On April 11, 2019, Maryland Attorney General Brian E. Frosh (D) announced that the Consumer Protection Division of the Office of the Attorney General filed charges against Cash-N-Go, Inc. (“Cash-N-Go”), Cash-N-Go’s owner, Brent M. Jackson, and related entities for allegedly making “unlicensed and usurious consumer loans” in the form of “title loans.” The Office of the Attorney General claims that these types of loans are predatory and put Maryland consumers at risk of losing their vehicles in violation of Maryland’s Consumer Protection Act, Maryland Consumer Loan Law, the Maryland Interest and Usury Law, and the Installment Loans–Licensing Provisions of the Maryland Code.
Specifically, Cash-N-Go was allegedly issuing title loans to vulnerable Maryland consumers at upwards of a 30 percent monthly interest rate, or an annual interest rate of 360 percent, which is 10 times the state’s legal limit. According to the Complaint, each of the title loans were secured by an interest in the consumer’s motor vehicle, whereby in order to obtain a loan, the consumer was required to provide Cash-N-Go with a free and clear title to his or her vehicle, a blank bill of sale, proof of income, references, and a spare key. Cash-N-Go would directly repossess consumers’ vehicles if they failed to make a scheduled payment, and Cash-N-Go did not send written notices to consumers prior to, or after repossession and sale of the vehicles. The complaint seeks injunctive relief, restitution, economic damages, civil penalties, and costs.
While dealers are not necessarily directly affected, dealers and financial institutions should be aware of the latest action by Maryland’s Attorney General to crack-down on alleged predatory lending practices that are at least tangentially related to the automobile industry.
Note: This article was written by Matthew D. Berkowitz, Esq. and Samantha N. Lewis, Esq., of WANADA Kindred-Line member Carr Maloney P.C.Download Bulletin PDF