When consumers have to pay for unexpected expenses, many choose to turn to short term lenders for fast cash. Within the industry, there are different types of companies, ranging from those who allow individuals to borrow against their next expected paycheck to pawnshops. Similar to pawning an item, a borrower can give the title of their vehicle to a lender, who will lend a sum based on the value of the car. The owner is able to retain use of the car for the duration of the lending period, and is given the title back once the amount is paid off. Lawmakers recently passed a new regulation aimed at changing the loan process and title ownership for traditional lenders. However, because titles can be held by short term lending
companies, the new law affects other businesses as well. Provides protection for lenders
According to the Wisconsin State Journal, citizens residing in the state will not be able to obtain the titles to their vehicles if they have taken a loan out to pay the car off. The source said that any car with a lien, including any legal claim on a property, will be entitled to temporarily hold the ownership document. While this is already the practice within the title loan industry, where the company holds the title until the owner pays, a separate part of the legislation is more pertinent. The Wisconsin State Journal reported that consumers are allowed to sell their cars even if there is still a loan out involving the vehicle and the owner does not have the title. The director of the Wisconsin Department of Motor Vehicles told the news source that the borrower would still be required to pay off the loan in the appropriate amount of time. The original owner would also have to inform the lender of the sale, so that the title could be given to the new user. Also included in the regulations is a provision that would allow lenders to attain the rights to an electronic version of the title, making the transfer process faster and saving postage and printing costs, the Wisconsin State Journal explained. The legislation serves to ensure short term lenders are paid for their services no matter what happens to the vehicle. Many lenders located in Wisconsin
There are numerous lenders to which these new rules would apply. More than traditional lenders in financial institutions, the state's multiple title lenders could also be assured these rights. There are many large, reputable companies that supply Wisconsin citizens with loans in exchange for car titles. For example, the Title Loans of Wisconsin website boasts more than 500 brick-and-mortar locations. Other national lenders with a multi-state presence, such as Northeastern Title Loans, based out of Virginia, operate within Wisconsin state lines as well.