The Nevada Financial Institutions Division (NFID) issued an order requiring TitleMax to “immediately cease and desist offering its “Grace Period Payments Deferment Agreement (GPPDA)” title loan option and return all principal and interest collected under every GPPDA entered into after December 18, 2014. ”
The order directs TitleMax to pay an administrative fine of $307,000 for breaking Nevada car title loan laws.
The Nevada complaint focused on TitleMax of Nevada, Inc. TitleMax offered an agreement entitled Grace Period Payments Deferment Agreement and cited a violation of NRS 604A.445 which allows for only two types of title loans: a 30-day loan, extendable for up to six additional 30 day periods and a 210-day loan that may not be extended.
A judge upheld a previous ruling that “by entering into the GPPDA, TitleMax unlawfully extends the term of the loan beyond the initial 210-day term. Under the GPPDA, the customer receives an additional 210 days to pay off their title loan with the first seven payments going toward interest only and the second seven installments going toward principal only. While the interest rate remains the same as the initial loan agreement, the customer’s payments are no longer fully and ratably amortized as required by law. A customer who makes payments according to the GPPDA, will ultimately pay more money in interest than he or she would have paid under their initial loan agreement.”
Customers that have a GPPDA title loan agreement with TitleMax should reach out to their TitleMax branch with questions.
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Here’s a link to the TitleMax car title loan “Findings of Fact, Conlusions of Law, and the Order.