Commentary: Stop vehicle-title loan ripoff

In an effort to keep a predatory loan company from locating on the corner of Osborne Road and Jefferson Davis Highway the Village News has been offering a series of commentaries on the effects of borrowing from lenders that charge up to 220 by law in Virginia. On August 28 the Board of Supervisors will vote on whether to allow such a business to locate in our community.

Here is a partial article from the Washington Informer written by Charlene Crowell on July 11 this year. Predatory lending continues to be a problem in many communities across the country.

“In the newest chapter in the State of Lending research series, the Center for Responsible Lending (CRL) analyzed the debt traps of car-title loans. It’s an under-reported financial issue that today affects consumers in 21 states through more than 8,100 retail stores. It’s also an industry that annually reaps $4.3 billion in fees on loans totaling $1.9 billion, with an average loan size of only $1,042.

“Let’s say you find yourself a little short on cash; but have title to your vehicle. A vehicle-title lender is ready, however, to offer a loan with no questions asked about your credit or other financial obligations. The loan will always be a fraction of the vehicle’s full market value. Just sign the loan papers and ready cash of several hundred or even a few thousand dollars is yours.

“What vehicle-title lenders seldom mention is that most borrowers are unable to repay the full amount of fees and the loan in just a single payment. The typical borrower takes eight renewals on a single loan and eventually pays $3,391 — over three times the average amount borrowed. Even if a vehicle-title loan leads to vehicle repossession the borrower must continue to repay all monies still owed even when the borrower has neither title nor use. For example, in 2008, 60 percent of New Mexico vehicle-title borrowers lost their cars to repossession.

“And what does the lender get for his money? Let us count the ways:

  • Excessive loan fees that frequently total more than the principal borrowed;
  • Repossession of your vehicle, made easier by installed GPS trackers;
  • An additional loan fee for the repossession itself, typically $350-$450;
  • The right to sell the vehicle at market prices — without your notification or the chance to catch up on your loan;
  • The right to keep all of the vehicle sales proceeds; and
  • The ability to force continued payments on the loan and fees until the full financial obligation is met.

“So who borrows these high-cost loans? Typically they are consumers who earn $25,000 or less a year.”

Tell your Supervisor that you don’t want a predatory lender in your community/neighborhood. Go to: and sign the petition or email your Supervisor at


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