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HB 810, Consumer Finance Act Amendments Dies In Senate Rules Committee

May 25, 2011
Financial Literacy

House Bill 810, after barely passing the House in 2011, died in the Senate Rules Committee in 2012. And, for the first time in five years, there is no study commission appointed to "study" this industry. HB 810 would have significantly increased the rates and fees that consumer finance companies can charge on installment loans0. CRL estimates that this bill would have cost NC borrowers $50-70 million per year in additional interest alone, plus tens of millions of dollars in additional fees. In addition, the bill would have significantly increased the maximum size of these expensive loans from $10,000 to $15,000.

With 12 lobbyists on retainer, we expect another push in 2013. However, the appetite to take up this bill again will be dampened by the Senate's refusal to even hear the bill this year and the slim majority by which it passed the House.

Since CitiFinancial and American General control two-thirds of the loan volume in NC, the bulk of these windfall profits from higher interest rates nad higher fees would have flowed to these two lenders and the companies that own them -- CitiGroup, AIG and a New York hedge fund.

In 2011, the House passed HB 810 despite strong opposition from:

  • NC and national military leaders -- commanders at every military base in the state and the Department of Defense;
  • The NC Attorney General, who spoke repeatedly against the bill;
  • The Governor, who released a press statement opposing HB 810; and
  • AARP NC, NC NAACP, the NC Justice Center, and Credit Counseling Agencies of NC.

In addition, the NC Commissioner of Banks, after careful study of the industry at the request of the General Assembly, recommended no increase in rates and fees.

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How Did Your Representative Vote on HB 810 in 2011?

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