Saturday, January 29, 2005

Bolkcom seeks ban on car title loans

Bolkcom seeks ban on car title loans

"A state senator is seeking to ban car title loans, which sock customers who put up their vehicles as collateral with 360 percent annual interest rates.

'We don't need to create another form of abusive lending that we can live without,' said Sen. Joe Bolkcom, an Iowa City Democrat. He plans to introduce a bill to halt the sky-high interest rates and similar practices.

Unlike other lending transactions where consumers use their vehicles as collateral, the title loans are considered open-ended credit on which there is no ceiling for interest rates.

Bolkcom estimated that a borrower who took a $400 loan and paid the minimum payment would have after 75 days paid $265 interest and still owe $292 on the $400 loan..."

It used to be that the only guy with interest rates like that was named Louie Kneecaps. I spent more years than I care to admit on the wrong end of predatory lending. It's really expensive to be poor and I'm glad MY senator is the one taking this issue off the back burner.


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