Iowa Legislative News

[IA_Seth]

Another morsel from the inbox....

My spam filter usually gobbles this stuff up, but this one got by.


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Legis.News -- Inside the Iowa Legislature, February 10, 2006

By House Democratic Leader Pat Murphy

CAR TITLE LOANS NEED LIMITS

A new type of loan sharking has emerged as an issue in the Iowa House
of
Representatives this year, but it's unclear how it will be resolved.

Car title loans are generally short-term loans for smaller amounts of
money which are secured by the title to your car. If you default on
your
loan payments, your lender takes your car. It's pretty common for a
loan
to be secured by some form of collateral, but car title loans have a
distinct difference-exorbitant interest rates.

Car title loan companies have been known to charge interest as high as
360%. At that rate, a person who got a $1,000 loan for two months would
owe $1,600 when the loan comes due. It's a sweet and profitable deal
for
the lender, but not so good for the borrower who is getting ripped-off
by these excessive interest rates.

The people seeking these loans are usually in a desperate financial
crisis. But the fact is that more than 1,600 Iowans lost their vehicles
last year to this type of loan and with those vehicles went their
transportation to jobs and perhaps their livelihoods.

More than half the states currently restrict car title loans. Last year
the Iowa Senate voted unanimously to set a maximum interest rate of 21%
on car title loans. But that bill hit a snag in the House, however,
where it has been sitting in Rep. Jamie Van Fossen's Ways & Means
Committee since last April.

Lobbyists for the car title loan industry have been active in trying to
stop the legislation from becoming law . It was recently reported that
one lender contributed $40,000 to a campaign fund started by House
Speaker Christopher Rants, who has since publicly expressed his opinion
that car title loan legislation is not needed. Since the Speaker has
virtual control over what gets debated in the House, it remains to be
seen whether the House will be allowed to even consider placing
interest
rate limits on car title loans.

I also received a contribution from the car title industry, but I
returned it when I leaned more about their business practices. I don't
want to be associated with an industry that in my opinion preys upon
the
poor. I think it is important as a consumer protection issue to hold
car
title loan companies accountable and prohibit the interest gouging that
they practice.

*************************************************************
ENDING EXPLOITATION OF ILLEGAL ALIENS

Democrats this week announced a package of proposals aimed at punishing
corporations that exploit illegal aliens by luring them to Iowa with
the
promise of jobs.

The plan would hold corporate executives personally and criminally
accountable if their businesses have a pattern of knowingly hiring
illegal immigrants. The bill would also protect employees who expose
the
hiring of undocumented workers. It would also outlaw human trafficking
in Iowa, a practice akin to virtual slavery.

Most businesses in Iowa would never think of recruiting illegal aliens
to the state to drive down wages and increase their profit margins, but
those that do need stiff penalties that mean something. By targeting
corporate executives, we hope to make the decision-makers more
accountable for their actions.

*************************************************************
QUOTE OF THE WEEK

"Sometimes you can't be a nanny state that just protects people from
themselves."

House Speaker Christopher Rants, explaining why he opposes limits on
car
title loan interest rates

*************************************************************
ABOUT PAT MURPHY

Pat Murphy is the Democratic Leader in the Iowa House of
Representatives. He is serving his eighth term representing Dubuque.
Before being elected as Democratic Leader in 2003, Pat spent nine years
as the top-ranking Democrat on the House Appropriations Committee.

*************************************************************
CONTACT INFORMATION

For more information and news from the Iowa House of Representatives,
visit our website at www.iowahouse.org or call [phone].

*************************************************************

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