There’s a common perception in the General Assembly these days that storefront consumer finance shops are not as bad a payday lenders. Indeed, this has been a common explanation offered by members of the Senate as they advanced legislation in recent weeks that will jack up the interest rates on consumer finance loans.
If this is true, however, the difference between the two predators is just a matter of degrees, not basic characteristics. If payday lenders are the great white shark of small loan predators, then finance companies are the tiger sharks. This truth is made clear in a new and powerful article from the muckrakers at the national news website, Pro Publica entitled “The 182 Percent Loan: How Installment Lenders Put Borrowers in a World of Hurt.”
The article looks at the reprehensible Georgia lending practices of World Acceptance Corporation — a South Carolina-based lender that has previosuly lobbied in North Carolina for legalization of the kinds rates and practices it employs elsewhere. As you will learn from the hair-raising article, World Acceptance may not be a payday lender, but its overall approach to its customers is just as predatory, if not worse — especially given that it frequently manages to bleed customers for much longer periods of time than the payday sharks.
At this point, World Acceptance is not registered to lobby the North Carolina General Assembly, but you can bet your bottom dollar that it is closely watching the actions of the current crop of finance company lobbyists and the bill they managed to get through the Senate in recent weeks. They know that if the rate-hike legislation passes, North Carolina will be one step closer to welcoming the kind of lending it practices in other states.