Thursday, February 14, 2013

Advocates say state bill would legalize payday loans

Consumer advocates are protesting a bill filed Wednesday in the state Senate they say would re-legalize payday lending in North Carolina.

The bill, introduced by Archdale Republican Jerry Tillman, would allow businesses to loan people money in advance of a paycheck, charging a maximum of 15 percent.

But since most loans generally have a two-week term, both Attorney General Roy Cooper and the N.C. Justice Center note that the annualized interest rate on such a loan would be more than 300 percent. Current state law generally bans loans with an interest rate greater than 16 percent, aimed at eliminating payday lending.

“This is the same old rip-off we ran out of our state years ago," Cooper said in a statement. "These overpriced loans trap borrowers in a cycle of debt many cannot escape. Payday lending was a bad idea then, and it’s a bad idea now.”

The bill passed a first reading Thursday and has been referred to a Senate committee.


Garth Vader said...

Gotta keep the loansharking confined to Bank of ScAmerica and the other drug money launderers.

Unknown said...

My opinion is that everything has a right to exist. Payday loans provided by REPUTABLE lenders like ameriloan can be helpful in case you need fast financial assistance but have no one to borrow money from. So I think that this service can be legalized but there should be regulations for payday loan lenders. There are many those who set extremely high interest rates and don’t provide their consumers enough information. I think that loans should be available only for those consumers who really understand that they are going to apply for high interest rate loan which is unsecured, have short repayment term and are ready to take responsibility for their actions.