North Carolina’s attorney general has filed a federal court brief defending state laws protecting residents from predatory high interest loans.
A car title lender is challenging the constitutionality of North Carolina’s laws preventing such loans, and Attorney General Josh Stein said the state kicked predatory, payday, and car title lenders out of North Carolina years ago, and he’s not letting them back in.
The case involves Auto Money North, a car title lender that has stores in South Carolina but had customers in North Carolina.
With car title loans, a lender makes a loan in exchange for a lien that it can use to repossess a borrower’s car if the borrower doesn’t repay the loan on time.
North Carolina caps the maximum interest rate on a consumer finance loan at 18 percent for unlicensed lenders and 33 percent for licensed lenders. But Auto Money made loans to North Carolinians with triple-digit interest rates.
In one instance, a North Carolina couple was given a loan of $18,186 but was charged almost $100,000 in interest and additional charges.
Courts have ruled that North Carolina’s laws apply to the company’s loans but Auto Money is challenging the constitutionality the state’s anti-predatory lending laws in a federal court.
