Car Title Loans Banned In Iowa

The governor of Iowa has signed a bill banning car title loans. From the Iowa Attorney General:

Car-title loans have astronomical and unjustified interest rates, typically 264% and sometimes 360%. On top of that, the consumer puts his or her car at risk – the car-title loan company takes a lien on the car and actually takes keys to the car to make repossession easier.

But Car-title loans are about the only kind of loans where the lender gets to have it both ways: the loans have astronomically high interest rates, and they are secured by the consumer’s car or truck. Consumers get a bad deal on both counts, while the loan company gets a great deal. It’s unfair, it’s unjust – and now it’s a thing of the past in Iowa.

In other news, the governor of Iowa’s name is Chet Culver, which we think is sort of adorable. —MEGHANN MARCO

Miller Hails Car-Title Loan Bill [Iowa Attorney General Via U.S.PIRG Consumer Blog]
(Photo: Todd Ehlers)

Comments

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  1. govkid201 says:

    its about time someone got rid of those places!

  2. OnceWasCool says:

    Now, that is what a good corn fed governor can do. With the others wasn’t so busy being PC that they would remember the little folks.

    Title pawn and reverse mortgages just take advantage of the low income.

  3. Coder4Life says:

    Wohoo. I am from Iowa. Not that I would ever get a loan like that, but I am glad they got rid of it.

    I am sick and tired of the darn commercials taht come up every 10 minutes about car title loans. These people in thier new NISSAN or BMW and are getting a title loan in the commercials.

    If you own a brand new car, you should probably sell it and you would have more money..

    Geezzz.. though good news..

  4. hop says:

    hooray for iowa…….sounds like they are on the ball…….

  5. hop says:

    yeah for the state of iowa…….

  6. minneapolisite says:

    Another score for the state of Iowa is that it’s not legal for cell phone companies to lock you into a multi-year contract. I’m not sure of the exact details, but I do know that all it takes to get out of a cell contract in Iowa is a letter to the Iowa Attorney General. (Plus the cost of living in Iowa’s most expensive city of Des Moines is 21% less than Minneapolis.)

  7. thrillhouse says:

    Go, Iowa!

  8. kevjohn says:

    Next target: pawn shops!

  9. Bpj says:

    Yeah i wish they would do that here in Utah, but most of the payday and title loan businesses are owned by the politicians that make the laws.

  10. Buran says:

    I don’t have such a loan, and I don’t live in Iowa, but what if you have one and live there?

  11. TWinter says:

    @ Buran

    Most legal changes of this sort aren’t retroactive. It probably just bans issuing new car title loans after a certain date.

  12. oudemia says:

    Hey Iowans — Is it still the case that ATM fees are illegal there? I thought that rocked too. Good, populist Iowa.

  13. Zeroist says:

    oudemia,

    They brought back ATM fees right before I moved down from Minneapolis a few years ago. I didn’t particularly mind the fees, as I was used to them and just looked for a machine from my bank as usual. But co-workers and neighbors complained constantly about actually having to pay attention to who owned the machine and how much other banks would charge.

  14. abkad says:

    oudemia- ATM fees are in fact legal here. I’ve been paying them when using other banks’ ATMs ever since I’ve had a bank account.

    minneapolisite- Although it used to be much easier to get out of a cell phone contract in Iowa, it appears to be much more difficult now. Previously, the argument was made that cancellation fees would effectively charge consumers for a service they did not receive. A few years ago, the AG settled with one of the larger phone providers and the policy appears to have changed. I believe the key is whether your bills have covered the cost of equipment at the point you try to cancel, which doesn’t seem entirely unreasonable. Honestly, though, the official policy isn’t entirely clear.


    There are a number of great things about Iowa in addition to the loan ban. Our districts are drawn in a unique way where the legislature only approves redistricting plans after they have been put together by an independent commission. The first in the nation caucus allows almost every Iowan to meet Presidential candidates multiple times and to make informed votes, where it would be difficult to manage this in most other states. And hell, as the song goes “our state fair is a great state fair.”