Letter: A common-sense cap on car title loans
The annual interest rate cap on most small loans in our state is already a generous 36 percent. But 36 percent wasn’t enough for one group of lenders, who fought to repeal the 36 percent cap on “car title loans.”
Car title loans, which are secured by the title to the borrower’s vehicle, can now charge interest up to a whopping 300 percent per year. If a borrower can’t afford to pay back the loan, he or she faces repossession of the car. For rural folks, that can mean no way to get to work, the grocery store, the doctor or other essential destinations.
New Hampshire has a long and proud history of imposing reasonable limits on interest rates. These limits are rooted in the simple idea that it’s not right to lend money to people at rates that make it impossible for them to get out of debt. It’s also bad for business more broadly when you have a group of people stuck in a debt trap that then can’t choose to spend their money in other ways. And it’s bad for employers to have their employees stressed out by credit problems. The New Hampshire Senate is currently considering HB 562, which would bring back a common-sense rate cap on car title loans. It passed the House easily, with broad and bipartisan support. I ask our state senators to vote to pass HB 562.
LEAH A. PLUNKETT