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State Banking Meetings

Reports For TPCA Members On Important State Banking Discussions

Updated February 1, 2008 --  Scroll down to read all stories.

TPCA MEETS WITH STATE BANKING. February 1, 2008.   On Thursday, January 31 TPCA President, Max Wood and Board of Directors members Charles Hunter and Roy Hutcheson met with the Alabama State Banking Department to discuss their proposed title pawn legislation.  For your information, here is a link to their legislative proposals.

The meeting was with the Superintendent (John Harrison), the Director (Scott Corscadden) and General Counsel (Elizabeth Bressler).  Our position was that we did not understand why the Department was making their proposals and, in particular, making them at this time.  We stated we were not aware of problems (complaints) from consumers or from operators, so why fix something not broken?  They indicated that next to the mortgage industry, which they regulate, we were the second ranked group in terms of complaints.  They were not, however, able to quantify that number and even indicated it was not a large number.  But, when the AG, the Governor or a legislator receives a complaint from a consumer about a vehicle that has been repossessed for, as an example, a $1,000 loan and then sold for $10,000, these situations do not help either the industry or the regulators.  They indicated that generally these are the type of complaints they receive and even though they are not a large number they are difficult cases because the law allows this to happen.  And, a few of these stories can go a long way toward moving the governing parties to push for changes.  They indicated this certainly was not the sole reason but that clearly over time these complaints were a serious problem.  We, of course, reminded them that for every single one of those stories there were thousands where the exact opposite occurred.

Other responses from State Banking in terms the "why and why now" question centered around the fact that State Banking is proposing changes for virtually all of the industries they regulate to be sure the regulations are all “up to date.”  Further, as it relates to title lending, the Pawn Act does not actually address title lending and that we operate under a judicial order -- not a legislative statute (which is true).  Additionally, most states have implemented statutes that deal with title pledge and it has worked well for the states, the consumer and for the industry. 

After lengthy discussions, we are confident that State Banking has a good bit of “give and take” in the details of their proposed legislation.  We know they are focused on a several specific points -- principal reduction and repossession procedures are a couple of those points.  Their proposal to us was that we (TPCA & State Banking) work together to come to an agreement on the legislation and jointly support the effort in the legislature.  Clearly, there are good reasons to solve some of the ambiguities that we deal with in our business.  To name just a few; challenges to the pawn act (judicial authority vs. statute) and the associated legal implications, treatment as motor vehicle dealers and APR disclosure.  These and many others cost us money, frustration and time. 

The choices are we can work with State Banking and craft legislation that we all agree may solve many of the negative issues related to the current statute or we can work on the legislative side to be sure our interest are represented and understood by those who make the laws that affect our business.  We believe we are well positioned to be effective at the latter and that we will have a considerable influence over any proposed legislation.

We advised State Banking that we would discuss their proposals with our members and get back to them within a few days.  In the meantime, we will hold a Board of Directors meeting soon to discuss this in greater details and to determine what course of action is best for our members and our industry. 




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