As we continue our visit to Louisiana and meet with lenders (of all types: credit unions, banks, finance companies, buy-here-pay-here dealers and others) questions about the mandatory participation deadline are common.
When are we actually required to sign up? I spoke with the OMV and they said June...
The legislation requires participation by January 1, 2010. The LA Attorney General provided an opinion (09-0250) the last paragraph of which states
Accordingly, it is the opinion of this office that La. R.S. 32:707.2 makes implementation of the electronic media system for lien recordation and title information mandatory for the Department of Motor Vehicles and use of the system mandatory for all lenders.
The OMV's website refers to this opinion and states
DPS does not have the authority to delay the implementation of ELT. Act No. 689 became effective August 15, 2008, and DPS has been working on adjustments to the system to better accommodate industry since that time. However, DPS does realize the burdens to the industry associated with fully implementing ELT. While DPS cannot delay implementing the ELT program, DPS does intend to not hamper lien recordation and titling of motor vehicles in this state. It is the intention of DPS to accommodate such issues through continuing to issue paper titles until June 30, 2010 in situations where lenders are working to become compliant with the mandatory ELT program.
In short, any lender not currently under contract for ELT with a Louisiana Public Tag Agent is out of compliance with the law. Once the grace period ends on June 30, 2010, the OMV will presumably begin rejecting applications for liens from lienholders not participating in ELT.
Why didn't we hear about it before now?
This is a hard question to answer. Some contributing factors:
- The OMV considered the law to mandate that they provide an ELT program, rather than that everyone must participate. Clarification from the AG only arrived recently.
- The OMV began re-evaluating the program once the new legislation was passed in 2008 to identify potential problems and improve the program. This process takes time and is ongoing.
- The ELT program has existed with the OMV since around 2001. The program always required prospective participants to partner with a Public Tag Agent (PTA) who would provide an interface to the OMV. There were no PTAs providing ELT services until late 2009.
Despite being mandated, the Louisiana Electronic Liens and Titles program is an excellent program providing many benefits to lenders. We hope that you are able to significantly benefit from ELT in Louisiana.
Image: January sky panorama