CHAPTER 301

HB 267 – FINAL VERSION

02/14/08 0390s

21May2008… 1818eba

2008 SESSION

07-0275

08/03

HOUSE BILL 267

AN ACT relative to certain small loans.

SPONSORS: Rep. D. Smith, Hills 22; Rep. McLeod, Graf 2; Rep. Schulze, Hills 26; Rep. Kidder, Merr 1; Rep. Velez, Hills 12; Sen. Gottesman, Dist 12; Sen. Letourneau, Dist 19; Sen. DeVries, Dist 18

COMMITTEE: Commerce

ANALYSIS

This bill establishes a limit on the percent of interest for certain small loans.

This bill also limits eligibility for payday and title loans.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

02/14/08 0390s

21May2008… 1818eba

07-0275

08/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Eight

AN ACT relative to certain small loans.

Be it Enacted by the Senate and House of Representatives in General Court convened:

301:1 Findings and Intent. The general court finds that the rates of interest charged by many title loan lenders and payday lenders are unreasonable and predatory. Statistics available to the general court demonstrate some title loan lenders charge annual percentage rates of interest of up to 350 percent and payday lenders are charging up to 1,000 percent. The general court recognizes that due to the extremely short term of title loans and payday loans, documentation fees of even a nominal amount will cause such loans to have a high rate because the fees are included in the annual percentage rate calculation. However, the rates currently charged are unfair and improper. Therefore, to continue to make these credit products available to individuals who are otherwise unable to obtain credit, rates permitted may be higher than are usually seen in other credit transactions but must be capped at reasonable rates.

301:2 New Paragraphs; Provisions Applicable to Payday Loan Lenders. Amend RSA 399-A:13 by inserting after paragraph XVIII the following new paragraphs:

XIX. A lender shall not make a loan to a borrower who currently has an outstanding or who has had an outstanding payday or title loan within the previous 60-day period. As part of its application process for such a loan, a lender shall obtain a written statement under oath from the borrower certifying the borrower does not currently have an outstanding and has not had an outstanding payday loan or title loan within the previous 60-day period.

XX. The annual percentage rate on a payday loan shall be no more than 36 percent per year.

301:3 New Paragraphs; Limitations on Title Loans. Amend RSA 399-A:14 by inserting after paragraph IV the following new paragraphs:

V. Make a loan to a borrower who currently has an outstanding or who has had an outstanding payday or title loan within the previous 60-day period. As part of its application process for such a loan, a lender shall obtain a written statement under oath from the borrower certifying the borrower does not currently have an outstanding and has not had an outstanding payday loan or title loan within the previous 60-day period.

VI. Charge interest at higher than 36 percent per year; however actual costs incurred by the lender to perfect a security interest in the title may be passed through to the borrower, thus increasing the annual percentage rate above 36 percent.

301:4 Effective Date. This act shall take effect January 1, 2009.

Approved: July 2, 2008

Effective Date: January 1, 2009