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Are Payday Loans In North Carolina Just A Form Of Legal Racketeering?

North Carolina has laws established to protect consumers from unfair and outrageously high interest charges. These laws are called usury laws and they are intended to keep consumers from being required to pay more than ten percent annual interest on any type of loan. So why do payday loans charge consumers sometimes triple digit interest plus fees?

The reason consumers seeking payday loans North Carolina cannot get short term financing at 10% APR is because the state has dozens of exemptions and loopholes in the laws. In most cases the usury laws are worthless. Most banking and financial institutions have special exemptions, as well as just about every type of business that lends money or collects interest for anything. For the most part, North Carolina’s usury laws are only in place to keep one individual from charging another the same amount of interest that a bank would charge them. Even pawnbrokers have special exemptions to the state’s usury laws.

The reason the state has so many different usury law exemptions and rules in the first place is because it is easier to write new laws than it is to change the state’s Constitution. But this practice has caused more problems than it would have been to just change the Constitution.

The state’s Constitution is clear when it states what interest rate limits are allowed to be charged in the state. All loans made to private individuals are not to exceed ten percent interest per year and loans to companies are to be 10% or 5% over the Federal Reserve Bank of San Francisco’s discount rate.

Payday loans are usually quite higher than that. Most payday loans in North Carolina have fees and interest charges that equal fifteen percent of the amount borrowed. The problem is that these loans are only for one month. Fifteen percent interest to borrow money for a month sounds like highway robbery. If a bank made money like that people would riot in the streets, but no one seems to care that the people who can afford these charges the least are required to pay.

Payday loans are not fair no matter how you look at it. People seeking emergency funds should have better options available to them. Several states have tried to put a stop to the practice of payday loans and it might be time for North Carolina to do the same.

If someone needs fast money to make ends meet there are batter options, especially if they have good credit. Those looking for better options should take the time to find better options available to them, at least until North Carolina follows other states and does something to fix this problem.

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West Virginia Payday Loans

Lots of people in West Virginia need access to quick, short-term financing in the form of cash advance loans, but if you drive around the state you will not be able to find one location that offers payday loans. The reason there are no places in West Virginia that offer payday loans is that it is illegal.

Just because payday loans in West Virginia are illegal does not mean that you can’t get one of these types of loans. There are dozens of online providers that offer all types of cash advance loans to people in several different states. If you are really wanting to get one of these loans you might want to hurry because the state is actively going after several online providers of payday loans.

The state’s Attorney General believes that all types of payday loans are prohibited by law. The Attorney General contends that not only are the loans themselves against state laws, the marketing of these loans by online providers is also illegal.

This fight is not going away any time soon; as it stands, West Virginia is not the only state actively trying to stop the practice of payday loans. Most states have well established usury laws that govern that amount of interest that can be charged for all types of loans, but some states in recent years have created safe harbor laws for payday lenders, capped interest rates on all loans, or outlawed them completely.

The state’s Attorney General wants all residents in West Virginia to know that it is unlawful for any type of lender to make payday loans, whether online or in person. If a consumer has taken out any type of payday loans, even from an online vender, they are not required to pay the loan off.

If a consumer is unsure what their rights are concerning payday loans they may have taken out, they should contact the Attorney General’s office for advice. If a consumer has previously taken out payday loans that were not paid off leading to collection agencies harassing them, the Attorney General invites these consumers to contact the office for help in ending the harassment.

The Attorney General’s office has been conducting an ongoing investigation to stop payday lenders since 2018 and until the state passes clear laws governing the practice, these court battles will continue. Currently the Federal Government is considering legislation that will make these loans unprofitable for the lenders to continue to provide them by capping all interest rates for any type of loan at 36%…


How to Tell if Your Cash Loan is Trustworthy

When you search for any sort of financial advice online you are almost immediately inundated with advertisements for “cash loans” and “no credit loans” and “get cash now!” Obviously, these ads can be tempting, especially if you are in need of a loan. The truth is that there are far more scam artists out there than legitimate lending operations. This does not mean that there are no legitimate online lenders or that all offers of cash loans are bogus. On the contrary–some cash loans are backed be legitimate financial institutions.

The easiest way to tell if the company promising your “cash loans” is legitimate is to do some digging into the company. Find out the street address for the company. If there is no street address or if there is only a post office box, move on to the next company. If there is a street address, check into the city, county, and state business records to make sure that the company is registered properly. If you cannot find any business listings for the company in its own state or in your own, move on to another financial institution.

If there are business records, check the company’s rating with the Better Business Bureau and the Federal Trade Commission. Make sure that the company is not under investigation for fraudulent activity and that it has a good reputation. If it looks shady, move on. Finally, make sure that you are able to call the company directly and talk to a person (or that you can visit its offices if they are located in your local area). If there either is no way to communicate directly, vocally, or face to face with the company, move on to another company that is offering you the opportunity to apply for a cash loan.

Your first stop on any cash loan quest should be your bank. You might be able to take out a loan if your account is in good standing and you have a good history with the bank. If your bank turns you down, your loan officer might be able to point you to another legitimate source of case. One that isn’t out to make money off you by charging you extra high fees or is only in search of your personal information. Remember that the rule of thumb is always, “If it feels shady, walk away.” Trust your gut!…

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Government Drops Amendment Regulating Payday Loans

Think the companies that pass out payday loans care about their costumers? That seems unlikely now that one of the top officials for the country’s largest payday lender, Advance America, has basically outlined the industry’s methods for hooking customers into an endless series of high-interest-rate payday loans. The Los Angeles Times recently reported on the confidential e-mail messages that Dan Mart, a divisional director of operations for the company, wrote to his employees. The underlying message of these e-mails? Advance America makes its money by making sure that borrowers keep taking out small loans with incredibly high interest rates.

The E-mails

According to the Los Angeles Times, Mart wrote his e-mails in response to a proposal, since scuttled, in the financial reform package now headed toward Pres. Obama’s desk that would have limited the number of payday loans that payday lenders could make to their customers in a specific period of time. Mart wrote in his messages that after customers repay their loan, they’ll ask for a new one. At this time, Mart wrote, payday lending employees were supposed to tell their customers that they couldn’t make another loan to them because the government has put them out of business. Mart then advised his employees to tell customers to write their senator and congressman. There are two problems with Mart’s e-mail. First, the information in it is incorrect. Secondly, it underlines the business strategy of payday lenders: They only succeed when consumers continually take out their loans. And when consumers do this, they rarely escape the cycle of debt.

The Failed Amendment

Mart was incorrect. The proposed amendment by Sen. Lay Kogan, a Democrat from N.Carolina, would have forbidden payday lenders from issuing more than six loans to any one borrower in a 12-month time. That’s not nearly the same as telling payday lenders that they can’t make more than one loan to a customer. That point is moot, though. The payday lending amendment is no longer part of the financial reform package that Obama will sign.

Payday Pressure

Credit a strong campaign by the companies that issue payday loans for scuttling the amendment. The association that serves payday lenders sent memos to these businesses across the country, requesting that they ask their customers to write letters and send e-mail messages to their federal politicians. The industry trade group also put out a statement saying that such an amendment would deny emergency loans to hardworking Americans. That all sounds good. But it’s hard to deny the message implied by Mart: Payday lenders want to protect their profits, and that means hooking consumers into taking out a string of high-interest loans.…