Pennsylvania residents who thought they might get their vehicles repossessed because of a title loan, may want to keep their ears to the ground for some welcome news. Hundreds of people in this state, including more than a few folks from the Lehigh Valley, can soon stop making payments on illegal title loans and remove GPS trackers that have been installed. The Department of Banking and Securities notified customers recently that loans made under the names of Car Loan LLC, Autoloans LLC and Sovereign Lending Solutions are not legally permitted to be collected on in the state and that repossessions based upon these loans are not allowed. The businesses mentioned are just a few that are part of a larger title lending operation that the state has been working on putting a stop to for about a year now.
All told, there are 535 Pennsylvania residents who have vehicles that are in lien by the companies we mentioned. 42 of those people are in Northampton and Lehigh counties. Another 16 are in Allentown, eight in Easton, and others spread throughout various areas in the state. The department said that it petitioned Commonwealth Court to help enforce the terms of a similar order in the past, but things appear to have been lost in the shuffle. The court officially okayed this request just last month.
The department’s petition said, “Pennsylvania consumers are at risk for continued economic damage by these unlicensed and unauthorized entities charging usurious interest and repossessing motor vehicles used as pawns for these loans.” The ruling from the court, given last month, ruled that the companies had to cease lending and put a stop to collections from residents of Pennsylvania, and that no vehicles were to be repossessed. The court added that the companies must release any liens and return the titles for the vehicles to their rightful owners. Calls made to some of these lending companies for comments on the ruling were not immediately returned.
Complaints from consumers are being included in the Banking and Securities Department petition to demonstrate how expensive some title loans can be, and to help people avoid these loans when applicable. For example, one person got a loan for $2,500 with an APR of 180 percent. This loan was taken out in 2013, with the borrower’s truck being put up as collateral. This person made payments for over $9,000 over the course of 12 months, but did not make all of the agreed-upon payments; payments that should have added up to $14,000. This borrower, it should be revealed, refinanced her loan twice and dealt with three vehicle repossessions. It is apparent that this borrower either did not intend to live up to her side of the loan terms or that she was unaware of what those terms were. In either case, she is just one example of how some consumers in Pennsylvania were affected by these lending companies.
When people take out title loans, they have to pay close attention to the loan agreements that they sign. The lending companies now under scrutiny obviously crossed lines that the local government does not agree with. Borrower should always be aware of how much they are borrowing, how long they have to repay the loan, how high the interest rates are and whether or not there are any additional fees or loan terms that they should be aware of. By doing so, it is easier for people to avoid getting their vehicles repossessed or losing the title to their vehicles. As for the lenders mentioned in this article, it doesn’t look like Pennsylvania consumers will have to worry about doing business with them any time in the near future.