North Carolina Attorney General Josh Stein urged Congress to rescind the so-called True Lender rule, which allows predatory lenders to evade state usury laws and take advantage of people.

“I’ve already gone to court to prevent loan sharks from coming back into our state and taking advantage of North Carolinians, and now I urge Congress to take action to protect people from predatory lenders,” said Attorney General Josh Stein. “We need every tool at our disposal to uphold state law and stop them from coming back into our state.”

The bipartisan coalition of 25 attorneys general are calling for Congress to use the Congressional Review Act to rescind the rule from the Office of the Comptroller of the Currency (OCC). Through the rule, predatory lenders circumvent state interest rate caps through “rent-a-bank” schemes. Banks act as lenders in name only, passing along their state law exemptions to non-bank payday lenders. These arrangements would allow lenders to charge consumers rates that far exceed the rates permissible under North Carolina consumer protection laws.

Under the federal National Bank Act, national banks that are licensed and regulated by the Office of the Comptroller of the Currency (OCC) can charge interest on loans at the maximum rate permitted by their “home” state, even when that interest rate exceeds the 30 percent interest rate limit in North Carolina. National banks have this privilege because they are subject to extensive federal oversight and supervision. For years, non-bank entities such as payday, auto title, and installment lenders have attempted to partner with national banks to exploit these exemptions to offer ultra-high-rate loans in states where such loans are forbidden.

Courts have previously concluded that these non-bank lenders are not the “true lender” of the loan and must follow state interest rate limits. However, the so-called True Lender rule prevents courts from intervening if a national bank is either named as the lender on loan documents or the bank initially “funds” the loan. The rule also fails to require the bank to take any meaningful risk and is a departure from decades of OCC policy.

NC Attorney General Stein previously led a coalition of 24 states objecting to the rule when it was initially proposed by the Trump Administration and sued to stop its implementation in January. However, Congress can pass pending resolutions to repeal the rule and save years of litigation and more quickly protect people.

North Carolina Attorney General Stein is joined in sending this letter by the Attorneys General of Arkansas, California, Colorado, Connecticut, District of Columbia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, South Dakota, Vermont, Virginia, and Wisconsin.

Opinion: Why bankruptcy must be an option for homeowners and small businesses to survive this COVID-19 recession

The U.S. Bankruptcy Code should be overhauled to protect families and savings

Few Americans are unaffected by the recession and economic turmoil COVID-19 has wrought, with unemployment numbers spiking to Great Depression levels and millions in need of temporary benefits such as mortgage forbearance or expanded unemployment insurance. With no obvious end to the pandemic in sight, it’s increasingly clear that many Americans are sitting on a ticking financial time bomb.

If the U.S. is to avoid a disastrous repeat of the Great Recession, there must be a determined response from government. What Americans need now is a substantial overhaul of the U.S. Bankruptcy Code. Without this lifeline, millions of Americans could lose their homes, igniting a chain reaction that will slow the recovery and cripple the U.S. economy for years to come.

So far, efforts by federal and state governments to provide relief to Americans blindsided by COVID-19 have helped to stanch the bleeding. But for many, these measures have come too little, too late. Despite more than 16 million people being unemployed, efforts to pass a second federal aid package have stalled, creating the real possibility that the lack of progress from politicians will accelerate the speed and size of the bankruptcy wave — a wave that would surpass the 2008 economic downtown, and possibly become the worst financial crisis of our lifetime.

The numbers are bleak — currently non-housing debt totals more than $14 trillion and more than 7% of residential mortgages are delinquent. This means millions of people can no longer meet their debt obligations, given the size and scope of this pandemic.

Far from being a way to escape financial obligations, bankruptcy is a key part of the social safety net for those who have been dealt a bad hand — and you’d be hard-pressed to find a worse hand than COVID-19. Bankruptcy is a vital and even necessary means for honest people struggling with finances to obtain relief.

The most common causes of personal bankruptcy include job loss, medical problems and divorce. In this current crisis, bankruptcy may truly be the only real solution for many families and small business owners who never dreamed they would need it. It should be seen as integral to surviving the recession for some Americans as unemployment insurance, loan forbearance, Paycheck Protection Program (PPP) loans, and other relief measures.

Yet the U.S. Bankruptcy Code has not evolved to address today’s global crises. Whatever Congress’ intentions might have been in passing the Bankruptcy Abuse Prevention Consumer Protection Act (BAPCPA) of 2005, it is clear they did not anticipate the seismic economic shocks that Americans have experienced since then. Accordingly, there remain substantial barriers to accessing bankruptcy relief that make a quick and meaningful recovery unavailable to many families.

In May of this year, the House of Representatives took an important step toward reversing this obstacle when it passed H.R. 6800, also known as the “HEROES Act.” The bill includes provisions that would provide critical relief to those burdened by the impact of COVID-19.

For example, it would increase the homestead exemption floor so that debtors forced to file bankruptcy as a result of the pandemic do not lose their homes due to a financial disaster that is far beyond their control. The legislation would protect debtors from having their COVID-19-related benefits, often the only resource standing between them and deprivation, seized by trustees during the bankruptcy process. And it would dramatically expand access to and effectiveness of Chapter 13 bankruptcy by raising debt limits for filing and providing more flexible options for discharging debts or extending repayment plans.

This legislation is a move in the right direction. It now falls to the Senate to craft a companion bill that goes the distance to relieve debtors and provide a light at the end of the tunnel. There is more that can be done, including giving Chapter 13 debtors options to deal with mortgage payments when there has been forbearance on those payments, as well as expanding provisions for relief from onerous student loan debts. One thing is clear: doing nothing is not an option.

Without decisive action, Americans who have lost jobs or businesses through catastrophes beyond their control will be mired in crippling debt they cannot repay. They will not soon return to the earning, spending and investing behavior that will be essential for America’s recovery. The long-term health and competitiveness of the U.S. economy will suffer for this mistake.

Bankruptcy reform is the fresh start — and the economic kick-start — we desperately need. It’s a solution with bipartisan appeal, and with the pandemic not likely to end anytime soon, it’s time for Congress and the Trump administration to come together to make this a priority.

John C. Colwell is president of the National Association of Consumer Bankruptcy Attorneys.

The Most Significant Change to the Bankruptcy Code in 40 Years




UNITED STATES SENATORS (2 for each state):





Consumer Bankruptcy Reform Act of 2020

On December 9, 2020 United States Senator Elizabeth Warren (D-Mass.) and House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) introduced the Consumer Bankruptcy Reform Act of 2020, bicameral legislation to simplify and modernize the consumer bankruptcy system to make it easier for individuals and families forced into bankruptcy to get back on their feet.

The Consumer Bankruptcy Reform Act will make significant changes to the Bankruptcy Code. Among other amendments it will:

• Replace chapter 7 and chapter 13 bankruptcies with a single system.
• Allow for discharge of student loans.
• Allow discharge before completion of payment plans.
• Choice of state or new federal exemptions which includes new homestead floor.
• Assist renters with back rent avoid eviction.
• Allow discharge of local government fines.
• Exempt sources of income and assets traceable to alimony, child support income, the child tax credit, and the Earned Income Tax Credit (EITC).
• Crack down on predatory practices and hold corporate wrongdoers accountable by banning collection of debts that violate consumer protection laws, allowing lawsuits against creditors that attempt to collect previously discharged debt, and preventing creditors from pursuing consumers in mandatory arbitration.
• Allow cram-down and extended re-amortization of home mortgages
• Create a minimum federal homestead exemption




The members of NACBA’s Legislative Committee will discuss the major changes proposed in the Act and how they will affect consumers and attorneys. NACBA’s Legislative Committee has spent hundreds of hours reviewing the proposed changes in the Act and are ready to share their analysis with NACBA Members.


To a debt free future

Thank you Rod and staff for all of your help. Our meetings were all very professional and productive. We could not have been happier with the way our case was handled. We both have renewed energy and look forward to a debt free future. Ashley

Boone, NC

Thank You to Rod and Staff

I would like to say thank you to Rod and staff for all help in our bankruptcy proceeding. Your compassion and help made this trying situation more comfortable and less stressful. You have always been so helpful and Rod was so nice in our meetings. Been a lot of sleepless nights and worry over our financial situation, I now can breathe a little easier, see some light at end of tunnel, and more importantly start planning for the future. This will all be behind us and a new start to the year 2019. I only wish I had made the call much sooner……

Hickory, NC

I Can Start Building My Credit

I just got my discharge papers so my chapter 7 is completed and I can start to building my credit score again. I didn’t want to have to go this route but after trying debt consolidation and get a lawsuit served at my office I realized this was my best option. Rod helped me with a easy payment plan. Thank you Rod and staff.

Taylorsville, NC

I Wish I Hadn’t Waited So Long…

I wish I had not waited so long to meet with the staff at Rod Vujovic’s law office. The staff is caring and so very helpful- the hardest part was making the first call. Be sure to talk to Rod- I am so glad I did

Lenoir, NC

Vujovic Law Saved My Home

Thank you Vujovic Law for saving my home! My chapter 13 bankruptcy has been much easier than I thought and I don’t have to worry about my home- I just make one payment each month to the Trustee- yay.

Alexander County, NC

Run to Vujovic Law

I want to thank Rod and his staff for all the consideration- you made me feel like this was a business decision and that I am  not a failure.  Thank you.  If anyone finds they can not pay their bills RUN to Vujovic Law- I promise they will help.