On April 11, 2019, the Maryland Attorney General’s Office (AG) announced that the AG’s Consumer Protection Division had filed charges against affiliated businesses and their owner (defendants) alleging that they had made unlicensed and usurious consumer loans in the form of “title loans” or “title pawns” secured by Maryland consumers’ motor vehicles. The AG charged the defendants with engaging in “unfair or deceptive trade practices” under the Maryland Consumer Protection Act, Com. Law § 13-303.
The AG alleged that the defendants offered consumers short-term, high-interest loans, and held title to consumers’ vehicles pending repayment. If the consumers failed to make payments on their loans, defendants repossessed and sold their vehicles. However, the defendants typically charged annual interest at a rate of over 360%, or over 10 times the state’s legal rate of interest for consumer loans. The AG further alleged that the defendants were not licensed by the Maryland Commissioner of Financial Regulation – a prerequisite for offering consumer loans in Maryland. The AG seeks an order compelling defendants to permanently cease and desist from making unlicensed and usurious consumer loans in Maryland, to pay restitution to all affected consumers, and to pay civil penalties.