Auto-title lenders (204% APR) thrive in Arizona after payday lenders outlawed

[Newsjock]

Source: Arizona Republic

Consumer watchdogs sighed with relief after Arizona voters rejected a permanent extension of payday lending in 2008. Payday loans carried triple-digit interest rates that critics said left low-income borrowers trapped in debt, and those high rates were going away.

But the sunset of payday lending only fueled a surge in another form of quick cash for the financially vulnerable: auto-title lending. Like their payday-lending counterparts, auto-title lenders, which use borrowers’ vehicles as collateral, offer short-term loans at triple-digit interest rates, potentially reaching 204 percent.

More than 430 auto-title-lending branches have been licensed in Arizona since 2009, the year after voters rejected payday lending, state figures show. By comparison, from 2000 to 2008, about 160 title-lending branches were licensed with the state.

The rise of title lenders has rekindled a debate over whether these kinds of high-interest loans ultimately help or take advantage of low-income borrowers.

Read more: http://www.azcentral.com/business/news/articles/20130318title-loans-hurt-poor-critics.html

[sakabatou]

1. Such lenders should be illegal

[freshwest]

2. +1

[tammywammy]

4. Agreed. n/t

[olddots]

3. The turd maggots call this "Free Enterprise "

I call it a form of slavery .