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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

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Harold BrubakerAs anyone who happened to glance at the front page of this past Sunday’s edition of Raleigh’s News & Observer probably noticed, former North Carolina House Speaker and Appropriations Committee Chairman Harold Brubaker has gotten through the almost meaningless six-month “cooling off period” during which former legislators are barred from lobbying their old chums. He now appears ready to make a big splash as a high-powered lobbyist.

Already, Brubaker has signed up nine separate clients for Brubaker and Associates for the 2013 legislative session that begins in earnest tomorrow. Some lobbyists represent more “principals” than this, however, so it wouldn’t be surprising if this number grew in the days to come.

Most of the nine are about who you would expect: insurance companies, doctor groups, the beer and wine lobby and, as is frequently the case for big shot “lobsters,” the requisite nonprofit client. One client that many would not have predicted, however, is this one: Read More

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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. Read More

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In case you missed it, the North Carolina Legislative Black Caucus sent a powerful letter to Regions Bank this week. Regions is the Alabama bank that’s trying to reintroduce the banned practice of high-cost, predatory payday lending in the state. The group joins Attorney General Roy Cooper and a large group of consumer protection groups calling on Regions to halt making the loans — which can have interest rates as high as 365% APR.

 

 

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Raleigh’s News & Observer gets it on the money this morning in an excellent editorial about Regions Bank’s attempt to reintroduce predatory payday lending in North Carolina.  

“We do not want North Carolina consumers subjected to payday loans,” [Attorney General Roy] Cooper said. “Payday loans are like a consumer needing a life preserver being thrown an anvil.” But it may be easier to complain about the bank than to do something about it.

Cooper defines what Regions is offering as a payday loan; the company characterizes it as money “intended to be used occasionally for emergencies.” For his part, Cooper wants to stop it, but the out-of-state charter held by Regions – and the fact that this is an online offering – complicate the attorney general’s position from a legal standpoint. Still, he should keep working on the issue with an aim to, borrowing from legendary lawman Barney Fife, “nip it … nip it in the bud.”