Highlights from Report on Tennessee's Title Lending Industry

Published: February 15, 2006

A report released by the Tennessee Department of Financial Institutions on February 1, 2006 reveals that Tennessee’s title lending industry has taken thousands of borrowers’ cars after charging borrowers sky-high rates. Findings from the report include the following:

  • High Rates. Some Tennessee lenders charged as much as 30% per month for title loans, substantially more than the 22% per month allowed by Tennessee law. Most other title lenders charged 22% per month, which is 264% APR. (page 6)
  • Illegal fees. Over one quarter of the title lenders surveyed charged illegal fees, in addition to the interest and fees allowed by law. These unauthorized fees include late fees, NSF charges, additional interest, lien recording fees, repossession fees, application fees, renewal fees, trip charges, and storage fees. (page 6)
  • Repossessions. Tennessee title pledge lenders reported 17,313 repossessions related to the title loan business in 2004. (page 7)
  • Frequent Rollovers. Title loans were renewed in Tennessee an average of 7 times. The maximum number of times renewed was 105. The average maximum number of days from loan start to loan payoff reported by title pledge lenders was 360. (page 6)
  • Scope of Industry. Tennessee has approximately 900 title loan locations. The five companies that entered into the largest numbers of title pledge agreements in 2004 had an average net income of $95,000 per location. Other states also reported hundreds of title loan locations. According to information provided by regulators, there are 997 licensed locations in Alabama, 119 in Idaho (with an additional 219 eligible), 295 in Mississippi, 250 in Missouri, 63 in New Hampshire (payday and title), 58 in Oregon, 175 in South Carolina, and 180 in Utah. (pages 4-5, 8, 11)

The “Report to the Tennessee General Assembly, Pursuant to Public Chapter 440, Acts of 2005, Section 7(e)” is based on the Department of Financial Institution’s review of information from 894 title pledge locations. Get the full report >