CHICAGO – A report released today by the Illinois Department of Financial and Professional Regulation found that most of the almost 1,000 random title loan files reviewed in a late July compliance sweep had no exceptions and were without problems. Loan documents for 106 borrowers were found to have violations, most pertaining to the new consumer protection rules that took effect in April. Disciplinary orders have been issued on those violations and lenders have been given 10 days to accept the findings and pay the fines or dispute the findings and seek an administrative hearing.
“Generally we are pleased that the vast majority of loans inspected last month met the stringent consumer protection rules adopted in April. Unfortunately, some lenders have not changed their lending practices to accommodate the new protections or have failed to train their staff to understand their responsibilities,” said Brent Adams, Acting Secretary of Financial and Professional Regulation. “We will continue to monitor the lenders with multiple violations.”
Examiners found 205 violations at eight of nine companies visited during the sweep. All but one company had at least one ‘exception’ or problem loan file. More than 85 percent of the violations were the result of not meeting the requirements of new consumer protections that took effect in April 2009.
The violations included: failing to provide customers with information about debt management assistance, not obtaining borrowers’ most recent income statements to make sure the loan would be affordable, making a loan with payments that exceed the limits established in the new rule, processing a new loan too quickly after a previous loan had been paid off, and finally, repossessing the car of a borrower without providing advance notice for the borrower to make arrangements to empty the vehicle of personal items or surrender it voluntarily.
A summary of the findings of the July 30-31 compliance sweep and copies of each order are available at IDFPR.com.