SENATORS APPLAUD VOTE TO CAP INTEREST RATES ON PAYDAY LOANS

FOR IMMEDIATE RELEASE                                                Wednesday, January 16, 2008

Contact: Senator David Gottesman

(603) 271- 4152

SENATORS APPLAUD VOTE TO CAP INTEREST RATES ON PAYDAY LOANS 

CONCORD – Senators praised the House today for voting to limit the interest rates charged on payday and title loans.

House Bill 267 passed by a vote of 207-124. Senator David Gottesman (D-Nashua) was a co-sponsor of the bill, which sets a 36 percent cap on interest rates for small loans. The legislation now heads to the Senate.

“I think it is time we put some limitations on an industry that has descended upon our state and taken advantage of our vulnerable citizens to make an unreasonable profit for their shareholders. Not only do the cash-strapped borrowers pay the costs of these loans, but our local and state welfare offices also absorb these costs, so in a sense, we are all paying,” Gottesman said.

“It’s just taking advantage of people who can ill afford to pay these usurious rates,” said Senator John Gallus (R-Berlin).  “We have to do some kind of cap. We need to remedy the unintended consequences when we removed our state’s 24 percent interest rate cap in 1999.”

The legislation has the support for the Attorney General, the state Banking Commissioner and the New Hampshire Local Welfare Officers Association.

“This is an important consumer protection measure that will help families avoid getting trapped in a cycle of debt,” said Senator Deborah Reynolds (D-Plymouth).

“Payday lenders target those who can least afford to pay back the extraordinary fees and interest charges. Consumers can too easily get trapped in a never-ending cycle of debt,” said Senator Kathleen Sgambati (D-Tilton).

Gottesman is sponsor of a Senate version of the same legislation, Senate Bill 472, which has bipartisan support with 14 senators named as co-sponsors.