Bank fee bill moves closer to passage

Sen. Joyce Krawiec (R-Forsyth) and Ches McDowell of Winston-Salem law firm Kilpatrick Townsend walk out of the N.C. Legislative Building on Tuesday, March 19, 2019. Krawiec is the primary sponsor of Senate Bill 162, a bill to modernize loan origination fees which passed the Senate on March 13 and was heard in the House Banking Committee on Tuesday. Rep. Debra Conrad (R-Forsyth) chairs the banking committee. (North State Journal)

RALEIGH — The North Carolina General Assembly is one step closer to passing a bill that would help local North Carolina banks remain competitive and allow for origination and late fees on bank loans to increase for the first time since 1991.

Much of the charge for this bill was led by members of the Forsyth County delegation, Senators Joyce Krawiec, R-Forsyth and Paul Lowe, D-Forsyth and Representative Debra Conrad R-Forsyth. The Senate Bill, Senate Bill 162, passed the Senate last Wednesday, 46-1 and was referred to the House Committee on Banking.

The House also filed a Companion Bill as House Bill 223. Along with Representative Deborah Conrad R-Forsyth, the bill is also co-sponsored by Speaker Tim Moore R-Cleveland and other legislators from both sides of the aisle and from across the state.

Under current North Carolina law, banks are not allowed to charge origination fees higher than $50, putting banks that are based in North Carolina at a serious disadvantage to banks located in other states around the country.

“North Carolina banks need to be able to compete,” said Senator Joyce Krawiec R-Forsyth, “If we aren’t allowing banks to compete, they may charter somewhere else.”

Rather than a set fee, Senate Bill 162 would set a range of fees for loans starting at $100 for loans up to $1,499.99 to $250 for loans from $50,000 to $99,999.99. Loans that are more than $100,000 would have a maximum origination fee of 0.25 percent of the principal amount.

The bill drew bipartisan support in its passing through the Senate, as lawmakers knew they needed to come together to support local businesses to ensure North Carolina’s economy continues to move forward.

“A lot of people looked at this bill and wanted to find ways to keep them [banks] in North Carolina,” said Senator Paul Lowe D- Forsyth, “Local banks like BB&T want to be able to compete, or they will go elsewhere.”

One of the sponsors of the House Bill, Representative Deborah Conrad R-Forsyth, said one of the main reasons for bipartisan support was the guaranteed consumer protection clause of the bill. This provision on page 2, line 23, placed a cap on the interest rates for pay day lenders, ensuring people do not get into credit trouble when trying to obtain a loan.

Senate Bill 162 is very similar to the 2018 House Bill 810. The bill began as a bill about pet-boarding facilities, but once it got to the senate, the bill was gutted and bank language was put in.