Senate Passes Bill That Would Raise Installment Loan Rates
State lawmakers in the Senate have tentatively passed a bill that would allow installment loan companies to charge customers higher interest rates and fees.
Republican Senator Rick Gunn is a sponsor of the bill. He says the lending industry hasn't had a rate increase for a long time, and that customers would also be held responsible under the measure.
"Customers need to understand their need to make their payments on time, and according to their contract," says Gunn.
"Licensees should have the ability to collect a nominal 15 dollar late fee, just like banks, credit card companies, and other lenders."
But consumer advocates say interest rates are already too high for such loans. They say many borrowers who can't repay the loans get trapped in a cycle of debt.
Attorney General Roy Cooper is also opposed to the bill. In a statement released Thursday, Cooper said that consumers don't need higher interest rates and more fees when many families are still struggling to recover from a bad economy.