The Iowa Senate has for a passed a bill that would put limits on the car title loan industry. Senator Joe Bolkcom, a Democrat from Iowa City, says some car title loan companies charge over 300 percent interest on their loans. “I think it’s time to stand up for working Iowans who find themselves having a difficult time making ends meet week-to-week and who are really thrown to the wolves with these car title loan lenders,” Bolkcom says.
The bill sets a 21 percent cap on the interest businesses may charge on car title loans — transactions in which the car ends up being seized by the lender if the loan payments aren’t made. This is the second year the Senate has passed the bill. Senators passed it twice last year and the vote was 50-to-zero both times. Today’s vote was 47-to-three. “It sends a strong message to the House that real reform is needed,” Bolkcom says.
Senator Jerry Behn, a Republican from Boone, was one of three “no” votes on the bill. Behn believes if the bill became law, some car title loan companies would stop doing business in Iowa. Behn says the free market should be left alone in this case. “There are people who are utilizing the service,” Behn says. “Nobody’s making them go there.”
Behn had voted for the bill when it passed the Senate on the two previous occasions, but Behn says he must have been caught not paying attention to what he was voting on. Governor Tom Vilsack has said he’d sign the bill, but key members of the House say they’re not interested in passing it.