North Carolina is also the heart of the United States Military, home to numerous Army, Air Force, Navy, and Marine Corp bases. Many military families often find themselves in need of cash advances to especially when loved ones are deployed and money is tight. Often times a payday loan is their only option.

North Carolina has been quite dependent on payday loans in the past due to the for mentioned reasons and the industry burgeoned in the state in the early part of the decade. However, do to the unique situations with Military personal and natural disasters many payday loan companies began to take advantage of these unfortunate people. Their high rates of interest on payday loans has prompted the government and many public interest groups such as the North Carolina based Center for Responsible Lending to study the impact on the state’s residents. Interest rates as high as 400 percent lead the North Carolina government to ban payday loans in 2005.

Until 2006, a number of payday loan companies continued to operate in the state using banks as intermediaries and renting their charters to supply small loans. While the cap on the annual percentage rate (APR) in North Carolina is 36%, these companies continued to charge higher interest rates applicable in other states. This loophole allowed payday companies to circumvent North Carolina laws up until recently when the government made arrangements with the largest of such companies within the state. These agreements will serve to bring to an end the illegal practices surrounding cash advances in the North Carolina and prevent any further payday loans being advanced in the state. The companies will be allowed to collect only the principal amount on the outstanding loans.