Louisiana ELT Deadline: January or June?

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

Louisiana: Who's paying for this?

Now that the ELT program is mandatory in Louisiana (as of January 1, 2010) all lenders are required to participate. There are fees related to participating, so how does a lender deal with this increased cost of filing liens?

Option 1: Increase the application fee

This is probably the least attractive option to most lenders. Lenders are often reluctant to increase their fees or are unable to do so for a variety of reasons. For lenders who work with dealers to process their paperwork, they may not receive a fee from their customer at all.

Option 2: Pass the fee to the customer

It may be possible in Louisiana to collect the fee for electronic liens and title processing from the customer. Normally, "convenience" fees cannot be collected directly from the customer, but because the ELT program is mandatory in LA, ELT fees could be considered as separate from the "convenience" fee designation. Contact your legal counsel and reference LA RS 6:969.18.

Option 3: Absorb the cost

Several of our current customers see the ELT fee as a part of their cost in managing and tracking titles. Our cost benefit calculator considers all costs related to managing titles and calculates based on the differences between a paper-title program and an ELT program. (Differences such as looking up title/owner and matching to current open loan applications, scanning and filing paper titles, and having to request duplicates for owners who lost the title you provided.)

Bottom line: Keep the cost of ELT low

The best bet for you and your customer is to keep your ELT costs to a minimum. Premier eTitleLien™ has no monthly minimums, no support costs, no start-up fees, and no support fees. We charge a single fee on a transaction-by-transaction basis. Contact us for more information.

Image: Jennefer Asperheim's Dice: "Who Pays"

Louisiana Lenders: Emphasis on "Mandatory"

This week I am joining Casey & Casey (Auto Title Express) in meeting with Louisiana lenders at several information forums. We're discussing the Electronic Liens and Titles (ELT) program that became mandatory for the state this month.

In many ways it is unfortunate that participation in the LA ELT program is required. I am sure that many lenders will be paying attention to "you must participate" and miss the fact that ELT is a great program and can really help lenders resolve and prevent titling issues.

In demonstrating our ELT product, I'm pointing out the ease of use even for those customers who really don't want to change their current process. We've worked hard to make accepting electronic titles and releasing ELT liens extremely simple, making compliance with mandatory participation as painless as possible.

Presenting Premier eTitleLien™ in this way is a bit unfortunate, since it fails to present the many ways that an ELT program provides improvements over handling paper titles. Louisiana (through Casey & Casey as the registered tag agent) provides several features not yet provided by all existing ELT states:

• Title Check


• Protection against fraudulent lien releases


• Next day mailing of titles

These features along with the core ELT program features make the Louisiana program pretty nice. My hope is that all lenders can see the benefits of the program and not just another regulation to comply with.

Image: Clever Book Title: "Adventures in Missing the Point"

Finding a partner for ELT in Louisiana

Decision Dynamics, Inc. (DDI) does provide ELT services in Louisiana, but you won't know that from checking with the LA OMV. They only list in-state tag agents as providing ELT services.

By Louisiana statute (Section IV 35.03):

Information concerning the perfection and release of security interests will be electronically transmitted to and from the participating lien holder via public tag agents.

The LA OMV is authorized to contract only with in-state tag agents. In order for DDI to integrate our ELT solution with the LA OMV, we need to work with a Louisiana tag agent.

We inquired with the OMV in 2007 about participating in their program and ran into this restriction. At the time, we did not know of any tag agents working with the ELT program (nor did the OMV). Fortunately for us, we were contacted by Dan Casey of Casey & Casey at an AAMVA (American Association of Motor Vehicle Administrators) conference and we began discussing the possibility of working together. Once legislation passed in 2008 mandating participation, our efforts to provide title services in Louisiana increased.

All that to say that we are very pleased to be working with Casey & Casey as our tag agent in Louisiana (they do business as Auto Title Express). It has been a pleasure working with them to develop the specifications for ELT and giving them feedback about what data elements are most important to lenders.

Image: "Handshake2"

Questions about ELT in Louisiana

DDI participated in a informational conference call with Auto Title Express (our tag agent in Louisiana). Around 80 individual members of the Louisiana Banker's Association "attended" the call and asked a number of questions.

How will ELT change what we do today?
The primary change is that you will no longer receive a paper title. (There is a long list of reasons why this is good.) The forms you use today and the documentation required for the forms do not change. Applying for a lien is the same process (title application with owner signature, supporting documents, and fee).

How do I release an ELT lien?
PTAs cannot release an ELT lien based on a paper request by a lender (or email, fax, etc.). Liens must be released electronically by the lender.

How long will it take the OMV to print a title when a "release" is issued?
Typically, titles will be printed and mailed the next day. Delays may occur during DMV audits and other situations.

Is there any way to get a printed title faster?
No. The OMV does not allow PTAs to print single titles and they do not have an alternate method of making titles immediately available. We believe that fast print is essential to the whole process and will be working with the Louisiana Banker's Association, Automobile Dealer's Association, and Senator Duplessis to propose and pass legislation enabling a fast print solution.

What is required (technology-wise) for a lender to participate?
The PTA (such as Auto Title Express) or Service Provider (such as DDI) will provide all necessary software. (DDI's solution is Premier eTitleLien™, a web-based application that does not require any special installation.) The software should handle secure message exchange and allow for releasing liens and requesting paper copies of titles with liens in place.

What do I do for situations that require paper titles, like floorplan financing, audits, or repossessions?
DDI's experience in other states is that auditors, finance companies, and insurance companies are pleased with the ELT program and accept printed reports authenticating the validity of the lien on the electronic title. In cases where this is not acceptable, a printed copy of the title can be requested.

Image: "Magnolia" (Louisiana State Flower) by Emily Brodnax

Arizona: Mandatory ELT by May 31

This coming June Arizona will join Pennsylvania and Louisiana as states that require participation in the Electronic Liens and Titles program. Arizona sent a letter that we received a copy of yesterday:

All lenders conducting business will be required to transmit lien information through an appproved Service Provider. [Arizona Department of Transportation Motor Vehicle Division] advises all lenders to contract with an approved Service Provider prior to May 31st.

And we are listed as a "near future" service provider. (We've been working with AZ DOT for over a year now, but due to internal changes related to going mandatory they have delayed our participation.) This was a nice gesture on their part. We expect to be live in Arizona very soon.

As with Louisiana (see yesterday's post) Arizona has had an ELT program for a number of years. The state legislature passed the change ("REQUIRE") in July 2009. As well as making life easier for lenders, full participation will be a help for lenders and Arizona residents in the reduction of fraud.

Here is the full letter from the Arizona MVD.

UPDATE: Arizona reissued the letter with corrected vendor contact information. Ours has been correct all along. ;)

Louisiana: ELT now required

The Governor of Louisiana signed Senate Bill 373 into law on July 2, 2008 requiring the Office of Motor Vehicles (OMV) to require participation in the Electronic Liens and Titles program for all lenders by January 1, 2010. The OMV is now requiring this, but allowing a grace period through June 30, 2010.

From their site:

Louisiana Attorney General’s Opinion No. 09-0250 advised that as of January 1, 2010, it is mandatory for financial institutions, lending institutions, etc., to participate in ELT.

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.

DDI is excited to be working with a Tag Agent in Louisiana (which is required; see here for a list of tag agents working with ELT) allowing us to offer Premier eTitleLien™ to Louisiana lenders as well as integrating LA electronic titles for our current customers.

Although the OMV has had an ELT program for a while (legislation allowing it's development was passed in 1999), it has always required participation via registered tag agents, and has never caught on with the agents or lenders. Now that the program is fully available, Louisiana banks, credit unions, dealers, and other lenders can benefit from ELT.

Signing up with DDI is simple: our website has application instructions for Louisiana and the other states where we offer ELT.

Image: Buying a New Car in Louisiana