Car Title Loan Restrictions Passed
By
Ashley Hinson
Story Created:
Mar 20, 2007 at 7:02 AM CDT
Story Updated:
Mar 20, 2007 at 7:07 AM CDT
DES MOINES (AP) - The Senate has approved new restrictions
on car title loans -- a move supporters say could protect borrowers
from high interest rates and eventual car seizure.
The measure, which goes to Governor Culver, would limit annual
interest rates to 21 percent on car title loans, down from the
current 300 percent.
The Senate approved the bill 32-16 yesterday, rejecting warnings
from industry officials that the restrictions would force the
industry from the state.
Critics, including Attorney General Tom Miller, have pushed the
Legislature to tighten the restrictions on car title loans.
Under a typical car title loan, the borrower hands over the
car's title and a set of keys as collateral. Typically, there is no
credit check to see if the borrower can repay the loans, and
interest rates are high with payments due almost immediately.
A missed payment means a car is seized and then sold.
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