AN ACT TO MODERNIZE THE LOAN ORIGINATION FEE FOR NORTH CAROLINA BANKS AND TO ADJUST THE LATE PAYMENT CHARGE FOR CERTAIN LOANS.
Amends GS 24-1.1 to set the maximum origination fee for a loan or credit extension with a principal amount of $100,000 or greater at 1/4 of 1% of the principal. Sets out maximum origination fees of $100-250 depending on the principal amount for loan or credit extensions with a principal amount less than $100,000. Prohibits a loan or extension of credit with a principal amount of less than $5,000 from having an annual percentage rate that exceeds 36%, inclusive of the charge permitted by subsection (e) and the interest rate provisions of subsection (c). Specifies that annual percentage rate as used here is calculated using the standards established by the federal Truth In Lending Act (15 USC 1601, et seq.) and all regulations and rulings issued pursuant to that Act. Limits the application of new subdivision (e)(3) to situations where the borrower is a natural person and the debt is incurred primarily for personal, family, or household purposes. Makes additional technical and clarifying changes.
Amends GS 24-10.1 to set the following limitations on late payment charges, which under current law are capped at 4% of the amount of the payment past due. A late payment charge must not exceed (1) the amount disclosed with particularity to the borrower under the Federal Consumer Credit Protection Act, if applicable; (2) for a loan or extension of credit that meets all of the following conditions: the greater of $35 or 4% of the amount of the payment past due, the loan or extension of credit is made by a bank or savings institution organized under the law of this state or the United States, the loan or extension of credit is not secured by real property, the loan or extension of credit is governed by GS 24-1.1, and the loan or extension of credit has an original balance greater or equal to $1,500. Limits the charge to 4% of the amount of the payment past due for any other type of loan or extension of credit governed by GS 24-1.1 (concerning a loan, purchase money loan, advance, commitment for a loan or forbearance) or GS 24-1.1A (concerning home loans). Makes additional organizational, clarifying, and technical changes.
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