North Carolina's Personal Loan Industry Reviews Important New Video Project

Online, January 26, 2011 (Newswire.com) - Burlington, NC -- With the wide variety of consumer credit options exploding onto the ï¬nancial landscape over the past twenty years, the traditional consumer loan, or personal installment loan, is experiencing renewed positive interest by both consumers and legislators. The reason? In a time of ï¬nancial crisis, the historical position of the consumer installment loan as the responsible and most disciplined personal loan product is gaining both widespread support and respect. And a new video project is addressing the concerns of the consumer loan industry in the U.S. today.

On January 2, 2011, a new film was released as the beginning of a series which includes Professor Emeritus, Dr. Frederick Miller. Its focus is the personal installment loan and the importance of this product as an affordable and disciplined financial option. Dr. Miller, who is a recognized academic and expert in the area of consumer finance law, provided an important overview of the historical beginnings of the personal finance loan industry. In its continuing effort to develop a greater understanding of the role of the personal consumer loan for both legislators and the public, members of North Carolina's state lending association, the RLNC, were please to view the launch of the film series, available at Responsible Consumer Loans.

Consumer finance installment loans, widely recognized for offering a responsible and disciplined product for the public, have had a long and significant history. Dr. Miller addresses this history and the need for these loans in today's economy.

"One of the functions of a small loan act should be to make these kinds of relatively small loans available legally and at reasonable terms." - Dr. Frederick Miller

As this concept of availability of the traditional consumer loan is being addressed both in NC and elsewhere in the US, Dr. Miller warns: "We haven't learned from history. The small loan acts were a step forward given the circumstances at the turn of the last century. And this effort to re-introduce some arbitrary price control is a step backward." For those who might wish to make this type of non-bank loan available only through the banks or credit unions. "You simply can't do it without some sort of taxpayer subsidy or Community Reinvestment Act inducement." He continued to explain that this step to force taxpayers to foot the bill would be a mistake and "a shame."

In the new film, Dr. Miller was joined by Dr. Charles Richards, author and psychotherapist, who addresses why we do the things we do in relationship to money, and speaks about the psychology of our behaviors regarding building wealth. Dr. Richards has also been reviewing the role of the non-bank consumer finance industry and its importance in providing appropriate and responsible credit solutions to individual borrower's unique financial circumstance.

"The importance of the consumer installment loan industry is clear when we understand that the challenges, which led to its creation over 100 years ago, still exist today. When you look at what has made the traditional installment loan the responsible personal loan option for consumers from all walks of life, it is really quite unfortunate that most state legislatures have not sought to work more towards ensuring the continuing sustainability of this important industry." - Dr. Charles Richards

After meeting with Dr. Miller at the University of Oklahoma, Dr. Richards concluded, "I am pleased that we have been given an opportunity for Dr. Miller to give us the historical perspective of personal loans and what it takes for them to remain available and viable in today's business climate."

For the past year, the State of North Carolina has been looking into the consumer installment loan industry's challenges in maintaining sustainable businesses in light of a state regulatory rate schedule that was set in 1983. Last January, a Joint Legislative Study Commission looked into the long-term industry challenges in meeting ongoing personal loan needs in North Carolina. The personal loan industry is working with the legislators to help ensure the viability of this small-dollar (generally $500 to $10,000) lending option for the general public.

The Joint Legislative Study Commission directed the North Carolina Commissioner of Banks to review the information gathered during the study and prepare for the 2011 North Carolina Legislature's recommendations. These recommendations are meant to work towards industry sustainability with respect to profitability, while maintaining a strong focus on consumer protections.

"This is about keeping money moving for the middle class in America and we all need to understand how very important this is to the health of our overall economy." - Dr. Charles Richards

"One of the reasons that I'm so passionate about communicating the benefits of this industry is that it's an option that's worked really well - since it involves relationships, responsibility and accountability. But this industry has also been under-recognized with the explosion of new lending options," explained Dr. Richards. "I don't think most people understand the significance of what this industry provides - it serves a niche that banks simply can't."

FOR INFORMATION, CONTACT: Erin Wagner, RLNC Executive Committee [336-794-3833, [email protected]]