The Consumer Financial Protection Bureau report finds that one-in-five borrowers who take out a single-payment auto title loan have their car or truck seized by their lender for failing to repay their debt. According to the report, more than four-in-five of these loans are renewed the day they are due because borrowers cannot afford to repay them with a single payment. More than two-thirds of auto title loan business comes from borrowers who wind up taking out seven or more consecutive loans and are stuck in debt for most of the year.
The report examined nearly 3.5 million anonymized, single-payment auto title loan records from nonbank lenders from 2010 through 2013.
The CFPB's press release is here. Director Cordray's remarks on the report are here. The 23-page report is here.
