Alternatives to payday loans beat reform tries
Written by
Geoffrey Plant
on December 16, 2020
An alternative to short-term, high-interest loans like title loans that has been offered by Grant County to its employees for two years now has been branded a success by state and local officials — but many of those same officials say more needs to be done to rein in what policy experts refer to as the “predatory” storefront lending industry in New Mexico.
In New Mexico, lenders are allowed by law to offer loans with an annual percentage rate of up to 175 percent, which actually represents an improvement. Prior to 2018, when legislation mandating the current rate cap took effect, storefront lenders were charging interest rates as high as 1,000 percent. Earlier regulations, however, which lasted until the late 1980s, had capped rates at 36 percent for decades, according to the Think New Mexico think tank.