Essentially, an electronic lien is the replacement of the typical paper title with an electronic stream of data. Similar in operation to electronic stock certificates; under ELT, in lieu of mailing out thousands of paper titles, (and paying postage for each title) a DMV simply issues files of data each day to lienholders who have a lien on a vehicle. DMV’s began offering ELT in the late 80’s in an effort to offset DMV and lienholder processing costs. To date eleven states have gone to ELT. However, up until this Act the various states made the use of electronic title optional to the lienholder.

According to VINtek COO Larry Highbloom; a key player in drafting the legislation, these DMV’s were not seeing the projected cost savings due to some lienholders choosing not to participate in the state ELT program. "The ELT programs in operation to date across the country are tested, secure and stable. Lienholders who voluntarily implemented ELT are saving money by the bushel. Yet there are hundreds if not thousands of lienholders nationwide who have not yet turned their attention to this efficiency generating initiative due to competing priorities and other distractions," Highbloom stated.

House Bill 804 passed earlier this month in PA, makes the use of ELT by lienholders mandatory in the Commonwealth and lienholders must implement the program by July 10, 2008. Highbloom worked closely with the Pennsylvania House of Representatives, Senate and Department of Transportation during the past year and helped draft the bill. "The new Act updates the statutes regarding liens and certificates of title in PA and serves as a precedent to encourage other states to adopt a mandate and maximize state and lienholder cost savings" said Highbloom.

According to Highbloom, the resulting cost savings in time and effort to banks, credit unions, and captive and non-captive finance companies will be considerable and make ELT a must for all states, not just Pennsylvania. In addition to cost savings opportunities, an electronic title reduces the chance for fraud by eliminating a document which could easily be stolen or misused by a third party. In ELT processing, only the lienholder of record can perform transactions on an ELT record while the lien is still active. There isn’t any paper floating around for someone to manipulate. The chance for someone to release a lienholders’ lien without the permission of the lienholder is greatly reduced.

Commenting further on the new legislation Highbloom stated, "VINtek is pleased to play a supporting role in this significant process improvement for lienholders and DMV’s. Similar to electronic stock certificates of record, ELT will ultimately replace the paper title as the primary method of evidencing a lien on automotive collateral. Many advanced automotive financiers are already processing ELT’s and the 11 operable ELT states represent about 48% of the registration volume in the US. This legislation will encourage other lienholders to enjoy the benefits of electronic lien and title processing."

About VINtek:
VINtek has been helping automotive financiers increase efficiency and reduce exposure to fraud since 1990. VINtek solutions include Electronic Lien and Title, (also known as ELT and e-Title) title administration, business process outsource services, VIN decoding, and used vehicle valuation. In 1999, VINtek received a Top 10 Quality Award from Ford Motor Credit for ELT processing. VINtek also provided data exchange services for the Commonwealth of Pennsylvania in its ELT program from 1997 through 2002. The company is based in Philadelphia, Pa. For more information call: 215-563-3320; email e-mail protected from spam bots or visit www.vintek.com.