After 8-1/2 years, the State of North Carolina has announced the end of payday lending, as the last of the major payday lenders signed agreements to stop making illegal loans in NC. From the Outer Banks to Pisgah, TarHeels will no longer be conned into the cycle of debt by this predatory practice.
Payday lenders ply their trade by identifying a very real problem for thousands of working families: the need for an urgent loan to cover living expenses. But their short-term fix almost always creates a longer-term problem, as borrowers get trapped by interest rates sometimes topping 400%!
What’s worse, this industry targets African American neighborhoods, which have three times as many of these shops per capita as white neighborhoods — making this an victory for civil rights as well as economic justice.
According to Mark Pearce of the Center for Responsible Lending, a number of lenders, including the State Employees Credit Union, have stepped up “to offer an alternative product that actually [meets] the need for emergency credit without using that desperation as an excuse for abuse.”
Read the NC Attorney General’s press release here. Find out from the Herald-Sun (via AP) why this is a huge step, but not the end of predatory lending…
Traction is proud to be a member of the Coalition for Responsible Lending, and we say to payday lenders: Don’t let the door hit you on your way out.