KUNM

Heinrich And Udall Urge Storefront Lending Reform

Jun 8, 2015

Credit spartacus pustota via flickr

Senators Martin Heinrich and Tom Udall joined 28 other Democratic senators and two independents in sending a letter Friday to the director of the Consumer Financial Protection Bureau. They support new federal rules that would require lenders to check if customers could actually pay back their loans. The rules would also restrict the ways creditors could collect on debts.

In 2013, around 300,000 New Mexicans took out small-dollar, high interest loans from storefront lending shops. People with lower incomes and no credit tend to be the ones taking out those loans—and while supporters say storefront lending gives a cash lifeline to the poor, critics say the industry is under-regulated and can trap people in debt.