Topic: Automobile Lending
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When are we required to release a security interest on a titled vehicle if the same vehicle is used to secure multiple loans?
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We believe that you would not be required to release the certificate of title on a vehicle until all loans secured by the vehicle are fully satisfied (not just when one loan secured by the vehicle is satisfied). The Vehicle Code requires that you deliver a release of the security interest and the vehicle’s certificate…
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Would a blanket filing statement covering “all equipment” include titled vehicles?
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We do not believe that your security interest in the debtor’s vehicles could be perfected by a UCC blanket financing statement. The general rule is that you must perfect a security interest with a financing statement (which can cover “all assets” or “all personal property” 810 ILCS 5/9-504(2)). 810 ILCS 5/9-310(a). However, a special rule…
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Should we include vehicle registration fees in the finance charge calculation?
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We agree that a fee paid to the Secretary of State for securing your lien on a vehicle’s certificate of title would not be considered a finance charge. The Illinois Vehicle Code provides that the exclusive method of perfecting a lien in a vehicle, by “delivery to the Secretary of State of the existing certificate…
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If we made a loan secured by a vehicle title, and we release the lien on the vehicle’s title after it is paid off, do we need to again amend the vehicle’s title after making a new loan to the customer to reflect our lien on the vehicle?
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If the bank has an enforceable security agreement with the borrower, it has a security interest in the vehicle regardless of what the vehicle’s certificate of title states. However, the bank will not have a perfected security interest until the bank files for an amended certificate of title on the vehicle with the Secretary of…