MLR3C2126 - Legislation: Log Book Loans
Log books loans are secured in a similar way to pawn broking. In this case they will be secured against a vehicle and the log book will be retained by the lender until the loan and any outstanding interest is repaid. Sometimes loans are secured against boats. You will find that many log book loans are offered by the MSB as a broker and the loan is supplied by another business. In this case the MSB will not be required to include this activity within its anti money laundering policies and procedures. The ML risk is that the vehicle against which the loan is secured is stolen or has outstanding credit agreements. The lender will normally check to make sure there are no outstanding loans secured against the vehicle.