Lobbying government for relaxation of usury law
In this excerpt, Medlin recalls his first experience lobbying government on behalf of his business—his effort to strike down the 6% interest limit imposed by North Carolina law.
Citing this Excerpt
Oral History Interview with John Medlin, May 24, 1999. Interview I-0076. Southern Oral History Program Collection (#4007) in the Southern Oral History Program Collection, Southern Historical Collection, Wilson Library, University of North Carolina at Chapel Hill.
Full Text of the Excerpt
- JOSEPH MOSNIER:
I guess late '60s as you begin being drawn into these sorts of
organizations and contribute your efforts there, Bob Scott's Governor
over in Raleigh. Do you remember sort of first taking the measure of the
state political leadership in so far as the question of its relationship
to business and regulatory decisions say around the issue of business
and what measure you took of it in those years?
- JOHN MEDLIN:
I was not directly involved with Governor Sanford or Governor Moore or
Governor Scott really in the '60s. That role was generally assumed by
the then Chief Executive Officer, top management, which I was not
amongst at that time. But I was more a sideline observer I would guess
of what was going on and getting peripherally involved through a project
here or there or talking to legislators about public policy issues. I
guess the first time I really got involved was in the early '70s when
interest rates kept going up and hit the usury limits in North Carolina.
Six percent was sort of etched in stone. All bankers had to start to hit
the streets and the halls of the General Assembly and start lobbying
saying, 'Look. Inflation has driven the interest
rates beyond what the law permits us to charge, and we can't stay in
business.' So that was my first attempt at trying to influence public
policy in any major way.
- JOSEPH MOSNIER:
Reflect a little bit if you would about that experience. What sorts of
reception did you find over there? What types of access were you able to
gain? Who were the folks you were talking to as you took the broad
measure of the members of the General Assembly in those years?
- JOHN MEDLIN:
I was mainly talking to members of the General Assembly and I guess
higher ups were talking to the Governor. In North Carolina, the Governor
still has limited authority on things like this. He can only use the
bully pulpit. I was talking to legislators and trying to convince them
that despite the fact that the law, the six percent was sort of a magic
number. That this wasn't going to work in the modern world. That had to
open up and let banks make a profit, or they weren't going to be able to
assimilate and distribute capital. We couldn't pay our depositors enough
money to get it. We couldn't charge our loan customers enough money to
have a spread and stay in business. It was pretty difficult at first.
But finally when you sat down though and really got deep into the issue
with most people they understood it. One old legislator I remember. I
can't remember who it was, I remember his expression, 'Sometimes you
have to forget your principles and do what's right. I'll support your
usury bill.' It was early. The regulation of banking became more
restraining as time went on as inflation and technology and other
factors opened up new services, new opportunities. These regulations
held us back. It became a much bigger challenge on a national as well as
state scale to try to get some of the barriers to competition removed.
They were there mainly to protect bankers from themselves as much as
anything because of the behavior perceived out of the twenties and '30s
that caused the system to fail. The separation of investment banking and
commercial banking and those kinds of things which is still being
debated to some extent although it's been pretty much done a way with.