According to a new poll conducted by Public Opinion Strategies and released today by the Center for Responsible Lending (CRL), North Carolina voters overwhelmingly disapprove of predatory lending and a bill that would legalize some of the worst lending abuses. The poll shows that 93% of registered North Carolina voters oppose pending legislation, that would allow finance companies to charge over 60% APR. The bill, SB 681, was introduced last month by State Senator Rick Gunn.
"It's tough to get 93% of people to agree on anything, but our poll shows that North Carolinians are overwhelmingly opposed to legislation increasing interest rates on small dollar loans above 60% APR," said Ellen Harnick, a Senior Policy Counsel at CRL. "That's because they recognize that these loans are designed to trap people in debt, and that they already hit many communities hard."
"The poll also shows people of faith see increasing interest rates to 60% or more as a violation of the Biblical prohibition against usury, which is the practice of lending money at exorbitant interest rates," said Harnick.
Key Poll Findings
- 93% of voters oppose legislation that would allow finance companies to charge over 60% APR on high-interest installment loans.
- 84% of voters say they would be less likely to support a candidate who voted in favor of a rate increase. There is little difference among self-identified party supporters with 79% of Republicans, 85% of Independents and 87% of Democrats saying they are less likely to support a candidate who supports the Senate bill.
- Among voters who attend church regularly, 65% believe an interest rate over 60% APR violates the Bible's prohibition against usury.
- 83% of voters oppose legalizing payday lending in North Carolina. 87% oppose legalizing car-title lending.
The General Assembly bill comes only two years after the same lenders were successful in pushing an historic rate increase through the General Assembly, months after the Department of Defense proposed new rules to protect military personnel and their families from abusive installment loans, and just weeks after the federal Consumer Financial Protection Bureau announced it is considering new rules to rein in abuses by installment, payday and car-title lenders. CRL estimates that the General Assembly's 2013 rate increase is already costing financially-struggling North Carolina families $40-$60 million in additional interest payments every year. Earlier this year, North Carolina faith leaders wrote the legislature, opposing a bill increasing interest rates before one was even introduced.
Installment loans are often marketed to consumers as a quick fix, but operate very differently in practice. Like payday loans, installment loans are designed to trap borrowers in debt. As many as 75% of installment loans made in North Carolina are made to renew existing accounts or to former borrowers. Debt trap credit pushes borrowers deeper into debt and undermines their long-term financial security.
Public Opinion Strategies is a widely respected research firm co-founded by Glen Bolger and Bill McInturff. The firm's past North Carolina-based clients include Charlotte-based Bank of America, Duke University, Senator Richard Burr, Senator Thom Tillis and several North Carolina members of U.S. House of Representatives.
For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Andrew High at Andrew.High@responsiblelending.org or 919-313-8533.