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The State of North Carolina Seeks to Regulate Payday Loans

Currently, the state of North Carolina has an effective APR (Annual Percentage Rate) of 521% for a payday loan amount of $250.

This and other reasons have North Carolina legislators considering passing regulatory legislation on payday loan companies in 2010. Proponents of this suggest:

Once people enter this debt cycle, they often stay in it
An estimated $80 million in excess fees is paid out by borrowers. This is money that could otherwise be supporting North Carolina’s economy.
In most cases the money goes to firm headquarters outside the state
Legislative Efforts

In 2020 Mark Leeper, attempted to introduce legislation that would have limited the worst abuses. However, he wasn’t able to introduce the legislation.

Representative Leeper said he is considering making another run at it this year. He indicated that he’s working with some local consumer advocate groups to put together some legislation but is still uncertain whether or not he’ll proceed.

“I am up against a very strong lobbying core and they have a lot of money and a lot of influence down here. They have the ability to take any bill that is moving forward and shape it to their own interests and really stop any real reform. I want to make sure I have my ducks in a row before I go ahead on this,” said Leeper.

Other groups are working on legislation to impose a 36 percent rate cap on payday loans.

Another approach is to try and take it to the people to vote on the legislation as a referendum. This would avoid lobbyist pressures. Plus, the polls on it are favorable and strongly supported by Democrats and Republicans

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