The Nuts and Bolts of Auto Title Lending
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The Nuts and Bolts of Auto Title Lending Justin B. Hosie Elisha Brown
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Transcript of The Nuts and Bolts of Auto Title Lending
The Nuts and Bolts of Auto Title Lending
Justin B. HosieElisha Brown
Licensing
Regulatory Oversight
Advertisements
Multiple Parties
Transaction Terms
Cross Border Transactions
Default, Repossession, and Sale
Noteworthy Points
Questions
Overview of the Presentation
Licensing Pawn and Pledge
o How are they different than loans and credit sales?
30 day term and renewalsNon-recourse
oHow are they similar?
Small Loans, Retail Sales, and Installment Loan Laws
States with Title Laws where the Industry operates under Installment Laws
Regulatory OversightFederal: CFPB and FTC Considerations
o Added to CFPB complaint portal July 21, 2014
Unexpected charges or interest feesLoan application issuesProblems with the lender correctly charging and crediting
payments Issues with the lender repossessing, selling, or damaging the
consumer’s property or vehicleUnable to contact lender
State AgenciesMunicipalities
Advertisements
General Rules for Consumer CreditoTILAoFTC Internet Advertising Guidance
State StatutesoSome Pawn/Pledge States Prohibit Calling the
Transaction a “Loan”oGeneral Considerations
Posting Licenses and Fees
Multiple Parties
Multiple Parties, Marital Status, and ECOA Co-Owners (Getting Consent) Cosigners Co-Borrowers – Proceeds to Both People,
Both Sign
Transaction Terms General Consumer Credit Laws Apply: TILA, ECOA,
GLBA, etc. Dollar Amounts Duration and Term Typical Disclosures Renewals, Auto Renewals, Gunn and Tucker Cases Title: “Unencumbered” Requirement Title: Paying the Lien Fee – Some States Think it’s
a Finance Charge, Despite Reg. Z(Continued on next slide)
Disclosures:oGeneral Consumer Credit Requirements
Apply: o Adverse Actiono TILA Disclosureso Privacy Policy, etc.
oVarying State Disclosures
Electronic Liens and Paper Titles
Cross Border Transactions General Rule
o Midwest Titleo But see: Kaneff v. Delaware Title Loans, Inc.
North Carolina Washington, DC West Virginia Actions
Is the Repo Agency a Third Party Service Provider?
YES!
Default, Repossession, and Sale
Often “Non-recourse” Transactions Repossession and Sale as Only Collection
Option Notices of Default and Sale Notices of Surplus, but often no
deficiency permittedoMust report funds to state treasury
department for non located customers
Noteworthy Points Pawn/Pledge transactions are not installment loans Unique licensing and oversight Renewing 30 day terms Additional advertising limits Consumer credit laws such as TilA, ECOA, GLBA, etc. do
apply Multi-party transactions involve careful planning to
properly comply Beware of cross border relationships, in certain places Don’t expect to pursue a deficiency in a pawn/pledge
state
QUESTIONS?
Contact InformationJustin B. Hosie
Hudson Cook, LLP
6005 Century Oaks Drive
Suite 500
Chattanooga, TN 37416
(423) 490-7564
Elisha Brown
Speedee Cash
412 Hwy 61 N
Natchez, MS 39120
(601) 445-2377
