Advance America shutting down
Stores like this one won't be around in New Hampshire anymore.
Borrowers in New Hampshire will have one fewer source for payday advance loans after Advance America closes all 24 locations in the state. Last year the New Hampshire legislature passed a law that capped interest rates on payday loans at 36 percent, and that has now led to the store closing down in the state.
Trying to stay afloat
Advance America tried to save its business by offering short-term revolving credit loans, but the state Banking Department banned them from doing that, too. The company says closing their stores will put about 50 people in New Hampshire out of work, and it will cost the company $1.2 million.
It just doesn’t add up
The interest rate cap means that if someone in New Hampshire took out a $100 payday advance loan, the company could only charge $1.38. That simply wasn’t enough to cover the cost of operating the stores, so Advance America decided to cut its losses.
Comments a telling sign
Perhaps the most telling thing about this story is the comments section below it. Here is what a couple of readers had to say at UnionLeader.com:
I don’t think the politicians have any idea what it’s like to struggle in the real world; if they did they wouldn’t have all that free time to spend in Concord trying to help me. We are very concerned what we will do now if we need some cash for an emergency. We now have no place to turn.
-Mary and Tom, Manchester
Others expressed sympathy for Mary and Tom, who mentioned in their post that they had used a payday advance loan to fix their car and once to pay their rent.
Getting political
Some said the situation was the result of the government being too heavy-handed:
The “nanny state” likes to protect those who don’t take responsibility for themselves. They love nothing better than imposing their ivy tower liberal ideas on others and then pat themselves on the back for all the good work they have done at someone else’s expense.
- Greg Carson, Londonderry
Others viewed in in a financial light and responded with angry sarcasm:
So who is going to make up for the lost State and local revenue? Who is going to pay for the increase welfare rolls. Oh yeah, we will, you dolts. I hope everyone enjoys their tax increase.
- Anne H., Salem
Well, it seems people have pretty strong opinions about what their government is doing. Several other states have placed caps on interest for payday advance loans, so chances are we will be seeing more of this.
And another one bites the dust – again, no one is going to benefit from this at all. 50 more people out of work? It doesn’t sound like much, but that adds up. If each one of those people made, say, $25 K a year? Well, sir – there goes $1.25 million in earnings, and they have to go find work. Also, there goes millions more in business revenue. I know that New England is thought to only contain rich people, but it isn’t the case, and no state in the union right now can afford to put people out of work just because a few of their legislators got bought off by a bank.
This is just another way for these petty politicians to have control of our financial freedom. I absolutely have to agree with Greg… these government officials spend a lot of their time trying to get noticed by proclaiming drastic “must-get-done” changes without first evaluating what kind of impact their form of resolution will leave. They’re nothing but greedy, whining bastards who sit on their high thrones proclaiming gibberish. The sad part of this is it is us (as always) who will suffer.
These types of loans did not even exist 20 years ago. It used to be that lenders had to take some responsibility as to who they lent money. One had to have some collateral and good credit to borrow. Now it only takes a desire to want more money. Payday loan predatory lending has negatively effected a lot more than just 50 lives. Banks and money lending operations need to step up to the plate, take responsibility for their actions, and stop pushing the middle class into poverty.