The Iowa House Thursday night voted to crack down on so-called car title loans. Democrats say limiting the interest rates charged on such loans protects consumers, but some Republicans opposed the bill. Representative Jamie Van Fossen, a Republican from Davenport, says there’s a demand for such loans by consumers who can’t get credit elsewhere.
"My district borders Illinois. These people are just going to go across the river and get their loans," Van Fossen says. But Democrats like Representative Dave Jacoby of Marion, says charging more than three-hundred percent on a loan against your car is excessive and too many Iowans have lost their cars because of it. "…their only means to get into work," Jacob says. "Their only means of getting their kids to school or day care."
Representative Bob Kressig, a Democrat from Cedar Falls, says Iowa isn’t the first to crack down on the industry. Twenty-seven other states have passed laws limiting the interest rates which can be charged on car title loans. "We can send a message to Iowans that we’re looking out for their best interests," he said. The bill would limit interest rates on car title loans to 21 percent.
The bill now goes to the Senate, which has approved similar measures before. In past years the car title loan bill stalled in the House, blocked by Republicans who said the industry was unfairly being targeted and served a class of consumers who cannot get loans elsewhere.