SB57 (2011) Detail

Relative to regulation of title loan lenders.


03/09/11 0451s





AN ACT relative to regulation of title loan lenders.

SPONSORS: Sen. Carson, Dist 14; Sen. Sanborn, Dist 7; Sen. De Blois, Dist 18; Sen. Boutin, Dist 16; Rep. Marshall Quandt, Rock 13; Rep. Hunt, Ches 7; Rep. Gidge, Hills 24; Rep. Baldasaro, Rock 3; Rep. Shaw, Hills 16



This bill:

I. Increases the maximum percentage of interest allowed to be charged by title loan lenders annually.

II. Reduces the number of additional pay periods for which a lender may allow a title loan to be renewed.

III. Requires a borrower whose title loan has been renewed to pay at least 10 percent of the loan’s original principal balance at the time of renewal.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/09/11 0451s




In the Year of Our Lord Two Thousand Eleven

AN ACT relative to regulation of title loan lenders.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Title Loan Lenders; Interest Rates. Amend RSA 399-A:14, VI to read as follows:

VI. Charge interest at higher than [36 percent per year.] 25 percent per month, however actual costs incurred by the lender [to perfect a security interest in the title] pursuant to RSA 399-A:11, XI may be passed through to the borrower[, thus increasing the annual percentage rate above 36 percent].

2 Title Loan Renewals. Amend RSA 399-A:15 to read as follows:

399-A:15 Title Loan Renewals. A title loan shall be for an original term of no more than one month. A title loan lender may allow such loan to be renewed no more than [11] 10 additional periods each equal the original term, provided however, that at each such renewal the borrower must pay at least [5] 10 percent of the loan's original principal balance, in addition to any finance charge owed, to reduce the principal balance outstanding. If the borrower cannot pay this principal reduction at any renewal, the title loan lender may either: (i) declare the borrower in default, or (ii) allow the loan to be renewed, provided that the lender shall reduce the current principal amount of the loan by [5] 10 percent of the original principal amount for the purposes of calculating interest thereafter. This reduction in principal shall continue to be owed by the borrower, but such amount shall not be entitled to accrue interest thereafter. For the purpose of this section, a renewal is any extension of a title loan for an additional period without any change in the terms of the title loan other than a reduction in principal. No accrued interest shall be capitalized or added to the principal of the loan at the time of any renewal.

3 Effective Date. This act shall take effect 60 days after its passage.