Payday loan organizations prey on poor

by Ned Cantwell

Before you know it, the New Mexico legislative season will be upon us. Our lawmakers, as usual, will spend 14 hours a day pondering weighty matters and making momentous decisions, like, should the Official State Pest be the wood-boring beetle or John Dendahl?

That’s not fair. It’s not fair to John Dendahl, the outspoken former Republican state chairman who calls Gov. Bill Richardson a dictator and finds evil in any issue that offends his conservative nature.

It may not be fair to wood-boring beetles.

But most of all, it is not fair to our legislators. They do, in fact, plod through the session in somewhat orderly fashion trying to decide how much money of ours they should spend, whom they should tax to get the money, and what they should spend it on. All this takes a lot of time, and it is often difficult to show immediate results.

Here’s one they can pull off in five minutes after the opening gong:
Cap interest rates on payday loans. Get it through the House, get it through the Senate, get it to the governor’s desk. This one is a no-brainer.

New Mexico is one of only nine states that looks the other way when strip mall financial clip joints fleece the poor and vulnerable. What is going on in our state is outrageous and indefensible.

Within our borders, certainly the Land of Disenchantment for those who can’t pay their rent and turn to these payday outfits for temporary help, anything goes. So it is that a Gallup woman took out a $300 loan for two weeks, couldn’t pay it off, and finally ended up paying $881. There have been cases where the payoff amounts climb to the thousands on such small initial amounts.

New Mexico Attorney General Patricia Madrid says interest rates range as high as 800 percent, and she wants to do something about it. She will be knocking on legislative doors come January to push through a remedy to this legal financial mugging of those who can least afford it.

There is a place in our society for small, short-term, no questions asked loans. Not everybody can march down to the bank and pick up a check. But restraints are definitely called for here.

Madrid seeks legislation that would cap interest rates between 36 percent and 48 percent, and give the state specific authority to regulate short-term loans.

That seems reasonable enough, but there is reason to believe such a bill will not sail through the legislative waters without encountering gathering storms of opposition. As hard as it may be to fathom, similar legislation has failed over the past six years.

If legislators are not going to regulate these payday outfits, then there is only one alternative. Make certain the loan folks have valid gun permits and have taken the gun safety course. If they are going to rob poor folks, they might as well be properly armed.

An official of one of the companies dealing short-term loans warns the state to be careful. If we are too hard on lenders, he says, we might drive them out of the state.
Promise?

Ned Cantwell is a retired newspaperman living in Ruidoso. Contact him at:
ncantwell@charter.net