Consumer advocates oppose return of high-cost payday loans in North Carolina (video)
The payday loan has been illegal for over a decade in North Carolina. But now Regions Bank has a product known as the “Ready Advance” loan, which consumer advocates say is just as bad as traditional in-store payday loans.
Al Ripley with the NC Justice Center says the out-of-state bank is exploiting a federal loophole that allows banks to ignore state usury laws and charge consumers triple-digit interest rates.
Ripley joined us this weekend on News and Views to discuss how these payday loans work and why the North Carolina Banking Commissioner and Attorney General should end the practice.
A recent study by The Pew Charitable Trusts found that Americans spend $ 7.4 billion a year on payday loans. Rather than being used to cover quick and unexpected emergencies, consumers using payday loans found themselves in debt for an average of five months.
The North Carolina Legislative Black Caucus also took a stand against this type of financial product.
The regions have refuse that their product is a payday loan.