North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
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AG Cooper launches investigation of state's largest payday lender

Release date: 8/26/2004

Raleigh: Attorney General Roy Cooper today issued an investigative demand that Advance America turn over documents relating to its payday lending operations in North Carolina.

“Companies that are making loans to North Carolina consumers need to abide by our laws,” said Cooper. “We want to determine whether this lender is hiding behind an out of state bank to illegally skirt North Carolina law.”

According to an Investigative Demand issued by Cooper’s office today, Advance America has one month to produce records of its business for inspection and copying. The request also applies to any company affiliated with Advance America. According to the company’s website, Advance America is the nation’s leading payday lender with more than 2,000 locations in 35 states. It has more than 100 outlets operating in N.C., including locations in Raleigh, Charlotte, Fayetteville, Wilmington, Greensboro, Winston-Salem, Asheville and Hickory.

Cooper has asked Advance America to turn over materials that document how it conducts its payday lending business in North Carolina, including its links with Republic Bank & Trust Company of Louisville, Kentucky. Advance America offers loans in North Carolina but claims that Republic is the actual lender.

Cooper also commended Commissioner of Banks Joseph A. Smith, Jr. today for initiating a coordinated investigation into Advance America. The Attorney General’s Office and the State Commissioner of Banks have worked together on the issue of payday lending since state legislators allowed North Carolina’s payday lending law to expire after four years on August 31, 2001. Since sunset of the law, many payday lenders across the state have closed their doors. But others have looked for ways to circumvent the state’s laws, such as affiliating with out of state banks or claiming their loans are rebates on Internet service contracts. Several bills have been proposed since 2001 but the General Assembly has not enacted any legislation to authorize payday lending.

The Attorney General and the Commissioner have taken action to stop several payday lenders over the past three years, including Check into Kwik Kash, ACE Cash Express, Timrik, Inc., Crawford’s Leasing, Highlands Venture (operating as Speed Net) and NCCS Loans (operating as Advance Internet). ACE had partnered with Goleta National Bank, a nationally chartered bank, to argue that federal banking regulations preempted North Carolina’s ability to regulate loans made by ACE. Under a consent judgment reached in 2002, ACE agreed to drop its claims that affiliation with a national bank made it immune to enforcement of state laws. It also stopped lending in North Carolina.

“When times are tight, consumers need access to short term, emergency loans,” said Cooper. “But these loans must be legal and under fair terms that do not trap consumers under a mountain of debt.”


NC Department of Justice � 9001 Mail Service Center Raleigh, NC 27699-9001 � (919) 716-6400