MANCHESTER, N.H. (7/15/08)--New Hampshire Gov. John Lynch last week signed House Bill 267--an act relative to certain small loans--that caps interest rates for payday loans and car-title loans at 36% in the state. The cap, which takes effect Jan. 1, will protect New Hampshire citizens from a cycle of debt that occurs when payday lenders make high-interest loans to cash-poor borrowers. “Hopefully the bill will have the effect of not only preventing consumers from falling into a predatory payday lending trap, but it will also help draw their attention to the fact that there are far better ways to finance small amounts over short periods of time or to get their finances in order so that they will not be dependant on short-term financing,” Rob Kimmett, senior vice president of public relations and marketing for the Massachusetts, Rhode Island and New Hampshire credit union leagues, told News Now. When the state’s small-loan rate cap was eliminated in 2000, pay day lending was effectively legalized in New Hampshire, according to the Center for Responsible Lending. Service CU, Portsmouth, and St. Mary’s Bank, Manchester, are two New Hampshire credit unions that have programs that aim to meet the needs of payday borrowers, Kimmett said. New Hampshire is now among 15 states and the District of Columbia that have capped interest rates at or around 36% to stop predatory lending, the center said. Congress passed a 36% cap to protect military families nationwide at the request of the Department of Defenses, the center added.