N.H. senate approves payday loan interest rate cap

Saturday, February 16, 2008

The Senate has approved a cap on payday lending in New Hampshire, a move the industry says will put it out of business.

The plan sets a 36 percent interest rate cap on all small loans primarily affecting payday and title loans. The bill already passed in the House but the Senate version changes the effective date, so it will have to go back to the House for agreement. Governor John Lynch says he’ll sign it.

Supporters said they wanted to prevent people from being victimized by extremely high interest rates.

Opponents, including Advance America, which writes payday loans around the country, say the cap will put the industry out of business. It operates 24 stores, with 50 employees, in the state.

The Senate also voted to create a commission to study consumer credit, but opponents of the cap say the lenders will go out of business before any recommendations could be addressed.

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