Virginia's Fairfax County Looking to Better Regulate Car Title Loans
When money’s tight and you’re hit with an emergency, borrowing cash against the equity in your car often makes sense. As long as you pay it back as promised, you keep your car and have the cash you need for emergency bills, such as unexpected house repairs or medical bills. Virginia’s Fairfax County is looking into cracking down on car title loans in Virginia. The Fairfax County Board of Supervisors feels that the interest rates and fees for these loans is far too high, especially when you look at the target market for car title loans in that area. It’s often low-income borrowers who apply for a Virginia car title loan.
In recent years, the number of car title lenders, especially in Fairfax County, has drastically increased. While the government set a limit restricting these lenders to interest rates of 264 percent, the number of companies opening for business has grown dramatically. As of 2013, 400 car title loan companies had opened their doors in Northern Virginia.
The Fairfax County Board of Supervisors Opinion
After looking at the title loan industry, the FCBS felt that the companies were taking advantage of low-income borrowers, many in the area who do not fluently speak English. The board fears that many do not understand the paperwork they’re signing. They do not understand the fees, interest rates, and risks involved with such a loan. As a result, the FCBS approached the planning commission to discuss regulating these companies by limiting the number of companies that can open their doors in poorer districts. If the planning commission agrees, public hearings would be scheduled so that the car title lenders, borrowers, and county officials can discuss the matter together.