Nola.com: Louisianans can get caught under crushing OMV debt. A proposed law could fix that.

BY MEGHAN FRIEDMANN | Staff writer | Jun 2, 2024 | 3 min to read

Gayl Payton was stunned when she recently learned that she owed the Louisiana Office of Motor Vehicles over $1,800, a debt that stemmed from nine-year-old insurance lapses.

Until she pays off that debt, Payton, a 70-year-old New Orleans resident who says she has been without access to a car since 2015, cannot have her driver’s license reinstated.

She is one of many Louisianans stuck beneath crushing OMV debt. Under the state’s current system, fines for insurance lapses, even brief ones, can quickly balloon, sometimes to sums of tens of thousands of dollars.

That’s a problem that Dan Casey, whom Gov. Jeff Landry appointed as the newest OMV commissioner, hopes to fix. A bill that would empower him to do so recently passed the Legislature.

Currently, the OMV has $470 million in unpaid debt on the books, according to Casey. About $220 million of that dates to between 1986 and 2016, he said.

“The first day I got (on the job), I got emails about, ‘I’m trying to get on a payment plan, I owe the department $2,000 and I have to get my license to start working,’” Casey said. “A lot of this is bad debt. People can’t get out of it, and we have half a million drivers driving around with suspended drivers’ licenses.”

House Bill 683 by Rep. Chuck Owen, a conservative Republican from Rosepine, has received broad bipartisan support, including praise from progressive activists. The proposal unanimously passed the House and Senate, and now awaits Landry’s signature before becoming law.

Currently, uncollected OMV fines are sent to the Office of Debt Recovery, which accelerates the debt HB 683 would allow the OMV to claw that debt back from ODR and lower the fines, Casey said.

“We have a very cruel system in Louisiana that allows for fees that you may not know you have to rapidly increase,” Owen said when asked why he filed HB 683.

Debt quickly piles up

Much of the debt drivers owe to the OMV is due to insurance lapses. If the OMV receives notice that a driver’s insurance has been canceled, they issue a $125 fine. If the driver does not pay the fine within 90 days or get on a payment plan to do so, the debt gets sent to the Office of Debt Recovery and is set to the maximum $500 fee, Casey said.

Once it is transferred to the ODR, that agency adds an extra 15% charge. Until this year, the charge was 25%.

Though the OMV offers payment plans for drivers, their debt also can be sent to the ODR if they miss payments and do not resolve the issue within a 60- day timeframe, Casey said. Under such circumstances, it’s easy for Louisianans to get caught in a vicious circle where they must choose between paying their insurance bills or paying the state, he said.

And if they miss an insurance payment, they get hit with another $125 fine. Failure to resolve such fines results in license suspensions.

Payton had two brief insurance lapses in 2015. The first lasted six days, and the other lasted 19 days, according to an OMV report. Though Payton could not recall the lapses, one may have occurred while she was ill, she said. Those issues will cost about $1200 to resolve.

The rest of her fines, about $656, came after her granddaughter totaled her car, during a period when Payton was ill and unable to drive.

“She had no idea at the time that she had needed to turn in the license plate and I wasn’t able to communicate that at the time,” Payton said.

Payton, who is on a fixed income, does not know how she will pay off more than $1,800.

Losing her license “changed my life completely,” she said. “It was really a problem. I’m a grandparent, I was doing things, helping my daughter with her children. She’s a single parent...but from that point on I wasn’t able to help her.”

Offering a reset

Under Casey’s plan, the OMV would reset people’s fines to their original levels. Generally, those fines would be $100 for lapses that lasted between five and 30 days, $250 for lapses that lasted between 31 and 90 days, and $500 for lapses of over 90 days, he said. The agency also would cap how much customers would owe, according to Casey.

“We’re going to work with people if they can’t pay and try to find some range that they can,” he said.

Peter Robins-Brown, executive director of the left-leaning group Louisiana Progress, said the current system “(traps) people in poverty.” Those looking to pay off a debt, for example, may struggle to find a job or get to work without a driver’s license.

He believes HB 683 will help more people than any other piece of legislation passed this year.

“You’re talking about tens of thousands, if not hundreds of thousands, of people...who will potentially be able to take advantage of this program,” Robins-Brown said.

Casey said implementing the program will be a huge undertaking.

“It’s basically all hands on deck because we’re going to get a flood of calls, and we’re going to ask the public to please have patience,” he said.