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Title Lending in Arizona 2019 

 

***  Updated report released August 2019  ***
 

The 2019 Report **NEW**

When payday lenders ran Prop 200 in 2008 to indefinitely allow payday lending, Arizonans voted "No".  Unfortunately, many payday lenders simply migrated to title lending, because Prop 200 did not impact the separate law in Arizona allowing title loans with rates up to 204%.

In 2019, the Center repeated a survey of car title lending in Arizona and issued a new report "STILL WRONG: Wrecked by Debt / Title Lending in Arizona 2019".  This is an update to the original survey report issued in 2016.

Key Findings

  • In 2019, five of the ten largest title lenders -- and 37 percent of all title lender licensed locations -- were licensed as payday lenders 12 years ago.
  • The Center for Responsible Lending (CRL) estimates that Arizona borrowers annualy pay $254,924,519 in interest charges for title loans.
  • In 2019, 73 companies hold 80 unique licenses from AZDFI to make title loans. These companies have 476 licensed locations, not counting unlicensed service locations.
  • Arizona permits lenders to charge title loan rates to consumers who do not hold a clear title to the vehicle used to “secure” the loan. Twenty-five licensed lenders with 359 licensed locations or 75 percent make “registration loans.” This is up from 2015 when 20 companies with almost 50 percent of locations made these loans.
Read the 2019 Report
The 2016 Report

In 2016, the Center for Economic Integrity and Consumer Federation of America issued a survey report on title lending in Arizona "Wrong Way: Wrecked by Debt / Auto Title Lending in Arizona" which was based on 2015 licensing information.
Read the 2016 Report

More Title Loan Facts

  • Title loans trap borrowers due to a carve-out from the consumer lender law usury cap
  • Title loans are debt traps by design
  • Title lending is not based on he borrower's ability to repay the loan
  • Failure to pay back a title loan results in repossession of the vehicle
  • Lenders exploit loophole in title lending law to make payday loans by another name
  • Arizona's title loan law permits lenders to offer balloon payment loans
  • The Arizona legislature fails to protect consumers from usury
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Copyright © 2019 Southwest Center for Economic Integrity, All rights reserved.



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