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Home / Iowa court sides with car title loan business
Iowa court sides with car title loan business
Gazette Staff/SourceMedia
Jul. 25, 2009 9:39 pm
The Iowa Supreme Court has ruled that a law limiting high interest rates on car title loans cannot be applied to new cash advances made on old loans.
The lawsuit was filed by Anderson Financial Services, which does business as Loan Max and Loan Smart, against Iowa Attorney General Tom Miller.
The law took effect July 1, 2007, and capped annual interest rates on car title loans at 21 percent. Lawmakers argued it would protect against rates reaching up to 300 percent.
In its Friday ruling, the Supreme Court says the Legislature didn't make the law retroactive. That means the limits cannot apply to loans made before July 1, 2007, even if new advances are taken on those loans.
The ruling sends the case back to district court.
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