If passed, the policy could cost North Carolina's working families millions per year. Four local groups will hold a news conference Monday in opposition.
WHAT: A news conference opposing new predatory consumer loan fees that would take advantage of struggling families
WHO: NC Justice Center, Center for Responsible Lending, AFL-CIO and AARP NC.
WHEN: Monday, April 26, 2 p.m.-2:30 p.m.
WHERE: In front of the Legislative Building, 16 W. Jones St., Raleigh NC
RALEIGH (April 23, 2010) -- Backed by lobbyists from the high-cost consumer loan industry, lawmakers are proposing new fees on consumer finance loans that would extract millions of dollars from North Carolina's working families.
A new bill to permit additional fees on high-cost consumer finance loans will be introduced at this Tuesday's Joint Legislative Study Commission on the Modernization of North Carolina Banking Laws and the Consumer Finance Act meeting. The majority of loans made in North Carolina come from subsidiaries of big out-of-state lenders Citi and AIG.
The bill would remove a longstanding prohibition on late fees, which have never been allowed on finance company loans. When lawmakers passed the Consumer Finance Act in the 1960s, it was acknowledged that high interest rates, which often reach or exceed 30 percent, would already compensate the lenders for late payments and defaults of risky borrowers.
With the majority of finance companies making a profit - and the majority of working families struggling under the worst economy since the Great Depression - adding a new fee to loans whose annual percentage rates can already reach 54 percent would further prey on North Carolina's consumers.
Financial institutions issued more than 425,000 such loans in 2008. Experts conservatively estimate that, if the new fees are allowed, it would cost consumers millions per year in additional fees.
On Monday, representatives from the NC Justice Center, the Center for Responsible Lending, AFL-CIO and AARP NC will hold a news conference at the Legislative Building explaining the legislation and its potential effects on consumers.
Speakers will include:
- Alfred Ripley, NC Justice Center
- James Andrews, AFL-CIO
- Chris Kukla, Center for Responsible Lending
- Bill Wilson, AARP North Carolina
FOR MORE INFORMATION, CONTACT: Alfred Ripley, NC Justice Center, 919.274.8245; Chris Kukla, Center for Responsible Lending, 919.308.0770; Jeff Shaw, Director of Communications, NC Justice Center, 503.551.3615.