MassDOT and the Office of Consumer Affairs Announce Collaboration to Stop Unlicensed Motor Vehicle Financing
Division of Banks Orders "Buy Here, Pay Here" Auto Dealerships to Cease Financing Activity in Massachusetts
The action by the Division of Banks focuses on car dealers who were giving loans without a license. Licensed dealers must adhere to maximum interest rate limits and inform customers of loan terms in an appropriate manner. The licensing process also includes a background check and subjects the licensee to examination by the Division of Banks, creating further protections for consumers.
Additionally, MassDOT's Registry of Motor Vehicles Division issued a new policy statement announcing that it will not allow a motor vehicle dealer who sells vehicles under a retail installment contract and holds the contracts to obtain a "lien code" unless the dealer is in possession of the required license from the Division of Banks. Registrar Rachel Kaprielian, advised so called "Buy Here-Pay Here" dealers to be particularly vigilant with regard to the licensing requirement.
"My office strongly urges dealers to carefully evaluate and consult with the Division of Banks to determine whether a license is required prior to requesting a lien code from the Registry. We will forward the name of any dealer who already has a lien code from the RMV without a license to the Division of Banks for investigation." Kaprielian said.
"This collaborative effort between the Division of Banks and the Registry of Motor Vehicles will allow us to better protect Massachusetts consumers from excessive fees, finance charges and wrongful repossessions," said Undersecretary of Consumer Affairs and Business Regulation Barbara Anthony. "By ensuring these companies are properly licensed and regulated, they will be subject to regular on-site examinations to determine compliance with various consumer protection laws."
Currently the Division of Banks licenses 69 motor vehicle sales finance companies. The list of licensees may be found at www.mass.gov/dob by clicking on "Find a Licensee."Anyone with additional questions regarding the licensing of motor vehicle sales finance companies may contact the Division of Banks' Consumer Hotline at 1-800-495-BANK (2265) Ext. 501. The RMV's Title Division may be reached at (617) 351-9503.