Lawmaker says recusal unneeded on loan bills

State Rep. Tara Reardon is the new chair of the House Commerce Committee, which is expected to vote on three bills this session attempting to cap the interest rates on payday loans.

The Concord Democrat also is the daughter-in-law of Richard Bouley, who renewed his registration as lobbyist for the Community Financial Services Association, a national group representing payday lenders that opposes such caps. (“We wouldn’t be in business,” said Steve Schlein, a spokesperson for the national organization, of an interest-rate cap.)

But Reardon – who opposes interests-rate caps herself – says that even if her father-in-law came before her committee, she would not recuse herself from the issue, since she would not financially benefit from his efforts.

Reardon, who has served on the committee for much of the last decade, was officially named chair of the panel on Dec. 15. Less than a week later, her father-in-law re-registered as lobbyist for the CFSA.

And Reardon — despite claiming that she “doesn’t keep track” of Richard Bouley’s contracts — actually notarized his latest CFSA disclosure forms that were filed at the Secretary of State’s office as late as Dec. 7 – less than a week before she became chair. She also notarized an October filing disclosing Richard Bouley’s 2006 income from CSFA up to that point: $19,000.

Reardon also is the wife of Jim Bouley (Richard Bouley’s son and former partner), who last year represented Advance America, the largest payday lender in New Hampshire as well as the nation.

Calls to both Bouleys were not returned by deadline, but Reardon said that as far as she knows her husband no longer represents Advance America. As for her father-in-law, “I do not financially benefit from anything he might do,” said Reardon. “I might declare a conflict, but without any financial gain, I see no need to recuse myself.”

Reardon noted that she has other relatives who are lobbyists – notably Judy Reardon, a cousin who once served as chief of staff under Gov. Jeanne Shaheen. Because New Hampshire is a pretty small state, and there are some 400 legislators, there are bound to be some conflicts, which should be disclosed, she said. Recusing oneself because of conflicts is “taking it to the extreme.”

“I would consider it a gray area,” said Rep. David Smith, D-Nashua, who is sponsoring one of the bills capping interest rates. “But it’s up to her. I’d like to think that anyone looking at anything do it objectively.”

In fact, Reardon said that, even though she chairs the committee, she only has one vote and would be willing to listen to the recommendation of the subcommittee dealing with the issue as well as the Democratic leadership.

Federal action

Reardon did say she would recuse herself if her husband were lobbying on an issue that came before her committee. However, that didn’t happen last February, when her husband was a registered lobbyist for Advance America and her father-in-law was a lobbyist for the payday lenders trade group.

House Bill 1126, a bill regulating payday lenders and numerous other lending institutions, passed the Commerce Committee unanimously when Reardon was a member of the minority. In May, Reardon served on the conference committee that hammered out a final version of the bill, which among other things changes the definition of a payday loan.

Advance America paid Jim Bouley $280 for three months’ work from January to April of that year, and he filed forms indicating that he was still a lobbyist for the company as late as October 2006.

Reardon did not declare any conflict of interest in 2006, according to the House clerk’s office.

HB 1126 bill became law while another bill – Senate Bill 331, which would have capped interest rates — was tabled in the Senate and never went before the House Commerce Committee.

This year, however, an interest-rate cap may get a different reception because there is a more active movement supporting one and because of a new federal law that limits annual interest rates charged to active-duty military personnel to 36 percent.

Sen. David Gottesman, D-Nashua, who chairs the Senate Commerce, Labor and Consumer Protection Committee, said that he was “more likely to support a cap on interest rates than not,” though he stressed he would listen to testimony before making a final decision.

“I think a thorough review of the practice of payday lending is in order,” he said. “I want to protect our constituents from predatory lending.”

However, in order for a bill to get to Gottesman, it has to go through the House Commerce Committee, and there interest-rate caps will have a tougher reception.

“We have historically not capped small loans,” Reardon said. “Such a cap will make a race to the bottom. There will be no free market about different rates. Everyone will charge the maximum.”

Smith, sponsor of one of the bills, countered that such a position is “irresponsible,” since payday lenders currently charge as much as 500 percent annual interest. Those are the lenders that would be affected, not those charging lower interest rates, who are more affected by the market, he said.

Besides, he added, if it’s fair to protect military personnel, “it is fair for the good people of New Hampshire.”

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