New name, same old tricks. So says a movement that wants auto title loan stores outlawed, just as Arizona voters abolished payday loans. A House bill going after car title loans would cap interest rates at 36-percent, and repeal the State law allowing the industry to keep operating in Arizona.
Representative Debbie Mc Cune Davis says her bill would honor the voter’s wishes when they voted payday loans out of Arizona in 2008 by putting auto title loans, which operate on the predatory practices, out of business.
Car title loan advocates echo the arguments payday loan lenders once made. It gives cash strapped families with poor or no credit a way out. But Mc Cune Davis says, however luring it may be to desperate consumers, ultimately, they wind up losing.
Susan Fronczak is a former auto title loan borrower who warns people to stay away from these loans. She says her title loan ballooned from two thousand to five thousand dollars after losing a job she briefly held and the company repossessed her car overnight. She says making good faith payments was not acceptable to the lender. But she says the tide finally turned for her after filing a complaint with the Consumer Financial Protection Bureau. The company released her from the debt and her car was returned, but only after filing the complaint.