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Jan 16 (Reuters) - Advance America Cash Advance Centers Inc AEA.N said it will discontinue its new credit line product in New Hampshire and will waive all interest on loans issued so far this year, after an order from the state's banking commissioner.
Earlier this month Advance America’s was denied its request to offer its credit line product after Jan 6 by New Hampshire Banking Commissioner Peter Hildreth who said that the product did not comply with the state’s law.
The Bank Commissioner has found that Advance America could only collect the principal amount of loans made under the credit agreement without violating the state’s unfair trade practices statute, the company said.
The company has also decided to waive all interest on the loans issued in the state from the beginning of the month through Jan. 6, it added.
“While we continue to believe that our new credit line product was compliant with New Hampshire law, ... we have decided that continuing to offer it is simply not practical,” Jamie Fulmer, Advance America’s director of public affairs, said. In its proposal made to Banking Commissioner Hildreth, Advance America said that its product was a “small loan” rather than a payday loan and the interest rate cap on payday loans did not apply to it.
The company had proposed to charge annual interest ranging from 365 percent to 456 percent.
Shares of the company closed down 4.62 percent at $1.86 Friday on the New York Stock Exchange. (Reporting by Adheesha Sarkar in Bangalore; Editing by Savio D’Souza)
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