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.
