North Carolina

In early 2002, North Carolina attorney general requested that a payday advance loan provider be preventing from charging customers high interest rates for loan. Cooper stated that the loans were not just unfair, but illegal as well.

Cooper and North Carolina Commissioner of Banks Hal Lingerfelt claimed that Ace Cash Express Inc. was in violation of the state’s Consumer Finance Act. This Ace Cash Express, which has its headquarters in Texas, has at least 16 payday loan locations in North Carolina and was charging customers $17 per each $100 borrowed. The stores offered short term loans of up to $500.

Payday lending was supposed to legally expire on August 31, 2001, but many payday loan providers remained open, taking advantage of a loophole which allowed them to affiliate with national banks.

Ace Cash Express Inc. argued that its affiliation with Goleta National Bank in California allowed it to make loans. Many disagree. The Office of the Comptroller of the Currency discourages this practice, calling it “rent-a charter”, claiming that the national banks which support payday loan providers in this manner do so in name only, and are skirting state laws.