is it legal for a florida company doing business in ny charge a daily interest fee on a auto title loan ...

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is it legal for a florida company doing business in ny charge a daily interest fee on a auto title loan

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DakotaLegal's picture

The Rules In New York

The Rules In New York
 
A national study showed that the average annual rate charged on title loans is 300%. This is why New York State and many larger cities have fought back against these rates. What’s interesting about your question is that neither New York State nor Florida now allow very high interest loans on vehicle (auto) title loans. Here is a map showing you what states now ban title loans altogether: http://www.responsiblelending.org/other-consumer-loans/car-title-loans/tools-resources/car-title-lending-by-state.html. New York now bans auto title loans. So the bottom line is that you can argue the Florida company is not allowed to even loan money on a title loan in New York. One place to begin is the Consumers Protection office: http://www.dos.ny.gov/consumerprotection/ or by calling 1 (800) 697-1220.
 
 
Having said that, there’s a possibility that you or someone you know has still entered into a car auto loan, against New York law. This may even become a fraud question. You may be eligible for low-cost or free legal aid: http://www.lawhelp.org/ny/.Next we’ll look at a more complicated question about how an out-of-state company may try to avoid the New York ban.
 
Do These Rights Change If the Company Is a “Florida” Company?
 
Very possibly. It also seems likely that the Florida company probably got legal advice before trying to make title loans in New York.
 
Almost every state has made changes in the way interest rates can be charged. Here’s a survey of rates: http://www.consumerfed.org/pdfs/Car_Title_Loan_Report_111705.pdf. Since you are close to others states, you may want to see other, better options in nearby states. But most of all, take a look at the current Florida rules.
 
Though Florida’s new laws shut down most of its car title loan companies, there are still businesses loaning money on auto titles in Florida. This means that you may be working with a Florida-based company that’s following the laws in Florida….including the new limits on the amount of interest allowed. Because so many title loan companies lost business with the change in Florida loan laws, they may (but not necessarily) be trying to get new business in other states. This is where the answer to your question gets complicated. Does a Florida company have to follow all New York laws?
 
There is a federal court case, where an out-of-state company (in Illinois, which is next to Indiana) argued that it did not have to follow a state’s limits on title loans. http://caselaw.findlaw.com/us-7th-circuit/1503073.html. In this case, the company was charging TEN times the allowed rate in Indiana. Indiana tried to stop it. But the Illinois company was also careful not to have offices in Indiana. The title loan company advertised heavily in Indiana. In the end, the loan company was allowed to keep doing business in the neighboring state. What may be important in your case is how the loan was made: did you deal with a local (meaning in New York) office, or did you mail the information or use a web site? As much as possible, have your documentation to explain all of your contacts with the title loan company. Keep all originals, and use copies when discussing this with anyone.
 
You might have special rights.
 
The more you can prove the transaction was intended to be covered by New York law, the more likely you can avoid the entire deal…not only the interest, but even the principal amount borrowed. Because many title loans were based around military bases, or those who move from state to state, special protections are common for military members and their families. If the person borrowing money is a senior or disabled, there may also be special protections, by the State’s Attorney General: http://www.ag.ny.gov/intergov-affairs/publications.

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DakotaLegal's picture

The Rules In New York

The Rules In New York
 
A national study showed that the average annual rate charged on title loans is 300%. This is why New York State and many larger cities have fought back against these rates. What’s interesting about your question is that neither New York State nor Florida now allow very high interest loans on vehicle (auto) title loans. Here is a map showing you what states now ban title loans altogether: http://www.responsiblelending.org/other-consumer-loans/car-title-loans/tools-resources/car-title-lending-by-state.html. New York now bans auto title loans. So the bottom line is that you can argue the Florida company is not allowed to even loan money on a title loan in New York. One place to begin is the Consumers Protection office: http://www.dos.ny.gov/consumerprotection/ or by calling 1 (800) 697-1220.
 
 
Having said that, there’s a possibility that you or someone you know has still entered into a car auto loan, against New York law. This may even become a fraud question. You may be eligible for low-cost or free legal aid: http://www.lawhelp.org/ny/.Next we’ll look at a more complicated question about how an out-of-state company may try to avoid the New York ban.
 
Do These Rights Change If the Company Is a “Florida” Company?
 
Very possibly. It also seems likely that the Florida company probably got legal advice before trying to make title loans in New York.
 
Almost every state has made changes in the way interest rates can be charged. Here’s a survey of rates: http://www.consumerfed.org/pdfs/Car_Title_Loan_Report_111705.pdf. Since you are close to others states, you may want to see other, better options in nearby states. But most of all, take a look at the current Florida rules.
 
Though Florida’s new laws shut down most of its car title loan companies, there are still businesses loaning money on auto titles in Florida. This means that you may be working with a Florida-based company that’s following the laws in Florida….including the new limits on the amount of interest allowed. Because so many title loan companies lost business with the change in Florida loan laws, they may (but not necessarily) be trying to get new business in other states. This is where the answer to your question gets complicated. Does a Florida company have to follow all New York laws?
 
There is a federal court case, where an out-of-state company (in Illinois, which is next to Indiana) argued that it did not have to follow a state’s limits on title loans. http://caselaw.findlaw.com/us-7th-circuit/1503073.html. In this case, the company was charging TEN times the allowed rate in Indiana. Indiana tried to stop it. But the Illinois company was also careful not to have offices in Indiana. The title loan company advertised heavily in Indiana. In the end, the loan company was allowed to keep doing business in the neighboring state. What may be important in your case is how the loan was made: did you deal with a local (meaning in New York) office, or did you mail the information or use a web site? As much as possible, have your documentation to explain all of your contacts with the title loan company. Keep all originals, and use copies when discussing this with anyone.
 
You might have special rights.
 
The more you can prove the transaction was intended to be covered by New York law, the more likely you can avoid the entire deal…not only the interest, but even the principal amount borrowed. Because many title loans were based around military bases, or those who move from state to state, special protections are common for military members and their families. If the person borrowing money is a senior or disabled, there may also be special protections, by the State’s Attorney General: http://www.ag.ny.gov/intergov-affairs/publications.