New Hampshire Payday Loans Get Renamed

In New Hampshire payday loans are not actually illegal, charging over 36% interest is. When the interest rate on loans was capped all of the payday loan operations closed up and moved out.

House bill 160 is trying to bring back these high interest loans again but calling them “installment loans”. Title loans are also in the process of coming back although voted in, the bill was vetoed by Governor John Lynch. The House has since overridden his veto and the matter will now proceed to the Senate, for consideration next year.

John Hunt, chairman of the House Commerce Committee, also seems to be in favour of these New Hampshire payday loans or installment loans. He has been quoted saying “usury is in the eye of the beholder,”which would imply that it’s a matter of opinion. Republican Fred Rice was also quoted saying, “you can’t legislate against stupidity,” he said. “If the interest rates are too high, don’t go there. It boils down to free enterprise.”

Wells Fargo has already started to offer short-term high-interest loans in New Hampshire through the internet. The State can’t do much about these online payday loans as Wells Fargo is a bank, and federally regulated, and they do not have a physical presense in the New Hampshire.

The new bill does provide some protection against loan rollovers that trap borrowers in a debt cycle. There is a cooling off period of a couple of days when the loan is paid off early. This restriction is not applicable if the loan is not paid off early for some reason, and would allow for back to back loans. Sounds like a new type of roll over to Sarah Mattson, a New Hampshire Legal Assistance attorney who would like to see payday loans banned completely.

“You pay off your loan with your paycheck. You don’t have money for rent. And you get a new one while you are in the store,” she said. “There is nothing to prevent back-to-back loans.” Alex Koutroubas, a lobbyist for Advance America, a national payday lender, acknowledged that Mattson was right.

The House Commerce Committee is examining the New Hampshire payday loans matter further at this time, however, they seem to be leaning toward bringing back payday loans in New Hampshire, as long as they are regulated. The question still remains, what to do about the online payday loans being offered in the State? Apparently the Banking Department has received so many complaints about unlicensed lenders that it has assigned an attorney to handle the matter.