Will auto titles be a part of payday loan reform?

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I was looking over financial legislation in the Assembly and came across this bill authored by Rep. Josh Zepnick (D – Milwaukee), which would ban the use of auto titles as collateral by payday lenders.

This bill prohibits a licensed lender from making or offering a motor vehicle title loan.  The bill defines “motor vehicle title loan” as a loan of $25,000 or less to a borrower that is, or is to be, secured by a nonpurchase money security interest in the borrower’s motor vehicle and that has an original term of not more than three months.

As I’m sure many of you have noticed, “auto titles” are one of the chief marketing tools used by payday lenders.

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