The New Hampshire House Commerce Committee will soon vote on the legalization of installment loans - or short term loans - in the state, the New Hampshire Business Review reports.
New Hampshire previously capped short term loan interest rates at 36 percent, which forced many short term lenders to move to states where caps didn't exist. However, House Bill 160 would once again allow high-interest lending activity in the state. The bill would include a provision that protects against loan rollovers and features a "cooling off period" for those who pay off their loans early. Republican Representative Fred Rice believes when it comes to short term loans, common sense should prevail. "You can't legislate against stupidity," he said, as quoted by the news source. "If the interest rates are too high, don't go there. It boils down to free enterprise." HCC banking subcommittee chair Jenn Coffey adds that some larger banks have begun offering high-interest short-term loans as well. CreditCards.com notes that Wells Fargo, Fifth Third, U.S. Bank and Regions Bank have all taken up the practice, referring to the services by alternative names such as direct-deposit advances or early access to distance themselves from the stigma of short term loans.