§ 22-43. Title loan charges and maximum interest rate.

(a)

A secondhand dealer may charge an interest rate not to exceed 18 percent per 30-day period for a maximum of three months from the date of the loan agreement. Following such three-month period, if the title loan agreement remains outstanding and unsatisfied, the title loan lender may charge an interest rate not to exceed two percent per 30-day period. In determining compliance with the maximum interest and finance charges, the computation must be simple interest without add-on interest or any other interest computation.

(b)

The annual percentage rate that may be charged in a motor vehicle title loan may equal, but not exceed, the annual percentage rate that must be computed and disclosed as required by the Federal Truth in Lending Act and Regulation Z of the Board of Governors of the Federal Reserve System. When the period for which the charge is computed is more or less than one month, the maximum rate for the period must be computed on a basis of 1/30 of the applicable monthly interest rate, multiplied by the number of days of the period.

(c)

Any transaction involving a borrower's delivery of a motor vehicle certificate of title in exchange for the advancement of funds on the condition that the borrower shall or may redeem or repurchase the certificate of title upon the payment of a sum of money, whether the transaction be characterized as a "buy-sell agreement," "sale-leaseback agreement," or otherwise, shall be deemed a violation of this article if such sum exceeds the amount that a secondhand dealer may collect in a title loan agreement under this article or if the terms of the transaction otherwise conflict with the permitted terms and conditions of a title loan agreement under this article.

(d)

No secondhand dealer shall be required to extend or renew any loan.

(e)

Any fees or taxes paid to a state agency and directly related to an individual title loan transaction may be collected from the borrower as part of the final installment or payment completing the contract for a title loan transaction at the end of the loan, upon presentation of a copy or copies of receipts showing payment of such fees or taxes by the title loan lender, and shall be in addition to the permitted finance and interest charge.

(f)

Any finance charge contracted for or received directly or indirectly, in excess of the amounts authorized under this section are prohibited, may not be collected, and render the title loan agreement voidable, in which case the secondhand dealer shall forfeit the right to collect any interest or finance charges.

(Ord. No. 99-19, § 5, 9-28-99)