Assembly Passes Car Title Loan Reform
Posted by Brent Finnegan on March 12th, 2010
Car title lenders, like the brightly colored LoanMax on South Main Street, may soon be be restricted in terms of how much they can charge or lend to people desperate enough for cash to put their vehicle on the line. Both houses of General Assembly passed a bill introduced by Sen. Dick Saslaw, which caps car title loan interest rates at 15 to 22 percent per month (depending on the amount of the outstanding balance).
Saslaw cited the example of a Harrisonburg man who took out a $1,500 car title loan, paid $380 per month for about a year, and after paying more than $4,700 he still owed the $1,500 principle. (New York Times)
In 2007, a case involving the Harrisonburg LoanMax was featured in Newsweek.
In 2006, Del. Matt Lohr received a $2000 campaign contribution from LoanMax. Lohr voted for Saslaw’s bill earlier this week.
Tags: General Assembly
This makes total sense, and has been a long time coming.
Good, these companies rip people off to the max and need some laws to limit what they can charge.
However, this is another case of a lack of planning for the future. We need to educate people on how terrible this option is and that there are alternatives such as budgeting, living within your means, emergency assistance programs such as Way to Go, medication assistance, etc. Making these less profitable is not the only answer.
and who is going to lend to these people if a legitimate, regulated title loan company doesnt? the neighborhood loan shark who will bust their kneecaps if they cant come up with the money? anyone offering them an alternative to get the cash? or just thinking as far as cutting them off from any source of cash. typical government myopia.