FOR IMMEDIATE RELEASE                                        

For more information contact:

Carleton Sales Team

574.243.6040 option #3

sales@carletoninc.com

 

North Carolina Rate and Threshold Adjustments for Loans and Retail Sales Going into Effect

 

As reported in Carleton's July 2023 Compliance Alert, North Carolina Senate Bills No. 329 and 331 modified provisions relating to small loans, retail installment sales, and motor vehicle sales. These changes go into effect October 1, 2023.

 

Provisions Impacting Computational Requirements:

• Loans

  • Senate Bill 331 made some definitional changes, specifically by adding a definition for “amount financed”. As defined, the term includes certain allowed charges, such as the loan closing or processing fee. As such, the definition differs from the Truth in Lending Act definition of the Amount Financed. 
  • The bill adjusts the upper threshold of the Consumer Finance Act from $15,000 to $25,000.
  • The following new loan rates/tiers will apply:

Loans up to $12,000 (melded/blended rates):
$0 - $4,000		33%
>$4,000 - $8,000		24%
>$8,000 - $12,000		18%
Loans >$12,000 up to $25,000:
>$12,000 - $25,000		18%

 

• The closing or processing fee was also adjusted to a maximum of $30 for any loan up to $3,000 (an increase from $25 for loans up to $2,500), and for any loan exceeding $3,000, the maximum fee would continue to be 1% of the amount financed (excluding the processing fee), not to exceed $150 (up from $40).
• The bill also adjusted the maximum late fee from $15 to $18.

 

• Retail Installment Sales

  • Senate Bill 329 makes some significant changes to the thresholds and rates for retail installment sales. It also makes corresponding changes to motor vehicle sales.
  • Under the new language, the previous four tiers are reduced to two tiers for retail sales, as follows:
    • Less than $3,000 Amount Financed: 24% TILA APR
    • $3,000 or more Amount Financed: 21% TILA APR
  • The motor vehicle provisions are reduced from four classes to three classes as follows:
    • Class 1: Any Vehicle up to 3 model yrs - 20%;
    • Class 2: Any vehicle 4-5 model yrs - 26%;
    • Class 3: Any vehicle 6+ model yrs - 30%
  • Similar to loans, the late fees for retail sales are changed from $15 to $18.

 

Carleton maintains regular communication with industry professionals and trade associations to ensure we are assisting our clients to implement these necessary updates. The information contained herein is for informational purposes only and shall not be construed as legal advice.

 

About Carleton, Inc.:

Carleton is the country's leading provider of financial calculation software, loan origination compliance support, and document generation software. With over 50 years of experience, our ongoing expertise and industry knowledge reaffirms why we are a trusted partner.  Founded in conjunction with the Truth In Lending Act, Carleton provides expert compliance support with continuous accuracy in all our calculations and disclosures at a state and federal level. To learn more about Carleton's lending solutions, visit www.carletoninc.com or contact our sales team at sales@carletoninc.com or 574-243-6040 option #3.