Ted Gest, Public Information Officer
WASHINGTON, D. C. -- TitleMax of Virginia, Inc., has agreed to provide $117,257 in credits and refunds to consumers whose cars were repossessed in D.C. to collect high-interest car title loans made in northern Virginia, D.C. Attorney General Irvin B. Nathan announced today. TitleMax agreed not to repossess cars in D.C. that are collateral for title loans whose interest rates exceed the District’s legal limit.
Under the District’s usury law, interest on car title loans may not exceed 24% APR. In addition, District law requires that loan-related vehicle repossessions in D.C. must be performed by or on behalf of D.C.-licensed lenders subject to D.C. lending regulations. The District alleged that TitleMax, which was not a licensed lender in D.C., repossessed vehicles in D.C. to enforce car title loans that violated the District’s usury law. Most of these high-interest loans were made at TitleMax’s Alexandria location.
TitleMax repossessed 96 consumers’ vehicles in D.C. from September 2011 to December 2013, including 70 vehicles belonging to D.C. residents.
Consumers who are eligible for credits or refunds will receive written notices from TitleMax by August 31 explaining their rights under the settlement. TitleMax will pay the District $50,000 to cover the Office of the Attorney General’s investigative and case-preparation costs.
In a related settlement, D.C.-based DMV Towing, Inc., which performed 27 repossessions for TitleMax, has agreed to stop repossessing vehicles in D.C. on behalf of unlicensed lenders.
“We will not allow car title lenders – wherever located – to repossess vehicles in D.C. for the purpose of enforcing title loans that violate the District’s lending laws,” Attorney General Nathan said. Nathan commended Assistant Attorneys General Gary Tan and Grant Moy for their work on the case.