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N. Hampshire House approves 36 payday-loan cap
CONCORD, N.H. (1/18/08)--Supporters of a 36% cap on payday loans approved Wednesday by New Hampshire's House say consumers can turn to credit unions, among others, when they can't repay their loans. New Hampshire has no limit on payday interest rates. If passed, the cap bill may force payday loan companies out of New Hampshire, say payday lending supporters and New Hampshire's banking commissioner (Associated Press Newswires Jan. 16). The cap, which would apply to payday loans and vehicle title loans, would translate into $2.96 in interest per $100 borrowed on a 30-day title loan and $1.38 per $100, or 10 cents a day, on a $100 payday loan for 14 days. Payday lenders said the money earned at such a rate wouldn't cover staffing, rent and the bills. The bill's supporters, including New Hampshire Legal Assistance and the state's welfare administrators, said consumers caught in the payday loan debt trap could instead turn to credit unions, banks, churches, friends and town welfare officers for help. The House vote was 207 to 124 to send the bill to the state Senate, which is considering a similar bill. In 1999, the state repealed an interest cap on small loans after lenders complained about the credit card industry's entry into the market.
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