MEDIA RELEASE: Military groups oppose rate hike for consumer finance loans

 Military groups oppose rate hike for consumer finance loans

Department of Defense, Navy-Marine Corps Relief Society speak out against HB 810, which would allow lenders to charge even more than the 54 percent APR already allowed under NC law
 
RALEIGH (April 28, 2011) – The Department of Defense, a military aid society serving the Navy and Marine Corps and retired service members are speaking out against a new push to make consumer loans more expensive in North Carolina.
 
Representative Rick Glazier will join representatives of the military in opposing House Bill 810 at a press conference this Thursday, April 28, at 11 a.m. in the press room of the NC Legislative Building.

“The Department of Defense views HB 810 not so much as giving our young troops access to much needed credit they wouldn’t otherwise have; but rather, providing an opportunity for lenders to take further advantage of unsophisticated consumers,” wrote Michael S. Archer, Regional Legal Assistance Director for Marine Corps Installations East in a letter to lawmakers on behalf of the Defense Department.
 
Archer, who served in the Marine Corps for 28 years as an active duty judge advocate, will speak at the press conference. Rep. Glazier will also speak.
 
House Bill 810 would increase rates and fees on small consumer finance loans that can already reach as high as 54 percent. The legislation would allow consumer finance companies and big out-of-state lenders like CitiFinancial and American General to charge new fees and even higher rates for loans to consumers.
 
The Navy-Marine Corps Relief Society, whose mission is to provide, in partnership with the Navy and Marine Corps, financial, educational, and other assistance to members of the Naval Services of the United States, also opposes the bill.
 
“We are very concerned about any legislation that increases rates and fees on consumer finance loans,” said Retired Admiral Steve Abbot, President of the Navy-Marine Corps Relief Society. “Many high cost lenders target military personnel and families. It’s a disservice to those protecting our freedoms to be burdened with high interest debt that can create unnecessary hardships for them and their families.”
 

“This legislation will increase the already high interest rates and fees charged on consumer finance loans in North Carolina. We believe these changes would be harmful to Sailors, Marines and their families struggling to make ends meet in this difficult economy.”
  

The consumer loan market is dominated by six big out-of-state companies that control 80 percent of the lending in North Carolina – including CitiFinancial and American General (owned by AIG and a NY hedge fund). 
 
Many major statewide groups oppose this bill, including AARP NC, NC NAACP, NC AFL-CIO, NC Justice Center, the Center for Responsible Lending, the Credit Counseling Agencies of NC and other members of the Coalition for Responsible Lending, a collection of organizations which represents more than 3 million North Carolinians.  
 
 


 


The NC Commissioner of Banks in February released a report which determined that the consumer finance industry has been profitable over the past five years and recommended that no changes be made to the law. 
 

FOR MORE INFORMATION, CONTACT: Michael S. Archer, Department of Defense, (919) 215-6531; Rep. Rick Glazier, 919.753.5601; Alfred Ripley, NC Justice Center, (919) 274-8245; Chris Kukla, Center for Responsible Lending, (919) 308-0770.