Another Scathing View of Payday Loan Revival in North Carolina
By J.J. CameronPayday Loan Writer
We recently ran the majority of an editoral that criticized the possibility of payday loan companies returning to North Carolina. Looks like that critic wasn't alone. A recent piece in The Fayetteville Observer echoed these negative sentiments:
We won’t bother to ask what they were thinking. They weren’t. Nor were they caring.
It’s inconceivable that any legislator with a conscience could try to bring the scourge of payday loan lending back to North Carolina. But that’s exactly what a group of lawmakers is trying to do. What’s most remarkable about the effort is that many of the bill’s supporters represent the people who have been hurt the most by the usurious practices of payday advance lenders.
The practice of payday loans was finally banned from North Carolina after a battle that raged for years. Even though cash loan lending was made illegal on 2001, lenders found loopholes and continued to offer the loans — which often have triple-digit interest rates — until this year.
A bill filed by Mecklenburg Democratic Rep. Beverly Earle would allow North Carolina faxless payday loan lenders to issue “credit enhancement loans” to customers who are “financially underserved” and can’t qualify for conventional loans. The bill permits payday loans of up to $3,000 at initial interest rates of up to 50 percent.
Chris Kukla, director of legislative affairs for the N.C. Center for Responsible Lending, told an Observer reporter that the bill could permit the same sort of interest rates charged by fast payday loan lenders in the past.
“The APR could be well above 200, or even 500, 600 or 700, depending on how the loan is structured,” he said. “The way this bill is written, it opens itself up to manipulation.”
It’s shameful that this low cost payday loan bill has even been filed. And doubly shameful that four of its nine sponsors represent areas that include major military installations.
Service members have been heavily victimized by military payday loan lenders. One of the sponsors is Rep. Marvin Lucas of Spring Lake. Other sponsors represent areas around Camp Lejeune, the Cherry Point Marine Corps Air Station and Seymour Johnson Air Force Base.Another Cumberland County state representative, Rick Glazier of Fayetteville, sees the legislation a bit more clearly than his colleague:
“It may be the worst bill I’ve seen come through since I’ve been here. There is very little redeeming about this bill.”
We hope the rest of the General Assembly will see it equally clearly and vote this dreadful idea down.
