Title Loan Firm Barred From North Carolina

     (CN) – An online car title lender that charged outrageous interest rates and confiscated consumers’ cars with little or no warning has been now banned from making loans in North Carolina, Attorney General Roy Cooper announced.
     Cooper filed sued the lender which does business under a number of names, including, Autoloans, Car Loan, Sovereign Lending Solutions and Title Loan America last week.
     Cooper claims for the lender charged North Carolina consumers average interest rates of 257 percent on loans of $1,000 to $2,500.
     Title loans are small dollar loans secured by consumers’ car titles. State law caps interest rates on such loans at 30 percent for licensed lenders and at 16 percent for unlicensed lenders, such as the defendants.
     
     On Tuesday, Judge Donald Stephens of the Wake COunty Superior Court ruled that while the lawsuit is pending the company and its owners are barred from making or collecting on loans in North Carolina or repossessing, selling or placing liens on any car owned by a North Carolina consumer.
     Stephens also barred the company from destroying records or spending and transferring funds.
     The attorney general sued the lend after an investigation that he says found that at least 700 North Carolina consumers took out title loans from the defendants, and that in addition to charging sky-high annual interest rates on the loans, most of the agreements included payments on interest only for the first 11 months and a final balloon payment larger than the original loan amount.
     Cooper said these payment scheme often caught consumers unawares because the lender misstated interest rates, withheld details of the loan, or failed to give consumers a copy of their written loan agreement.
     He is seeking a permanent ban on the defendants’ illegal lending business, cancellation of previous loans and liens, and refunds for consumers who did business with the lender.

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