New Hampshire will become the latest state to keep payday lenders from gouging their patrons. A measure passed by the legislature will cap interest rates on payday loans at 36%, a drastic change for an industry used to bludgeoning underbanked consumers with interest rates exceeding 500%. Payday borrowers spend an average of $793 trying to repay a $325 loan. Let’s see how the economic leeches spin this as a loss for consumers.
The state’s largest payday lender, Advance America, claims the bill would either force them to close shop or accept losses of $100,000 per storefront. They are “very concerned” for the future of the 200 employees statewide who make their living cheating hard-working consumers.
…others argued that payday loans are an option that consumers need; without them, they said, people could be driven to less-savory choices, may depend more on their towns’ welfare departments or have to scrimp on necessities. Other options facing someone who’s broke – such as bouncing a check – are much more costly than a title loan, they said.
Sen. Bob Clegg recounted times of struggle in the 1970s and 1980s when he had to turn to the “black market” to tide him over. “You can fail, or you can take another chance,” said Clegg, a Hudson Republican. “My position, I took another chance.”
He would be too embarrassed to go to a welfare office, he said, and would rather “stand tall, make my deal with them and then make my payments because that keeps me a man.”
Yes Senator, consumers should smile and stand tall as they take their financial raping like real men. Anything to stay away from the dreaded social safety net.
Payday loan limits passed [Concord Monitor]
PREVIOUSLY: Payday Lenders Can’t Afford To Lend You Money At Only 36%