Title















Site Registration | FInd a Copy | Event Calendar | Site Map | Search the Site
The Voice of the Black Community

Business

N.C. payday loans scrapped
Regions Bank pulls plug after consumer criticism
 
Published Wednesday, January 23, 2013 2:22 pm
by Herbert L. White

Payday lending is again a relic of the past in North Carolina.


Birmingham, Ala.-based Regions Financial Corp. pulled the plug on its Ready Advance loans last week after sharp criticism from a consumer coalition that steep interest rates trap low-income borrowers in a cycle of debt.


N.C. law bans payday loan shops or Internet services, but federal law allows banks to make loans based on laws in their home state.


“This is a victory for all North Carolina consumers,” said Jeff Shaw of the Raleigh-based North Carolina Justice Center. “Especially in the wake of the bad lending that led to the financial crisis, banks should understand that the last thing we need is destructive loans that drag cash-strapped families down even further.”


Regions is the nation’s 15th-largest bank with $121.3 billion in assets as of June 30.


Ready Advance customers were required to pay back loans – with a credit limit of $500 – within 10 days using a bank account with direct deposit. Regions charges $1 in fees for every $10 advanced and the entire balance is repaid upon the next direct deposit. Overdraft fees would also apply.


“The people of North Carolina and the North Carolina legislature have consistently said they do not want payday lending in our borders,” said Chris Kukla, senior vice president at the Durham-based Center for Responsible Lending.


“We’re glad that Regions Bank has decided to stop thumbing its nose at our North Carolina laws and has dropped this product in our state.
An N.C. law passed in 2001 effectively shut down payday lenders, with the last of those businesses closing shop in 2006, but Regions used a federal loophole that allows banks to ignore N.C. laws because of its Alabama charter. A survey by Pew Charitable Trusts found African Americans are more than twice as likely to use payday loans compared to other ethnic groups. Nearly a quarter of payday borrowers are seniors whose primary source of income is Social Security.


In addition to CRL, the N.C. NAACP, N.C. Attorney General Roy Cooper, the Legislative Black Caucus and AFL-CIO pushed to end payday loans.

Comments

Leave a Comment


Send this page to a friend

Upcoming Events

read all
15

Blue Man Group

This group of silent blue men is best known for

20

Women in the Winner's Circle

Danica Patrick is far from the only female

21

How Did Testing Get Out of Control and What Can We Do About It?

We invite you to a meeting to discuss the current

Latest News

read all

JCSU's Hernandez top rookie

Freshman SS third in CIAA batting average

Deadline set for sterilization claims

Eugenics victims must file by June 30 

Clergy to N.C. leaders: Let's talk

Ministers urge meeting with N.C. conservatives