ALBUQUERQUE, N.M. (AP) — Attempts to rein in payday loans in New Mexico fell by the wayside during the recent 60-day legislative session. While the small loans industry says it helps people in need, consumer advocates say a fix is sorely needed.
According to a 2014 study by the Pew Charitable Trusts, 14 states and the District of Columbia either ban payday loans or cap interest rates at 36 percent. Nine states have some restrictions, while 27 allow single-repayment loans with rates 391 percent or higher.
In my opinion, a 36 percent interest rate should be considered usury. And since it’s the Big Banks and Wall Street who own these payday loan stores, it appears they are still in charge.
Predatory lending practices have been a target of consumer advocates for decades in New Mexico, one of the poorest states in the country. Bills that would have capped interest rates at 36 percent went nowhere. Industry members say businesses would be forced to shut down at that rate.
Google: Usury, noun, the illegal action or practice of lending money at unreasonably high rates of interest.
Wikipedia: A loan shark is a person or body who offers loans at extremely high interest rates.