Bill Summary for S 489 (2013-2014)
|View NCGA Bill Details||2013-2014 Session|
A BILL TO BE ENTITLED AN ACT TO MODIFY THE MAXIMUM INTEREST RATE ALLOWED AND TO MAKE VARIOUS AMENDMENTS TO THE NORTH CAROLINA CONSUMER FINANCE ACT TO ENSURE CONTINUED ACCESS TO CREDIT.Intro. by Gunn, Newton, Clodfelter.
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Amends GS 53-166(a), changing the lending limits that subject an individual to the provisions of this section from $10,000 to $15,000 or less.
Amends GS 53-172(a), making clarifying changes and further classifying acts that are not considered as being other business in violation of conducting other business in the same office.
Amends GS 53-173, changing section title to Computation of interest; application of payments; limitation on interest after judgment; limitation on interest after maturity of the loan. Deletes GS 53-173(a) and (a1). Deletes language in GS 53-173(b), which states that payment made on a loan will first be applied to any accrued interest and then to principal. Creates new subsection GS 53-173(b1) (Application of payments), providing that payments made on a loan are first applied to late or other permissible charges, and then to any accrued interest, then principal.
Amends GS 53-176, changing title to Rates, maturities and amounts (was, Optional rate, maturities and amounts). Makes technical and clarifying changes. Establishes that a licensee can only make loans in installments not exceeding $15,000 and which cannot be repaid in less than 12 months or more than 96 months (was, $10,000, and 12 and 84 months). Establishes new actuarial rates which the licensee cannot exceed in requiring repayment for the loan. Provides that interest will be contracted for and collected at the single simple interest rate. Deletes GS 53-176(d) and (f).
Amends GS 53-177, changing title to Fees (was, Recording fees). Deletes provision allowing the licensee to retain fees, thereby self-insuring against the loss of a security interest.
Amends GS 53-177 by creating new GS 53-177(b) (Late fees), (c) (Deferral Charges), and (d) (Insurance Policy), establishing that a licensee can charge a late payment for a payment outstanding for 10 days or more but that the late payment fee cannot exceed $15, nor can it be charged more than once for a single late payment. Also provides that a licensee can collect a deferral charge and defer the due date of all or part of one or more installments. Provides that a licensee can collect a fee to purchase a non-filing or non-recording insurance policy; provides what the licensees must do if they receive funds from an insurance claim.
Amends GS 53-180 (Limitations and prohibitions on practices and agreements), deleting language dealing with loan amounts and payback periods, and instead provides for repayment of the amount loaned in substantially equal installments. Provides language stating that an agreement between a licensee and borrower pursuant to a loan is only enforceable to the extent that the borrower fails to maintain contractually required insurance coverage. Amends GS 53-180(e) (Limitation on Attorney's fees), replacing a reference to GS 53-173 with GS 53-176.
Amends GS 53 by creating a new section GS 53-180.1 (Military service members limitation), providing the requirements and limitations of granting loans to military service members. Establishes that a licensee may not make a loan to a borrower who is a military service member with a rank of E4 or below unless six requirements are met. Provides penalties and remedies for violating the requirements for granting a loan to a military service member in the appropriate manner. Provides that no licensee will contact a military service member by phone or email when deployed to a theater of combat.
Effective July 1, 2013.