KUNM

payday lending

taberandrew via Flickr / Creative Commons License

Lawmakers voted Wednesday to study a plan that would make small dollar loans available to state employees. At 26 percent interest, the loans would offer options for low income borrowers who have traditionally turned to high interest storefront loans.

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.

Ed Williams

High interest, small dollar loans are abundant in New Mexico. Businesses offer quick cash payments for people who need money right away. But the interest rates on these loans can be as high as two thousand percent, and many people are unable to pay them off.   

This is especially true in the state's low-income communities. Statewide, storefront lending businesses outnumber fast food chain restaurants.

Payday Lending Industry Gives Big

Feb 16, 2015
frankieleon via Flickr / Creative Commons

Storefront lending companies and affiliated associations gave nearly $140,000 to New Mexico public officials and political action committees in 2013 and 2014, according to an analysis of data from the New Mexico Secretary of State’s office.

The bulk of that -- $115,805 -- went to dozens of elected officials, including Republican Gov. Susana Martinez, Democratic Attorney General Hector Balderas and more than half of the members of the New Mexico Legislature, Democrats and Republicans alike.