AUSTIN, Texas — The Texas Department of Motor Vehicles has officially been served with a lawsuit by a group of independent auto title service companies.
Earlier this summer, the Texas DMV Board adopted rules that place a cap on how much private title companies, or deputies, can charge: $10 for registrations and $20 for title services.
At first, the DMV proposed lower rates, but increased them after receiving feedback.
Business owners say their livelihoods will be at risk when new rules take effect in January. While there are fewer than 40 private title companies, or deputies, left in Texas, they carry a big load in Travis County: one-third of all business according to the Travis County Tax Office.
Drivers who come into Fry Auto Title Service pay a convenience fee on top of state prices. Owner Sharon Fry said it's kind of a trade-off for folks who don't want to sit and wait at the Tax office. It’s also a way for her business to stay put.
"No one is forced to use our service and they willingly pay our convenience charges," said Fry, whose family has operated the title company for the last 50 years.
The new fee structure is a major problem for Fry.
"We would not be able to continue to operate as a private business," she said.
A spokesman for the Texas DMV said the state agency has no comment on the case, beyond confirming they'd been served. When they were proposed in April of this year, several deputies and Tax Office officials protested the rules, saying it would add congestion to county offices, and cost taxpayers in the end.
"The main intent of these rules was to really drive customer service," said Jeremiah Kuntz, Director of the Vehicles, Titles, and Registration Division at the Texas DMV.
Kuntz said the rules were drafted to comply with state law. The 83rd legislature tasked the DMV to define deputies, the services they provide and the fees they're allowed to charge. He said the rules were focused on keeping consumers from paying too much.
"Our board made it very clear that they had no intention of putting anybody out of business,” said Kuntz.
Officials at the Travis County Tax Office have backed the title companies from the beginning. Kim Sue Lia Perkes, Communications Program Director at the Travis County Tax Office, said if those independent offices close, they'll have to hire an additional 17 full-time employees.
"It's not possible to hire enough government workers to cover everything that consumers need right now," she said.
Travis County Tax Assessor and Collector, Bruce Elfant said if the title companies close, taxpayers could be on the hook for $4 million to pay for additional staff, increased hours for other staff and expanded space for them to go.
For now, drivers can still decide what's more important: saving time or money when it comes to their cars. Next year, that may not be the case.