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Wednesday, April 21, 2010

 3:35 AM 

Assembly taking up Senate payday lending bill

Rep. Gordon Hintz is talking about his amendment to regulate the auto title industry.

The Assembly passed a bill in February that in addition to regulating payday loans banned auto title loans. The Senate version did not address auto title lending.

The Hintz amendment would regulate the auto title loan industry by:

- Requiring lenders to return any profit from the sale of the lost vehicle above the principal, interest, and fees on a loan to the borrower. If you lose your car and it is worth more than what you owe, then you get the money back

- Prohibiting lenders from taking physical possession of car keys. Many lenders in Wisconsin require that borrowers turn over a copy of their keys. By providing keys to the lender, borrowers face the risk of loss of their vehicle without notification that it is being repossessed.

- Only allowing one auto title loan per customer at a time. Right now there is no regulatory mechanism to prohibit someone from taking out multiple loans on the same auto title.

- Limiting loans to 50% of the motor vehicle's value. This is inclusive of all interest and fees. Just as it was important to include a threshold for payday loans, it is important to do the same thing for auto title loans.

- Requiring notice to be given before a car is repossessed or sold. The biggest risk of auto title loans is the result of a lost vehicle. Appropriate notification of when a car is going to be repossessed or sold will provide people with time to make informed decisions.

- Only allow auto title lenders to charge a reasonable storage fee after the motor vehicle is repossessed or surrendered. Once a vehicle has been repossessed and is held prior to storage, additional fees beyond principle and interest should not be added making it even more difficult for someone to reclaim their car. (Rules process to determine amount)

- Prohibiting interest accrual on a loan after vehicle has been repossessed or after 60 days following the failure to make a payment. If someone has their car repossessed, additional interest should not be added once a vehicle is repossessed making it even more difficult for someone to reclaim their car.


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