Reggie Osenton, Brandon Bankruptcy Attorney, Warns Against Title Loans
Apr 13, 2016
Brandon, FL (Law Firm Newswire) April 13, 2016 – Title lenders are coming under fire from the federal government and ordinary Florida citizens.
The lenders issue loans to individuals using titles to the borrowers’ automobiles as collateral. Despite existing state law limiting certain controversial practices, the companies remain under scrutiny for what some call predatory lending. Federal regulators may weigh in on the matter soon, and at least one Florida couple is suing one of the state’s biggest lenders.
Reggie Osenton, a Tampa bankruptcy attorney, strongly cautions against borrowers turning to title lenders.
“Even the best of these lenders have rates that are very high,” Osenton said. “And even savvy borrowers often find themselves trapped in cycles of debt and end up feeling taken advantage of.”
In 2000, Governor Jeb Bush signed into law a group of reforms designed to curtail the worst abuses by title lenders. The law capped annual rates at 30 percent, prohibited lenders from selling insurance or issuing finance charges, and required them to accept partial payments. But lenders soon began to offer optional insurance after becoming licensed under Florida’s consumer-finance laws and created other pricey loan options of dubious value.
Janet and James Schmitt of Jacksonville claim they were told this “optional” insurance was in fact mandatory. They borrowed $2,500 using their Ford pickup as collateral, and after making more than $1,400 in payments, they still owe the entire original principle. Now they are suing InstaLoan, Florida’s largest title lender.
Meanwhile, the federal Consumer Financial Protection Bureau is considering broad reforms on certain short-term loans, including title loans and payday loans. Private consumer advocacy groups including the Pew Charitable Trusts and the Center for Responsible Lending have recommended state-level reforms, but no such reforms are currently pending in Florida.
“Borrowers with bad credit who find themselves in a jam are often sorely tempted to turn to a title or payday lender,” Osenton said. “But I strongly encourage anyone to think twice about that. Seek debt counseling from a nonprofit company, look into offerings from government or charity, and consider asking friends and family for help. And if you feel trapped by debt, speak with an experienced bankruptcy attorney.”
Learn more at http://www.brandonlawoffice.com/
Osenton Law Office, PA
500 Lithia Pinecrest Road
Brandon, Florida 33511
Call: (813) 654-5777
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