In a big win for consumers, Alabama-based Regions Bank has shelved its practice of making predatory, high-cost “payday” loans in North Carolina. This is from a statement released today by my colleague Jeff Shaw at the Justice Center:
MEDIA RELEASE: Regions Bank Halts Illegal Payday Lending in North Carolina
RALEIGH (January 16, 2013) – After a campaign by consumer advocates and state leaders, a bank dropped its harmful payday lending program in North Carolina.
Payday loans have been illegal in North Carolina for more than a decade, but that hasn’t stopped all payday lending. For the past year, Regions Bank has used federal banking law to offer payday loans that are illegal for any other lender to make in our state. These loans carried, on average, an annual percentage rate (APR) of 365%. Now, after significant pressure from consumer advocates and the state Attorney General’s office, Regions has quietly dropped its payday lending program for North Carolina customers.
“The people of North Carolina and the North Carolina legislature have consistently said they do not want payday lending in our borders,” said Chris Kukla, Senior Vice President at the Center for Responsible Lending (CRL). “We’re glad that Regions Bank has decided to stop thumbing its nose at our North Carolina laws and has dropped this product in our state.”
Hopefully Regions’ welcome action will help put a final nail in the coffin of this exploitive and bottom-feeding industry in North Carolina. Unfortunately, with high-powered lobbyists like former state Republican boss Tom Fetzer lining up to represent it, such a conclusion may well be premature.