2015 New Hampshire Revised Statutes
Title XXXVI - PAWNBROKERS AND MONEYLENDERS
Chapter 399-A - REGULATION OF SMALL LOANS, TITLE LOANS, AND PAYDAY LOANS
Section 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 10 additional periods each equal the original term, provided however, that at each such renewal the borrower must pay at least 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 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.
399-A:15 Provisions Applicable to All Persons Under This Chapter. --
I. Any loan made outside this state, as permitted by the laws of the state in which the loan was made, may be collected in this state in accordance with its terms.
II. No person making a small loan, shall advertise, print, display, publish, distribute, or broadcast or cause or permit to be advertised, printed, displayed, published, distributed, or broadcast, in any manner whatsoever, any statement or representation with regard to the rates, terms, or conditions which is false, misleading, or deceptive.
III. This chapter, or any part thereof may be modified, amended, or repealed so as to effect a cancellation or alteration of any license, or right of a licensee hereunder, provided that such modification, amendment, or repeal shall not impair or affect the obligation of any pre-existing lawful contracts between any licensee and any borrowers.
IV. No interest shall be paid, deducted, or received in advance. Interest shall not be compounded and interest shall be computed only on unpaid principal balances. For the purpose of computing interest, whether at the maximum rate or less, a month shall be considered a calendar month and, where a fraction of a month is involved, a day shall be considered 1/30 of a month. However, if all or any part of the consideration for a loan contract is the unpaid principal balance of the prior loan with the same lender then the loan contract may include unpaid interest of such prior loan which has accrued within 60 days of the making of the loan contract.
V. If charges in excess of those permitted by this chapter are charged, contracted for, or received, except as a result of an accidental or bona fide error, the loan contract shall be void and the lender shall have no right to collect or receive any principal, charges, or recompense.
VI. No licensee shall take any confession of judgment or any power of attorney running to himself, herself, or any third person to confess judgment or to appear for the borrower in a judicial proceeding.
VII. No person shall take any note, agreement, or promise to pay which does not disclose the date and amount or maximum credit line of the note or agreement, a schedule or description of the payments to be made thereon, and the agreed charges or rates of charge; nor take any instrument in which blanks are left to be filled in after the loan is made.
VIII. No person shall include any of the following provisions in a small loan contract:
(a) A hold-harmless clause;
(b) A confession of judgment or other waiver of the right to notice and the opportunity to be heard in an action;
(c) An agreement by the consumer not to assert any claim or defense arising out of the contract against the lender or any holder in due course;
(d) An executory waiver or a limitation of exemption from attachment, execution, or other process on real or personal property held by, owned by, or due to the consumer, unless the waiver or limitation applies only to property subject to a security interest executed in connection with the loan; or
(e) A clause permitting the continuation of interest after repossession of the consumer's motor vehicle.
IX. No person shall be permitted to accept as collateral on a loan under this chapter:
(a) Real estate; or
(b) Household furniture presently in use on loans of $2,000 or less.
X. Any agreement purporting to convey to a lender a security interest in the property listed in paragraph IX shall be null and void.
XI. No charge for any examination, service, brokerage, commission, or other fee shall be directly or indirectly made or contracted for on closed-end loans, payday loans, or title loans except the lawful fees, if any, actually and necessarily paid out by the lender to any public officer, for filing or recording in any public office any instrument securing such loan, which fees may be collected when such loan is made, or at any time thereafter and except the reasonable costs, charges, and expenses, including court costs actually incurred in connection with a repossession of the security or an actual sale of the security in foreclosure proceedings or upon entry of judgment.
XII. Credit life insurance, credit accident and health insurance, and credit involuntary unemployment insurance may be issued in connection with a loan or other credit transaction authorized by this chapter in compliance with the provisions of RSA 408:15, II and the cost of such insurance and any commission, benefit, or return to the lender therefrom shall not be deemed a violation of any provision of this chapter; provided, however, that if there is more than one borrower or obligor on any such loan or credit transaction, credit life insurance providing a single benefit may cover both borrowers or obligors.
XIII. The lender may require a borrower to insure tangible personal property given to secure the loan against any substantial risk of loss, damage, or destruction for an amount not to exceed the reasonable value of the property insured or the amount of the loan, whichever is less, and for the customary insurance term approximating the term of the loan. The borrower shall not be required to insure against unusual or exceptional risks not ordinarily insured against in policies issued to nonborrowers. The premium for such insurance may be included in the principal amount of the loan. Such insurance shall be written by or through a duly licensed insurance agent or broker with a company qualified to do business in New Hampshire. Such insurance shall name the borrower as insured but may include the lender as co-insured or protect the interest of the lender under a loss-payable clause. No lender shall require a borrower to duplicate or cancel existing insurance or to purchase insurance from a lender or any employee, affiliate, or associate of the lender or from any agent, broker, or insurance company designated by the lender, as a condition precedent to the making of the loan.
XIV. A lender shall include in every loan contract a notice, printed in type size equal to at least 12-point type, stating that the consumer or the consumer's attorney may file a complaint with the commissioner.
XV. If the contract so provides, the lender may collect a single late fee on each installment in default for a period not less than 10 days in an amount not in excess of 5 percent of the installment in default. In addition to such late fee, the contract may provide for the payment of reasonable attorneys' fees where such contract is referred for collection to an attorney not a salaried employee of the holder of the contract plus the court costs and the licensee's out-of-pocket collection expenses.
XVI. Every lender shall:
(a) At the time of the making a loan, mail or deliver to the borrower, or if more than one, to one of them, a payment book in which space shall be provided for the record of all payments showing principal, interest, and balance. The payment book shall contain statements showing the date of such loan, the amount of the principal of such loan, the total interest charged for the period of such loan, the nature of the security, if any, for such loan, the name and address of the borrower and of the lender, and the description of schedule of payments on such loans. The payment book shall also contain an interest calculation such as the following:
(b) Give to the person making any cash payment on account of any closed end loan a receipt at the time such payment is made.
(c) Permit payment in advance in an amount equal to one or more full installments at any time during the regular business hours of the lender.
(d) Upon repayment of a loan in full, mark plainly every note, agreement, or assignment or other evidence of the indebtedness or assignment signed by an obligor or a copy of any of the foregoing documents with the words "PAID IN FULL'' or "CANCELLED'' and release or provide the borrower evidence to release any mortgage or security instrument no longer securing any indebtedness to the lender. If the original note, agreement, or assignment is retained by the lender, the original shall be returned within a reasonable period of time upon the written request of the borrower. In the case of open-ended credit, as defined in 12 C.F.R. section 1026.2(a)(20), the borrower shall provide written notice to the lender terminating such loan and surrender any checks or other device used to obtain such credit.
XVII. No lender shall conduct the business of making loans under this chapter at any office, suite, room, or place of business where liquor or lottery tickets are sold.
XVIII. A lender shall include a provision in the loan agreement that the borrower shall have the right to cancel the loan transaction at any time before the close of business of the next business day following the date of the transaction by paying to the lender the amount advanced to the borrower in the form of cash or other funds instrument.
XIX. Persons subject to this chapter shall be responsible for the supervision of their employees, agents, and branch offices.
XX. Each licensee shall maintain a positive net worth at all times.
XXI. Persons subject to or licensed under this chapter shall abide by applicable federal laws, and regulations adopted thereunder, including the Federal Truth in Lending Act, and the laws, orders, and rules of this state. Any violation of such law, rule, or order shall be a violation of this chapter.
XXII. Examination expenses and fees, fines, penalties, and other moneys obliged to be paid to the department shall be paid within 14 days of receipt of notice by the licensee or other person or such later time as determined by the commissioner.
XXIII. No revocation, suspension, or surrender of any license shall impair or affect the obligation of any preexisting lawful contract between the licensee and any obligors, and such contracts and all lawful charges thereon may be collected by the licensee, its successors, and assigns.
XXIV. All persons subject to or licensed under this chapter shall be qualified on the basis of such factors as experience, knowledge, and financial integrity to conduct business under this chapter.
Source. 2015, 73:1, eff. Jan. 1, 2016.
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