Blog sponsored by Bankrupt-Law.com


MARK JOHNSON
mjohnson@charlotteobserver.com

RALEIGH - Attorney General Roy Cooper announced this morning that the last
three payday lenders in the state had agreed to shut down and pay $700,000
to credit counseling services.

The legal settlements end more than four years of haggling over the
short-term, high-interest loan business that Cooper called a "debt
treadmill."
"It's a great day," Cooper said at a news conference. "Payday lenders are
surrendering."

Check Into Cash, Check 'n Go and First American Cash Advance agreed to stop
making payday loans and will not collect interest or late fees on existing
loans. They'll also pay $700,000 to credit counseling services statewide,
including in Charlotte and Gaston County.

"This has been a long, long battle for consumers across the state," said
Stella Adams, executive director of the N.C. Fair Housing Center, an
advocacy group for low income consumers. She joined Cooper at the
announcement.

Payday loans, which are short-term and high interest, are frequently rolled
over into another loan, adding another fee and piling up the consumer's
debt. Such lenders have defended their role as responding to a market that
mainstream banks, including the national ones based in Charlotte, refuse to
serve.

The settlement comes two months after the state's banking commissioner ruled
that the largest payday lender at the time, Advance America, was violating
state law and had to stop offering the loans. Payday lenders had encountered
several legislative or legal roadblocks before but always found a way around
them.