North Carolina installment loan bill H810 aids industry

Protestors outside the North Carolina capitol building in Raleigh.

North Carolina's Capitol building. (Photo Credit: CC BY-ND/Ivy Dawned/Flickr)

The North Carolina General Assembly has introduced a bill that would enable installment loan companies in the state to adjust loan fees to compensate for losses to the recession. The Jacksonville Daily News reports that N.C. H810 would amend the North Carolina Consumer Finance Act to allow lenders to increase the processing fee on installment loans of $2,000 or less by as much as $100. Lawmakers are also seeking to add a handling charge of $3 per month for every $100 borrowed.

Increased loan fees have Marines on alert

Marine Corps Installations East director of Legal Assistance Michael Archer took aim at the proposed changes to North Carolina installment loans, claiming that higher loan fees would “encourage usurious lending” and lead borrowers straight into a squalid debtors’ prison, straight out of Charles Dickens. In the process, he also denounced payday lending, which is already illegal in the state and not currently slated to return.

“We have a lot of businesses, particularly lenders, that target military installations, large places like Camp Lejeune and Fort Bragg,” said Archer. “We have a very unsophisticated population as well. They have crosshairs on their backs and they are vulnerable.”

Archer expressed these concerns – however unfounded – in spite of the fact that installations like Camp Lejeune already have tight regulations regarding the proximity of installment loan and military loan companies to the military base. Wherever need exists, however, consumers find a way.

“It’s very difficult, both procedurally and practically, to put a place off limits,” Archer told the Daily News.

Battle turns to education

Camp Lejeune financial counselor Lewis Summerville is prepared to launch a series of educational workshops for Marines and their families should H810 be signed into law. Added education would enable military consumers to make informed decisions regarding the use of installment loans.

Such would be the case if educators like Summerville even considered adopting an even-handed approach to the military lending issue. However, as the Jackson Daily News suggests, the actual education Marine families in North Carolina will receive is the unstudied, “just say no” approach.

“We can only educate and make sure they make the right choice in not taking that loan,” said Summerville.

Do your research

Independent studies have shown that installment loans contribute to financial well-being, rather than causing poverty. If Michael Archer and Lewis Summerville had taken the time to read existing research, perhaps they’d have valuable information to add to the installment and military loan dialogue.


Jacksonville Daily News

eLobbyist: N.C. H810

North Carolina Consumer Finance Act

North Carolina professionals support installment loans