State Legislature To Consider Tighter Controls On Payday Loans
Posted September 4, 2001 3:58 a.m. EDT
RALEIGH — State lawmakers closed the door last week on cash advance outlets across the state known as payday lenders, companies that exchange post-dated checks for cash. The amount borrowed is paid back within a month, with a handsome fee added.
New legislation to be considered later this week would allow payday lending to resume business, but with tighter controls.
"This bill would give you 60 days to pay it back, a reasonable amount of time," says Rob Schofield of the N.C. Justice and Community Development. "The effective interest rate on the loan is still 105 percent. It's not cheap, but it's something that has some realistic prospect of being paid back."
Payday lenders can continue to do business collecting loans that have been made, but no new business can be conducted until the legislation becomes law, which could take a couple of weeks.