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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%…