Lee Miller, a spokesman for the Arizona Community Financial Services Association, a trade group whose members include the former payday lenders, said the auto lending products are the low-cost payday alternative. They [lenders] are not focusing on the collateral of the loan. They are saying: 'Come see us for a loan — we now offer loans that are 50 percent cheaper than a payday loan,' which is absolutely true. And they're still many times higher than the rates charged by traditional lenders.,Miller contends you can't operate a storefront lending business if interest rates are capped at 36 percent.
Nearly all offer some variation of the auto title loan product, but they are also experimenting with other consumer loans, check cashing and prepaid debit cards.payday loans yuma az
He estimates auto title lending may be 60 percent of some lenders' business.,In traditional auto title loans, which have been around for decades, the lender assumes title of a car for the life of the loan. But some auto loans offered by former payday lenders don't require the borrower to surrender the title as collateral.
Even if someone has a bank loan on a car, they may still be able to get a car title loan.,We are in new territory, McCune Davis said.
We have asked the Attorney General's Office to take a look at this practice, and we are waiting for some guidance as to where these loans fall. Are they really auto title loans?,The senator wants consumers to know that if they have a loan that involves their vehicle, but the lender isn't the title holder, the car cannot be taken to satisfy the loan.,Miller expects further efforts to close the auto title loophole to be made in the coming sessions.
The folks who campaigned against payday loans will continue to campaign against auto title loans. They sincerely believe that morally, legally, ethically, the maximum Americans should pay for loans is 36 percent annually, he said.,GO TO THIS ARTICLE
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