CFPB Issues Rule on Title Pawn Featured
09 October 2017
The Consumer Financial Protection Bureau’s new rule on payday lending includes a section on auto title loans.As with payday loans, the CFPB found that the vast majority of auto title loans are re-borrowed on their due date or shortly thereafter. The rule requires that lenders determine whether the borrower can afford the loan payments and still meet basic living expenses and major financial obligations. For auto title loans that are due in one lump sum, full payment means being able to afford to pay the total loan amount, plus fees and finance charges, within two weeks or a month. The rule is actually stricter for title loans because it does not allow a principal-payoff option, in which borrowers can take out one loan that meets certain restrictions and pay it off in full.