Las Vegas, NV - August 15, 2016
Las Vegas, NV –
The Administrative Complaint for Disciplinary Action brought against TitleMax
of Nevada, Inc. by the Nevada Financial Institutions Division (NFID) has
resulted in an order being issued at the conclusion of an administrative law
August 12 order requires TitleMax to immediately cease and desist offering its Grace
Period Payments Deferment Agreement (GPPDA) title loan option and return all
principal and interest collected under every GPPDA entered into after December
18, 2014. The order also requires TitleMax to pay an administrative fine of
$307,000 with $257,000 held in abeyance provided the company’s ongoing
compliance with Nevada law.
annual examination of the company in 2014 found that TitleMax offered an
agreement entitled Grace Period Payments Deferment Agreement and cited a
violation of NRS 604A.445 which allows for only two types of title loans: a
30-day loan, extendable for up to six additional 30 day periods and a 210-day
loan that may not be extended. The administrative complaint hearing was sought
after a follow-up examination initiated in May 2015 found the company was still
offering the GPPDA to customers in violation of statute.
hearing, the Division argued and the administrative law judge upheld, that by
entering into the GPPDA, TitleMax unlawfully extends the term of the loan
beyond the initial 210-day term. Under the GPPDA, the customer receives an
additional 210 days to pay off their title loan with the first seven payments
going toward interest only and the second seven installments going toward
principal only. While the interest rate remains the same as the initial loan
agreement, the customer’s payments are no longer fully and ratably amortized as
required by law. A customer who makes
payments according to the GPPDA, will ultimately pay more money in interest
than he or she would have paid under their initial loan agreement.
copy of the full order can be found at http://fid.nv.gov/Opinion/Enforcement_Actions.
that have a current GPPDA title loan agreement with TitleMax should contact
their local TitleMax branch with questions.
About the Nevada Financial
Financial Institutions Division, a division of the Department of Business and
Industry is mandated to maintain a financial institutions system for the citizens
of Nevada that is safe and sound, protects consumers and defends the overall
public interest. The Division also
promotes economic development through the efficient, effective and equitable
licensing, examination and supervision of depository, fiduciary, and
non-depository financial institutions.
Consumers can file a complaint online at http://fid.nv.gov/Resources/Resources.
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