House votes to limit interest on title loans
Under House Bill 562, title loan companies could charge customers 25 percent interest for the first month of the loan and then 3 percent a month.
Rep. Kermit Williams, D-Wilton, proposed the change to cap the interest rate to 3 percent a month after the first year, saying the companies claim the loans are short-term for a month or so, so they need to charge high interest rates to make the loans profitable.
"Personally, I agree with the lawmakers in the 30 other states that outlaw title loans," Williams said, but noted this is the "Live Free or Die" state and people here want to make their own decisions.
Rep. John Hunt, R-Rindge, said that when lawmakers limited the interest to 36 percent, the companies left the state and people with poor credit had nowhere to turn for loans.
Rep. Pam Tucker, R-Greenland, said the bill will put 40 people out of work when there have been few complaints about the companies.
The bill now goes to the Senate where it faces an uncertain fate.
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