Title loan laws vary from state to state. Some states have heavy restrictions on title lenders, and others do not. In Tennessee, lenders must conduct their business according to the Tennessee Title Pledge Act.
Benefits
The Tennessee Title Pledge Act helps prevents lenders from taking advantage of borrowers. The law sets restrictions on licensing, rates and holding periods before a car faces repossession. If lenders do not follow the law, they can face penalties and lose cash.
Significance
The Tennessee Department of Financial Institutions enforces the law and regulates, examines and investigates complaints of the title loan industry. "In 2009, 812 examinations were conducted, resulting in refunds of $64,815," according to the 2010 Report on the Title Pledge Industry which is posted on the department's website.
Ammendments
On June 17, 2005, several amendments to the Tennessee Title Pledge Act were signed as law. These amendments changed how lenders practiced business in the state but did not affect how they can set interest and rates.
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