"If we don't get consumer spending going again, and we don't get it pretty quick, we're headed for depression, not recession," Sen. David Hoyle said. "Banks will not make consumer loans."
Hoyle is also the chairman of a regional bank. He says there are fewer than 80 companies in North Carolina willing to offer loans for less than $10,000 to people who are simply strapped for cash.
However, critics stress that 60 percent of the state's billion dollar consumer loan business is controlled by two national companies, which have taken a beating since the credit crisis -- Citibank and AIG.
"They are the largest players in the industry," said Al Ripley with the North Carolina Justice Center. "And they are the ones pushing the fees the hardest."
The state's lending rules for consumer finance, which ban late fees, are more than 20 years old and the industry says they need an update.
"How do we get a responsible loan product out there that is a fair rate for the consumer, but provides the lender with a reasonable rate of return," said Chris McKinley with Green Cap Financial.
Hoyle admits the timing to push for higher lending fees is very awkward.
"Now, I'm not talking about Goldman Sachs," he said. "I hope they kick their butts. They really deserve it."
Small lenders hoped new late fees could be enacted in 2010, but the proposal was kicked back for more study and a decision, maybe in 2011.