A group critical of the car title loan industry brought a lawyer from the Center for Responsible Lending to Iowa to speak out against car title loan companies. Kathleen Keest, legal counsel for the Center for Responsible Lending, has a message for the Republican lawmakers in the Iowa House who refuse to allow debate on a bill that would limit the interest on car title loans to 21 percent.
“We hear a lot about values voters today and I think real values voters don’t think it’s right to let greed be an excuse for exploiting people economically,” Keest says. Keest says car title loan companies not only secure the car itself as collateral, they charge interest rates that’re over 200 percent.
“Most people don’t think it’s right to, on the one hand, say these people need help getting from paycheck to paycheck,” Keest says. “If people are struggling getting from paycheck to paycheck paying their bills at zero percent interest, 264 percent loans to get them short-term from paycheck to paycheck is a recipe for making their problem worse.”
The car title loan industry says they can’t afford to offer loans to their customers for 21 percent and still make money, and Republican leaders in the House say they don’t want to put limits on such businesses. Keest says there are a whole lot of “predatory” businesses the state does regulate, and car title loan companies should be one of them.
Keest says the state has laws that ban growing marijuana even though the business people involved in the pot trade could argue the ban impinges on their right to do business in Iowa. The bill that would limit car title loan interest rates to 21 percent has passed the Iowa Senate three times in the past two years but has never cleared even a committee in the Iowa House.