Letter: Danger of Car Title Loans
To the Editor:
The Title Cash store opening in West Lebanon (“Title Loan Company Opens in W. Lebanon,” July 14) is a threat to our community. The United Valley Interfaith Project, comprised of 12 local faith communities and a soup kitchen, has strongly opposed car title lending for the past several years. Title loans are short-term loans secured by a car title, with interest rates up to 300 percent per year (25 percent per month). They prey on low-income people in financial distress. If a car owner borrows $1,000 for 10 months and pays back $100 of that principal each month and is charged 25 percent interest each month on the unpaid balance, the owner will pay $1,375 in interest in addition to repaying the $1,000 principal in just 10 months. Failure to make these outrageous payments can lead to loss of the car and financial ruin.
These loans were legalized by the New Hampshire Legislature in 2012 over the objections of the governor, our Upper Valley House and Senate representatives, and the United Valley Interfaith Project and many allies. This was a special and appalling exception to New Hampshire’s 36 percent cap on annual interest rates for consumer loans, and made New Hampshire the only New England state allowing 300 percent annual interest rates.
Car title stores are now opening around New Hampshire, including in Claremont and now West Lebanon. Our phone calls to each new store indicate almost all are charging the highest interest allowed by law — 300 percent per year. The United Valley Interfaith Project continues to fight car title lending on three fronts. We and many allies strongly support HB562, a bill pending to re-cap car title loan interest rates at 36 percent annually, although the bill has an uncertain future. We are educating Upper Valley clergy and social service agencies on the dangers of car title loans, as these are the places people often go when in financial distress. And we are actively seeking low-interest alternatives to such predatory loans. If you wish to join our efforts, please contact us at firstname.lastname@example.org.
New Hampshire President
United Valley Interfaith Project