SENATE BILL ON CONSUMER CREDIT PRESENTED TO THE HOUSE

FOR IMMEDIATE RELEASE                                                          Thursday, April 10, 2008

Contact: Senator David Gottesman

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SENATE BILL ON CONSUMER CREDIT PRESENTED TO THE HOUSE

CONCORD – Senator David Gottesman (D-Nashua) testified today before the House Commerce Committee on a bill to study responsible options for consumer credit to replace payday loans.

“We want consumer credit options that can help our families achieve long-term financial stability and build household wealth, not trap them in a cycle of debt,” Gottesman said.

Senate Bill 472 is a partner to House Bill 267, which capped interest rates at 36 percent. The interest rate cap has already passed in the House and Senate and once signed into law, would go into effect on Jan. 1 2009. Payday lending companies have testified that the interest rate cap will drive them out of business in New Hampshire.

“It is important for us to work to provide more reasonable solutions to people who have been relying on payday loans. Options that are good for consumers and represent good business models for lending in our state are very important,” Gottesman said.

The 17-member commission would include representatives from the Attorney General’s office, the Banking Department, the Consumer Credit Counseling Association and the New Hampshire Credit Union League, among others. It would be charged with looking at the potential for new products to provide responsible consumer credit to people without charging exorbitant interest rates or fees. The legislation requires the commission to present its findings and recommendations by Nov. 14, 2008.

Senate Bill 472 also adds some new definitions to ensure payday lending companies cannot circumvent the interest rate cap as they’ve done in other states that have passed similar rate caps.

“These provisions will prevent these companies from skirting the intent of the legislation in order to continue to trap consumers with predatory loans,” Gottesman said.

Also testifying in support of Senate Bill 472 today were representatives of the Roman Catholic Diocese of Manchester, the Banking Department and New Hampshire Legal Assistance.