Tuesday, April 16, 2013

Charlotte lawmakers support study of credit access

A group of state lawmakers from Charlotte are throwing their support behind a bill that seeks a study of credit accessibility for low- and moderate-income people in North Carolina.

Rep. Evelyn Terry, a Winston-Salem Democrat, introduced the bill into the General Assembly last week. Eight representatives have signed on, four from Charlotte: Kelly Alexander, Carla Cunningham, Beverly Earle and Rodney Moore, all Democrats.

House Bill 678 would authorize research into how state and federal laws might be limiting access to credit. Among other things, the bill also calls for a study of which incentives are used by financial institutions that lend to low- and moderate-income people.

The North Carolina Office of the Commissioner of Banks would conduct the research, according to the current version of the bill.

Terry is serving her first term in the legislature. A Winston-Salem native who said she has worked in the public housing sector, Terry called the bill “something I’ve been wanting to do for a long, long time.”

Loans of only $200 to $1,000 “would make all the difference in the world to some people,” she said Tuesday. But North Carolinians who need such loans for, say, emergency car repairs have few options, which include predatory lenders, she said.

“I want to find a way forward to help these people get up out of that rut,” she said.

Alexander said the bill would result in the banking commission studying, for example, the kind of lending for which Grameen Bank is known. Grameen, based in Bangladesh, was formed to help people in that country escape poverty. The bank, which specializes in microloans for entrepreneurs, opened a Charlotte branch last year.

“The idea is to take a look at some of these principles and to see how they might be able to be employed to give access to credit to low- and moderate-income folk in our state,” Alexander said.

Although all nine sponsors are Democrats, Alexander believes the bill could have a chance in the Republican-controlled legislature. “I think there’s a growing recognition that we have to do something,” he said.

But Nathan Batts, counsel for the North Carolina Bankers Association, said he was concerned about “having another study bill for the sake of having another study bill.”

Batts said he worried about the costs associated with the study. Some of Terry’s goals might be achieved by modernizing and clarifying state laws that govern interest rates and fees, Batts said.