| 14 | 13 | | A BILL TO BE ENTITLED 1 |
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| 15 | 14 | | AN ACT TO LOWER THE CAP ON CREDIT CARD INTEREST AND TO MAKE 2 |
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| 16 | 15 | | TECHNICAL CHANGES . 3 |
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| 17 | 16 | | The General Assembly of North Carolina enacts: 4 |
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| 18 | 17 | | SECTION 1. G.S. 24-11 reads as rewritten: 5 |
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| 19 | 18 | | "ยง 24-11. Certain revolving credit charges. 6 |
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| 20 | 19 | | (a) On the extension of credit under an open-end credit or similar plan (including 7 |
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| 21 | 20 | | revolving credit card plans, plans and revolving charge accounts, but excluding any loan made 8 |
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| 22 | 21 | | directly by a lender under a check loan, check credit credit, or other such similar plan) under 9 |
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| 23 | 22 | | which no service charge shall be imposed upon the consumer or debtor if the account is paid in 10 |
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| 24 | 23 | | full within 25 days from the billing date, but upon which there may be imposed an annual charge 11 |
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| 25 | 24 | | not to exceed twenty-four dollars ($24.00), there may be charged and collected interest, finance 12 |
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| 26 | 25 | | charges charges, or other fees at a rate in the aggregate not to exceed one and one-half percent 13 |
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| 27 | 26 | | (11/2%) one and seventeen hundredths percent (1.17%) per month computed on the unpaid 14 |
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| 28 | 27 | | portion of the balance of the previous month less payments or credit within the billing cycle or 15 |
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| 29 | 28 | | the average daily balance outstanding during the current billing period. 16 |
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| 30 | 29 | | (a1) If the lender chooses not to impose an annual charge under this section, the lender 17 |
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| 31 | 30 | | may impose a service charge not to exceed two dollars ($2.00) per month on the balance of any 18 |
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| 32 | 31 | | account which that is not paid in full within 25 days from the billing date. 19 |
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| 33 | 32 | | (a2) No person, firm firm, or corporation may shall charge a discount or fee in excess of 20 |
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| 34 | 33 | | six percent (6%) of the principal amount of the accounts acquired from or through any vendors 21 |
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| 35 | 34 | | or others providing services who that participate in such the plan. 22 |
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| 36 | 35 | | (b) On revolving credit loans (including check loans, check credit credit, or other 23 |
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| 37 | 36 | | revolving credit plans whereby by which a bank, banking institution institution, or other lending 24 |
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| 38 | 37 | | agency makes direct loans to a borrower), if agreed to in writing by the borrower, such the lender 25 |
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| 39 | 38 | | may collect interest and service charges by application of a monthly periodic rate computed on 26 |
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| 40 | 39 | | the average daily balance outstanding during the billing period, such rate period at a rate not to 27 |
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| 41 | 40 | | exceed one and one-half percent (11/2%). 28 |
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| 42 | 41 | | (c) Any An extension of credit under an open-end or similar plan under which there is 29 |
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| 43 | 42 | | charged a monthly periodic rate greater than one and one-quarter percent (11/4%) may shall not 30 |
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| 44 | 43 | | be secured by real or personal property or any other thing of value, provided, that this subsection 31 |
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| 45 | 44 | | shall value. This subsection, however, does not apply to consumer credit sales regulated by 32 |
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| 46 | 45 | | Chapter 25A, the Retail Installment Sales Act; provided further, that in any Chapter 25A ("Retail 33 |
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| 47 | | - | Installment Sales Act") of the General Statutes. In an action initiated for the possession of 34 General Assembly Of North Carolina Session 2025 |
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| 48 | | - | Page 2 House Bill 508-First Edition |
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| 49 | | - | property in which a security interest has been taken, a judgment for the possession thereof of the 1 |
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| 50 | | - | property shall be restricted to commercial units (as defined in G.S. 25-2-105(6)) for which the 2 |
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| 51 | | - | cash price was one hundred dollars ($100.00) or more. 3 |
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| 52 | | - | (d) The In this section, the term "billing date" shall mean means any date selected by the 4 |
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| 53 | | - | creditor and the creditor. The bill for the balance of the account must shall be mailed to the 5 |
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| 54 | | - | customer at least 14 days prior to the date specified in the statement as being the date by which 6 |
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| 55 | | - | payment of the new balance must shall be made in order to avoid the imposition of any finance 7 |
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| 56 | | - | charge. 8 |
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| 57 | | - | (d1) A lender may charge a party to a loan or extension of credit governed by this section 9 |
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| 58 | | - | a late payment charge not to exceed five dollars ($5.00) on accounts having an outstanding 10 |
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| 59 | | - | balance of less than one hundred dollars ($100.00) and ten dollars ($10.00) on accounts having 11 |
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| 60 | | - | an outstanding balance of one hundred dollars ($100.00) or more, for any payment past due for 12 |
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| 61 | | - | 30 days or more; provided, in more. In no case shall the late charge exceed the outstanding 13 |
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| 62 | | - | principal balance. If a late payment charge has been once imposed with respect to a late payment, 14 |
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| 63 | | - | no late charge shall be imposed with respect to any future payment which that would have been 15 |
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| 64 | | - | timely and sufficient but for the previous default. 16 |
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| 65 | | - | (e) An annual or service charge pursuant to this section upon an existing credit card 17 |
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| 66 | | - | account upon which the charge has not previously been imposed may shall not be imposed unless 18 |
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| 67 | | - | the lender has given the cardholder at least 30 days days' notice of the proposed charge, charge 19 |
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| 68 | | - | and has advised the cardholder of his the cardholder's right not to accept the new charge. This 20 |
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| 69 | | - | notice shall be bold and conspicuous, conspicuous and shall be on the face of the periodic billing 21 |
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| 70 | | - | statement or on a separate statement which that is clearly noted on the face of the periodic billing 22 |
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| 71 | | - | statement provided to the cardholder. If the cardholder does not accept the new charge upon an 23 |
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| 72 | | - | existing credit card account, the lender may require that the cardholder make no further use of 24 |
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| 73 | | - | the account beyond the 30-day period in order to avoid paying the annual charge, but the 25 |
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| 74 | | - | cardholder shall be is entitled to pay off any remaining balance according to the terms of the 26 |
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| 75 | | - | credit agreement. Nothing in this subsection shall limit limits the lender from decreasing any 27 |
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| 76 | | - | rates or fees to the cardholder forthwith. Should any cardholder. If a cardholder within 12 months 28 |
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| 77 | | - | of the initial imposition of an annual charge rescind his rescinds the cardholder's credit card 29 |
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| 78 | | - | contract and surrender surrenders all cards issued under the contract to the lender, he shall be the 30 |
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| 79 | | - | cardholder is entitled to a prorated refund of the annual fee previously charged, credited to the 31 |
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| 80 | | - | cardholder's credit card account." 32 |
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| 81 | | - | SECTION 2. This act becomes effective October 1, 2025, and applies to interest, 33 |
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| 82 | | - | finance charges, and fees charged on or after that date. 34 |
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| 46 | + | Installment Sales Act") of the General Statutes. In an action initiated for the possession of 34 |
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| 47 | + | property in which a security interest has been taken, a judgment for the possession thereof of the 35 |
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| 48 | + | H.B. 508 |
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| 49 | + | Mar 25, 2025 |
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| 50 | + | HOUSE PRINCIPAL CLERK General Assembly Of North Carolina Session 2025 |
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| 51 | + | Page 2 DRH30196-MU-13 |
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| 52 | + | property shall be restricted to commercial units (as defined in G.S. 25-2-105(6)) for which the 1 |
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| 53 | + | cash price was one hundred dollars ($100.00) or more. 2 |
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| 54 | + | (d) The In this section, the term "billing date" shall mean means any date selected by the 3 |
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| 55 | + | creditor and the creditor. The bill for the balance of the account must shall be mailed to the 4 |
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| 56 | + | customer at least 14 days prior to the date specified in the statement as being the date by which 5 |
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| 57 | + | payment of the new balance must shall be made in order to avoid the imposition of any finance 6 |
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| 58 | + | charge. 7 |
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| 59 | + | (d1) A lender may charge a party to a loan or extension of credit governed by this section 8 |
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| 60 | + | a late payment charge not to exceed five dollars ($5.00) on accounts having an outstanding 9 |
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| 61 | + | balance of less than one hundred dollars ($100.00) and ten dollars ($10.00) on accounts having 10 |
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| 62 | + | an outstanding balance of one hundred dollars ($100.00) or more, for any payment past due for 11 |
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| 63 | + | 30 days or more; provided, in more. In no case shall the late charge exceed the outstanding 12 |
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| 64 | + | principal balance. If a late payment charge has been once imposed with respect to a late payment, 13 |
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| 65 | + | no late charge shall be imposed with respect to any future payment which that would have been 14 |
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| 66 | + | timely and sufficient but for the previous default. 15 |
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| 67 | + | (e) An annual or service charge pursuant to this section upon an existing credit card 16 |
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| 68 | + | account upon which the charge has not previously been imposed may shall not be imposed unless 17 |
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| 69 | + | the lender has given the cardholder at least 30 days days' notice of the proposed charge, charge 18 |
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| 70 | + | and has advised the cardholder of his the cardholder's right not to accept the new charge. This 19 |
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| 71 | + | notice shall be bold and conspicuous, conspicuous and shall be on the face of the periodic billing 20 |
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| 72 | + | statement or on a separate statement which that is clearly noted on the face of the periodic billing 21 |
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| 73 | + | statement provided to the cardholder. If the cardholder does not accept the new charge upon an 22 |
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| 74 | + | existing credit card account, the lender may require that the cardholder make no further use of 23 |
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| 75 | + | the account beyond the 30-day period in order to avoid paying the annual charge, but the 24 |
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| 76 | + | cardholder shall be is entitled to pay off any remaining balance according to the terms of the 25 |
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| 77 | + | credit agreement. Nothing in this subsection shall limit limits the lender from decreasing any 26 |
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| 78 | + | rates or fees to the cardholder forthwith. Should any cardholder. If a cardholder within 12 months 27 |
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| 79 | + | of the initial imposition of an annual charge rescind his rescinds the cardholder's credit card 28 |
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| 80 | + | contract and surrender surrenders all cards issued under the contract to the lender, he shall be the 29 |
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| 81 | + | cardholder is entitled to a prorated refund of the annual fee previously charged, credited to the 30 |
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| 82 | + | cardholder's credit card account." 31 |
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| 83 | + | SECTION 2. This act becomes effective October 1, 2025, and applies to interest, 32 |
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| 84 | + | finance charges, and fees charged on or after that date. 33 |
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