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Usury Explosion: Northern Virginia Becomes Hotbed for Car-Title Lending Industry
Usury Explosion: Northern Virginia Becomes Hotbed for Car-Title Lending Industry
Route 1 corridor currently has eight locations; soon to get ninth.
Wednesday, November 27, 2013
In the last three years, dozens of new car-title lending businesses have popped up in neighborhoods across Northern Virginia — the result of recent regulations opening the door to a business that charges as much as 264 percent a year on loans. Since 2010, when the Virginia General Assembly gave the green light to the industry, the total number of locations has more than doubled from 184 to 395. And locations are opening every week.
"It's a trap, and although it's presented as a loan it's really loan-sharking," said Jay Speech, executive director of the Virginia Poverty Law Center. "People who get into this end up much worse off than when they started."
Lenders have always charged a range of interest rates for loans, but what's happening now in neighborhoods across Northern Virginia is unprecedented. Back in 2010, after then-Attorney General Bob McDonnell went after the car-title lending industry for violating Virginia law restricting how soon collections could begin on loans, members of the Virginia General Assembly crafted legislation that set rules specific to car-title lenders. The legislation created some restrictions that prevented lenders from going after borrowers for additional money if they had already repossessed an automobile, prevented lenders from charging more than 50 percent of the value of a car and capped the interests rate at 264 percent a year.
....
INDUSTRY LEADERS contributed generously to members of the General Assembly and lobbied heavily to get their way. Since 2009, LoanMax contributed more than $500,000 and Fast Auto Loans contributed more than $200,000. {Senate Democratic leader Dick Saslaw (D-35)} received the largest individual contributions, receiving $22,000 from Fast Auto Loans and almost $20,000 from LoanMax. Many of the other legislators voting in support of the industry also received financial support from car-title lenders. When asked about his support of the 2011 bill, Del. Bob Brink (D-48) had little to say.
This site is soon to become the latest addition to the series of car-title lending operations that have opened along the Route 1 corridor since legislators opened the door to the industry back in 2010. Photo by Michael Lee Pope.
Route 1 corridor currently has eight locations; soon to get ninth.
Wednesday, November 27, 2013
In the last three years, dozens of new car-title lending businesses have popped up in neighborhoods across Northern Virginia — the result of recent regulations opening the door to a business that charges as much as 264 percent a year on loans. Since 2010, when the Virginia General Assembly gave the green light to the industry, the total number of locations has more than doubled from 184 to 395. And locations are opening every week.
"It's a trap, and although it's presented as a loan it's really loan-sharking," said Jay Speech, executive director of the Virginia Poverty Law Center. "People who get into this end up much worse off than when they started."
Lenders have always charged a range of interest rates for loans, but what's happening now in neighborhoods across Northern Virginia is unprecedented. Back in 2010, after then-Attorney General Bob McDonnell went after the car-title lending industry for violating Virginia law restricting how soon collections could begin on loans, members of the Virginia General Assembly crafted legislation that set rules specific to car-title lenders. The legislation created some restrictions that prevented lenders from going after borrowers for additional money if they had already repossessed an automobile, prevented lenders from charging more than 50 percent of the value of a car and capped the interests rate at 264 percent a year.
....
INDUSTRY LEADERS contributed generously to members of the General Assembly and lobbied heavily to get their way. Since 2009, LoanMax contributed more than $500,000 and Fast Auto Loans contributed more than $200,000. {Senate Democratic leader Dick Saslaw (D-35)} received the largest individual contributions, receiving $22,000 from Fast Auto Loans and almost $20,000 from LoanMax. Many of the other legislators voting in support of the industry also received financial support from car-title lenders. When asked about his support of the 2011 bill, Del. Bob Brink (D-48) had little to say.
This site is soon to become the latest addition to the series of car-title lending operations that have opened along the Route 1 corridor since legislators opened the door to the industry back in 2010. Photo by Michael Lee Pope.
Mount Vernon residents who seek to revitalize Route 1 corridor oppose auto title loan firm
By Antonio Olivo, Published: December 22
For decades, Mount Vernon residents have tried to harness the area’s rich history in a string of attempts to remake a portion of Route 1 that has long been marked by rent-by-the-hour motels, boarded-up buildings and auto repair shops.
As part of a new effort, a sign reading “Gateway to America’s Historic Heritage” welcomes visitors to a stretch of highway where community leaders recently approved plans to attract high-rise apartment buildings and restaurants — all a short drive away from George Washington’s iconic mansion.
....
While those plans are being promoted, Route 1 has become a prime spot for title loan companies after a 2011 Virginia law allowed such businesses to accept out-of-state automobile titles. Overall in Virginia, the industry has grown from 184 companies in 2010 to 480 today, state records show.
....
Del. Mark D. Sickles (D-Fairfax) said the industry’s expansion illustrates a demand for small loans that banks are not meeting. ... “There are not a lot of other lenders out there aggressively pursuing people who need these small loans, which is too bad, because I think they can offer them a better deal,” said Sickles, who, like several other state lawmakers, has been a regular recipient of campaign contributions from title loan businesses.
By Antonio Olivo, Published: December 22
For decades, Mount Vernon residents have tried to harness the area’s rich history in a string of attempts to remake a portion of Route 1 that has long been marked by rent-by-the-hour motels, boarded-up buildings and auto repair shops.
As part of a new effort, a sign reading “Gateway to America’s Historic Heritage” welcomes visitors to a stretch of highway where community leaders recently approved plans to attract high-rise apartment buildings and restaurants — all a short drive away from George Washington’s iconic mansion.
....
While those plans are being promoted, Route 1 has become a prime spot for title loan companies after a 2011 Virginia law allowed such businesses to accept out-of-state automobile titles. Overall in Virginia, the industry has grown from 184 companies in 2010 to 480 today, state records show.
....
Del. Mark D. Sickles (D-Fairfax) said the industry’s expansion illustrates a demand for small loans that banks are not meeting. ... “There are not a lot of other lenders out there aggressively pursuing people who need these small loans, which is too bad, because I think they can offer them a better deal,” said Sickles, who, like several other state lawmakers, has been a regular recipient of campaign contributions from title loan businesses.
John McDonnell/The Washington Post - A stretch of Route 1 that cuts through Mount Vernon in Fairfax County and Alexandria has long been a blighted area. Some residents want to revitalize it and create a gateway to the Mount Vernon area.