Title loans, which were essentially outlawed in New Hampshire in 2009, could be brought back under a bill to be considered by the Senate Commerce Committee, reports the Concord Monitor.
Sponsored by state Senator Sharon Carson, a Republican from Londonderry, the bill would lift a cap on interest rates for car title loans. For this nontraditional credit
, borrowers use their cars as collateral. For those who need emergency funds, a car title loan is one of the few options. Supporters of the bill think that consumers should have access to these loans when needed. However, opponents worry that the loans trap vulnerable customers in a cycle of debt. State Representative Lee Quandt, a Republican from Exeter and a co-sponsor of the bill, told the news source that the legislation just gives consumers an option. When title loan rates were capped at 36 percent in New Hampshire, short term loans were also restricted, which drove the short-term loan industry from the state. Currently, only one short term lender and one title loan company exist in New Hampshire. If this bill is passed to reverse the loan rate cap in New Hampshire, it would be a move contrary to laws being passed in other states across the country. Many are looking to install a 36 percent loan rate cap, which the Granite State currently has in place.