Tuesday, March 27, 2007
Governor Culver Signs Car Title Loan Bill Into Law
(Des Moines) Today, Governor Chet Culver signed into law the Car Title Loan bill. House File 5
caps the interest that car title lenders can charge consumers. 
The bill protects Iowans by putting a limit of a 21% annual percentage rate (APR) on
loans secured by a certificate of title to a motor vehicle.
“For far too long, car title lenders have preyed upon the most vulnerable Iowans. Due to the nature of the system, the Iowans who utilize their services often have the most difficulty paying back the loans due to financial limitations,” said Governor Culver.
He cited that car title lenders are currently free to operate under an unintended loophole in Iowa law that allows them to charge unreasonable and unfair interest rates, sometimes as high as 300%. “These Iowans are often compelled to go to ‘car title’ lenders because of unforeseen expenses, such as health needs or higher than expected utility bills.”
Governor Culver signed the legislation in his formal office at the Capitol with legislators, Attorney General Tom Miller, advocates and supporters of the bill present. The Governor said, “By signing this bill, Iowa is sending a message. We send a message that businesses cannot prey upon any Iowan, that Iowa will not tolerate unfair business practices and Iowans will never fall victim to predatory car lenders again.”
The bill will take effect July 1, 2007.