Some lawmakers in Raleigh have been toying with the misguided idea of re-opening the gates of North Carolina to payday lenders.
These predatory businesses suck meager funds out of working families and industrial communities, like those in Lincoln County, under the guise of helping those briefly down on their luck make ends meet. Their business model depends on desperate customers who become trapped in a cycle of taking out the next loan to cover the unpaid expenses left over after paying off the previous one.
This is an issue that should transcend political affiliation as those concerned about North Carolina’s economy and individual households’ well-being speak out against taking a step backward.
“This is legalized loan-sharking at its worst,” Al Ripley of the N.C. Justice Center said in a press release on the subject last week. “Payday lending is one of the most harmful forms of lending. Despite substantial public opposition, this bill would let high-cost predatory lending back into North Carolina when there is no policy justification for this.
“(Senate Bill 89) opens the door right back up for payday lending in North Carolina,” Chris Kukla of the Center for Responsible Lending was quoted by the Justice Center as saying. “We kicked predatory payday lenders out of the state a decade ago. It makes no economic sense to let them back in.”
Military organizations have also come out against the the proposal with a letter from the Navy-Marine Corps Relief Society issued to all legislators last week. Payday lenders have been a special blight in areas with significant military populations.
Similarly, advocates for seniors have sounded alarms. “These loans are especially dangerous to seniors,” Helen Savage of AARP North Carolina was quoted as saying in the Justice Center release. “The high costs of predatory loans carry serious risks for all of us, but especially for older North Carolinians on fixed incomes.”
N.C. Attorney General Roy Cooper, who has been repeatedly re-elected with broad support, has been especially vigilant against these lenders. Lawmakers would be wise to follow his lead and keep this gate locked tight.