ORLANDO, Fla. - It took four years of perseverance, but the fifth try was the one that succeeded in getting the state legislature to finally pass a bill that caps interest rates Florida title lenders can charge borrowers. Almost 100 credit union supporters were on hand at Martin FCU May 18 for the historic signing of the bill into law by Gov. Jeb Bush. Bush said he was "pleased to sign a bill into law that corrects a situation that has existed in our state where people in need of money would seek a loan, and instead end up deeper in debt and deeper in trouble." The governor described title loan businesses as "a situation that has adversely affected many residents of our state", particularly-but not limited to-those in the state's poorer communities. "The law I'm signing today allows the free market to operate fairly while looking out for consumers who otherwise wouldn't have anyone looking out for them. By placing a limit on the amount of interest that can be charged on a title loan transaction and by directing the department of banking and finance to regulate the title loan industry, consumers can now comfortably enter the market knowing they're protected against unfair practices." H.B. 301, the "Florida Title Loan Act," was sponsored by State Rep. Bill Sublette (R-Orlando) and was supported by the Florida Credit Union League, state Attorney General Bob Butterworth, Comptroller Robert Milligan and various consumer advocate groups including Florida Public Interest Research Group (PIRG). The measure was passed unanimously by the State House of Representatives. The law caps title loan interest rates at 30% APR (a statute passed in 1995 allowed title lenders to charge up to 264% per annum.) It also gives the Florida Department of Banking and Finance the responsibility for licensing and regulating the businesses and permits the adoption of more restrictive ordinances by counties or muncipalities, provides for application, bonds, remedies and criminal penalities for violation of the act. The state Assembly unanimously passed an identical measure, S. 694 sponsored by state Assemblyman Kendrick Meek (D-Miami). Sublette called the day "a wonderful day for the consumers of Florida. No longer will they be preyed upon by 264% interest charging loan sharks, no longer will our Navy men and women bear the risk of these loans, no longer will we read hooror stories about title lenders." According to industry estimates, more than 600 title loan shops operate in Florida. Sublette sponsored similar title loan legislation three times before this year's measure (a first bill was introduced in 1996 by another legislator, but it never made it out of committee.) The earlier bills were successful in the state House but they consistently died in the state Senate. Last year, just hours before adjournment on April 30, the state Senate passed a bill, S. 898 that would have capped title loan interest rates at 96% annually. Many consumer advocates, legislators, religious leaders, even the U.S. Navy voiced their opposition to that bill and called the provisions unacceptable. S. 898 would also have prohibited local governments from regulating the car title-loan industry. Even before the demise of last year's title loan bill, nine counties or cities in Florida had taken their own initiative and passed laws capping interest rates at 18% or 30%. By the time H.B. 301 passed in the state legislature this year, more than 30 counties or cities had passed similar ordinances or laws. Both Bush and Sublette recognized credit unions' efforts in securing passage of the title loan legislation. "It's appropriate that we're signing this bill in a credit union which has a great tradition of providing quality consumer loans to people of all walks of life," said Bush. He suggested that title lenders could take a lesson from credit unions in loan practices. Sublette echoed the governor's remarks saying, "We are here today because credit unions have been a wonderful part of this process. They are true heroes in the financial arena, they provide low cost loans and were the first to step up to the plate and counter the perception that was intended to be created by the title lenders that there were no other alternative sources of lending or financing for these folks who didn't have access allegedly to credit. This was a team effort." -
ekingoff@cutimes.com
