First step consumer protection against predatory lending
Leaders from the Iowa Senate and House joined Iowa Attorney General Tom Miller today in calling for fundamental reform of the car title loan industry to protect Iowa consumers.
“Last year, the reason we failed to clean up the car title industry was the Republican House leadership refused to let the bill come to the floor,” Kevin McCarthy, House Majority Leader said. “This year, we will vote on car title reforms and I expect it to pass the House with the same large bipartisan majority that approved it in the Senate. This is a first step for a new Iowa Legislature that takes consumer protection seriously.”
“The key test of any car title legislation is the interest rate. The Iowa Senate has repeatedly, with overwhelming bipartisan support, approved legislation which would cap t the interest rate at no higher than 21 percent,” said Senator Roger Stewart of Preston, who sponsored the bill last year in the Iowa Senate. “This rate is still high for a loan that is secured by your car but it is far better than the predatory, outrageous rates of 264 percent or more. Any legislation that claims to reform this industry must address the interest rate problem.”
“The one indicator of predatory lending that everybody agrees on is making a loan without regard to ability to pay,” Attorney General Miller said. “The result is that most consumers are on the ‘down’ escalator as soon as they sign car-title loan papers. It’s very risky to consumers, but the car-title loan company – with the vehicle as collateral – is risking little or nothing.”
“Elections have consequences and I’m hoping that one consequence of November’s election is that Iowans will be less likely to be victimized by outrageous interest rates and fees,” Senate Assistant Majority Leader Joe Bolkcom of Iowa City said. “Reforming car title loans should be the first step to helping consumers have confidence that financial transactions in Iowa are based on reasonable fees and interest rates.”
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“Last year, the reason we failed to clean up the car title industry was the Republican House leadership refused to let the bill come to the floor,” Kevin McCarthy, House Majority Leader said. “This year, we will vote on car title reforms and I expect it to pass the House with the same large bipartisan majority that approved it in the Senate. This is a first step for a new Iowa Legislature that takes consumer protection seriously.”
“The key test of any car title legislation is the interest rate. The Iowa Senate has repeatedly, with overwhelming bipartisan support, approved legislation which would cap t the interest rate at no higher than 21 percent,” said Senator Roger Stewart of Preston, who sponsored the bill last year in the Iowa Senate. “This rate is still high for a loan that is secured by your car but it is far better than the predatory, outrageous rates of 264 percent or more. Any legislation that claims to reform this industry must address the interest rate problem.”
“The one indicator of predatory lending that everybody agrees on is making a loan without regard to ability to pay,” Attorney General Miller said. “The result is that most consumers are on the ‘down’ escalator as soon as they sign car-title loan papers. It’s very risky to consumers, but the car-title loan company – with the vehicle as collateral – is risking little or nothing.”
“Elections have consequences and I’m hoping that one consequence of November’s election is that Iowans will be less likely to be victimized by outrageous interest rates and fees,” Senate Assistant Majority Leader Joe Bolkcom of Iowa City said. “Reforming car title loans should be the first step to helping consumers have confidence that financial transactions in Iowa are based on reasonable fees and interest rates.”
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