North Carolina legislators seem likely to reject a bill that would remove or reduce limits on interest rates and fees for home equity loans and credit cards.

The measure is one in a growing string of legislative moves by states to loosen rate and fee caps in recent years - but most of the others have succeeded.

"North Carolina is out of step" with states that have already repealed rate and fee caps, said Christian T. Jones, of counsel at Jones, Day, Reavis & Pogue, a Cleveland law firm.

Even Maine recently moderated its interest rate and fee limitations, he said, and it was one of the most notoriously tough states regarding banking regulations.

The North Carolina bill would not affect home equity lending much because competition has already reduced rates substantially in the state, said Paul H. Stock, executive vice president and counsel, Community Bankers Association of North Carolina. But the bill would let banks be more active in lending to borrowers with poor credit histories, who must pay higher rates, he said.

Regarding credit card lending, the bill would help stem a migration of card companies out of North Carolina, said industry executives. Large banks have moved credit card operations out of North Carolina in recent years because of its poor business climate.

North Carolina is among the least hospitable states to credit card lenders, according to a study by MasterCard International, New York. Its April study ranked North Carolina the 38th-best state in which to do credit card lending, down from 28th in 1994.

The reason for the decline: "Other states increased their attractiveness," said William P. Binzel, MasterCard's director of government relations.

Many states have taken to easing pricing rules to attract credit card businesses, he said, citing Utah and Colorado as examples.

North Carolina's proposed legislation has already gone through the wringer. Introduced in March, the bill went to committee. The panel was about to report it out for a floor vote but postponed action May 9, and the measure has sat in committee ever since.

The bill's fate should be decided within a week.

Mr. Stock of the state Community Bankers Association said the bill's latest version would not drop caps altogether, just limit them. The measure is important for introducing a "probanking climate" in North Carolina, he said.

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