THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Friday, December 8, 1995               TAG: 9512080538
SECTION: LOCAL                    PAGE: B9   EDITION: FINAL 
SOURCE: ASSOCIATED PRESS 
DATELINE: RICHMOND                           LENGTH: Short :   34 lines

CAR PAWN'S INTEREST RATES ARE ILLEGAL, JUDGE RULES

A Norfolk company's practice of charging annual interest rates of 60 percent on pawned automobiles violates state lending and consumer protection laws, Circuit Judge T.J. Markow ruled.

The judge issued his decision Tuesday in a lawsuit brought by the attorney general's office against Car Pawn of Virginia Inc.

Under its business plan, Car Pawn lends from $200 to $2,500 to consumers who agree to pawn their vehicles as security. Car Pawn takes the certificate of title and a set of keys but allows the consumer to retain possession under an ostensible lease-back arrangement.

Car Pawn contended that the titles were legitimate subjects of pawn, but Markow disagreed. The titles were merely evidence of indebtedness, and ``the transaction is simply a loan with property listed as collateral,'' he said.

``In form, this transaction mimics a pawn; at heart it is simply a small loan for an extended period and with excessive interest rate,'' Markow said.

Its pawnbrokers license therefore did not allow Car Pawn to escape the maximum legal interest rate of 12 percent.

Markow said he would order an end to Car Pawn's business practices and appoint a receiver to recover damages from the company and make refunds to consumers. by CNB