The Center for Responsible Lending today commended North Carolina Commissioner of Banks Joseph A. Smith, Jr. and Attorney General Roy Cooper for launching investigations into whether payday lender Advance America is violating the state's usury laws.
The Commissioner of Banks today issued a subpoena for Advance America President William M. Webster, IV or appropriate employees of the company to appear at a public hearing into the matter on October 5. Attorney General Cooper today issued an Investigative Demand to Advance America to turn over documents relating to its payday lending operations in the state.
"CRL and many other groups have believed for years that Advance America and other payday lenders are operating illegally in North Carolina since the sunset of payday authorization legislation in 2001," said Mike Calhoun, CRL general counsel. "That Advance America continues to operate 118 payday lending shops in our state shows their contempt for North Carolina's consumer protection laws governing small loans.
"Commissioner Smith, as the public official responsible for consumer lending in our state, has taken an important step requiring Advance America to testify in a public hearing. AG Cooper, who has asked the company for documents related to their operations in our state, continues to show that he is an advocate for our state's consumers in combating this illegal and predatory practice."
CRL, a nonprofit research and policy organization based in Durham, found in 2003 that payday lending -- which offers short-term loans at interest rates often exceeding 400% APR -- costs American consumers more than $3.4 billion per year in exorbitant fees. Along with dozens of consumer groups, it helped ban these high interest rates in 2001.
"Payday lenders have claimed to be exempt from state law even after the industry's authorization was removed," Calhoun said. "North Carolina's cash-strapped consumers who have paid more than $50 million in exorbitant fees since then should be thankful that their public officials are looking after their interests. It's time for these out-of-state lenders to stop preying on North Carolina families."
Contact: Mike Calhoun at 919-313-8513