Perhaps the most useful benefit to lienholders is electronic notification when liens are perfected. Lienholders do not need to wait for a paper title in the mail to verify their liens are perfected -- they receive next-day notification electronically, with owner and vehicle information included. Other benefits to lienholders include:
Overnight receipt of lien perfections;
Faster verification of title information;
Help Desk service provided by an ELT Service Provider;
Elimination of title storage and handling/mailing paper titles;
Cost savings for replacing lost titles;
Postage costs eliminated for mailing paper titles;
Elimination of staff time dedicated to filing and maintaining paper titles;
Section 1151.1 of the Pennsylvania Vehicle Code requires all lienholders, except individuals and lienholders who are not normally engaged in the business or practice of financing vehicles, to enroll in the mandatory ELT Program. Lenders who offer the service of vehicle financing to customers are considered to be engaged in the business or practice of financing vehicles.
Visit the Motor Vehicle Information Center on PennDOT's Driver and Vehicle Services website, www.dmv.pa.gov. Click on the Electronic Lien and Title Program link, and download Form MV-37 (Application for Enrollment/Change in Electronic Lien and Title System). Follow the instructions on the form.
Do vehicle dealers need to be enrolled in the mandatory ELT Program?
If the dealer is in the practice or business of financing vehicles and wants to be recorded as a lienholder on Pennsylvania vehicle titles, the dealer must be enrolled in the mandatory ELT Program. Dealers that do not finance vehicles and do not request to be lienholders on Pennsylvania vehicle titles, are not required to enroll in the ELT Program.
Can lenders be exempt from the mandatory ELT Program if they finance only a few vehicles a year?
No. Section 1151.1 of the Pennsylvania Vehicle Code does not exempt lienholders from participation in the mandatory ELT Program based on the number of vehicles financed in a given time period. If a lender offers the service of vehicle financing to customers, the lender must enroll in the mandatory ELT Program in order to be recorded as a lienholder on Pennsylvania title records.
Can lenders be exempt from the mandatory ELT Program if they finance vehicles but never want to be recorded as a lienholder on the Pennsylvania title record?
Yes. Section 1151.1 of the Pennsylvania Vehicle Code specifically requires "lienholders" to participate in the ELT Program. If a lender is in the practice of financing vehicles and never requests to be recorded on Pennsylvania title records as a lienholder, then that lender is also exempt from participation in the ELT Program. If the lender requests to be recorded on a title record as lienholder then the lender must enroll in the ELT Program.
Can dealers who finance vehicles avoid the requirements of Section 1151.1 by designating an individual at the dealership to be named as lienholder on all titles?
A dealership that will never request to be recorded as a lienholder on Pennsylvania title records will not be required to participate in the ELT Program. The individual whose name will be recorded as lienholder will be required to participate in the ELT Program, since this individual is considered a lienholder normally engaged in the business or practice of financing vehicles.
Are out-of-state lienholders required to participate in the mandatory ELT Program?
Out-of-state lienholders engaged in the business or practice of financing vehicles purchased by Pennsylvania residents, to be titled in Pennsylvania, must participate in the mandatory ELT Program. Out-of-state lienholders who finance vehicles to be titled only in other states by non-Pennsylvania residents are not required to participate. Pennsylvania will record existing lienholder information appearing on non-Pennsylvania titles when a new Pennsylvania resident applies to transfer a vehicle title. Those lienholders will be issued paper titles if they are not enrolled in the ELT program.
How do dealers obtain a paper title for a vehicle taken in trade, when paying off a loan, if the lien is electronic?
When a dealer pays off a loan for a vehicle taken in trade, the lienholder is required to immediately perform a transaction to release the lien to the dealer. When this transaction is performed by the lienholder, PennDOT automatically prints a paper title with the dealer's name and address in the lienholder section and mails it to the dealer the next business day. Dealers are not required to enroll in the ELT Program to receive titles in this manner after paying off loans on trades.
What transactions can the lienholders do in the ELT Program?
The transactions listed on back of Form MV-37 include:
Lien Verification - This transaction allows the lienholder to verify they are the lienholder for a specific Title or VIN number.
Rejection of Lien - This transaction allows a lienholder to reject the lien establishment transaction, as sent by PennDOT, when the lienholder believes the record was established in error.
Rejection of Changed Vehicle Data - This transaction allows the lienholder to reject the changed vehicle transaction, as sent by PennDOT, when the lienholder has no corresponding record on their file.
Change Owner Address - This transaction allows the lienholder to update the owner's address at any time while its electronic lien is in place.
Change Owner Address and Release Lien - This transaction allows the lienholder to update the owner's address and then release its electronic lien, resulting in an unencumbered paper title issued to the owner at the new address.
Release Lien - This transaction allows the lienholder to release its electronic lien, resulting in an unencumbered paper title issued to the owner.
Release Lien to an Approved Third Party - This transaction allows the lienholder to release its electronic lien when a vehicle loan is paid off by a vehicle dealer, resulting in a paper title issued to the dealer.
Convert ELT to Paper Title - This transaction allows the lienholder to convert an electronic title to a paper title with the lien information intact, resulting in a paper title issued to the lienholder.
Convert Existing Paper Title to ELT - This transaction allows the lienholder to convert a paper title with lien to an electronic title with lien.
Update Lienholder Address - This transaction allows the lienholder to update its address on established ELT records. NOTE: Form MV-37 must be submitted to change the address prior to this update.
How do lienholders connect electronically with PennDOT?
No. All lienholders in the ELT Program are issued electronic notice of their liens, and cannot choose to have paper titles issued by PennDOT. After the electronic notice is sent by PennDOT, the lienholder may then convert an ELT to a paper title if there is a valid business need.
What happens to title applications when a lien is to be recorded, but the lienholder on the application has not enrolled in the ELT Program?
If the lienholder is exempt, the application will be processed and a paper title issued to the lienholder. If it is determined that the lienholder is not exempt, the lienholder will be notified by PennDOT to enroll in the ELT Program or risk having titles issued with no lien recorded.
How are title applications completed to ensure an ELT is issued?
Any time lien information is entered on a title application, PennDOT requires name, address and Financial Institution Number (FIN) of the lienholder. If the FIN is not entered, the application is rejected for the required information, unless the application indicates "Not ELT", in the case of an exempt lienholder.
What is the FIN (Financial Institution Number), and how does a lienholder get one?
The FIN is currently an 11-digit number assigned by PennDOT to each lienholder. The FIN is based on either the lienholder's Federal Employer Identification Number (FEIN) or its ABA Routing Number, whichever is provided by the lienholder on Form MV-37.
If a lienholder has one FEIN covering numerous locations, such as a dealer with multiple business locations in Pennsylvania, and vehicle financing is offered at each location, can each location obtain a FIN?
Applicants are to obtain the FIN from the lender when securing their vehicle loan and provide the FIN to the agent completing the application. If the applicant does not provide the FIN to the agent, the agent can check the list of ELT participants on PennDOT's Driver and Vehicle Services website to obtain the FIN, or contact the lender directly to obtain the FIN.
How does PennDOT determine if a lienholder is or is not normally engaged in the business or practice of financing vehicles?
If a lender offers vehicle financing as a service to its customers, then the lender is considered to be normally engaged in the business or practice of financing vehicles and must enroll in the mandatory ELT Program if the lender wishes to have its lien recorded on Pennsylvania titles.
Are lienholders required to contract with PennDOT in order to participate in the ELT Program?
No. Lienholders must contract with one of the PennDOT-approved service providers listed on Form MV-37. The service providers will provide technical guidance, help desk service, software, hardware and system training. When a lienholder becomes active as a participant in the ELT Program, title and lien information is passed between the lienholder and PennDOT through the service provider.
What is the cost for a lienholder to enroll and take part in the ELT Program?
Costs will vary depending on the fees charged by each service provider. No fees are paid to PennDOT or the Commonwealth of Pennsylvania. Lienholders pay only the service providers' fees for electronic title transactions and connectivity. Lienholders must contact the service providers directly for actual costs.
Is a vehicle owner permitted to have an electronic lien released using Form MV-38O in order to obtain an unencumbered title at the PennDOT counter service area?
If the lien is released by the lienholder on Form MV-38O, or with a notarized lien release statement on lienholder's letterhead, PennDOT's counter service area will accept a properly completed application and issue a duplicate title to the vehicle owner (with proper owner ID) with no lien. A fee of $51.00 will be required. (There is no fee required if the vehicle record shows an electronic lien release and the owner has not received the title ten or more days after the date of the electronic release.)
What FIN should an agent enter for a lienholder when the lienholder address provided by the customer does not match the lienholder address on PennDOT's ELT participant list?
The agent should contact the lienholder directly to verify the FIN, and enter that FIN on the title application. The address to be used is the address shown on the PennDOT list of ELT participants since this is the address provided to PennDOT by the participating lienholder.
Will individuals be permitted to be lienholders in the mandatory ELT Program?
Yes. Individuals will be permitted to be lienholders on Pennsylvania title records, and are exempt from participation in the mandatory ELT Program, unless engaged in the business or practice of financing vehicles.
How do vehicle owners obtain a paper title upon paying off their loan if the lien is electronic?
Under the ELT Program, the lienholder is required to immediately perform an electronic transaction to release the lien when a loan is paid off. When the electronic release is done by the lienholder, PennDOT automatically prints and mails a paper title to the owner the next business day.
Is a lienholder with an electronic lien permitted to use Form MV-38L to obtain a paper title, with its lien intact?
No. The lienholder must utilize the electronic transaction to convert an ELT to a paper title when there is a legitimate business need. When the lienholder performs this transaction, PennDOT will automatically print and mail a paper title to the lienholder the next business day. Titles are not released to lienholders at PennDOT's counter service area.
Is a lienholder required to convert its existing paper titles to ELT after enrolling in the ELT Program?
Yes. Option 2 to Record Lien on Form MV-38L requires both the lien fee of $24 and a title fee of $51. The only exception is when Form MV-38L is used to record a 2nd or 3rd lien. In those cases, only the lien fee is required. This applies to ELT and non-ELT liens.
What is the correct procedure for assigning a security interest from one ELT lienholder to another?
If the lien has been satisfied, the lienholder must electronically release the lien. This will produce a clear title to the owner. If the lien has not been satisfied, the lienholder may use Form MV-38L to record a lien after a lien expires along with the required fees. Form MV-38L cannot be used to renew the lien.