NEWS RELEASE: Consumer groups protest predatory payday lending at Regions Bank
North Carolina has a tradition of opposing predatory loans, like the 365 percent annual interest loans offered by Regions
RALEIGH (Oct. 3, 2012) – Bank payday loans typically carry a shocking annual interest rate of 365 percent. When Regions Bank began making these loans in North Carolina, a host of consumer groups and concerned citizens stood up to protest the potential damage to consumers.
Demonstrators gathered in front of Regions Bank in Raleigh at 10 a.m. on Wednesday, Oct. 3 to send a strong anti-predatory lending message. Experts say that the new payday loans would harm consumers through predatory interest rates.
“North Carolinians are still reeling from the recession, yet Regions Bank wants to add insult to injury with their high-interest payday loans. We can't let Regions or any other bank take advantage of families who are already struggling to make ends meet,” said MaryBe McMillan of AFL-CIO NC.
North Carolina has a longstanding tradition of consumer protection, including strong anti-payday lending laws. The NC General Assembly made payday lending illegal in 2001, and the Attorney General chased out the remaining payday lenders in 2006. But banks offering abusive loans could threaten that consumer protection regime.
“Banks should not be allowed to undermine our state usury cap,” said Al Ripley, director of the Consumer Project at the NC Justice Center. “We've made a choice in North Carolina to stand up against abusive loans, and we need to affirm that choice now.”
Members of the NC Justice Center, Center for Responsible Lending, AARP NC, NC AFL-CIO, NAACP NC, and other allied groups, along with concerned citizens fought the high-interest loans. Vulnerable populations are particularly at risk from these dangerous loan products, advocates say.
"Predatory lenders are not welcome in North Carolina, and AARP will continue to protect older adults from scams and pitfalls of payday other predatory loans that threaten our members’ financial and retirement security,” said AARP North Carolina State Director Doug Dickerson. "Many older North Carolinians and low-income workers are struggling to make ends meet. And the current recession has made things even worse. Living paycheck to paycheck or social security check to social security check is the reality in many households. Payday lenders try to take advantage of this struggle by providing high interest loans that are repaid out of the workers’ next paycheck or the retiree’s next social security check."
“The NAACP has consistently opposed payday lending because these products disproportionately impact communities of color across our state,” said Stella Adams, NAACP Housing Committee Chair. “We call on Regions to stop preying upon North Carolinians with these wealth-destroying loans.”
Raising awareness about Regions is the first step to preventing predatory lending entirely in North Carolina, said organizers.
“This product simply traps struggling families in debt,” said Chris Kukla of the Center for Responsible Lending. “Our research shows that the average bank payday loan borrower ends up taking 16 of these loans in a year, which translates into being in debt to the bank an average of 175 days per year. Put another way, the average borrower who takes out a $300 loan will end up paying at least $480 in fees.”
FOR MORE INFORMATION, CONTACT: Al Ripley, NC Justice Center, firstname.lastname@example.org, (919) 856-2573; Chris Kukla, Center for Responsible Lending, 919-313-8520 (Office) , 919-308-0770 (Cellular), email@example.com