Tennessee Rights on Vehicle Repo Title Pawns

State laws govern the rights that lenders have to repossess their collateral or security from borrowers who default on their loans. In Tennessee, the Tennessee Title Pledge Act establishes the rights that pawnbrokers and title loan lenders have to repossess their collateral from buyers. According to the Tennessee Code, title pawn lenders can repossess vehicles if they comply with the Tennessee Annotated Code Section 45-15-101.


Consumer Rights
Under Tennessee law, pawnbrokers cannot enter into title loans with consumers who are under 18 or with consumers who are under the influence. Furthermore, before a title loan lender can conduct business with a known felon guilty of theft, larceny or robbery, he must inform the local police department or law enforcement agency of his intent to conduct business with the known felon. Furthermore, Tennessee law allows residents to report their property as missing if they were victims of a theft or other property crime, such as, burglary. If an individual files a missing property report within 20 days of the incident, then under Tennessee law, pawnbrokers have a legal duty to return stolen property, including vehicles reported as stolen.

Tennessee Title Pledge Act
Title pawn lenders are subject to the Tennessee Title Pledge Act if they enter into title loans with Tennessee residents. Title loan lenders are subject to the state's redemption laws and interest caps. In 2005, the Tennessee Legislature enacted new regulations protecting consumers from deceptive lending practices by title pawn lenders. Tennessee regulates title loan as deferred presentment lenders who have an absolute right to repossess their secured collateral upon default by borrowers. As long as a title pawn lender does not breach the peace, he can repossess his collateral without first obtaining a judicial order for repossession.

Repossession Rights and Contractual Obligations
Title pledge lenders can enter into 30-day bailment contracts with borrowers, and if borrowers have not repaid their initial loans plus accrued interest, lenders have the legal right to renew their contracts providing them with additional time to repay their loans or redeem their collateral through repossession.

Title pawnbrokers are required to hold their repossessions for at least 20 days. Tennessee residents have 20 days to redeem their vehicles by paying all outstanding loan fees, including interest, late fees and reasonable fees for repossession. After 20 days, lenders have a right to conduct commercially reasonable auctions to sell their vehicles without first notifying consumers. However, they must return any profits to borrowers after their sales.

Considerations
Since consumer protection laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in Tennessee.