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RSSGovernor Lynch Comes To the Rescue of Would-Be Borrowers
February 21st, 2012
Loan veto protects consumers
Once again Governor Lynch has come to the rescue of New Hampshire consumers. On Jan. 27, 2012, he vetoed Senate Bill 160, which would create a new small loan product we don’t need. In his veto message he explained that SB 160 would legalize excessive interest rates for these so-called “installment loans”, meaning payday loans, that would hurt our families, communities and economy. “That is why 31 other states, including all the other New England states, ban these types of excessive interest rates for consumer credit.”
Example
As an example, SB 160 would allow a lender to charge nominal interest of $15.50 per $100 installment, but also allow as many as 26 installments per year. This could result in the Annual Percentage Rate being in excess of 400 percent! On a six-month loan with payments every two weeks, a lender would be able to charge a consumer over $1,100 to repay a $500 loan!
Regulation of lenders
Lynch also warned that oversight and regulation of lenders would be weaker under SB 160 than current practices for other forms of consumer credit. Thus, consumers would not receive the same level of protection as would normally be expected. SB 160 was strongly opposed by both Republicans and Democrats in the Legislature, the N.H. Attorney General’s Office and N.H. Legal Assistance, as well as other organizations interested in protecting consumer rights. Yet the Republican majority ignored their warnings and passed the legislation.
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