Bill would make Payday Loans legal
GREENSBORO, N.C.–Payday loans were outlawed in North Carolina over a decade ago, but soon they could making their way back to check cashing stores.
Senate Bill 89 would amend the Check Cashing Licensing Act to allow check cashers and lenders the ability to pay out cash loans of up to $500, for a fee of 15 percent of the cash advance. People would also have to pay off the loans before taking out another one.
Payday loans are typically cash advances people use in between their paychecks to pay for things, like car repairs and bills.
Sen. Jerry Tillman (R-Archdale), who is behind the bill, says he filed it after several people told him they needed a loan, and had no other alternative.
However, Attorney General Roy Cooper says these loans are a trap and that lenders sometimes loan money with an interest rate of over 300 percent.
“Payday lending is like needing a life preserver and being thrown an anvil,” Cooper said.
Cooper says that if you find yourself in a financial bind, there are lenders who make small loans with a capped interest rate, and you can always turn to your family and friends.
The bill would not allow payday loans to those in the military or their spouses. A law was passed in 2007 to protect them from Payday lending.
If approved, the bill could go into effect as early as July 1.