Benefits to Citizens
The North Carolina General Assembly strives to provide an environment that permits the operation of businesses which benefit the citizens of North Carolina. One such business is the Independent Consumer Finance Industry. These companies provide a source of credit to the citizens of North Carolina who may not otherwise be able to obtain credit from other sources. The average customer is a hard-working family or individual with average income. These loans are needed to pay for necessary family, personal or household items. Their high debt ratio or imperfect credit history may preclude them from consideration by banks so they turn to consumer finance companies for assistance. Legislatures all over the United States have recognized the need for companies that make these small consumer loans. They have also recognized that higher interest rates are necessary in order to make smaller loans.
In addition to significant governmental regulation by the N. C. State Banking Commission, the Consumer Finance Industry practices significant self-regulation as well. The two industry associations, Resident Lenders of North Carolina and the North Carolina Financial Services Association, are the backbone of this effort. The industry is proud of its efforts in this area and will continue to monitor customer satisfaction.
Consumer Lending Compared with Mortgage Lending
The Resident Lenders of North Carolina would like to emphasize that their loans do not represent mortgage loans which have received recent publicity for predatory lending practices. These Companies typically serve customers with small loans not secured by real estate.
Purpose and Use of Consumer Loans
These loans serve very important needs for these customers. The majority of these loans are to meet short-term cash requirements for large expenditures which occur suddenly or are of a non-routine nature. Examples of the use of these loans are summarized by the following chart which was developed based on a sample of 300 loans. This sample was derived from specific branches in the eastern, central arid western portions of North Carolina with 100 loans sampled from each region.
