Conservative Viewpoints

"Government is not the solution…it is the problem" -Ronald Reagan



  • ReoAd

    mainstreet_ad_pdf.jpg

    C&LPhoto

VaPERL Consumer groups warn about legality of some car-title loans

Posted by Stephen on June 10, 2011

From The Staunton News Leader

Virginians who took out a car-title loan in recent months, as well as those who arranged a short-term “payday” loan online may be parties to an illegal transaction, consumer advocates say.

But that could give borrowers some protection against lender abuses, according to Jay Speer, of the Virginia Poverty Law Center.

Virginia required licenses for companies that make car-title loans as of Oct. 1, 2010, but only seven of the 23 firms now in the business got a license that month, according to State Corporation Commission records.

Many of the firms had set up offices and were making loans before the license requirement took effect.

Speer said that if the companies made loans after Oct. 1 and before obtaining a license, they would have commited a Class 1 misdemeanor, which subjects offenders to up a year in jail or a $2,500 fine.

He said he is aware of at least two cases.

Virginia, meanwhile, bans Internet payday loans. It is a felony offense to make such loans.

Speer said borrowers cannot be forced to pay back an illegal loan, but adds consumers need to be careful lenders don’t take steps that could hurt them.

The law center, along with 25 other nonprofit groups, has toll free telephone hotline that borrowers can call if they are concerned they may have taken out an illegal car title or payday loan. The number is 866-830-4501.

Loan companies have pushed aggressively in recent years to limit regulation in Virginia, spending hundreds of thousands of dollars in lobbying and in campaign donations to state legislators.

Lobbyists for the companies did not return calls seeking comment Thursday.

The State Corporation Commission has not received any complaints of illegal loans. The Attorney General’s office declined to comment when asked if it had.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: