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Testimony Before the 2011 NC General Assembly: The Customer Finance Act

Testimony Before the 2011 NC General Assembly: The Customer Finance Act

Executive Overview

The contemporary customer finance installment loan industry ‘s almost a hundred years old. The industry in North Carolina has been regulated through the North Carolina Consumer Finance Act (G.S.53, the CFA or the Act) for 50 years. The CFA as well as other comparable laws and regulations had been initially passed away whenever professional had few legal credit choices; these laws and regulations had been effective in driving down illegal loan sharking by giving a safe, available financing choice. The CFA has evolved but remained real to your fundamental concept of providing access to affordable, repayable credit. Today, the CFA governs the business of supplying direct-to-consumer installment loans in amounts as much as $10,000 for terms as high as seven years in a extremely regulated manner.

The buyer finance installment loan industry is an item of general general public policy. This policy framework warrants review that is occasional the entire world modifications. In this character, new york lawmakers have actually reexamined the state associated with the customer finance industry together with stability between loan provider viability and customer security. A legislative study commission, the Joint Legislative Commission on the Modernization of North Carolina Banking Laws and the Consumer Finance Act (the Commission) called on the North Carolina Office of the Commissioner of Banks (NCCOB) to conduct a more in-depth study in the process. This report presents evidence from research conferences, licensees’ yearly reports, interviews, presentations, current research, and reports and tips submitted towards the NCCOB. The Commission’s overarching requirement had been that what the law states have appropriate customer defenses but additionally recognize the profitability that is potential of loan provider.