Governor vetoes bills on interest rates, audits

Gov. Roy Cooper vetoed two bills Monday that would let companies to charge higher interest rates, plus a third bill to penalize local governments that fail to turn in state-required audits on time.

All three bills had bipartisan support and passed by veto-proof margins, though Cooper's veto may spur legislative Democrats to vote against the bills becoming law. The legislature's Republican majority has enough seats to overturn Cooper's veto and make these bills law without help from Democrats, though, and Senate Republican Leader Phil Berger's office said Monday that process will start as soon as Tuesday.

Cooper said he vetoed the two consumer finance bills because the cost of living is rising, and "North Carolina consumers cannot afford to be hit with higher fees and interest rates."

Senate Bill 331 would make a number of changes to the state's Consumer Finance Act, adding a number of new rules cash advance businesses would need to follow, as well as allowing higher interest rates and fees. Senate Bill 329 would increase interest rates that can be charged on vehicle purchases and other installment payment plans.

Senate Bill 299 would have let the state withhold sales tax revenue from local governments that fail to file their annual audit on time, up to 150% of the audit's cost.

In his veto message Cooper said the bill was well intentioned, but "as written is likely to punish residents of some of our state’s smallest communities." He encouraged lawmakers to "reconsider this legislation and provide more help for these communities to make sure they do it right rather than impose financial punishment that could make matters worse.”

The state's League of Municipalities, which lobbies for cities and towns, praised the veto, saying local governments need transparency, but "pulling sales tax revenue sets a dangerous precedent. The league also said there's a shortage of certified accountants in rural areas and that the state should create a pool of certified auditors willing to do this work.

In a joint statement, State Treasurer Dale Folwell and State Auditor Beth Wood encouraged the legislature to overturn Cooper's veto, saying too many local governments are "perennially failing to submit audits on time."