Philadelphia, Pa.—A recent bill enacted in Pennsylvania is the first to require the use of Electronic Lien and Title (ELT) by lienholders. Many state title laws are outdated and inadequate to deal with current issues, because most were enacted during a time when only paper certificates were used.

An electronic lien is the replacement of the paper title with an electronic stream of data. A DMV simply issues files of data each day to lienholders who have a lien on a vehicle. This process began in the late 80s in an effort to offset DMV and lienholder processing costs. Currently, 11 states are using ELT.

According to Larry Highbloom, president of VINtek, a company that helps automotive financiers increase efficiency and reduce exposure to fraud, the recent bill was enacted because DMV’s were not seeing the projected cost savings due to some lienholders not participating in the state ELT program.

Highbloom, a key player in drafting the legislation, says, “The new act updates the statutes regarding liens and certificates of title in Pennsylvania and serves as a precedent to encourage other states to adopt a mandate and maximize state and lienholder cost savings."

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