Title Lender Pays for Allegedly Predatory Loans to Pennsylvanians

  • Pennsylvania AG Michelle Henry settled with Community Loans of America, Inc. (CLA) to resolve allegations that the auto title lending company violated the state’s Unfair Trade Practices and Consumer Protection Law and its Loan Interest and Protection Law by charging usurious interest rates on title loans to Pennsylvanians.
  • The AG’s office alleges that CLA misrepresented to consumers that it was legal for the company to offer and provide title loans to Pennsylvania residents, when such loans are effectively prohibited as they charge interest rates far above the state’s 25 percent annual interest limit. CLA is alleged to have charged interest rates equaling 426 percent per year in some instances.
  • Under the terms of the settlement, CLA must pay $2.2 million in restitution and $50,000 in civil penalties, and must cancel $3.7 million in remaining debt. It must also return any repossessed vehicles at no further charge and continue to refrain from furnishing negative credit information to any consumer reporting agency, among other things.