PHOENIX — State lawmakers are moving to get police out of the business of being repossession workers for auto dealers and title loan companies.
Legislation given preliminary Senate approval Wednesday would repeal laws that make it a crime to fail to return a motor vehicle after skipping payments.
To do so would still be illegal. But HB2484 would make it a civil matter, no different than failing to make payments on a new TV or washing machine.
Bobbi Sparrow, executive director of the Arizona Automobile Dealers Association, said those are invalid comparisons. She said motor vehicles are different because they can be driven off and hidden.
But Justin Thornton, executive director of the Fraternal Order of Police, said police are put into a dangerous and inappropriate position.
He said current law allows dealers and lenders to file reports of stolen vehicles. Those go into the same statewide and national database that police use when inputting a license plate for an inquiry, Thornton said.
And what that means, he said, is a “felony stop.”
Thornton told the story of patrolling in the city of Maricopa, running license plates and looking for stolen vehicles as well as possible drugs. One of the plates he ran showed the vehicle was stolen.
“I made a felony stop, which is a traffic stop where we stay back by our cars, we pull our weapons, and we start giving them commands to get out of the vehicle,” he told the Senate Judiciary Committee last month.
With the help of other officers, he pulled a father, a mother and three kids out of the vehicle who “really didn’t know why they were being pulled out at gunpoint,” Thornton said.
“That’s not something I’m proud of in my career,” he said. “I don’t think that family should have gone through that for a civil issue.”
There’s also the fact that felony stops can lead to danger for both the officers and the people being pulled over of something “going bad on one of these traffic stops,” Thornton said.
The officer assumes a vehicle is stolen when, in fact, it’s just that a business has a lien on it, he said.
‘Repo company at taxpayer expense’
Thornton wasn’t alone in asking lawmakers to repeal the law making failure to make payments or return a vehicle a criminal felony.
“It criminalizes a civil issue,” said Gilbert Police Chief Michael Soelberg. “It endangers our officers. And I believe it is a danger to the public as well.”
Sparrow argued this isn’t just about a missed payment. He said the law does not kick in until there have been no payments for at least three months. Even after that, the lender needs to send a certified letter to the borrower, Sparrow said.
But Joe Clure, executive director of the Arizona Police Association, said that’s still no reason to get police involved in what amounts to a breach of a civil contract.
“I understand why they want to keep it,” he told lawmakers. “What business wouldn’t want to have the police acting as their personal collection agency and have a nationwide repo company at taxpayer expenses? Who wouldn’t want that luxury?”
He said nothing stops auto dealers, title loan companies and others from going out and retrieving the vehicle.
“They can hire repo men,” Clure said. “They can put a GPS on it. Police have no business doing this.”
Making a related point, Clure cited a case where someone bought a vehicle for $14,700 and made payments of $1,225 a month for eight months, totaling $9,800.
“He owns more of the car than the (lending) company does at that point,” Clure said. But it was still reported as a “stolen” vehicle.
Clure also said his experience is that the lenders don’t follow through and prosecute even though they have reported a crime.
“Once they get the car back, they’re done,” he said, with dealers not wanting to waste the time going to court trying to get someone convicted.
Clure also said title lenders in particular may not want courts looking into the loans they make because if a court finds the terms “unconscionable,” the contract is void. A loan with an effective annual interest rate of 198% might fit that definition, he said.
Change could cost all car buyers, dealers argue
Dave Warkentin, director of the Arizona Independent Automobile Dealers Association, told lawmakers that taking away the tool of being able to use police to recover what his association calls stolen vehicles may have repercussions.
He said many of the people who get these loans have low credit ratings.
“They have a history of not paying their bills,” Warkentin said. “But they still need transportation to transport their families and to get to work.”
He said if the legal remedy lenders now have disappears, it will make all lenders make different deals, like increasing the down payment for everyone or charging higher interest rates for everyone below a certain credit rating.
“Is that better for the low-credit consumer?” Warkentin asked. “No, it’s not.”
And he had his own take about the family that Thornton said he pulled over.
“They were getting pulled over because they defrauded a secured creditor and hid the vehicle for four months from getting repossessed,” he said. “They knew this was not their vehicle. They didn’t have a right to that vehicle. They were driving it for free. And they were hiding it from the secured creditor.”
That constitutes theft, he said.
All this could soon be moot.
Car and Driver reports that Ford has filed a patent for technology that could aid in repossession of vehicles.
According to the report, it would allow a dealer or lender to start remotely disabling various vehicle functions such as the power windows. Ultimately, it could allow autonomous vehicles to drive themselves away and back to the dealership.
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