Friday, May 19, 2006

It's no secret that New Mexico Governor Bill Richardson isn't a big fan of payday loans. Following months of industry criticism, Richardson and Attorney General Patricia Madrid announced regulations yesterday, all meant to curtail predatory payday advance lending in the state.

The regulations, which target payday loan lenders almost entirely, would go into effect July 16 - after a public comment period in June.

Among the main features of the regulations are fee cap of $15.50 per $100 borrowed and limits on the total amount borrowed on a payday loan online to 25 percent of the borrower's gross income.

We have to do this," Richardson said during a news conference in Albuquerque today. "We have to stop abusive practices against consumers."

The regulations would:

• Set a flat fee for new payday loans and renewals at $15.50 per $100.
• Give consumers the sole discretion of renewing a cash loan two times at a maximum fee of $15.50 per $100.
• Cap the amount of borrowed money at 25 percent of the consumer's gross income.
• Give consumers the chance to enter into a longer-term payment plan - up to 130 days - with no additional fees after a second payday loan renewal.

"In the past," Madrid said, "people had only two weeks to pay. We are going to lengthen the time. They all want to pay. Now, we are going to make that possible."

Madrid has attempted to get legislation regulating payday loans passed since she became attorney general in 1999, to no avail.These regulations, she said, do not require legislative approval.

This entry was posted on Friday, May 19th, 2006 at 9:16 am and is filed under New Mexico.