April 5, 2013
How would you like to get trapped by endless debt?
In February we told you about SB 89, a bill filed in our state senate that would invite loan sharks back into North Carolina. State Attorney General Roy Cooper called it, “the same old rip-off we ran out of the state years ago.” The payday lending bill hasn’t gone away, but thanks to your phone calls and emails, it’s not a done deal.
Too bad that our state senators are not done wheeling and dealing for mega-banks like Citigroup and infamous financial-crisis villain AIG (the same AIG that threatened to sue you for bailing them out in 2008).
Senate Bill 489, filed at the behest of out-of-state consumer finance companies, backed by private equity firms (à la Bain Capital), would significantly raise the interest rates North Carolina lenders can charge; allow lenders to loan more money regardless of your ability to repay it in a reasonable time period; and allow lenders to charge late fees, recording fees, and other charges AND apply payments to those charges BEFORE interest and principal!
According to the Center for Responsible Lending (CRL), a study by the North Carolina Commissioner of Banks said raising rates, fees, and loan size limits will cost consumers $50 to $70 million more every year and make debt repayment harder than ever. And that’s the point says Susan Lupton with CRL:
“Consumer installment lenders depend on repeatedly refinancing existing customers for the overwhelming bulk of their loan volume. Instructions to employees of one large finance company show that the business thrives on getting people into debt but not letting them out: ‘push the renewals, by getting the customer to renew their accounts it will be harder for that customer to pay us out.'” — Susan Lupton, Center for Responsible Lending Action Alert
Between SB 89 and this new monstrosity, SB 489, it would seem that state senators care more about bankers’ ability to trap their constituents in a never-ending debt cycle than about governing for the good of their constituents. Well, unless by constituents we mean out-of-state bankers, not voters!
ACT TODAY to stop unnecessary rate hikes!
Please call your Senator, today! To get their phone number, find your county and click on your Senator’s name. If there is more than one Senator from your county, please call them all and tell them:
Please oppose SB 489. These interest rate hikes are unnecessary and unsafe. They will not increase access to credit. Instead, they will make credit much more expensive for NC borrowers, making it harder for them to repay the loan. Please protect NC borrowers, not high cost out-of-state lenders. Vote NO on SB 489!
It’s much more effective if you call, but you can also fire off an email to state senators telling them to oppose SB 489.
If you have any questions, please contact Susan Lupton at the Center for Responsible Lending at firstname.lastname@example.org or 919-313-8521.
The article has been updated to more accurately describe the nature of the rate increase allowed by this legislation. Contact Susan Lupton for more information about how significant the increase is.