Tuesday, December 22, 2009

Don't Let a Payday Loan Company Be Your Santa Claus

That's the basic message of Lt. Gov. Diane Denish and Attorney General Gary King at a Tuesday press conference.

"During this holiday season, many New Mexicans will be looking for a few extra dollars to buy last minute gifts, but before taking out a predatory title or installment loan, it’s important to know the facts. I encourage all New Mexicans to seek other options before getting trapped in a never-ending cycle of debt,” Denish said in a press release.

King said, "Earlier this year my office filed lawsuits against two lenders who were using a loophole in the law to continue to charge extremely high rates, in some cases, more than one-thousand percent. These practices take advantage of consumers and are against public policy and will be vigorously challenged by the Attorney General's Office.”

Ho ho ho ...

Looking beyond the holidays, Denish endorsed a bill prefiled by Sen. Peter Wirth, D-Santa Fe. Senate Bill 33 would:

* Cap interest rates for all payday loans. For loans of $2,500 or smaller, the APR must not exceed 45 percent. For loans larger than $2,500, the APR must not exceed 36 percent.

* Establish a statewide database to track the number of loans issued, rates of loans issues, interest rates and specifics of the loan. This will put additional oversight on the predatory loan industry and so the state can protect vulnerable citizens from unfair and illegal loan agreements