§ 22-303. Maximum interest rate.

A secondhand dealer who engages in title loan transactions may not exceed the following interest rates:

(1)

A secondhand dealer may contract for and receive a finance charge. The finance charge under a title loan agreement may not exceed 96 percent simple interest during the first year that the agreement is in effect nor may the amount of interest charged exceed 22 percent in any of the first 4 months or 1 percent in any of the remaining 8 months. In addition, a secondhand dealer may charge the borrower an application fee of $22.00 or 10 percent of the loan amount, whichever is less. Any extension must be executed in writing and must clearly specify the new maturity date, the title loan finance charges paid for the extension, and title loan finance charges owed on the new maturity date, and a copy must be supplied to the pledgor. A secondhand dealer may not capitalize any unpaid finance charges as part of the amount financed in a subsequent title loan transaction.

(2)

The annual percentage rate that may be charged in a motor vehicle title loan may equal, but not exceed, the annual percentage rate that must be computed and disclosed as required by the Federal Truth in Lending Act and Regulation Z of the Board of Governors of the Federal Reserve System. When the period for which the charge is computed is more or less than one month, the maximum rate for the period must be computed on a basis of less than one month, the maximum rate for the period must be computed on a basis of 1/30 the applicable monthly interest rate, multiplied by the number of days of the period.

(3)

Any transaction involving a borrower's delivery of a motor vehicle certificate of title in exchange for the advancement of funds on the condition that the borrower shall or may redeem or repurchase the certificate of title upon the payment of a sum of money, whether the transaction be characterized as a "buy-sell agreement," "sale-leaseback agreement," or otherwise, shall be deemed a violation of this article if such sum exceeds the amount that a secondhand dealer may collect in a title loan agreement under this article or if the terms of the transaction otherwise conflict with the permitted terms and conditions of a title loan agreement under this article.

(4)

Any fees or taxes paid to a state agency and directly related to an individual title loan transaction may be collected from the borrower and shall be in addition to the permitted finance and interest charge.

(5)

No charges, including interest, in excess of the combined total of all charges permitted by the section shall be allowed.

(Ord. No. 99-07, § 1, 8-12-99)