North Carolina Praised for Predatory Lending Policy

A new report released by the Department of Defense praises North Carolina as one of the most effective states in protecting military personnel from predatory lending practices.

In 2001, North Carolina became one of a few states to prohibit payday lending companies, the report said.

Predatory lending does not just affect members of the military. Payday lending companies frequently target people of lower income living paycheck-to-paycheck.

Predatory lending includes practices such as payday loans, car loans, rent-to-own programs and other temporary loans that can charge service members triple-digit annual percentage rates.

All states can do better in preventing predatory lending abuses. The report’s recommendations are not new to the predatory lending issue, but should be repeated and noted.

The report recommends that Congress and individual states put caps on annual percentage rates, require more disclosure, force lenders to consider borrowers' ability to pay and allow service members legal recourse in disputed cases.