Commentary: Car title lenders invasion

Wrapping up the last few commentaries on LoanMax locating on Osborne Road and Jefferson Davis Highway, these are the most important issues to consider.

• “In the newest chapter in the State of Lending research series, the Center for Responsible Lending (CRL) analyzed the debt traps of vehicle-title loans. It’s an under-reported financial issue that today affects consumers in 21 states through more than 8,100 retail stores. It’s also an industry that annually reaps $4.3 billion in fees on loans totaling $1.9 billion, with an average loan size of only $1,042.

“Let’s say you find yourself a little short on cash; but have title to your vehicle. A vehicle-title lender is ready, however, to offer a loan with no questions asked about your credit or other financial obligations. The loan will always be a fraction of the vehicle’s full market value.Just sign the loan papers and ready cash of several hundred or even a few thousand dollars is yours.

“What vehicle-title lenders seldom mention is that most borrowers are unable to repay the full amount of fees and the loan in just a single payment. The typical borrower takes eight renewals on a single loan and eventually pays $3,391 — over three times the average amount borrowed. Sign the petition at signthepetition.org

•    We know that our Board is made of good God-fearing people so I am curious as to why they would not have consulted the Book that advises them on how to live their lives. The Bible, Torah and Quran teach the same basic dogma.  “Do to others as you would have them do to you.” - Luke 6:31. Would you charge your neighbor 220 percent interest on money he needed to send his wife to the doctor?

The good Book contains numerous prohibitions against usury. The Old Testament contains the following: “If you lend money to one of your poor neighbors among my people, you shall not act like an extortioner toward him…” - Exodus.

Centuries later Gordon Gekko rose to prominence in the movie Wall Street as a corporate raider and insider trader. In his famous speech before the stockholders of Teldar Paper, Gekko stated, “Greed, for lack of a better word, is good. Greed is right.”

 “But is greed truly good?” said Tarcisio Bertone, when speaking to the Italian Parlament about usury. “The issue of greed and avarice in society is certainly not unique to the realm of literature and film; it is an all too significant issue in today’s complex world. In today’s economic world, just as it has done in the past, the practice of usury often threatens the most weak and vulnerable in society.”

Sign the petition at signthepetition.org

•    You walk into you favorite new car dealership, and on the way to the showroom you notice the prettiest little sedan, looks a little sporty, has room for the kids and navigation system with SiriousXM radio to boot. “Don’t know if I can afford it, but I’m going to give it a shot,” you say to yourself.

A salesman meets you at the door, introduces himself; you take the test drive and before you know it you’re sitting in the finance office. As you wait, you notice the poster on the wall, “No credit check, your word is good enough for us.”

The finance clerk clicks some keys and out comes a finance contract. You immediately notice the price of the car at the top, $20,000. “I can do that; monthly payment shouldn’t break the budget.”

The finance assistant slide the contract across the desk and you see the details as she begins to read them to you.

“Your pretty little car, and it is nice isn’t it, will cost you, after your negotiation with the manager, $20,000. Our deal this month is ‘no money down.’  So here is what we have come up with,” she says.

“Great.”

“Financed over six years, your payment would be $3,666.69.”

“That’s three times my house payment, are you kidding me?”

“No sir, let me finish. Your interest over six years on your 220 percent loan would be $244,001.44 for a total of $264,001.44. Now if you want to go to seven years… click, click, click… your payment would be actually a little more and you would pay $288,000.22. I think you should stick the six-year plan don’t you.”

“Who’s your finance company?”

Sign the petition at signthepetition.org

•    LoanMax is the top contributor to candidate and Political Action Committees (PAC) coffers in 2013 alone at $54,020. In 2012 and 2013, LoanMax remains the top contributor to State Delegates and Senators campaigns and Virginia PACs at $164,770.

The General assembly voted to allow vehicle-title lenders to charge up to 220 percent interest to their customers with a loan term of nine months.

It’s common knowledge that businesses like title lenders prey on those who make less than $25,000 a year. Why would our elected official take contributions from such an immoral business?

A TitleMax has already been approved for Chester. Does this end of the county need two of these predators less than a quarter mile apart? Exactly 1001 feet.  

Agree? Go to signthepetition.org and sign the petition opposing the predatory lender in Chester. Also please attend the Board of Supervisors public hearing on August 28 at 6:30 p.m., express your opinion or just attend in support or email your supervisor jaeckled@chesterfield.gov, elswicks@chesterfield.gov, geckerd@chesterfield.gov, warrena@chesterfield.gov or hollandj@chesterfield.gov.

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