Federal Agency Sues Arizona Title Lenders
A federal watchdog agency is suing five Arizona title lenders.
The Consumer Financial Protection Bureau said the five lenders violated the Truth in Lending Act. The law is meant to protect consumers against inaccurate and unfair billing and credit card practices.
In its press release, the CFPB said the auto title lenders advertised interest rates, but failed to disclose annual percentage rates which reflect interest and other charges.
Auto title loans are often marketed to people with lower credit scores. Borrowers use their vehicles as collateral. If someone can’t repay an initial title loan they must borrow again or risk losing the auto title.
The federal bureau is seeking monetary penalties and administrative orders requiring the companies correct their practices. The five lenders are: Auto Cash Leasing, LLC; Interstate Lending, LLC; Oasis Title Loans, LLC; Phoenix Title Loans, LLC; and Presto Auto Loans, Inc.