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News : Easy Cash Advance Payday Loan
House OK's payday loan interest cap
January 18, 2008
CONCORD – An annual interest rate cap of 36 percent on short-term consumer loans cleared the House of Representatives Wednesday.
The 207-124 vote sends the bill to the state Senate where it’s a 2008 priority for Senate President Sylvia Larsen, D-Concord.
Already, 14 of the 24 senators have signed onto a bill from Sen. David Gottesman, D-Nashua, which includes enhanced enforcement powers for banking regulators.
“These lenders pretend to provide easy credit to low-income people, but in fact, what they do is trap people into cycles of debt, paying off loan after loan after loan,” charged state Rep. Michael Marsh, D-Greenland.
But Rep. Marshall Quandt, R-Exeter, said cash-strapped citizens need this alternative.
The industry issued 160,000 short-term loans totaling $59 million in 2007.
“We know the interest rates are high, whether we like it or not. Ladies and gentlemen, just do the numbers; there is a need. There is a need for this option,” Quandt said.
Payday loan company executives say if this cap became law, they would close up shop and leave the state as they did last summer in Oregon after that state adopted this cap.
But in a statement, Advance America CEO Ken Compton said his group is still seeking a middle ground.
“We hope to continue offering payday loans in New Hampshire. It is a product that customers are satisfied with and use responsibly, and we look forward to working with legislators to make that possible,” Compton said.
The cap would translate into $2.96 in interest per $100 borrowed on a 30-day title loan and $1.38 per $100 – about 10 cents a day – on a $100 payday loan for 14 days.
Compton said $1.38 per $100 borrowed wouldn’t be enough to cover staffing, rent, electricity and other basic business expenses.
Rep. David Smith, D-Nashua, sponsored the rate cap bill that won the support of Attorney General Kelly Ayotte’s office, Banking Commissioner Peter Hildreth, New Hampshire Welfare Administrators Association and interest groups such as NH Legal Assistance and state chapter of the American Association of Retired Persons.
Gov. John Lynch has not publicly taken a position on it.
Source : http://www.nashuatelegraph.com/ |
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