North Carolina

Summary Full Session Law This legislation does two things. First, it made technical corrections to provisions enacted last year providing new protections for consumers in loan servicing. Second, the law banned subprime yield-spread premiums (YSPs). YSPs are compensation paid to a broker for increasing the interest rate on a loan or for getting the borrower to agree to accept unfavorable terms. YSPs provided the incentive for brokers to aggressively market the kinds of loans that created the problems in today's mortgage market. The technical changes to existing law include: Servicers must mail...

Full Session Law (pdf) Bill Summary (pdf) This legislation requires mortgage loan servicers doing business in North Carolina to be licensed and imposes new standards on their loan collection activities, providing more protection for North Carolina homeowners. This bill adds mortgage servicing regulation to the regulation of mortgage bankers and mortgage brokers. New duties for mortgage servicers include: Safeguarding and accounting for any money handled for the homeowner Following instructions from the homeowner Making proper disclosures to the homeowner, including: Schedule of servicing fees...

See details below about 2015 NC General Assembly bills: Senate budget bill would repeal State Fair Housing Act Bill to legalize 80 to 125% loans still stalled Bill to roll back debt collection protections also stalled Ratified bill reduces protections against harassing calls Wage garnishment put into study committee bill Bills to reduce protections against mortgage broker abuses have not passed Because of your quick action, bills to invite high-cost lenders into our state and eliminate protections against debt collection abuses are stalled. But the Senate budget bill proposes to repeal our...

August 8, 2013 This legislative session was truly like no other in recent history. Many changes to existing laws were made, and certainly our laws protecting consumers from predatory lending were targeted. A stated objective of the 2013 legislature was to reduce regulation and revise North Carolina's business-related laws to be no more stringent than federal law. This, coupled with the highly polarized political environment and the ample campaign contributions of our opponents, created challenges for us this legislative session. We also faced a large number of freshman legislators unfamiliar...

June 20, 2013 Learn about a pair of stalled payday lending bills, a bill to authorize predatory car title lending bill, a just signed consumer installment loan law that raises rates and fees, and a predatory mortgage lending bill in committee in our June 2013 NC legislative update. Payday bills stalled (SB 89/HB 875) Car title lending bill stalled (HB 721) Consumer installment bill signed by Governor (SB 489) Predatory mortgage lending bill still in committee (HB 692) Two Payday Bills Stalled (SB 89 / HB 875) Fourteen payday lobbyists pushing to keep their bills alive. Two companion payday...

On July 3, the NC General Assembly adjourned until January 2013. In this Legislative Wrap-up for the two-year session, we have summarized (click on each bill to learn more): Bad bills that died HB 810: Raise rates and fees on installment loans HB 814: Weaken mortgage lending protections HB 654: Weaken protections against foreclosure rescue scams and real estate abuses HB 30: Weaken wage garnishment protections HB 1155: Allow balloon payments on car loans Good bills that passed SB 826: State Home Foreclosure Prevention Project becomes permanent SB 816: Modernize NC Banking Code SB 806: Modify...

North Carolina allows wage garnishment for certain judgments, such as child support and taxes. House Bill 30 as originally drafted, Allow Wage Garnishment to Satisfy Judgments, would have expanded wage garnishment to other judgments, putting struggling families at severe financial risk. Once concerns were raised with the bill sponsor, the bill was amended significantly to deal with issues raised by the consumer advocates. The amended House Bill 30, which would only allow wage garnishment to be used against businesses that have committed fraud, not against consumers or for debt collection...

The North Carolina Consumer Finance Act lets non-bank lenders make installment loans of $10,000 or less. House Bill 810, Consumer Finance Act Amendments, as amended, would have: Increased the maximum loan size from $10,000 to 15,000, Increased the interest charged on these loans, which can already be as high as 54% annual interest, Added numerous new fees, and Continued to allow loan flipping and the sale of expensive add-on products. We conservatively estimated that this bill would cost NC consumers $50 to $70 million in extra interest every year, plus tens of millions of dollars in...

HB 773, the omnibus Studies Act of 2011, includes language that would have created a joint study commission on consumer finance loans under $3000 (see page 52). This would be the fourth study commission in 5 years. However, it appears that the studies bill cannot be approved until the short session starting in May 2012. The Senate made several changes to the bill. The House refused to concur with the Senate changes and appointed House conferees, but did so after the Senate adjourned. Since the Senate did not appoint conferees, under the rules the bill is ineligible for consideration until the...

HB 484 transfers the authority of the State Home Foreclosure Prevention Project (SHFPP), a very important program for NC homeowners at risk of foreclosure, from the NC Commissioner of Banks (NCCOB) to the NC Housing Finance Agency (NCHFA). Since the NCHFA was already administering a number of foreclosure prevention programs, most notably the NC Foreclosure Prevention Fund, this new law is designed to consolidate and streamline these state foreclosure prevention efforts. Both agencies agreed. The transfer preserves all the programs and protections included under the SHFPP. This new law became...