unlawfulcharges.comWhat's happening at LoanMart (Wheels Financial Group)?
LoanMart, operated by Wheels Financial Group of Van Nuys, California, makes car title loans to North Carolina residents at rates ranging from 36% to 300% APR. North Carolina's ceiling on interest for a consumer loan of that size is 16% a year. The rates LoanMart charges are many multiples of it.
The numbers on LoanMart's own paperwork show what that does to a borrower. A sample loan published on LoanMart's website showed $3,000 borrowed at 170% APR with total payments of $15,431, more than five times the amount borrowed. In one documented case, LoanMart charged 100.73% interest on a $2,951 loan. Regulators in other states have reached the same conclusion about the same product: California fined LoanMart $450,000, and in January 2026 Oregon ordered $900,000 in restitution to borrowers charged 126%–178% APR.
LoanMart routes its North Carolina loans through a "rent-a-bank" arrangement with Capital Community Bank in Utah, then points to Utah law, which has no rate ceiling, as the law governing the loan.
North Carolina's rate ceiling and the remedies behind it
North Carolina sets a legal ceiling on what a consumer loan can cost. For loans under $25,000, that ceiling is 16% a year (N.C. Gen. Stat. § 24-1.1). A rate above the ceiling is lawful only where a specific statute authorizes it, and no North Carolina statute authorizes a 170% car title loan.
The remedies are what give the ceiling its force. Under §§ 24-1.1 and 24-2, a lender that charges a usurious rate forfeits all the interest on the loan, and the borrower can recover twice the interest already paid - not just the amount above the ceiling.
Charging a usurious rate is also an unfair and deceptive trade practice under North Carolina's UDTPA (Ch. 75, § 75-1.1), which carries treble damages and attorney fees. A borrower elects between the Ch. 24 usury remedy and the Ch. 75 UDTPA remedy - § 24-10.1 does not allow both - and which one produces more depends on the size of the loan and how much interest has been paid.
"Utah law governs your loan"
The rent-a-bank structure exists to get around the rate cap. A lender that cannot charge 170% in North Carolina partners with a bank chartered in a state with no ceiling, papers the loan through that bank, and adds a clause saying the other state's law applies. The borrower still lives in North Carolina, drives the North Carolina car that secures the loan, and makes payments from a North Carolina account.
North Carolina closed that door by statute. Under § 24-2.1, any loan made to a North Carolina resident is treated as made in North Carolina, no matter where the lender sits or where the paperwork was signed. A choice-of-law clause cannot be used to contract around the state's usury protections.
So the Utah defense does not resolve these claims. A North Carolina borrower's claim turns on the rate charged to a North Carolina resident, not on which state's law is named in the loan agreement.
"But you agreed to the rate"
The most common response to a usury claim is that the borrower knew the rate, signed the contract, and got the money. That defense does not work against a rate ceiling.
A usury statute is not a disclosure rule. A disclosure rule asks whether the consumer was told the price. A rate ceiling says that above a certain price the loan is unlawful no matter how clearly it was disclosed or how willingly it was accepted. North Carolina made that choice deliberately: a borrower who needs cash against a car title in a hurry is in no position to negotiate.
Signing the agreement does not waive the claim. Neither does making every payment on time, or having already paid the loan off. Interest already paid is the measure of the recovery: the statute lets a borrower collect double what was paid in interest.
What you could recover, and what you'll need
There are two paths, and each claimant elects one:
- Usury (Ch. 24): forfeiture of all interest on the loan, plus recovery of twice the interest already paid.
- UDTPA (Ch. 75): treble damages plus attorney fees.
Because attorney fees are recoverable under the UDTPA, these claims are worth pursuing individually rather than only in the aggregate, which matters for borrowers whose loans were a few thousand dollars.
Timing matters. A usury claim carries a two-year statute of limitations counted per payment, and each usurious payment starts its own clock. A currently open loan generates a new claim with every payment, and a recently closed loan may still be well within the window.
What proves the case is ordinary documentation: the loan agreement showing the APR, your payment history, and any account statements. You do not need any of it in hand to sign up. Having it helps, but we will work with you to gather what is needed, and we can obtain records from the lender in the proceeding. You pay nothing unless we recover compensation on your behalf.
The legal basis
Why this may be illegal
LoanMart (operated by Wheels Financial Group, Van Nuys, CA) makes car title loans to North Carolina residents at rates of 36% to 300% APR — many multiples of North Carolina's 16% ceiling on consumer loan interest. LoanMart uses a "rent-a-bank" arrangement through Capital Community Bank (Utah) to claim Utah law governs the loan, but under NC § 24-2.1 any loan made to a North Carolina resident is treated as made in North Carolina, and a choice-of-law clause cannot be used to escape North Carolina's usury protections. LoanMart has been fined $450,000 by California and ordered to pay $900,000 in restitution to Oregon borrowers (January 2026) for charging 126%–178% APR. In one documented case, LoanMart charged 100.73% interest on a $2,951 loan. A sample loan on LoanMart's own website showed a $3,000 loan at 170% APR with total payments of $15,431 — more than five times the amount borrowed.
The law
NC Gen. Stat. Ch. 24 §§ 24-1.1, 24-2: a rate above North Carolina's 16% ceiling on consumer loans under $25,000 is usurious. The lender forfeits all interest on the loan, and the borrower may recover twice the interest already paid. Ch. 75 § 75-1.1 (UDTPA): charging a usurious rate is an unfair and deceptive trade practice carrying treble damages plus attorney fees; a claimant elects Ch. 24 or Ch. 75, not both (§ 24-10.1). § 24-2.1: North Carolina law governs any loan made to a North Carolina resident, so the rent-a-bank Utah choice-of-law defense is unenforceable. The Oregon $900,000 restitution order (Jan. 2026) and the California $450,000 fine establish a pattern of willful conduct.
What you could recover
North Carolina law gives you two ways to recover, and you choose one of them. Under the state's usury law, a lender that charged more than the legal ceiling forfeits all of the interest on your loan, and you can recover twice the interest you have already paid. Under the unfair and deceptive trade practices law, you can recover three times your damages plus attorney fees. You elect one or the other, not both.
Timing works in your favor while a loan is still open. The two-year window runs separately for each payment, so every payment you make on an outstanding loan starts its own claim, and a loan you recently paid off may still be well within the window.
Where the lender is based does not change any of this. A loan made to a North Carolina resident is treated as a North Carolina loan, and a clause in the contract naming some other state's law cannot be used to get around North Carolina's limits.
How your claim would be handled
Claims like this are handled as individual arbitration cases — private proceedings, no courtroom. For LoanMart (Wheels Financial Group), cases are typically administered through AAA.
What You Borrowed* vs. What the Loan Actually Costs*
| What You Borrowed* ($3,000 car title loan · 170% APR — North Carolina's ceiling is 16%) | $3000.00 |
| Interest and finance charges over the life of the loan | +$12431.00 |
| What the Loan Actually Costs* (A usurious loan forfeits ALL of its interest, not just the amount above North Carolina's ceiling — and you may recover twice the interest you have already paid) | $15431.00 |
Figures shown are illustrative examples, not records of an actual transaction; your amounts may differ.
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Check if you qualifyFrequently asked questions
Do I have to pay for this?
You don't pay anything unless we recover compensation on your behalf. Our legal team works on contingency, which means we only get paid if you do.
Will this affect my vehicle?
Your claim is about the interest you were charged, not about your right to the car. Signing up does not put your vehicle at risk, and if the lender has engaged in unlawful collection or repossession conduct, we can address that too.
I signed the contract and knew the rate. Do I still have a claim?
Yes. A rate ceiling is not a disclosure rule — above the ceiling the interest is unlawful regardless of how plainly the rate was disclosed or how willingly the contract was signed. Interest you already paid is the measure of the recovery.
Do I need my loan documents?
Having loan documents helps, but you can sign up without them. We'll work with you to gather what's needed, and records can be obtained from the lender in the proceeding.
What is Maginnis Howard?
Maginnis Howard is a consumer protection and personal injury law firm serving clients nationwide. You may find more details about us at www.carolinalaw.com.
Will I have to go to court?
No, we will file everything on your behalf.
What if I have other questions?
For all other questions, contact us at unlawfulcharges@carolinalaw.com.
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