Sen. says oversight of unregulated title loan industry too weak

Sen. says oversight of unregulated title loan industry too weak

April 6, 2005

NASHVILLE (AP) -- Tennessee's unregulated car title loan industry would be subject to some state oversight in a bill approved by a Senate committee. A senator studying predatory lending says the measure is too weak.

Democratic Sen. Roy Herron of Desden says the bill approved Tuesday by the Senate Commerce Committee is "like getting them to agree to stop murdering, but they're still going to continue raping."

Herron is chairman of a special legislative panel studying predatory lending.

The committee-approved bill would give the Tennessee Department of Financial Institutions regulatory oversight over lenders who use motor vehicles as collateral for short-term, high-interest loans.

The bill does not address title loan fees and interest rates, which have an effective annual percentage rate of 264 percent.

Financial Institutions Commissioner Kevin Lavender described the measure as "an important first step" in regulating the industry. Lobbyists for the lenders support the committee-approved bill.

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