Oklahoma financial industry lobbyists want state lawmakers to require registration for high-end livestock trailers.
Oklahoma Credit Union Association President Nate Webb told lawmakers at an interim study Tuesday some owners of high-end trailers are using them as collateral for multiple loans, leaving lenders to fight it out if the borrower defaults. Others are titling the trailers out of state if they fall behind on payments.
Webb said the solution is to require registration for high-end livestock trailers.
"We've tried to closely define this as a certain type of trailer that would not really affect, as I say, [agriculture] or day-to-day farm operations, those types of things," Webb said.
Webb’s suggestion is to require registration for livestock trailers that include a sleeping area and a bathroom. A price threshold for registration probably wouldn’t solve the problem.
"If you say $80,000, somebody's going to sell if for $79,095," Webb said.
Requiring registration would let financial institutions file liens on the trailers, which can easily cost six figures. Currently, the most they can do is submit a Uniform Commercial Code filing, which must be renewed and often doesn't follow the trailers across state lines.
Lenders say they’re essentially making unsecured loans, which are riskier and come with higher interest rates. Tinker Federal Credit Union COO Dave Willis said perfect credit could get a rate of 5 or 6 percent.
"A lot of our farmers and/or young folks who are transporting horses don't have that kind of credit score, so now they're looking at 13, 14 percent interest, potentially, to be able to borrow to purchase that," Willis said.
Currently, all livestock trailers are exempt from registration. The legislature took up a measure last session, House Bill 1915, to require registration for trailers with living quarters, but it stalled.
