North Carolina Attorney General Opinions
Free plain-English summaries of attorney general opinions issued in North Carolina, with full citations and the original source on every page.
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After a federal court called part of a 1991 NC AG opinion 'incomprehensible' and let consumer finance licensees collect insurance commissions on loan-related sales, do consumer finance companies still have to apply for 'other business' authority from the Commissioner of Banks before selling unrelated products on the same premises?
Yes. The AG concluded the federal decision in Herndon v. ITT Consumer Financial Corp. did not change the case-by-case 'other business' authorization requirement under G.S. 53-172. The federal court's …
Can the NC Banking Commission raise or lower the maximum interest rate on larger consumer finance loans, or only on the smaller loans?
Only on the smaller loans. The Banking Commission has explicit authority under G.S. § 53-173(f) to redetermine and refix the maximum interest rate for consumer finance loans made under § 53-173 (up to…
Can a North Carolina consumer-finance company sell new types of credit insurance to its borrowers, including joint accident and health policies and single or dual interest motor vehicle physical damage coverage?
Yes for credit joint accident and health insurance, no for single or dual interest motor vehicle physical damage insurance unless the Commissioner of Banks gives written permission. Joint accident and…
When a North Carolina consumer-finance licensee applies to do other business at the same office where it makes loans, is the licensee entitled to an evidentiary hearing, and what role does the State Banking Commission play in reviewing the Commissioner's decision?
Yes to an evidentiary hearing when there is any likelihood the application will be denied. The Administrative Procedure Act applies. The State Banking Commission reviews the Commissioner's decision on…
Can a NC consumer-finance licensee make a loan to a borrower who already has a loan from the licensee's affiliated bank or other lender that is not covered by the Consumer Finance Act?
Yes. Although G.S. 53-179's one-loan rule appears broad, the more specific provisions in G.S. 53-180 and the exemptions in G.S. 53-191 show the legislature meant to allow concurrent loans when the rel…
If a check-cashing company takes a customer's check that both know is currently no good, gives the customer cash minus a fee, and agrees to hold the check until the customer's account has money, is that a regulated loan, and can the company be criminally prosecuted under North Carolina's Consumer Finance Act and bad-check laws?
Yes. A deferred-presentment check-cashing transaction is in essence a small-dollar loan. If the loan amount is $10,000 or less and the fees exceed Chapter 24 interest caps, the company is making consu…
In North Carolina, can a small-loan company sell other things (like motor-club memberships or non-credit insurance) at the same office as its loans, and can it keep the commissions?
The Commissioner of Banks can let a consumer finance licensee run another business on the same premises as its small-loan office. But that licensee cannot benefit, directly or indirectly, from any cha…
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Attorney general opinions in North Carolina are written by the North Carolina Attorney General's office in response to questions from state agencies, legislators, and prosecutors. They are not binding like court decisions, but courts and agencies treat them as persuasive guidance on how state law applies. Every opinion above has a plain-English question and short answer, plus a link to the full original text.