CHARLESTON, S.C. (Legal Newsline) – An auto title lender is seeking a declaration that its agreements with out-of-state borrowers are enforceable.
Auto Money North wants a Charleston, S.C., federal judge to declare its loan to Glennie Nixon does not violate the North Carolina Finance Act or the state’s usury law. Nixon is from North Carolina but travelled to North Myrtle Beach, S.C., to obtain a loan from AMN.
Nixon has already sued the company in a North Carolina court to try to invalidate the loan, arguing its interest rate and terms exceed what is allowed in that state.
“The title loans issued by Plaintiff and AutoMoney, Inc., including the loans issued to the Defendant, are ‘supervised loans’ under the South Carolina Consumer Protection Code,” the complaint says.
“They are for the personal use of consumers, are subject to loan finance charges in excess of twelve percent, are secured by motor vehicle titles, are not under secured, and, except as will be set out further below, are generally payable for a period of twelve to twenty-four months.”
AMN met filing and posting requirements for its maximum rate schedule, which showed loans issued could result in interest rates of up to 300%, the company says. The agreement with Nixon was not a more-regulated short-term vehicle loan because the term of the loan was two years, the company says.