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At a time of historically low interest rates, state lawmakers gave final approval last night to legislation that ramps up the cost of consumer finance loans.

Meanwhile, consumer advocates are calling on Governor McCrory — who once made his oppostion to predatory “payday” loans a major plank in a mayoral reelection campaign in Charlotte  – to veto the legislation. This was released earlier today:

AARP Calls on Governor to Reject Rate Hike for Consumer Loans, Senate Bill 489 Senate Bill 489 will increase rates and fees on consumer finance loans 

RALEIGH –  On Monday night the Senate voted to concur with the House’s amendments to Senate Bill 489.  The bill now goes to the Governor’s office for his consideration.

“We are calling on the Governor to reject Senate Bill 489,” said AARP NC Director Doug Dickerson. “This legislation is going to hurt seniors and other consumers that use these loans by increasing interest rates and adding new fees.” Read More

3-4-13-NCPW-CARTOONTomorrow the North Carolina House Banking Committee will hear proposed legislation (already passed by the Senate) to jack up rates on already exorbitantly priced installment loans.

And in case you had any doubts as to what the proposal (and others like it) are at least partially about, check out this news story from earlier today over at Bloomberg News:

Payday Lenders Evading Rules Pivot to Installment Loans

For three years, payday lenders have been bracing for dedicated scrutiny from a U.S. agency for the first time. One way they’re getting ready: switching to loans designed to fall outside the regulator’s grasp.

Companies including Cash America International Inc. (CSH) and Advance America Cash Advance Centers Inc. (AEA) are increasingly selling longer-term installment loans to avoid rules the Consumer Financial Protection Bureau may impose on their shorter-term products.

Read the entire article by clicking here.

Loan sharks…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 Read More

As they have several times in past years, experts who counsel vulnerable soldiers, sailors, airmen and marines are speaking out against the expansion of predatory lending in North Carolina. Today, the Navy-Marine Corps Relief Society sent a letter to the General Assembly in which the group makes clear what a terrible idea it would be to re-legalize “payday” lending as is proposed in recently introduced legislation.

According to the letter (which is signed by the Society’s President, Retired Admiral Steve Abbot):

“The negative impact of payday loans on military readiness is profound, and the harm caused by these loans is significant; exhausting resources that could be used in other ways, and creating unnecessary hardship for military families (and others).” 

Click here to read the entire letter.

 

Payday loansWell, that didn’t take long. Sensing with good reason that it’s now open season on struggling families at the North Carolina General Assembly, the predatory “payday lending” industry is already banging on the door on Jones Street seeking to have its parasitic industry (which was banned in the state in 2001) made legal once more in North Carolina. Senators Jerry Tillman and Clark Jenkins filed the bill yesterday and it will be formally introduced in the Senate today.

As we have reported repeatedly in this space over the years, “payday lending” is the pernicious practice of making short-term loans (typically of a week or two in length) to desperate people at effective annual interest rates of several hundred percent. Read More