Attorney General Stein Fights to Protect North Carolinians from High Interest Loans
(RALEIGH) Attorney General Josh Stein this week filed a brief in federal court defending North Carolina’s laws protecting residents from predatory high interest loans. A car title lender is challenging the constitutionality of North Carolina’s laws preventing such loans.
“We kicked predatory, payday, and car title lenders out of North Carolina years ago, and we’re not letting them back in,” said Attorney General Josh Stein. “I will not let this lender or others levy illegal high interest loans against North Carolinians.”
The case involves Auto Money North, a car title lender that has stores in South Carolina but had customers in North Carolina. With car title loans, a lender makes a loan in exchange for a lien that it can use to repossess a borrower’s car if the borrower doesn’t repay the loan on time. North Carolina caps the maximum interest rate on a consumer finance loan at 18 percent for unlicensed lenders and 33 percent for licensed lenders. But Auto Money made loans to North Carolinians with triple-digit interest rates. In one instance, Auto Money gave one North Carolina couple a loan of $18,186 but charged them another $98,339.75 in interest and additional charges.
Because Auto Money made loans to North Carolinians and takes action in the state as part of its lending process, courts have ruled that North Carolina’s laws apply to the company’s loans. Auto Money is challenging the constitutionality of North Carolina’s anti-predatory lending laws in a federal court based in South Carolina. Attorney General Stein has intervened in the case to defend North Carolina’s laws.
A copy of the filing is available here.
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