Payday loan successor rears its head in Senate

New Hampshire lawmakers seem bent on bringing back title loans — short-term high interest loans backed by the title on the borrower’s car. But are they willing to go even further, and allow a new kind of “installment loan,” which seems similar to the old payday loan — loans that are even shorter-term than title loans and carry even higher interest rates?It’s not clear yet, but senators seemed to be taking tentative steps in that direction during their Wednsday session.The Senate seemed to hold back on Senate Bill 160, the “Credit Access Reform and Employment Act,” which would allow two-week installment loans for up to 180 days, with limits on the amount of interest charged at $15.50 per $100 every two weeks. But that still works out to an annual interest rate of more than 400 percent — or the possibility that someone will end up paying back $1,400, on $500, according to Sen. Matthew Houde, D-Plainfield, who said the bill would pave the way for the “return of payday lenders.”In the past, he said, many beleaguered borrowers went to town welfare officers to help in repaying such loans, and the “local property taxes end up subsidizing the practices of these predatory lenders.”He also said that as a new type of loan, outside the 2009 small lending law that essentially put the payday and title lenders out of business by capping annual interest rates at 36 percent, the bill needed a closer look.It was on that point that Senate Commerce Committee Chair Russell Prescott seemed to agree, saying that it might make sense to re-refer the bill back to committee, at which point Sen. Tom De Blois, R-Manchester, said he supported the bill and wanted it passed, arguing that consumers are protected because they can’t borrow more than 35 percent of their income. In the end, the measure was tabled, but will no doubt re-emerge some time in the future. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

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