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Excerpt from Oral History Interview with John Medlin, May 24, 1999. Interview I-0076. Southern Oral History Program Collection (#4007) See Entire Interview >>

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.

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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.

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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?
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.
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?
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.