(a)        Scope. – No person shall engage in the business of lending in amounts of fifteen thousand dollars ($15,000) or less and contract for, exact, or receive, directly or indirectly, on or in connection with any such loan, any charges whether for interest, compensation, consideration, or expense, or any other purpose whatsoever, which in the aggregate are greater than permitted by Chapter 24 of the N.C. Gen. Stat., except as provided in and authorized by this Article, and without first having obtained a license from the Commissioner. The word “lending” as used in this section, includes, but is not limited to, endorsing or otherwise securing loans or contracts for the repayment of loans.

(b)        Evasions. – Subsection (a) of this section applies to any person that seeks to avoid its application by any device, subterfuge, or pretense whatsoever. Devices, subterfuges, and pretenses include any transaction in which a cash rebate or other advance of funds is offered and all of the following apply:

(1)        The cash advance is made contemporaneously with the transaction or soon thereafter.

(2)        The amount of the cash advance is required to be repaid at a later date.

(3)        The selling or providing of any item, service, or commodity with the transaction is incidental to, or a pretext for, the advance of funds.

(c)        Penalties; Commissioner to Provide Facts and Testify. – Any person not exempt from this Article, or any officer, agent, employee, or representative thereof, that fails to comply with or that otherwise violates any of the provisions of this Article is guilty of a Class 1 misdemeanor. Each violation is a separate offense. The Commissioner shall provide the district attorney of the court having jurisdiction of any offense under this subsection with all facts and evidence in the Commissioner’s actual or constructive possession and shall testify as to these facts upon the trial of any person for the offense.

(d)       Additional Penalties. – Any contract of loan, the making or collecting of which violates any provision of this Article, or rule thereunder, except as a result of accidental or bona fide error of computation is void, and the licensee or any other party in violation shall not collect, receive, or retain any principal or charges whatsoever with respect to the loan. If an affiliate operating in the same office or subsidiary operating in the same office of a licensee makes a loan in violation of N.C. Gen. Stat. § 53-180(i), the affiliate or subsidiary may recover only its principal on the loan. ?(1955, c. 1279; 1957, c. 1429, s. 8; 1961, c. 1053, s. 1; 1969, c. 1303, ss. 13, 14; 1973, c. 47, s. 2; c. 1042, s. 1; 1979, c. 33, s. 1; 1985, c. 154, ss. 6, 13; 1987, c. 444, s. 3; 1989, c. 17, ss. 1, 13; 1989 (Reg. Sess., 1990), c. 881, s. 1; 1993, c. 539, s. 425; 1994, Ex. Sess., c. 24, s. 14(c); 2006-243, s. 2; 2013-162, s. 1; 2021-84, s. 1.)

Attorney's Note

Under the N.C. Gen. Statutes, punishments for crimes depend on the classification. In the case of this section:
ClassPrisonFine
Class 1 misdemeanorup to 120 days
For details, see § 15A-1340.23

Terms Used In North Carolina General Statutes 53-166

  • Contract: A legal written agreement that becomes binding when signed.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • following: when used by way of reference to any section of a statute, shall be construed to mean the section next preceding or next following that in which such reference is made; unless when some other section is expressly designated in such reference. See North Carolina General Statutes 12-3
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Testify: Answer questions in court.
  • Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.