Car Title News
The latest news on car title loans, auto title loans and the car title lending industry from the Center for Responsible Lending.
- Montgomery City Councilmen Seek Moratorium on Payday Lenders
WSFA-12 (AL) 20 Aug 2013
An item on the Montgomery, Ala., city council's agenda could threaten the future of payday and title loan businesses in the city. Councilmen Richard Bollinger and Charles Smith have proposed a temporary freeze on business licenses for these types of lending agencies.
- Auto-Title Lenders Peel Into Ohio
Cleveland Plain Dealer (OH) 16 Aug 2013
TMX Finance, the biggest auto title lender in the country, is expanding into Ohio, where it plans to open 12 outlets. Payday loans were officially banned there in 2008, but the state unofficially allowed the lenders to continue. Car title lending is not specifically sanctioned; but, like with the payday lending industry, there are loopholes that allow them to operate under other statutes.
- New York Scrutinizes Online Lenders
Wall Street Journal 06 Aug 2013
Benjamin Lawsky, superintendent of the New York Department of Financial Services, has issued 35 cease-and-desist orders to online firms that he believes might be dodging state laws prohibiting lenders from charging egregious interest rates.
- Title Lenders Seek Dismissal of Attorney General’s Lawsuit
West Virginia Record 19 Jul 2013
Virginia-based companies that make auto title loans to consumers in West Virginia are moving to dismiss a lawsuit over the practice. West Virginia Attorney General Patrick Morrisey inherited the case -- made against Virginia Auto Loans, Fast Auto Loans, and Community Loans of America -- from former AG Darrell McGraw. On July 9, the defendants in the case -- including Fast Auto Loans and Community Loans of America CEO Robert I. Reich -- filed motions to dismiss.
- Misfit Borrowers Attracting Lenders as Housing Revives
Bloomberg 18 Jul 2013
Raj Date was a key architect of the Consumer Financial Protection Bureau's new rules for U.S. mortgage underwriting. Formerly the regulator's deputy director, he now is putting together a firm that will offer loans to borrowers who have been shut out by the CFPB standards.
- GOP Seeks Data on What Prompted CFPB Auto Guidance
American Banker 24 Jun 2013
House Republicans, including 27 members of the Financial Services Committee, sent a letter dated June 20 to the Consumer Financial Protection Bureau (CFPB) expressing concern...
- Clay Places Moratorium on Payday Licenses
Trussville Tribune (Ala.) 07 May 2013
City councilors in Clay, Ala., have put a freeze on licensing for payday loan, auto title loan, and check-cashing establishments. The resolution stresses the city's opposition to any business deemed as detrimental to the health, safety, or welfare of its residents...
- Guest Column: Arizona Must Do More to Keep Predatory Car-Title Lending in Check
Arizona Daily Star 30 Apr 2013
More than 1.2 million Arizona voters rejected Proposition 200, which would have permanently legalized 300 percent annual percentage rate payday loans in the state. Since that pivotal 2008 ballot initiative, lenders have made other attempts to circumvent the state's consumer-loan laws, only to be rejected in the Legislature. Lenders are turning to auto title lending as another way to engage in high-cost financing,...
- Senators Seek to Cap Interest Rates on Consumer Loans
The Hill 09 Apr 2013
Senate Majority Whip Dick Durbin (D-Ill.) and several other Democratic colleagues have proposed a bill to set an interest rate and fee limit of 36 percent for all open- and closed-end consumer credit transactions...
- Title Loans Hurt Poor, Critics Say
Arizona Republic 31 Mar 2013
Although Arizona voters rejected payday lending in 2008, auto title lending grew in its place; and there now are about 600 licensed title lending branches statewide, according to Department of Financial Institutions data. The product may be attractive to borrowers with bad credit, little savings, and a lack of family resources...
- Competing Title Pawn Bills Emerge in Alabama Legislature
Anniston Star 17 Mar 2013
Rod Scott, a Democratic state legislator from Birmingham, says he often hears from consumers in need of help because of an auto title loan. This type of loan is illegal in more than half of U.S. states, but is common in Alabama...
- Ala. House Panel OKs Bill Regulating Title Loans
CBS42.com 14 Mar 2013
Auto title lenders, which use ownership of a borrower's personal vehicle as collateral for a short-term advance, will continue to do business in Alabama under legislation passed by state lawmakers. However, the Alabama Title Loan Act will now subject the industry to regulation. The measure was passed by a House subcommittee on March 13 and now moves to the full House for debate. Critics are displeased because the bill fails to address what they say are excessive interest rates imposed by title lenders.
- Organizations Join CLC in Fight to Regulate Payday Lenders
The Baptist Standard 25 Jun 2012
More than three dozen organizations representing consumers, financial institutions, low-income communities, and the elderly have joined Texas Faith for Fair Lending and its efforts to push for new state laws that regulate auto title and payday lenders. Texas Faith for Fair Lending, a coalition that includes the Texas Baptist Christian Life Commission (CLC), has concentrated on the controversial issue of payday lending, since church leaders noticed that payday loans hurt struggling individuals and families. "When a desperate borrower takes out a $4,000 auto title loan, pays $1,200 a month for months on end and never pays it off, something is terribly wrong with the law," said CLC Director Suzii Paynter, speaking on behalf of Texas Faith for Fair Lending. "This type of predatory lending hurts Texas families and is a clear moral issue of concern for our pastors and congregations." The new joint coalition reported that 75 percent of surveyed registered Texas voters support legislation to lower consumer costs on small-dollar loans. Eighty-five percent of respondents favored capping interest rates on payday and auto title loans at 36 percent APR or less. Public perception of these loans is largely negative. Many of these organizations say that short-term loans unfairly target low-income families, military members, and seniors. In January, new laws took effect in Texas to license payday and auto title lenders for the first time in the state.
- Birmingham City Council Extends Moratorium on New Payday Loan Businesses
Birmingham News (AL) 16 May 2012
Birmingham, Ala., has extended its moratorium on new payday loan, check cashing, and title pawn shops. The decision gives City Council until at least October to approve new rules. It established the freeze in December, including an amendment stating that that city's economic development division and planning and zoning officials would develop ways to curb "clustering" of these businesses. Councilwoman Lashunda Scales says Birmingham has too many payday loan and check cashing outlets, adding that they target vulnerable residents and send them into a spiral of debt. A gathering of too many payday lending businesses in one area may discourage other businesses from operating in the same area, she and others believe. Councilwoman Valerie Abbott said the committee has been looking into a possible modification to the zoning ordinance. Birmingham's ordinance was modeled after one in Midfield last year that limited the number of payday lending institutions to the current 12. In March, Center Point renewed its own long-standing moratorium on payday lending and title loan businesses. Because of Birmingham's moratorium, there is more interest being generated on this issue. The new federal Consumer Financial Protection Bureau chose Birmingham for the location of its first field hearing on payday lending, held this past January.
- TitleMax to Open in Cooper Center
Mount Vernon Patch 12 Apr 2012
Another car title loan outlet is expected to open in June in Mount Vernon, Va. If TitleMax wins final approval of its plans from Fairfax County, this will be the second business of its kind to open on Route 1 since Jan. 1. At least eight car title loan businesses already operate in the county. Legislation regulating the industry took effect in October 2010; but in 2011, state lawmakers passed a bill eliminating provisions that prevent car title lenders from doing business with individuals with out-of-state car registrations. The measure put additional regulations on car title lenders in Virginia, but local lawmakers fear that making the loans available to non-residents will increase the number of lenders on Route 1. Del. Scott Surovell suggested that the bill would encourage Maryland residents and active-duty military personnel to cross the Woodrow Wilson Bridge into Virginia to seek out fast cash.
- L.A. Clippers Make a Bad Play With 1-800LoanMart
California Progress Report 09 Apr 2012
In addition to payday advances, another type of high-interest, predatory product that is on the rise is the car title loan, in which a borrower's personal vehicle serves as collateral for triple-digit-APR loans. The most profitable of these companies, Encino-based 1-800LoanMart, recently signed a multi-year sponsorship deal with the Los Angeles Clippers. The Center for Responsible Lending has launched a petition calling on the professional basketball team to reconsider this partnership and publicize the dangers of car title lending. "Just as car-title lending on its own is a bad idea," write CRL's Ginna Green and Cesar Castro, "it is simply a bad idea for an NBA team to legitimize it." In California, there is essentially no limit to the amount of interest on a car title loan. With a $2,600 loan over 12 months and an APR of 180 percent, payments would be nearly $500 each month -- with more than $3,000 paid in interest alone by the end of the year. Such high interest rates should not be necessary, as car title loans are secured and the lender can seize a borrower’s car. 1-800LoanMart also has been the source of many consumer complaints, including misapplied payments, wrongful repossessions, and harassment.
- Mo. Judge Strikes Down Payday Loan Initiative
St. Louis Today 05 Apr 2012
A ruling by Cole County (Mo.) Circuit Judge Dan Green hinders a ballot proposal to limit payday loan interest rates. Green said that the initiative's ballot summary and financial estimate are "inadequate" and "unfair" and could mislead petition signers. According to the judge, the secretary of state's office should have mentioned in its summary that the measure would limit annualized interest rates to 36 percent on short-term loans. The financial summary from the auditor's office also underestimates how much tax revenue may be reduced due to lost business. Despite this ruling, supporters intend to keep gathering petition signatures by the deadline of May 6.
- Title Loan Cap Defeated
Bloomington Pantagraph 29 Feb 2012
An Illinois House panel on Feb. 28 trashed House Bill 4603 -- a proposal that would have limited interest rates on car title lenders to 36 percent, down from the current 300 percent. Critics said predatory lending laws were passed in the state in 2010, and that they need time to work before more laws are added. A Decatur pastor testifying before the panel said the loan rates are "abusive," "toxic," and lead people into bankruptcy; and he urged the panel, unsuccessfully, to pass the proposed bill.
- Group Wants Cap on Car Title Loan Rates
WJBC.com 24 Feb 2012
Illinois lawmaker have proposed legislation that would limit the allowable interest charged by car title lenders to 36 percent, significantly lower than the current 300 percent ceiling. State records show that almost 100,000 high-cost vehicle loans were issued in 2011 with interest rates of 300 percent, meaning borrowers who took out loans of $1,000 would end up repaying the principal plus $2,000 in interest. Illinois households paid more than $150 million in interest to car title lenders last year, according to data, which Illinois People's Action executive director Don Carlson called unfair to residents. "What happens is they trick borrowers into coming in for a loan that often lasts for a year or more," said Carlson, who backs the bill proposed by state Rep. Naomi Jakobsson (D-Champaign). "People have more money in their pockets because they are not spending the 300 percent interest on the loan, but communities will have more money," Carlson added.