…that high-interest loan companies in North Carolina “haven’t had a rate increase in 30 years” tell him/her that this statement is, in a word, baloney (and feel free to use a stronger word).
#1: Inflation for lenders is accounted for through the issuance of larger and larger loans, not higher and higher interest rates. As with home and car loans, the average finance company loan in North Carolina 30 years ago was much smaller than it is today. It is simply absurd to even imply that lenders must receive periodic interest rate hikes in order to make money.
#2: North Carolina lenders have, in fact, been given authorization on multiple occasions in recent decades to charge new loan fees that have the same effect as higher interest rates.
#3- Interest rates are currently at near all-time lows. In the early 1980′s, the prime rate (the cost that large lending institutions must pay to borrow money) was over 10% and sometimes more than 20%! Today, the prime rate is 3.25%. For an intelligent elected official to claim that a profitable industry that made money then, can’t make money now by lending at rates as high as 30% (and really, the rates are more like 45% or 50% when you add in the fees) is simply astounding and an insult to the intelligence of all North Carolinians.