There’s a debate at the statehouse over “car-title” loans which require borrowers to hand their car title over to the lender. The Senate has voted to limit the interest rates on such loans which in some cases have gone as high as 360 percent. Senator Joel Bolkcom, a Democrat from Iowa City, is urging the House to approve the limit on interest rates on car title loans. Bolkcom says in the first nine months of car-title loan operations in Iowa, more than a thousand Iowans have lost their car. “A 360 percent interest loan which puts your car at risk is not a service, it’s a ripoff and it should not be legal in Iowa,” Bolkcom says. He calls “car-title loan” companies the “bottom-feeders” of the banking industry. The Senate has voted to limit the interest rate on car title loans to 21 percent. Representative Joe Hutter, a Republican from Bettendorf, knows a woman who took out a car-title loan to buy tires for her car. In just two weeks, the loan company wanted its three-hundred dollars plus 70 dollars in interest, and the woman had to go to her mother for the money because she worked a minimum-wage job and didn’t have the cash. Hutter says the car-title loan firms prey on people who’re desperate, and there should be some kind of controls. But other Republicans in the House intend to oppose the move to restrict the interest rates these car-title loan companies can charge.
