When 54% APR is not enough
Despite the fact that consumer finance companies have been profitable over the last few years, they want more. Small consumer loan companies like Citifinancial and American General (owned by AIG) already charge up to 54% APR, but they want more of your money. House Bill 810 will allow for new fees which will raise the APR up to 100%. Industry insists they are being treated unfairly and need the increases to stay profitable. Heading into this session the Commissioner of Banks issued a report with the recomendation that no changes were needed for finance companies.
These companies financials show that they have been profitable at the current rate and fee schedule. I guess they have not taken enough money out of the hands of working families in NC. These companies are dominated by out of state lenders who want to increase their profit margins in the state. Repeat business is what this industry hangs it hat on. They like to talk about customers being satisfied and prefering to work with them over their bank.
If you care so much about the repeat business why do you want to raise the cost of loans to your current customers. That seems like a great way to repay them for their loyalty. Let's take more of your money, we want to charge you more for the loans you already get from us. This seems like a strange message to convey to your clients.
In a recent debate at the General Assembly, the industry lobbyist admitted that the cost of loans will go up if this bill passes. I guess this is the sign of the times going forward. Business need to tell clients that even though we are profitable we want more of your money.