DES MOINES, Iowa — The Iowa Senate and the House of Representatives both voted in favor of capping car title loans at 21% versus the current 264% to 300% that consumers pay.
The bill says a lender shall not contract for or receive a finance charge exceeding 21% per year on the unpaid balance of the amount financed for a loan of money secured by a certificate of title to a motor vehicle used for personal, family, or household purpose.
Iowa Rep. Bob Kressig (D-Cedar Falls), who is also a director at $1.1 billion Veridian Credit Union, said he threw his support behind a similar bill during Iowa's legislative session last year, but the Republican-controlled Congress did not bring the proposal up for debate. Kressig has said if the bill becomes law he hopes it will drive car title loan lenders out of Iowa.
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