Credit on Wheels: The Law and Business of Auto Title Lending

Abstract:     
Despite the fact they are used by millions of Americans, auto title loans have received little attention in the legal literature about consumer credit. Friends and foes of title lending make confident statements about their net welfare effects, but we still lack empirical data on many of the central policy questions that title lending raises.

This Article offers new evidence about the title lending transaction, paying special attention to the risks borrowers face when they use their vehicles as collateral for the loan. I gathered this evidence by obtaining new reports from state regulators about the title lending industry, examining public disclosure statements by title lenders, interviewing title lenders, and surveying a small group of title lending customers.

Additionally, this Article organizes the different legal responses to title lending, creating a taxonomy of regulatory approaches. Based on the new data uncovered by my research, I offer tentative evaluations of these diverse regulatory strategies.

Number of Pages in PDF File: 54

Keywords: auto title lending, fringe banking, consumer credit, bankruptcy, financial distress, alternative financial service provider

Accepted Paper Series