Indiana ponders car title lenders

The Indiana Legislature is on the verge of welcoming a lending industry that makes controversial "payday lenders" look as conservative as mainstream banks.

Title lenders, which make loans using a borrower's car title as collateral, would be able to charge up to 22-percent interest per month under Senate Bill 383. The annual percentage rate could climb to triple digits for desperate borrowers who roll over the loans repeatedly to extend repayment time.

The bill has already emerged from a Senate finance committee. It is opposed by consumer groups and by the Indiana Department of Financial Institutions, which regulates statechartered banks and consumer credit.

Opponents warn that title lending euphemistically advertised by some as a "motor vehicle line of credit"-is the last thing needed in a state that has ranked at or near the top in personal bankruptcies and home foreclosures in recent years.

They're concerned title lending could even dwarf payday lending in scope because borrowers need provide little more than a valid car title to qualify. There are about 350 payday loan offices in the state.