Payday Loans

North Carolina Payday Loan Laws

North Carolina payday loan laws have completely banned payday lending in this state. In fact, North Carolina has been very popular for its battle against predatory payday lending since August 2001. Earlier there were a few loopholes in the laws, but now various strict changes have been imposed in the law code to sew up all those loopholes. Payday lenders have almost packed their business out of this state. Those licensed lenders who are still there are bound to follow the low rate cap imposed by the state laws. However, many Internet payday lenders are still targeting consumers residing in North Carolina. They have the assumption that since they are operating their business from Internet and that their offices are not based in North Carolina, the state laws do not apply to them. This is just not true. You can still file a complaint against them with your state authority and take legal actions to ensure your rights and interest remains protected.

Maximum Limit on APR

As per North Carolina payday loan laws, whether it is a short-term cash advance or just any other type of lending program, lenders cannot charge an APR (annual percentage rate) of more than 36% per annum.

The Regulating Authority

The North Carolina Attorney General is the regulating authority in this state. You can contact them to obtain more detailed information about your rights and legal options regarding the matters related to payday lending. They are also the point of contact when you have to file a complaint against a specific payday loan lender in North Carolina. They are accessible at (919) 716-6400 (their phone number). You can also write them a letter or visit their office at NC Attorney General’s Office 9001 Mail Service Center Raleigh NC 27699-9001.

The Battle Against Predatory Lending

A legislation passed was first passed in the year 1997 that made payday lending legal in this state, but with the introduction of the North Carolina payday loan laws in August 2001, the old legislation expired. As per the 2001 laws, the state government termed these types of expensive and unusually high rate lending programs as “predatory lending” and so imposed a complete ban on it. But the law could not be enforced until recently when the state government succeeded in bringing many illegal lenders to the courtroom and got them convicted under the charges of harassing and treating consumers residing in North Carolina unfairly and illegally. In 2005, the then very popular payday loan company ‘Advance America’ was forced to cease all its lending practices. Overall, the laws have been tightening its grip over illegal payday lenders in this state. As a result, at present, there are no legal payday loan companies operating their businesses in North Carolina. Companies have either closed their business operations or have become licensed consumer finance lenders and are following North Carolina usury laws.

It is a well-known fact that low-income consumers are the main targets of payday lenders because these consumers often struggle to make their ends meet. They also often find it difficult to repay the cash advances in full because of their hand to mouth limited monthly salary. Consequently, lenders easily drag them into a viscous cycle of debt, sucking as much cash from them as possible under different charges and sky-high interest rates. The North Carolina payday loan laws are thus undoubtedly a great move, but consumers can benefit from it only if they are aware of their legal rights.

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One Response to “North Carolina Payday Loan Laws”

  1. Jack says:

    A very knowledgeable article on the lending law in North Carolina. Money lending has been completely abolished by state laws however some money lenders are working in the area through web services, thinking that State law does not applicable to them but this is only a myth and you can go against them in the court. Maximum rate of interest per annum has been fixed in the state and no body can charge beyond that. Borrower can contact the highest authority to take any consultation in filling a case against the lending institution. All previous lending laws have been superseded by the new law which clearly said that all high interest rate loans have been banned, resulting in the closure of so many companies from the state. These all development results in the favor of the borrower and will definitely help him to get out of this lending web. We can hope that now a common man which is earning quiet a little amount will not fall into the hands of money lenders and all his rights to live will be fulfilled.

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