House amendments make the following changes to 2nd edition. Amendment #1 creates the 16-member North Carolina Legislative Study Commission on Improvement in Small-Dollar Lending (Commission). Details the purpose of, and issues to be studied by the Commission. Sets forth details on appointment of membership, reimbursement of members in the performance of their duties, and reporting requirements. Effective when it becomes law.
Amendment #2 removes proposed subsection(c) from GS 53-177 that allowed a licensee to collect any actual charges paid by the licensee related to payments submitted by the borrower or at the borrower’s request through electronic or other means not affiliated with the licensee.
Amendment #3 creates a new subsection (l) to GS 53-180 to prohibit licensees from making loans to a borrower who is a military service member unless the military service member obtains a written authorization signed by the service member’s company commander. Provides additional requirements a licensee must perform before making a loan to a military service member.
Bill Summaries: H 810 CONSUMER FINANCE ACT AMENDMENTS.
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Bill H 810 (2011-2012)Summary date: Jun 2 2011 - View Summary
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Bill H 810 (2011-2012)Summary date: May 31 2011 - View Summary
House committee substitute makes the following changes to 1st edition. Deletes several provisions of the previous edition. Amends GS 53-166(a), stating that no person can engage in the business of lending in amounts $15,000 or less (was, $10,000) as specified. Amends GS 53-173(a) to increase the outstanding principal balance at which the maximum interest rate of 36% per annum applies from $600 to $1500. Creates new subsection (g) to GS 53-173 to provide the limitations on loans to individual borrowers. Deletes other amendments made to GS 53-173 in previous edition. Amends 53-176 by (1) raising cap on installment loans to $15,000 (was $10,000), (2) increasing the maximum time frame after which an installment loan may not be repayable up to 96 months (previously 84), (3) limiting monthly interest on installment loans to 30% per annum for balances below $5,000, 24% per annum for balances between $5,000 and $10,000, and 18% per annum on remaining balance, (4) deleting in its entirety subsection (d), concerning the right to make loans under the statute by filing written notice, and (5) deleting in its entirety subsection (f), concerning prohibitions on making loans under the statute. Amends GS 53-177 to provide that a licensee may charge a late payment charge for a payment that remains past due for 10 days or more after the due date, with specified limitations. Makes a conforming change to GS 53-179. Retains amendment to GS 53-172 (a).
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Bill H 810 (2011-2012)Summary date: Apr 7 2011 - View Summary
Adds definition of “Consumer Price Index” to GS 53-165. Add to definition of “other business” permitted of lenders in GS 53-172. Amends maximum loan charges and fees for personal installment loans found in GS 53-173 by (i) setting maximum amount of loans at $2,000 (was $3,000), (ii) setting the maximum account handling charge at $3 per $100 of loan amount, (iii) setting the loan processing fee at 10% of the loan amount not to exceed $100 (was 5% not to exceed $25), (iv) indexing these caps to the consumer price index, (v) capping the interest on a money judgment on a loan made subject to this section at the annual percentage rate of the loan contract as computed under the federal Truth in Lending Act, (vi) capping interest after the maturity of a loan at the annual percentage rate of the loan contract as computed under the federal Truth in Lending Act, (vii) prohibiting other charges and fees on loans subject to this section, (viii) limiting loans made to consumers who already have outstanding loans with the same lender, (ix) requiring the partial refund of certain fees and charges if the loan is paid in full prior to the term expiration date, and, (x) permitting a consumer to terminate a loan contract within three days by returning the borrowed funds to the lender. Amends 53-175 to limit the maximum fee for returned checks to the greater of $30 or the amount permitted under GS 25-3-506 (currently $25). Amends 53-176 by (i) raising cap on installment loans to $15,000 (was $10,000), (ii) limiting monthly interest on installment loans to 2.5% for balances below $5,000, 2% for balances between $5,000 and $10,000, and 1.5% on remaining balance (was 30% annually for balances up to $7,500 and 18% annually on remaining balance), (iii) mandates that interest on installment loans not be compounded, (iv) caps closing fees for installment loans at $35 for loans up to $1,750 and 2% of the loans above that amount, and, (v) indexes the caps on fees and loan amounts to consumer price index according the same procedure created in GS 53-173. Amends GS 53-177 to cap late fees at $15 for loans under GS 53-173 and at the greater of 5% of the payment or $20 for loans made under GS 53-176. Amends 53-180 by restricting the time and payment limitations for loans issued under GS 53-173 as follows: between 4 to 7 months for loans of $500 or less; no more than 13 months for loans between $500 and $1,000; no more than 19 months for loans between $1,000 and $1,500; and, no more than 25 months for loans greater than $1,500. Amends GS 53-181 to require a lender once per year to provide upon request and payment of a $25 fee a statement of information regarding the loan. Amends GS 53-186 to require the Commissioner of Banks to provide timely responses to borrowers and lenders concerning borrowers’ complaints and inquiries and to develop an information pamphlet to be provided to borrowers by lenders as of January 1, 2012. Effective October 1, 2011.