After a number of deferrals or continuances it’s time for Chesterfield’s Board of Supervisors to consider the vehicle title lender, LoanMax, application for a stand-alone alternative lending office at Jefferson Davis Highway and Osborne Road. Below are some of the arguments against allowing the predatory lender from locating at the intersection that sees about 26,000 cars a day.
The public hearing on whether or not LoanMax ends up on Jeff Davis and Osborne is on October 23 at 6:30 at the Public Meeting Room in the County Complex at 9901 Lori Rd. in Chesterfield.
- In the newest chapter in the State of Lending research series, the Center for Responsible Lending (CRL) analyzed the debt traps of vehicle-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.
- The Bible contains numerous prohibitions against usury. The Old Testament contains the following: “If you lend money to one of your poor neighbors among my people, you shall not act like an extortioner toward him…” - Exodus 22:25.
- Would you buy a new car and pay 220 percent to finance it? On a $20,000 car financed over six years, your payment would be $3,666.69 a month.
- LoanMax is the top contributor to candidate and Political Action Committees (PAC) coffers in 2013 alone at $54,020. In 2012 and 2013, LoanMax remains the top contributor to State Delegates and Senators campaigns and Virginia PACs at $164,770.
The General assembly voted to allow vehicle-title lenders to charge up to 220 percent interest to their customers with a loan term of nine months.
It is common knowledge that businesses like title lenders prey on those who make less than $25,000 a year.
A TitleMax has already been approved for Chester. Does this end of the county need two of these predators less than a quarter mile apart? Exactly 1,001 feet.
A local group working against locating the LoanMax on the corner of JDH and Osborne has seen some movement in the right direction over the last months, and some are on their side. The group of regular folks, like your neighbors down the street, put a lot of shoe leather into the effort against this predatory lender that would not only lower residential property values in the area, but also dissuade good businesses to locate adjacent to the business in what should be a revitalization zone.