payday lending

Regions Bank Ends Payday Loans In NC

Jan 30, 2013

Regions Bank, based in Birmingham, Alabama has been using a federal banking law to provide payday lending services, even though these types of loans are illegal in North Carolina.

But the bank recently announced that it will no longer offer its payday lending service to North Carolina residents because of the small number of eligible customers for the product in the state.

Since 2001, payday lending shops have been illegal in North Carolina. But that law doesn't apply to banks that are based outside the state.

Regions Bank Sneaks Payday Lending Into NC

Sep 13, 2012
Philip Taylor PT/Flickr

Shops that offer short-term, small-dollar loans with annual percentage rates of 300 and 400 percent do not cluster on urban street corners in North Carolina like they do in other states. That's because this is one of just four states where payday lending is prohibited. 

But now a small regional bank - Regions Bank - has found a loophole.  Two loopholes, really.

"Were they not a bank, it would not be legal to make that loan here in the state," says Chris Kukla, a senior vice president at the Center for Responsible Lending.