Letter: Protect People From High-Interest Loans
To the Editor:
I write on behalf of the United Valley Interfaith Project, people of faith from 13 faith communities spanning a number of faith traditions in our community. We find ultra-high interest rates on loans to consumers — often called usury — offensive. All faith traditions have opposed usury for thousands of years. Ultra-high interest preys on the weakest and most vulnerable among us, and traps them in a downward cycle of debt.
So we are angry that current New Hampshire law allows lenders to charge up to 300 percent annual interest rates on “car title loans” — small cash loans secured by car titles. These loans, now available at storefronts in West Lebanon and Claremont (and at more than 30 other locations in New Hampshire), prey on unsuspecting people (often low-income) in financial distress. If they cannot repay the loan within 10 months at 300 percent annual interest (paying $1,375 interest plus $1,000 principal in just 10 months), they lose their car — and maybe their jobs if they can no longer get to work. It’s a vicious downward spiral.
We were heartened that House Bill 562 passed 212-129 in the New Hampshire House, and is now being considered by the New Hampshire Senate. HB562 would significantly reduce interest that could be charged on car title loans. It would still allow one month at 300 percent annual interest rate, but 36 percent annual interest rate thereafter. While these rates are still very high, they are much less than the 300 percent annual interest rate now being charged month after month after month. HB562 would also require that car title lenders expand their annual report to the New Hampshire Banking Department to include not only the number of loans, but also their duration and how many car repossessions occur.
We ask people across New Hampshire to join us in urging their state senators to pass HB562. It is a common-sense bill that protects people in financial distress from usury and financial ruin.
President, United Valley Interfaith Project