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.

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