Bill to Rein in Car-title Lenders Clears House

Examiner  
March 9, 2010
Flook, William C.

Virginia's House on March 8 passed a bill by a vote of 96-2 to regulate high-interest auto title lending in the state by creating limits on loan terms and interest rates. The measure, which originated in the Senate and advanced through the chamber in February, was modeled after similar legislation in Tennessee. It restrict title loans to a year's length, shrinks the pool of eligible borrowers, limits loan amounts to 50 percent of the vehicle's value, and prevents new interest from being added to a loan once a vehicle is repossessed. The bill also establishes tiers for interest rates ranging from 22 percent per month for loans smaller than $700 to 15 percent per month for loans above $1,400. The bill received support from industry groups and consumer advocates, but both said they were unhappy with individual provisions. Del. Terry Kilgore (R-Gate City) called it "a carefully crafted compromise."
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