Introduction

A screen shot of the annual reports from TitleMax.

A ruling issued Thursday by the Virginia State Corporation Commission will allow Virginia officials to keep annual business reports filed by auto-title loan companies under wraps, marking a major victory for the oft-criticized lenders.

The commission, which oversees financial institutions in the commonwealth, said it’s not clear under state law if corporations enjoy the same rights as people when it comes to the protection of financial information.

Three giant title lenders — TitleMax of Virginia Inc.; Anderson Financial Services LLC, doing business as Loan Max; and Fast Auto Loans Inc. — had asked Virginia officials to prevent the annual reports from being disclosed to the Center for Public Integrity.

The reports include detailed sales figures, volume of loans, interest rates, the number of cars repossessed when borrowers default, and how often the lenders get into trouble with state and federal regulators.

TitleMax, Loan Max and Fast Auto Loans submitted heavily redacted versions of reports earlier this year at the request of the commission. In its brief at the time, TitleMax argued the reports contain “trade secrets,” whose release could cause it “irreparable damage.”

The case turned on whether state laws protecting the privacy of “personal financial information” should apply to national corporations, just as they would for any person. The commission’s staff recommended that the records be released last year. But the three-member commission ruled on Thursday that that state law is not clear on the question.

“After full consideration of the arguments on this matter, the Commission concludes that the term ‘personal financial information’ is ambiguous since it can be understood in more than one way for the purpose of this statute,” according to the ruling.

The commission order directs its staff to seek “clarification” of the law from the General Assembly next year. In the meantime, the staff will release aggregate summaries of the annual reports as it has done in the past. Doing that “strikes a fair balance,” the commission order said.

In Missouri, where all three of the Virginia title lenders also operate, financial reports are public records and anyone can request copies.

The Center for Public Integrity requested the annual reports from Virginia officials in November as part of an investigation into the costs of title loans nationwide. In Virginia, where nearly 500 title loan shops are operating, average interest rates were 222 percent in 2014, according to aggregate figures that Virginia releases.