The headline in the St. Louis Post-Dispatch reads: "TitleMax is thriving in Missouri - and repossessing thousands of cars in the process."
The newspaper's investigation revealed that nearly 9,000 vehicles were repossessed in the state of Missouri in 2014 -- all tied to the title loan company.
"In 2014, TitleMax repossessed 8,960 cars in Missouri and sold 7,481 of them." -- St. Louis Post-Dispatch
The TitleMax promise is this: “Your car title is your credit.”
The St. Louis Post-Dispatch reports that some customers pay more than double for the loans they receive, and lose their cars when they can't keep up with the payments.
TitleMax classifies itself as a consumer installment lender, which makes any loan--secured or unsecured--protected by a 120-day return period. During this time, the loans accrue interest with no cap limitations. For many this results in repossession.
Attorney John Miller, of the Kansas City firm Swanson Midgley, says that as long as Kansas and Missouri lobbyists can donate an unlimited amount of money to legislators, change is unlikely to occur.
“The problem in Missouri is there are no limits on lobbying of our legislators and there are no limits on donations," Miller said. "The payday industry literally has spent millions of dollars to lobby our legislators and prevent meaningful reform in Missouri and in Kansas."
Payday and title lenders argue that if there is a cap set on interest rates, credit for many will not be available, making it harder for customers to secure loans. Miller says other states have proven to be successful with setting a cap on interest rates within the loan industry as a whole.
In response to a request for an interview, a TitleMax representative told 41 Action News the company has a policy of not responding to media inquiries.
“The title lenders will tell you, 'Oh, if you restrict us too much then the access to credit will dry up.' That is simply not true. They can charge a fair interest rate and still be in business, but instead they take advantage of the loopholes and the laws and charge triple-digit interest rates,” Miller said.
Support and relief for consumers
The Consumer Financial Protection Bureau says it plans to propose new regulations to protect consumers in relation to payday and title loans by the end of 2015.
Learn how you can protect yourself and even get relief from payday and title loans.