CONSUMER AFFAIRS GETS NEW TOUGH LAW ON CAR TITLE BUSINESSES
In 1997 and 1998, the city's Consumer Affairs Division received many calls from consumers who signed a car title loan contract and were confused as to how their specific loan amount resulted in such high monthly payments and penalties. Many of these same consumers were also told by their title loan broker before they signed the contract, not to worry, if they missed a payment, they only needed to make a partial payment or have to make a late payment. Unfortunately, they often find later their vehicle is going to be repossessed due to that one late or partial payment.
The lure of quick and easy cash of a title loan transaction resulted in statewide consumer problems. During the 1997 Legislative Session several bills were proposed concerning the practices of the title loan industry, which included changes in the industry's licensure, loan transactions, disclosure, and penalties for violations. Unfortunately, none of these bills were passed.
That is why the Consumer Affairs Division embarked on a campaign to toughen the laws governing the Title Loan Industry. We proposed to the City Council of Jacksonville to limit the interest that Title Loan businesses could charge to 30% annually, down from their allowed rate of 264% annually! We also asked that all Title Loan businesses register and be licensed by the Division. Mayor John Delaney took this measure to heart and vigorously lobbied local government officials to pass this much needed piece of legislation.
We are pleased to report that the City Council did us one better and, on January 12, 1999, not only passed the Title Loan legislation, but passed it with a maximum interest rate of 18% annually, bringing Title Loan lenders in line with other forms of lending institutions. This law became effective February 1 and gives local lenders 90 days to come into compliance with the new law.
- Under the new law, Title loan brokers are permitted to charge a maximum fee of 1.5 percent per month (or 18% per year). When the title loan has been paid in full, the Title lender must deliver to the borrower a certificate of title clear of all encumbrances placed upon the title within 30 days of such payment in full. A title lender may take possession of the motor vehicle upon the borrowers default under the title loan agreement. Unless the borrower voluntarily surrenders the motor vehicle, the title lender may only take possession of a motor vehicle through an agent licensed by the State of Florida to repossess vehicles.
- In addition, all Title Loan lenders in Duval County must register and be licensed by the Division of Consumer Affairs. Title Loan lenders will also keep their books open and available for inspection by the Division of Consumer Affairs.
We feel this new law will go a long ways in protecting the consumers of Duval County who have paid thousands and thousands of dollars and in some cases lost their automobiles to these risky loans.
98-135--1999 Title Loan Ordinance, Jacksonville and Duval County, Florida
If you need additional information or have a question as to how the new law might affect a current loan, please call us at 630-3467.
Back to Consumer Affairs
Citizen Information | Business Information | Visitor Information
