Some subprime loans are predatory, and an effective law that eliminates predatory loans will reduce the number of subprime originations accordingly. Showing a different growth rate than two other states without examining loan terms, as the MBA study itself acknowledges, fails to answer the real question of whether the NC law helps homeowners protect their homes from abusive lending while retaining access to credit.
The only study that examines loan terms to determine whether the NC law reduced the frequency of predatory lending was conducted by the University of North Carolina.  This study concluded that the number of loans with predatory terms has fallen in North Carolina after the law's enactment compared with the rest of the country, while credit is still widely available. The findings of that study remain unchallenged by the MBA report. In addition, North Carolina's Commissioner of Banks has stated that he has not received a single complaint involving the inability of a North Carolina citizen to obtain a home loan since the law was passed.  ---
1. R. Quercia, M. Stegman, & W. Davis, "An Assessment of the Impacts of North Carolina's Predatory Lending Law" (forthcoming Fannie Mae Foundation Housing Policy Debate), p.26. See "STUDY: NC Predatory Lending Law Cuts Abuses, Does Not Dry Up Credit for Borrowers," Center for Community Capitalism June 25, 2003 press release (available at http://www.kenan-flagler.unc.edu/News/DetailsNewsPage.cfm?id=466&menu=ki).
2. North Carolina Office of the Commissioner of Banks, Joseph A. Smith, Jr. letter to Comptroller John D. Hawke, Jr. (October 2, 2003) (available at http://www.banking.state.nc.us/reports/Hawke.pdf).
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