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. Enacted June 19, 2013. Effective July 1, 2013.
Bill Summaries: S489 CONSUMER FINANCE ACT AMENDMENTS.
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Tracking:
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Summary date: Jun 24 2013 - View Summary
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Bill S 489 (2013-2014)Summary date: Jun 4 2013 - View Summary
House amendment to the 4th edition makes the following changes. Amends GS 53-180.1(c) to provide that any credit agreement, promissory note, or other contract prohibited by the statutes is null and void [no longer provides for an exception from the provision as provided in (b)(6), which requires a licensee to take precautions to prevent making loans that violate the statute and sets the interest rate at 8% for loans where a licensee does not take resonable precautions to identify covered members].
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Bill S 489 (2013-2014)Summary date: Jun 3 2013 - View Summary
House committee substitute makes the following changes to the 3rd edition.
Providesthat loans issued in accordance with GS 53-176(a) cannot charge interest that exceeds the following actuarial rates with respect to a loan not exceeding $10,000:(1) cannot exceed 30% per annum on that part of the unpaid principal balance not exceeding $4,000 (was, $5,000); (2) cannot exceed 24% per annum on that part of the unpaid principal balance that exceeds $4,000 but does not exceed $8,000; and (3) and 18% per annum (was, 24% per annum)on the remainder of the unpaid principal balance.
Makes a technical correction to subsection (c) of GS 53-176.
Amends new GS 53-180.1 regarding the requirements and limitations of granting loans to military service members. Expands the restriction that prohibits a licensee from contacting a military service memberdeployed to a theater of combat or that member's spouse to collect on a loan providing that the licensee has received sufficient proof of the service member's deployment. Specifies that the restriction applies to a military service member deployed to a theater of combat, in a combat supporting role, in an area where there ishostile fire and/or when Imminent Danger Pay is authorized to the service member. Provides that written verification from the service member's commanding officer constitutes sufficient proof of the service member's deployment (was, only specified that an official copy of the member's deployment orders provided sufficient proof).
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Bill S 489 (2013-2014)Summary date: May 2 2013 - View Summary
Senate amendment #1 makes the following changes to the 2nd edition.
Amends GS 53-180.1 (Military service members limitation), providing that no licensee will contact a military service member or member's spouse by phone or email, for the purposes of collecting on the loan, when the military service member has been deployed to a theater of combat (previously, only provided for no contact to the military service member, not spouse).
Senate amendment #2 makes the following changes to the 2nd edition.
Amends GS 53-177(b) (Late fees), providing that if a late payment fee has been imposed once, with respect to a particular late payment, no such fee can be imposed with respect to any future payment which would have been timely and sufficient but for the previous default.
Senate amendment #5 makes the following changes to the 2nd edition.
Deletes GS 53-176(a)(1), (2), and (3). Enacts new GS 53-176(1) and (2), providing that loans issued in accordance with GS 53-176(a) cannot charge interest that exceeds the following actuarial rates:
(1) With respect to a loan not exceeding $10,000, cannot exceed 30% per annum on that part of the unpaid principal balance not exceeding $5,000 and cannot exceed 24% per annum on that part of the remainder of the unpaid principal balance.
(2) With respect to a loan exceeding $10,000, cannot exceed 18% per annum on the outstanding principal balance.
Senate amendment #6 makes the following changes to the 2nd edition.
Makes technical and clarifying changes to GS 53-176(a).
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Bill S 489 (2013-2014)Summary date: May 1 2013 - View Summary
Senate committee substitute makes the following changes to the 1st edition.
Amends GS 53-180.1 (Military service members limitation), defining, for the purposes of this section, a military service member with a rank of E4 or below as a "covered member." Deletes all references or inclusions of "military service member" and replaces them with "covered member." Also makes technical and clarifying changes to this section.
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Bill S 489 (2013-2014)Summary date: Mar 27 2013 - View Summary
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.