56°F
weather icon Clear

TitleMax broke Nevada law, but won’t pay damages

CARSON CITY — An auto title lender violated Nevada law with a loan program that overcharged customers with interest payments lasting twice as long as state law allows, the state Supreme Court ruled Thursday.

But the court’s unanimous ruling excused monetary damages against the company, TitleMax, on the grounds that it had reasonably interpreted the law and did not willfully seek to violate it.

The court’s decision partly reverses an earlier state District Court ruling, which itself tossed out an administrative law judge’s finding that voided more than 6,000 of the company’s loans and ordered refunds.

A spokeswoman for state Attorney General Aaron Ford said the office was “pleased with the court’s decision to shut down a potentially predatory lending program.”

TitleMax operates more than 1,000 offices in 16 states, offering high-interest loans to consumers with their vehicles as collateral. Nevada law limits the length of such loans to 210 days.

In 2014, TitleMax began to offer a loan program in Nevada that got around that limit with a “grace period” that initially charged lower interest-only payments for the first 210 days before switching to higher amortizing payments for the next 210 days.

Following inspections in 2014 and 2015 by the state Department of Business & Industry’s Financial Institutions Division of 42 company locations in Nevada, the state ordered TitleMax to stop the program on grounds that the deferred payment schedule amounted to a doubling of the permissible loan period with resulting higher interest charged to customers — in some cases up to 19 percent more.

TitleMax discontinued the program in December 2015. The following August an administrative law judge voided 6,140 earlier loans, fined the company and ordered it to refund principal and interest to affected customers.

The company appealed in District Court, and the decision was reversed, with sanctions against the company vacated. The Supreme Court’s ruling Thursday found that TitleMax’s offering was an “impermissible extension of its 210-day loan in violation of the plain language of (state law).”

But the high court sided with the District Court on lifting sanctions, finding that TitleMax’s actions in response to the 2014 inspections “tellingly demonstrate” it did not know the program violated state law and “took active steps to discern” if it did.

Contact Bill Dentzer at bdentzer@reviewjournal.com or 775-461-0661. Follow @DentzerNews on Twitter.

Nevada v. Titlemax of Nevada by Las Vegas Review-Journal on Scribd

Don't miss the big stories. Like us on Facebook.
Business Videos
Binion's debuts a spinning bar overlooking Fremont Street Experience
Binion's debuted its spinning bar inside the Whiskey Licker Up Saloon. The Rotating bar only goes at one full rotation per 15 minutes overlooking the Fremont Street Experience. (James Schaeffer/Las Vegas Review-Journal)
Southern Nevada could set a new resale-price record in coming months.
The median sales price of previously owned single-family homes – the bulk of the market – was $310,000 in September. Before the economy crashed last decade, prices peaked in June 2006 at $315,000, according to the Greater Las Vegas Association of Realtors.(Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Walmart container park in Henderson - VIDEO
Henderson could be home to a container park associated with a Walmart Inc. initiative. (Las Vegas Review-Journal)
Recession lessons could help Las Vegas face next slump - VIDEO
While the last economic downturn had a dramatic impact on local casinos, most experts expect the industry will be better able to weather the storm during the next recession. (Mat Luschek / Las Vegas Review-Journal)
MGM and victims of Oct. 1 reach settlement agreement - VIDEO
MGM Resorts International and lawyers representing potentially thousands of victims of the Oct. 1, 2017, mass shooting on the Las Vegas Strip have reached a tentative settlement of between $735 million and $800 million. (Mat Luschek /Las Vegas Review-Journal)
Live music and EDM dominate the night on day 2 of A’Le’Innstock
After sunset bands rocked the crowds at A’Le’Innstock in Rachel, Nevada on the second night of the event.
iPhone 11 Release
Local Las Vegas long time Apple product consumer shares her excitement for the new iPhone 11 release Downtown Summerlin. (Elizabeth Page Brumley/Las Vegas Review-Journal)
Lihi Levin talks about a mobil app Dropit - VIDEO
Lihi Levin, regional manager at Dropit Shopping, talks about a mobil app Dropit. The app lets customers leave their shopping bags at a store then have them delivered the same day to their home or hotel so they can shop without carrying multiple bags all day. (Bizuayehu Tesfaye Las Vegas Review-Journal) @bizutesfaye
North Las Vegas company prepares for Mars - VIDEO
Robert Bigelow and his Bigelow Aerospace manufacturing facility played host to eight NASA astronauts and 60 engineers this week getting to know the company’s B330 autonomous, expandable space station. (Elizabeth Brumley/Las Vegas Review-Journal)
Las Vegas developer talks about a new apartment complex called “the yoU”
Frank Marretti lll, founder of G2 Capital Development, talks about his new apartment complex called “the yoU” near UNLV. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Steel cables will hoist roof at Allegiant Stadium - VIDEO
Stainless steel cables are being put into place at Allegiant Stadium to begin the process of putting the roof on the 65,000-seat stadium in Las Vegas. Stadium Chief Operating Officer Don Webb explains how the cables will be used to get the roof put on the future home of the Raiders and UNLV football. (Heidi Fang/Las Vegas Review-Journal)
The last remaining Sigma Derby game in Las Vegas
Derek Stevens, owner of the D Las Vegas, talks about the last remaining Sigma Derby horse racing game in Las Vegas inside his casino floor. (Erik Verduzco/Las Vegas Review-Journal)
Popeyes Spicy Chicken Sandwich Review
Janine Blake of Las Vegas gives her review of the new Popeyes Spicy Chicken Sandwich at the restaurant’s location on west Bonanza Road on Thursday, Aug. 22, 2019,
SuperZoo 2019 takes over Mandalay Bay in Las Vegas
SuperZoo 2019 show for pet retailers brought pet products of all description to the Mandalay Bay Convention Center in Las Vegas. (Heidi Knapp Rinella/Las Vegas Review-Journal)
MSG Sphere at The Venetian to cost $1.2B plus
Scheduled to open in 2021, it is expected to be busier than Madison Square Garden in New York. (Michael Quine/Las Vegas Review-Journal)
Favorite products from SuperZoo 2019
Some of the fun and interesting pet products on display at the SuperZoo in Las Vegas at the Mandalay Bay Convention Center. (L.E. Baskow/Las Vegas Review-Journal)
MAGIC Convention Day 3
The fashion trade show MAGIC, held Monday through Wednesday at the Las Vegas Convention Center. (Elizabeth Brumley/Las Vegas Review-Journal)
MAGIC Las Vegas - Day One
The biannual MAGIC convention show opened Monday at the Las Vegas Convention Center. (Elizabeth Brumley/Las Vegas Review-Journal)
Allegiant celebrates naming deal with tailgate party
Allegiant Air employees celebrate with a tailgate party after the company’s naming deal with the Raiders for the new Las Vegas stadium.
Nevada's sportsbook operators welcome competition
Sportsbook operators from near and far are looking to get into in the established Nevada market, experts say. (Las Vegas Review-Journal)
Get a first look of MSG Sphere construction in Las Vegas
Representatives of The Madison Square Garden Company give the first glimpse of progress Tuesday of the under-construction MSG Sphere — a first-of-its-kind performance venue with high-tech audio and visual capabilities.
THE LATEST
China’s growth hits 26-year low, slowing global economy

The world’s second-largest economy expanded by 6 percent in the three months ending in September, down from the previous quarter’s 6.2 percent, data showed Friday.