AN ACT TO MODERNIZE THE LOAN ORIGINATION FEE FOR NORTH CAROLINA BANKS AND TO ADJUST THE LATE PAYMENT CHARGE FOR CERTAIN LOANS.
Senate amendment makes the following changes to the 2nd edition.
Makes organizational changes to the proposed changes to GS 24-1.1(e) concerning loan origination fees for North Carolina banks. Modifies the proposed table setting out maximum origination fees by principal amount for a loan or extension of credit with a principal amount less than $100,000, with the table now setting the maximum origination fee at $100 for loans or extensions with a principal amount of $0 to $1,499.99 and $150 for loans or extension with a principal amount of $1,500 to $19,999.99 (previously, set the maximum origination fee at $150 for loans or extension with a principal amount of $0 to $19,999). Further modifies the table to provide for the difference in cents between the specified levels of principal amounts. Adds a new subdivision (e)(3), prohibiting 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 charged 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.
Adds to the proposed changes to GS 24-10.1(b)(1), concerning late payment charges imposed by lenders on a party to a loan or extension of credit. The previous edition proposed to prohibit a late payment charge greater than $35 or 4% of the amount of the past due payment for a loan or extension of credit that (1) is made by a bank or savings institution organized under NC or federal law, (2) is not secured by real property, and (3) is governed by GS 24-1.1 (regarding contract rates and fees for specified loans and extensions of credit, amended by the act). Further requires the loan or extension of credit to have an original balance greater or equal to $1,500 for the proposed prohibition in subdivision (b)(1) to apply.
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