and gives money when collateral is put up.
Oden, the contractor who pawned the Expedition, soon learned exactly how Georgia law works.
He made his first payment late and short: paying $200 of the $507 finance charge 11 days after the first due date.
Oden said he called the Lawrenceville business, which operates simply as Title Loans, and promised to catch up. He said he was assured that they wouldn’t take the Expedition, which his wife used for her real estate business.
The next payment was due on a Saturday in November. Oden said he called the store, owned by Optimum Financial Inc., and promised to make the payment the following Monday. He says he was told that would be OK. Instead, Oden says, someone knocked on his door in the wee hours of that Monday morning.
“She said, ‘I’m here to take the Expedition,’ ” Oden said.
And she did.
And what did the title loan company tell the AJC? Well, for starters, they never said they wouldn’t come after his wife’s car…which Oden had agreed they could have if he didn’t pay.
“He made so many promises he couldn’t keep. Even after the repo, he couldn’t make the payment,” Friedman said.
Good. So, again, what is the problem? Well, at least one member of the Georgia General Assembly thinks he needs to stick his nose into a situation where a company and a private citizen agree to an exchange and sign a legally binding contract. That man, the one who knows better then the rest of us, is State Representative Rich Golick (pictured right).
Golick (R-Smyrna) plans to introduce a bill this week to require title pawn brokers to return any proceeds in excess of the principal, interest and fees on a loan.
Golick, a veteran legislator, said he believes in the free market and has no interest in driving title lending out of Georgia — especially in times when many Georgians have few options.
But he’s strongly opposed to allowing lenders to keep excess proceeds.
“It is nothing more than a tool to gain a windfall unrelated to the underlying transaction,” he said in an e-mail.
Who the %#@& is State Representative Rich Golick (allegedly a Republican from Cobb County) to tell a business when they have gained a “windfall?” And what the %#@& is a “windfall” anyway? Since when did Golick become the arbiter of when someone has made too much profit and when did legally binding contracts need to have a “unless you make too much profit” clause to meet a “Golick Standard?”
This is just vapid nonsense spewing from Golick, who professes to believe in the “free market”…except when he doesn’t.
Oden made a deal and signed a contract. He didn’t have to sign the contract and he didn’t have to put his wife’s car up as collateral.
And what kind of car was this again?
[Oden] described the car as “immaculate” and loaded: Eddie Bauer trim, a DVD system and seats that were not just heated but cooled.
Oooooooo, seats that heat and cool? Wow! Maybe Mr. Big Pants here could have taken his wife’s car and sold it at auction himself, bought her an inexpensive used car, and taken the proceeds to resolve his outstanding debts. Then he wouldn’t be whining and crying like a petulant infant because he made an agreement and now wants to back out…with State Representative Rich Golick standing ready to make sure this never happens again!
Let me be clear: would I have entered into this deal? Hell no! But Oden did and he got what he wanted. Oden got his $2,000.00 and he wouldn’t lose his wife’s tricked out SUV if he paid the money back like he said he would. But he didn’t. So sad for Oden, but that is how business works. If Oden had honored his agreement, his wife’s tush would even today be cooled and warmed (as the season dictates) to her heart’s content as she drives that fancy SUV.
Making a stupid decision isn’t against the law, nor should businesses which provide such loan services be penalized because customers don’t honor their end of the bargain.
Mark Friedman, the owner of the business where Oden voluntarily put up the Expedition as collateral, has the right view of his business.
“We’re there to help people when no one else would,” he said.
Where else can you get $2,000.00 so quickly? That’s right, nowhere.
Oden made a decision and now has to deal with the consequences. Man up and quick sniveling. And to State Representative Rich Golick: go mind your own business.
{ 24 comments }
I tend to agree with you on this one, especially a state rep sticking his nose in this. My question is, doesn’t GA have a usury law? If this loan is within the law, then…….sucks to be him. Kiss the car goodbye and move on. To Rep. Golick: sin’t there more pressing matters to deal with…..like, I don’t know………oh yeah………that $2.1 BILLION deficit!
It reminds me of my time in CA during the rolling blackouts. We, the citizens, were driving in evening rush hour without traffic lights, while the CA Assembly worked on a bill to guarantee workers the right to cross-dress at work.
Rogue:
I think that you need to get a grip and get off the soapbox on this one. The language “excess’ may be poorly chosen, and the term “surplus” would be more consistent with the concept in other areas of the law.
I believe that where Golick is going with this is to make it consistent with secured transactions in personal property under Article 9 of the UCC as well as sale or real estate collateral under power. It appears that Golick contends that the title lenders should not be able to exercise “strict foreclosure” alone, simply keeping the collateral, but should have to sell the collateral. If the sale generates a surplus, or as Golick may have awkwardly stated it, an “excess,” then the surplus goes to borrower.
If they are going to do it, they should consider the downside to strict foreclosure across the board, in conventional loans for autos and mobile homes, etc. Strict foreclosure is pretty onerous, because it wipes out all the borrower’s residual equity. A lot of people don’t read squat before they sign or understand the concept of collateral liquidation versus strict foreclosure, and the lender lobby has done a lot to quash improvements in the law of disclosure prioer to making a loan.
The UCC and many other laws are written by drafting committees stuffed with lenders’ attorneys , the banks and title pawn lenders are hardly being oppressed. In commercial law, the golden rule applies, because the one with the gold makes the rules.
Finally, where does it say anywhere in there that Golick’s measure is going to apply retroactively to Oden’s matter or reverse the transaction between Oden and his title shylock?
I don’t mean to imply in my post above that strict foreclosure is prohibited in other secured transactions involving personal property, because it is permissible. But it is a little harsh, and if there is a market for the collateral, it would be more just to force a lender to sell the collateral, apply the sale proceeds to the debt and all the interest, penalties, and costs, and return the excess, if any, to the borrower.
Earl Ehrhart is going to jump all over this and fight it tooth and nail on behalf of the multi-million $ loan shark companies that he secretly represents as a “consultant.”
The fact is that title loan places prey on the people who are in an immediate financial hardhsip whom are often panicking, just as the payday loan businesses did. I believe that the should be laws which protect the recipient in the case of a forclosure. No one should lose 14,000 dollars (the cost of one of the cars mentioned in the article) for a 600 dollar loan. Assuming the car sold for 12,000, and then added interest, principle, and other fees. The recipient of the loan should have recieved at least 10,000 dollars back.
The fact is that title loan places prey on the people who are in an immediate financial hardhsip whom are often panicking, just as the payday loan businesses did. I believe that the should be laws which protect the recipient in the case of a forclosure. No one should lose 14,000 dollars (the cost of one of the cars mentioned in the article) for a 600 dollar loan. Assuming the car sold for 12,000, and then added interest, principle, and other fees. The recipient of the loan should have recieved at least 10,000 dollars back.
And I think you are paid too much for your job and that your business should receive 20% of your salary back. No one should make so much that it means that another person can’t be employed. Why are you so evil? You think that your employer should just pay you a set amount every year because that is what you agreed to? I think not, greedy worker! You should work more for less, even though you already agreed to a salary. Because your employer is “panicking” and they need the money back.
Also, I didn’t realize that it was the job of the General Assembly to protect people who are “panicking.” Good stuff!
Rep. Rich Golick: Exhibit #2,793 of Why The Republican Party Must Return To Its Conservative Roots.
Can’t argue that the customer didn’t do all of this voluntarily, and via a valid written contract.
However, seems we have somewhat of a double standard for financial services of our prosperous and our deadbeat classes.
The banks that the prosperous deal with are heavily regulated, with many consumer protections, disclosure laws, usury laws, uniform presentation (i.e, Hud-1 statements), and these protect a generally more educated consumer than at a title pawn store.
So if we can have these consumer protections for the “good” consumers, why is it that we insist that the customers of a title pawn essentially “suck it” if they don’t understand their paperwork, and/or don’t have the same protections if they had borrowed the money from a commercial bank?
So if we can have these consumer protections for the “good” consumers, why is it that we insist that the customers of a title pawn essentially “suck it” if they don’t understand their paperwork, and/or don’t have the same protections if they had borrowed the money from a commercial bank?
I don’t see the need for those restrictions (or “protections”) at banks, either. Here, there is no issue as to if he understood the paperwork or the consequences. Should the government bar me from entering into an agreement for $10,000.00 if I put my house up as collateral and realize I could lose it if I don’t pay? Similarly nothing should keep banks and customers from negotiating terms of a contract to their own satisfaction, regardless of the terms. Yes, that means risk which I realize is abhorrent to an ever growing segment of the population.
Who cries for the title loan company when they aren’t paid back and the car for which the title was given is mysteriously wrecked and unsellable? When then do we feel sorry for the business that handed over large sums of money on an agreement that goes unfulfilled?
There was simply nothing that wasn’t disclosed in this instance with the signing of the contract. Oden knew his wife’s car was at risk because when he left the store, he didn’t have his car title with him.
The borrow must get the excess equity contained in the property that is left over after principal, interests and fees have been paid. PERIOD. Anything else is nothing short of theft. PERIOD.
At the end of the day the transaction demonstrates the risk vs. reward offer was priced right. All the legislation will do is hurt people who pay on time via price increase or eliminate access to the money. If they could get the money from a bank or friend they would have done it.
This is classic point about regulation. On a private deal with full discloser, sound mind and no fraud it should be up to the parties involved. And if the government guarantees the loan transaction in anyway than we should have strong logical controls with real teeth in it.
Rogue:
You are quoting others, but still have not answered my question:
where does it say anywhere in there that Golick’s measure is going to apply retroactively to Oden’s matter or reverse the transaction between Oden and his title shylock?
Doesn’t Loan Sharking fall under the purview of the RICO Statutue? Aren’t title loans the same thing except with a business license?
Why are pawn shops so uniform in their lending practices? Why the sticky markets here?
I find allowing Title Loan/ Pawn Shops to do business anywhere in a civil business environment somewhat as egregious as pulling the wings off of baby bald eagles. Do I lack clarity?
I’m always a fan of jumping on the “criticize Golick” bandwagon, since he’s a fraud when it comes to being pro—-, well, everyone knows my pet project without my needing to threadjack.
This has the potential to be the Schiavo moment for the Georgia GOP.
I am in favor of greater regulation of this shady industry.
Yes, I said the dirty little word “regulation”. Not all regulation is bad, especially if it protects Georgians. Plus, these loan sharks are now beginning to enter what could be defined as a “banking relationship” and thus the greater regulation is necessary.
I’d like to request a Terri Schiavo thread. Because I’m sick and tired of getting peppered from the left with these Terri Schiavo references. Fact is, a lot of people think she was murdered by her husband. And the old song and dance of “If that were true they would have said something” logic is for amateurs.
Making Sense
The regulation on profits against risk is how we got into this economic mess! Bottom line if you do a risky loan the lender needs the proper margin to cover the risk. If the margin is to high competition will lower your pricing.
As I said regulation is fine on government backed loans but if you regulate private loans on private transaction you will just eliminate options.
It was obvious the government was guaranteeing risky loanwithout proper reserves and pricing.
If the proper reserve or pricing would have been associated with the risky loans less would have been made or more offsets would have been in place for loses. And we would not be facing a lending crisis.
The borrow must get the excess equity contained in the property that is left over after principal, interests and fees have been paid. PERIOD. Anything else is nothing short of theft. PERIOD.
Except it is the law right now and permissible. PERIOD. FULL STOP.
ODB:
where does it say anywhere in there that Golick’s measure is going to apply retroactively to Oden’s matter or reverse the transaction between Oden and his title shylock?
Sorry…you made a good point and I slightly modified the post yesterday stating that Comrade Golich was going to help the “future” Scott Oden. Should I mentioned that.
Golick doesn’t get it. Get government out of our personal matters. The guy knew what he was doing. The State Rep needs to find something just a little more important to deal with (and again, I say you folks fussed at me about firearm legislation because so many more importanat things needed to be looked at this session… like regulating pawn shops out of business… There are ALWAY more important things to be looked at and the boys & girls under the dome won’t bother looking at em.)
Rogue,
Can’t you find a homeless family on the streets of Atlanta to kick around for the next forty days?
Comments on this entry are closed.