The office of Roy Cooper, Attorney General, can be reached at:
(919) 716-6400

They would probably be best equipped to answer your question regarding the specific situation in North Carolina.

You mentioned that you placed a stop payment to this account for one year. Please keep in mind that your bank will purge this stop payment order from their system in exactly one year. Cunning payday lenders will hold on to your check and attempt to cash it after the stop payment order expires. If the check doesn’t turn up after a year, you may want to renew the stop payment order.

Pitfalls When You Stop Payment on a Payday Loan Check:

Juanita said:

“They cannot report you to a credit bureau, so that’s not an issue. ”

While it is true that a payday lender would not report you to a credit bureau, failing to pay this loan may come back and bite you at a later date.

Payday lenders do not report to the major credit reporting bureaus. Instead, they report to TeleTrack, a sub-prime lender database.

TeleTrack:

If you don’t repay this loan, you may have trouble getting sub-prime loans (payday loans and other cash convenience products) in the future. Of course, you are better off not using sub-prime lenders in the first place (as they are very expensive credit) but keep in mind that, by not repaying this debt, you may be limiting your options in the future.

More importantly, the payday lender may turn your account over to a collection agency. If that happens, the collection agency may report it to the major credit reporting bureaus and that would hurt your credit rating.

If you do decide that you want to repay this loan, try talking to a credit union. They should be able to get you a longer term loan with a much lower APR (about 36%), which is less than a tenth of the cost of most payday loans. Also, a credit union will be able to offer free credit counseling to help you avoid problems in the future.

National Credit Union Administration

Again, talk it over with the NC Department of Justice / Attorney General first and see where you stand legally and whether or not the company can come after you.

Best of Luck.

UPDATE (August 10, 2006): Was the company you were dealing with a small ‘mom and pop’ shop or a major chain? If it was a small shop that closed their doors for good, you probably don’t have much to worry about. If it was a major chain, however, they may have just *suspended* collection in North Carolina while they appeal the ban on payday loans. If they win the appeal, they may resume collection!

Another place you may want to contact is the North Carolina Commissioner of Banks.

The Commissioner is responsible for, among other things, the registration and licensing of consumer finance companies.