(1) The department designates that a title loan is:

(a) a nonpurchase money loan secured by an unencumbered state issued title to personal property;

(b) on which the annual percentage rate exceeds 35%; and

(c) the lender does not take physical possession of the titled personal property.

(2) If a loan meets the criteria set forth in (1), the entity making it must be licensed as provided in Title 31, chapter 1, part 8, MCA, and must comply with the provisions of Title 31, chapter 1, part 8, MCA, and these rules, except as provided in 31-1-802(5), MCA.