The Iowa Department of Transportation (DOT) implemented the state's Electronic Lien & Title Program (ELT) in 2013. Participation in the Iowa ELT program is not mandatory. Lenders who choose to participate in the ELT program receive lien notation and release messages electronically from the Iowa DOT through a service provider. The service provider facilitates communication between the Iowa DOT and the lender by exchanging data files with DOT and validating those files. The ELT program provides a new avenue of communication between the DOT, participating lenders, Iowa’s 99 county treasurers and vehicle owners with the intent to improve the efficiency and timeliness of lien processes and to reduce costs for all parties involved.
Service providers participating in the Iowa ELT program include Decision Dynamics, Dealertrack Collateral Management Services, PDP Group, Inc., and VINtek, Inc. Additional service providers are expected to join the Iowa ELT program in the near future. Using a service provider, lenders are able to maintain control of their vehicle collateral while enjoying the benefits of electronic processing and communication.
Iowa Senate File 2273, which was approved on April 7, 2010, established a study committee regarding the implementation of electronic registration and titling of vehicles. This committee published the results of their findings on December 1, 2010, and recommended a phased approach to implementation of electronic transactions for titling and registration. Phase one consisted of facilitating electronic communication between the DOT and lenders for lien notations and releases. The Iowa ELT program is expected to result in faster notification of lien notations and releases, eliminate storage of paper titles, reduce fraud, reduce costs for mailing of paper titles, improve data accuracy, and reduce administrative burdens for all.
The Iowa ELT program is a method by which the Iowa DOT and lending institutions (lienholders) can exchange vehicle and title information electronically. The electronic exchange of information eliminates the need to print and mail paper titles. Once a lien has been released, the lienholder sends an electronic message releasing the lien on the title at which point the Iowa DOT releases the lien on its record. The title remains electronic unless a paper title has been requested by the lienholder or vehicle owner. This process eliminates much of the paper handling involved in the vehicle titling process.
- The lienholder provides the same documents that are needed to file a lien on a conventional paper title by providing to the appropriate Iowa County Treasurer’s office.
- The county office records the lien and the Iowa DOT sends the service provider an electronic message with similar titling information as appears on a paper form. This information includes a description of the vehicle and the name and address of the vehicle owner.
- The service provider receives the electronic message from the Iowa DOT and makes it available to the lienholder through the service provider’s electronic interface.
- The lienholder can then validate the lien information.
- Once the loan is satisfied, the lienholder uses the interface to release the lien electronically.
- The Iowa DOT receives the electronic lien release and releases the lien on the title record. The title remains electronic unless the lienholder or owner has requested a paper title. The county treasurer mails/delivers a paper title, if requested. The lienholder also has the option to electronically request a paper title with the lien noted.
Any ELT program allows lienholders to reduce the handling, storage and mailing costs associated with paper titles by replacing them with electronic titles. ELT participants also benefit in the following ways:
- Lienholders will receive fast, electronic confirmation that the lien has been recorded.
- Lienholders who participate in the ELT program will release liens electronically eliminating the need to hand-release liens on the paper title.
- Faster notification of lien satisfactions.
- If a paper title is desired, it can be printed and mailed with the lien intact or printed and mailed at the time of lien release.
- Reduction in title fraud by elimination of the paper title that is subject to tampering, counterfeiting, or other manipulation.
- Reduction in lost titles and the need to order duplicates.
- Better protection for dealers against failed financing.
- Reduction in the time needed to obtain release of a lien against a trade vehicle which helps to avoid delays that threaten timely completion of the sale and disposition of the trade vehicle.
- Vehicle owners who have satisfied their loan obligations will receive paper titles faster, after the lienholder has electronically notified the Iowa DOT that the lien has been released.
- Overall reduced costs.