Category: title loans

  • Dueling bills in Wisconsin

    As read at WisPolitics.com:

    Senate Bill 530 currently calls for a $900 limit on the size of payday loans, place zoning restrictions on payday lenders and allow one rollover loan for customers who fail to pay initial loans. The state Assembly’s version, Bill 447, would impose a limit on loans of $600 or 35 percent of biweekly income, whichever is less, and would ban rolling over loans from one paycheck to the next, as well as auto title loans. But neither proposed bill has included restrictions on initial interest rates.

    It would be a shame if they were to ban title loans.   Sure, you can lose your car, but I think people realize that.  The reality is that most lenders do not want the car.  They want to get paid.

  • Virginia title loan bill clears house

    “The bill originated in the Senate, which passed it last month. Modeled roughly on a similar law in Tennessee, the legislation would limit the loans to a year’s length, shrink the pool of eligible borrowers, restrict the loan amount to half the car’s value, and prevent new interest from being heaped on after a vehicle has been repossessed. It establishes a tiered interest rate cap that runs from 22 percent per-month for a loan smaller than $700, to a maximum 15 percent per month for higher than $1,400.”

    You can read more in the Washington Examiner.

  • D.C. announces settlement of car title loans

    I’m a little shocked about this settlement.

    “D.C. Attorney General Peter Nickles announced last week that the District has resolved lawsuits against two Northern Virginia automobile title lenders that have agreed to repay more than $1 million to hundreds of D.C. residents who lost their cars and were forced to pay thousands in interest for loans they took out against their vehicles.”

    Class action law suits aren’t new, but these one is unique. People who live in Washington D.C. would drive into Virginia and take out a car title loan that is perfectly legal in Virginia. The D.C. Attorney General goes after the lenders: Loan Max and Cash Point.

    Businesses do business across state lines all the time. Basic examples are people who buy gas on one side of a county or state line to save a few bucks. I remember driving to Indiana to buy fireworks when we were teenagers.

    What’s equally annoying is the pissed off borrower. Apparently, there are title loan shops lined up and down Washington DC streets lending money at 25% annual interest. I guess if the Virginia lenders apologized and declined his loan, he would have thanked them? It’s like saying to someone we can’t give you a mortgage b/c the government capped mortgage rates at 8% and your a subprime borrower.

    If you want to read the one-sided full article in the Washington Post.

  • New title loan rules in Illinois

    If you lend in Illinois, the new title loan rules go into effect on April 1st. Here are some relevant points with regards to the new laws.

    Some of this is systems based while other parts is operational.

    1. The loan must be computed at simple interest and must be fully amortized.

    2. The maximum loan amount is $4000.

    3. Loans may be refinanced, but the principal must be reduce by 20% at each refinance.

    4. After a refinance, the principal amount of the new loan may not exceed the total outstanding amount of the loan being refinanced.

    5. Loans must be checked against a state database, with loan information – determined by the department – entered into the database. Not until Oct. 1st. 6)A title-secured loan may not exceed $4,000 in principal amount. However, no loan shall be made in such amount that the principal and interest payment for any one monthly payment on the loan exceeds 50% of the obligor’s gross monthly income, except to the extent that loan prepayment is allowed by Section 16(j) of the Act.

    As far as your contract requirements, there are some disclosures that will need to be added to your loan agreements.

    If you want to join a group to get and share information on the new law change, please go to: http://groups.google.com/group/illinois-lenders .

    Please note that you must be a lender to join this group.

  • Limits on Title Loans in Illinois

    Most title lenders in Illinois give loans of atleast 61 days or greater. The new rule would will not except these lenders from refinance limitations and instigate a cool off period. I have no idea how they’re going to enforce this. How does a lender know if someone else gave a person a loan less than 15 days ago?

    Regardless, these rules have to get through committee. This Blog does a very good job of explaining the process.

    The Chicago Tribune also published the story, “Limits on title loans called a ‘Good Start’“