House votes to restrict car-title loans
By Charlotte Eby Journal Des Moines Bureau | Posted: Friday, February 02, 2007
DES MOINES, Iowa -- The Iowa House voted Thursday to slap restrictions on Iowa's car title loan industry, which critics have argued engages in predatory loan practices.
The bill, which cleared the House on an 84-12 vote, would limit interest rates on car title loans to 21 percent, the same as consumer loans.
Opponents of car title lending said the annual interest rates charged by lenders can reach 200 to 300 percent, making it impossible for borrowers to repay them.
Borrowers secure the loans by handing over the title to their vehicle and a set of keys at the time they take out the loan. If the loan is not repaid on time, the lender can repossess the vehicle, an occurrence that happens too many times, critics say.
House Majority Leader Kevin McCarthy, D-Des Moines, called car title lenders "loan sharks."
"I don't think it's a great loss if they were to move out of state," McCarthy said.
Iowa Attorney General Tom Miller called car title lending the worst consumer practice he's seen in 25 years in the job. He said a majority of states have outlawed the practice and that other alternatives exist for those seeking loans.
"Those other people survive. They do find loans," Miller said.
A report by the nonpartisan Legislative Services Agency found that 25 businesses in the state have paid the registration fee to do car title lending and 16,000 Iowans take out the loans each year.
Some backers of the car title loan industry argued it is a last resort for cash-strapped Iowans without the credit history to turn to traditional lenders.
Democrats, who are in the majority in the Iowa House, did not allow amendments to be considered after a missed deadline, which drew the ire of GOP members.
Rep. Tom Sands, R-Columbus Junction, voted against the bill. He complained that Republicans were not allowed to offer an amendment he says would have made the legislation better.
"It does nothing that would solve the problem," Sands said of the bill that was passed.
Rep. Jamie Van Fossen, R-Davenport, said he believes if the state restricts car title lenders, they should look at payday lenders as well.
"I think we're just a little hypocritical on taking on one industry," he said.
With approval in the House, the measure now moves to the Senate for consideration.
Charlotte Eby can be reached at (515) 243-0138 or chareby@aol.com.
Roll Call
Here is how Siouxland House members voted on the car-title loan bill:
Voting Yes -- Roger Wendt, D-Sioux City; Wesley Whitead, D-Sioux City; Christopher Rants, R-Sioux City; Dan Huseman, R-Aurelia; Mike May, R-Spirit Lake; Clarence Hoffman, R-Charter Oak; Rod Roberts, R-Carroll; Dwayne Alons, R-Hull; Royd Chambers, R-Sheldon; Chuck Soderberg, R-Le Mars.
Voting No -- Gary Worthan, R-Storm Lake.
Not voting -- Matt Windschitl, R-Missouri Valley
The bill, which cleared the House on an 84-12 vote, would limit interest rates on car title loans to 21 percent, the same as consumer loans.
Opponents of car title lending said the annual interest rates charged by lenders can reach 200 to 300 percent, making it impossible for borrowers to repay them.
Borrowers secure the loans by handing over the title to their vehicle and a set of keys at the time they take out the loan. If the loan is not repaid on time, the lender can repossess the vehicle, an occurrence that happens too many times, critics say.
House Majority Leader Kevin McCarthy, D-Des Moines, called car title lenders "loan sharks."
"I don't think it's a great loss if they were to move out of state," McCarthy said.
Iowa Attorney General Tom Miller called car title lending the worst consumer practice he's seen in 25 years in the job. He said a majority of states have outlawed the practice and that other alternatives exist for those seeking loans.
"Those other people survive. They do find loans," Miller said.
A report by the nonpartisan Legislative Services Agency found that 25 businesses in the state have paid the registration fee to do car title lending and 16,000 Iowans take out the loans each year.
Some backers of the car title loan industry argued it is a last resort for cash-strapped Iowans without the credit history to turn to traditional lenders.
Democrats, who are in the majority in the Iowa House, did not allow amendments to be considered after a missed deadline, which drew the ire of GOP members.
Rep. Tom Sands, R-Columbus Junction, voted against the bill. He complained that Republicans were not allowed to offer an amendment he says would have made the legislation better.
"It does nothing that would solve the problem," Sands said of the bill that was passed.
Rep. Jamie Van Fossen, R-Davenport, said he believes if the state restricts car title lenders, they should look at payday lenders as well.
"I think we're just a little hypocritical on taking on one industry," he said.
With approval in the House, the measure now moves to the Senate for consideration.
Charlotte Eby can be reached at (515) 243-0138 or chareby@aol.com.
Roll Call
Here is how Siouxland House members voted on the car-title loan bill:
Voting Yes -- Roger Wendt, D-Sioux City; Wesley Whitead, D-Sioux City; Christopher Rants, R-Sioux City; Dan Huseman, R-Aurelia; Mike May, R-Spirit Lake; Clarence Hoffman, R-Charter Oak; Rod Roberts, R-Carroll; Dwayne Alons, R-Hull; Royd Chambers, R-Sheldon; Chuck Soderberg, R-Le Mars.
Voting No -- Gary Worthan, R-Storm Lake.
Not voting -- Matt Windschitl, R-Missouri Valley
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red4free wrote on Feb 12, 2007 2:21 PM:
do the math wrote on Feb 10, 2007 3:24 PM:
Fearringtonflash wrote on Feb 2, 2007 8:39 PM:
mad-customer wrote on Feb 2, 2007 7:08 PM:
rodney wrote on Feb 2, 2007 5:24 PM: