CONCORD, N.H. (1/30/09)--New Hampshire's banking commissioner rejected a proposal for a new "small loan" product from Advance America, the nation's largest payday lender, saying that a 365% annual percentage rate (APR) on a small loan constitutes an unfair trade practice and would be "unlawful." "Generally this was seen as an attempt by the payday lender to work around the 36% interest rate cap law that the New Hampshire legislators had put in place," Rob Kimmett, senior vice president of marketing and public relations of the New Hampshire Credit Union League, told News Now. The state law was passed last year. So far, 15 states and the District of Columbia have enforced annual interest rates in the range of 36% to stop predatory lenders from ensnaring borrowers in high-interest loan traps, according to the Center for Responsible Lending. "It's business as usual when payday lenders try to circumvent state law, but time and time again aggressive state enforcement shows that this is a futile effort," said Uriah King, policy associate with the center. "The New Hampshire Banking Department's bold action should serve an example to policy makers and those charged with enforcing consumer protections in other states," King said. The commissioner, Peter Hildreth, said the proposed product did not meet fairness requirements specified by the Federal Trade Commission and the state Unfair and Deceptive Acts and Practices regulations. He termed small loans with 365% interest as "oppressive." Payday lenders had claimed that the new product was a small loan and didn't fall under the payday and car-title lending law. However, Hildreth said the argument is moot. "The unfairness was not that the loans were called payday or title loans. The unfairness was because of the interest-rates charged," he said. Advance America said it would comply and withdraw from the New Hampshire market as a result.