Title loan lenders are under fire from New York Attorney General Eric Schneiderman who announced this week that he reached “agreements” with 10 repossession agents to stop accepting their repossession assignments.
Title loan companies do not establish a physical presence in New York to avoid its 16 percent maximum loan interest rate for unlicensed lenders, according to a press release from Schneiderman’s office. According to the press release, these out-of-state title loan lenders are charging interest rates ranging from 100 percent to more than 700 percent. A title loan, which is a type of payday loan, can often worsen a consumer’s financial problems because many are unable to pay off the loan when it becomes due, according to Schneiderman. Instead, the payment periods are extended, resulting in additional interest.
Repo agents not accepting his “agreement” received a warning from Schneiderman:
“Any other business that repossesses the vehicles of New Yorkers based on illegal title loans should recognize that my office will not tolerate this kind of behavior.”
You can read the full press release here.