CONCORD, N.H. (AP) - New Hampshire's House has approved a 36% cap on payday loans which will force payday loan companies out of the state if the Senate and governor agree.
New Hampshire and Rhode Island are the only New England states whose laws make payday loans profitable.
New Hampshire's banking commissioner and payday lenders had told lawmakers that the companies would close if interest rates were capped. The plan approved on Wednesday caps the annual rate at 36% on payday advances and vehicle title loans.
Critics said a cap would leave consumers few other choices to get cash to tide them over.
But cap supporters - including New Hampshire Legal Assistance and the state's welfare administrators - said consumers get caught in a "debt trap" when they can't repay the loans and must roll them over. They said consumers could instead turn to banks, credit unions, churches, friends and town welfare officers for help.
Payday lenders offer quick cash advances for a fee, often secured by a postdated personal check from the borrower. Title lenders offer cash loans based on the value of the borrower's car.
