Miller calls the extremely-high-interest loans "abusive and unconscionable."
DES MOINES. Attorney General Tom Miller is urging Iowa House leaders to pass a consumer-protection measure that would protect Iowans from what he called "abusive and unconscionable" car-title loans. Miller asked the leaders to "move this simple measure as you wrap up action for the year."
Car-title loans are secured by the consumer's automobile or truck. Lenders actually keep an extra set of keys to the vehicle - and may repossess a vehicle if a lender is delinquent in making one payment. Miller sent his appeal in a letter to House Speaker Christopher Rants, House Majority Leader Chuck Gipp, and House Ways & Means Committee Chairman Jamie Van Fossen. Click here for a copy of the letter and a fact sheet on car-title loans.
Miller said there is one car-title loan business in Iowa now, a Georgia company operating a number of branches - and charging 360% APR interest on its loans. "Secured lending should be much cheaper, because it is guaranteed by the car," Miller said. "There is no justification for the astronomical interest rates."
"There are legitimate Iowa banks and credit unions that can and do extend credit to these borrowers at far better rates, without putting the borrowers' means of transportation and livelihood at risk," Miller added. "Repossession and loss of transportation to work and health care is a very severe threat to these Iowans," he said.
Miller noted that the Senate approved the car-title loan measure by a vote of 50-0, and other states have banned or severely limited abusive car-title loan practices. The measure "would be extraordinarily valuable to consumers - and to legitimate Iowa businesses," Miller wrote, "and I believe it should be non-controversial."
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