NHLA Leads Efforts in Passage of HB267

 

NHLA Leads Efforts in Passage of HB267

On July 8, 2008, Governor Lynch signed into law House Bill 267, which provides important protections to consumers regarding payday and car title loans. For the past year and a half, NHLA was hard at work in support of House Bill 267, which caps the interest rate on payday and car title loans at 36 percent. Payday loans are small, short-term loans secured by a personal check, which the lender cashes if the consumer does not repay the loan. Car title lenders take the title to a consumer vehicle as security; if the consumer defaults, the vehicle may be repossessed and sold at auction. Until the passage of House Bill 267, New Hampshire had no interest rate cap on small loans, and payday and car title lenders typically charge between 300 and 500 percent. NHLA has fielded dozens of inquiries from consumers ensnared in the payday and car title lending debt trap, a cycle of repeat borrowing that strips much-needed income away from budgets that are already strained. The financial devastation experienced by low-income consumers as a result of the debt trap led NHLA to make interest rate reform a policy priority during the 2007 and 2008 legislative sessions. The rationale is straightforward: only responsible lending benefits people who are struggling to lift themselves out of poverty. To help facilitate passage of the bill, NHLA reached out to and coordinated the efforts of a broad and diverse coalition of legislators, state agencies, and service providers who supported the legislation.

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