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If the Legislature fails again to pass rules on fees at title loan and check-cashing businesses, Pinellas County commissioners say they'll pass their own.
By EDIE GROSS
© St. Petersburg Times, published February 23, 2000
CLEARWATER -- If state legislators do not put the squeeze on Florida's title loan companies this year, Pinellas County commissioners say they will.
Under state law, title loan companies can charge up to 22 percent interest per month -- or 264 percent per year -- on loans made to people who put their car titles up as collateral. If borrowers default on their loans, the companies take the cars.
Previous attempts by state legislators to rein in those interest rates have failed, leading at least 35 Florida counties to pass their own ordinances limiting how much interest title loan lenders can charge car owners.
Pinellas County commissioners say they are prepared to do the same thing if state lawmakers' efforts fall short again this session.
On Tuesday, commissioners looked at a draft of an ordinance that would limit the interest that local title loan companies could charge to 2 1/2 percent a month, or 30 percent per year. Hillsborough County passed a similar ordinance in May.
"We're going to put the squeeze on the title loan business in Pinellas County," Commissioner Bob Stewart said. "We'd rather the state pass a law that does that, but we'll be ready in 90 days if they don't."
State Rep. Bill Sublette, R-Orlando, is sponsoring a bill that would cut title loan interest rates to 30 percent per year. Sen. Jack Latvala, R-Palm Harbor, has proposed similar legislation that would also restrict how much interest check-cashing stores could charge customers.
Both industries generally cater to customers who cannot get loans anywhere else. At a check-cashing store, customers write personal checks in exchange for cash, called "pay-day loans." The store holds the checks for up to two weeks, charging fees that can equate to yearly interest rates of up to 400 percent.
Opponents of both operations have called the practice legalized loan sharking. County commissioners said they will alter their measure to include regulations on check-cashing stores if the legislation fails.
Officials with title loan companies say their operations are essential to those who cannot secure loans any other way. The businesses cannot survive if their yearly interest rates are limited to 30 percent, said David Halprin, president of Low Cost Auto Inc.
Halprin's company still operates in Pinellas and Pasco counties, but had to pull out of Hillsborough last year when county commissioners passed the ordinance, he said.
That leaves former title loan customers in a lurch when they need money fast, Halprin said.
"It's a politically expedient thing they're doing, but it's got nothing to do with helping these people," Halprin said. "If they want to launch a program to help these people, I'm all for it. But don't just deny them access to it."