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Consumer Law

Unlicensed Banks

In the financial landscape of North Carolina, the operation of unlicensed banks is a subject of stringent regulation and oversight. The state’s laws are designed to protect consumers from the risks associated with financial transactions that lack the security and guarantees provided by licensed institutions.

An unlicensed bank in North Carolina is any entity that offers banking services such as taking deposits or making loans without the proper authorization from state regulators or without a charter. This includes both brick-and-mortar establishments and online entities that might attempt to operate outside the purview of state and federal banking laws.

The North Carolina Consumer Finance Act

North Carolina General Statutes provide the legal framework that governs banking operations within the state. The North Carolina Office of the Commissioner of Banks (NCCOB) is the primary regulatory body responsible for overseeing banks and ensuring they comply with the necessary laws and regulations. In North Carolina, lenders facilitating loans of $25,000 or less cannot charge more than 16% in interest unless they have a license from the North Carolina Commissioner of Banks NCCOB.

Usury Laws

Usury laws, also known as interest rate laws, are designed to prevent lenders from charging excessively high rates on loans. These laws vary from state to state. In North Carolina, consumer legislation provides specific guidance on lending that differs from that of neighboring states. However, there are many factors that affect the maximum interest rate. For example, the type of loan, the financial institution, the amount of the loan, and sometimes a combination.

Consumer Protection Representation

North Carolina’s laws regarding unlicensed banks are clear. It is essential for consumers to remain vigilant and for financial entities to adhere to the regulations set forth by the state to ensure a secure and trustworthy banking sector. If you suspect a financial institution has violated your rights under North Carolina’s consumer laws, contact us today. Maginnis Howard’s unlicensed bank attorneys are located across the state in Raleigh, Charlotte, and Fayetteville.