MEDIA RELEASE: Bill would bring "legalized loan-sharking" back to North Carolina
RALEIGH (Feb. 14, 2013) — A new bill would legalize predatory lending in North Carolina by permitting loans of 390 percent interest, according to consumer advocates.
“This bill opens the door right back up for payday lending in North Carolina,” said Chris Kukla of the Center for Responsible Lending. “We kicked predatory payday lenders out of the state a decade ago. It makes no economic sense to let them back in.”
Senate Bill 89, which was just introduced on Feb. 13, could come up for a vote as early as Tuesday, Feb. 19.
“This is legalized loan-sharking at its worse,” said Al Ripley of the NC Justice Center. “Payday lending is one of the most harmful forms of lending. Despite substantial public opposition, this bill would let high-cost predatory lending back into North Carolina when there is no policy justification for this.”
“These loans are especially dangerous to seniors,” said Helen Savage of AARP North Carolina. “The high costs of predatory loans carry serious risks for all of us, but especially for older North Carolinians on fixed incomes.”
Major payday lenders are all based out of state or out of the country. Most are based in Mexico, South Carolina, Texas or Ohio, Kukla said, so any revenue generated will flow out of state.