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TORRANCE DAILY BREEZE: Lieu bill regulating 'buy here, pay here' car loans passes state Senate
June 01, 2012
The state Senate voted 23-12 on Thursday to approve a South Bay lawmaker's bill aimed at regulating car dealers who offer "buy here, pay here" installment loans.
Senate Bill 956, introduced by state Sen. Ted Lieu , D-Redondo Beach, would require dealers to obtain a state lender's license so consumers are better protected when purchasing vehicles.
The bill now goes to the Assembly for consideration.
In some cases, consumers pay thousands of dollars more for a vehicle than it's worth while also paying high interest rates, Lieu said. The move sometimes leads to repossession, while the dealer keeps the down payment and resells the same vehicle.
The measure also would limit used-car installment loans to a maximum of 17.2 percent interest. The bill also calls for providing grace periods before a used car is repossessed.
"These buy-here, pay-here used-car dealers take advantage of our lack of laws to prey on desperate workers, low-income families and members of the military by pushing unregulated loans to sell cars for far beyond market value," Lieu said.
- Art Marroquin