May 18, 2016
The Consumer Financial Protection Bureau today signaled that it is targeting the title loan business. The CFPB released a report that demonstrates that 20% of borrowers who obtain a single-payment auto title loan have their car or truck seized by their lender when they default. According to the CFPB's research, lenders renew more than four-in-five of these loans on the due date because borrowers could not otherwise repay the loan. The report examined nearly 3.5 million anonymized, single-payment auto title loan records from nonbank lenders from 2010 through 2013. The CFPB concluded from its study that these auto title loans have issues similar to payday loans, including high rates of consumer reborrowing, which can trigger high costs in fees and interest.