NORTH CAROLINA GENERAL ASSEMBLY

1979 SESSION

CHAPTER 138

SENATE BILL 228

AN ACT TO REVISE CONTRACT INTEREST RATES ON LOANS, REPEAL CERTAIN INSTALLMENT LOAN RATE PROVISIONS AND SIMPLIFY THE PROVISION THAT CERTAIN LOANS TO CORPORATIONS ORGANIZED FOR PROFIT NOT BE SUBJECT TO A CLAIM OR DEFENSE OF USURY.

The General Assembly of North Carolina enacts:

Section 1.  G.S. 24-1.1 is rewritten to read as follows:

"§ 24-1.1.  Contract rates. — Except as otherwise provided in this Chapter or other applicable law, the parties to a loan, purchase money loan, advance, commitment for a loan or forbearance may contract in writing for the payment of interest not in excess of:

(1)        twelve percent (12%) per annum where the principal amount is twenty-five thousand dollars ($25,000) or less; or

(2)        any rate agreed upon by the parties where the principal amount is more than twenty-five thousand dollars ($25,000).

As used in this section, interest shall not be deemed in excess of the rates provided where interest is computed monthly on the outstanding principal balance and is collected not more than 31 days in advance of its due date. Nothing in this section shall be construed to authorize the charging of interest on committed funds prior to the disbursement of said funds."

Sec. 2.  G.S. 24-1.2(2) is amended by deleting the words and figures "three hundred thousand dollars ($300,000)" in lines 1 and 2 and inserting therein the words and figures "twenty-five thousand dollars ($25,000)".

Sec. 3.  G.S. 24-1.2(3) and G.S. 24-1.2(4) are repealed.

Sec. 4.  G.S. 24-1.2(5) is renumbered as G.S. 24-1.2(3).

Sec. 5.  G.S. 24-9 is rewritten to read as follows:

"§ 24-9.  Loans to corporations organized for profit not subject to claim or defense of usury. — Notwithstanding any other provision of this Chapter or any other provision of law, any foreign or domestic corporation substantially engaged in commercial, manufacturing or industrial pursuits for pecuniary gain may agree to pay, and any lender may charge and collect from such corporation, interest at any rate which such corporation may agree to pay in writing, and as to any such transaction the claim or defense of usury by such corporation and its successors or anyone else in its behalf is prohibited."

Sec. 6.  This act is effective upon ratification.

In the General Assembly read three times and ratified, this the 12th day of March, 1979.