Loan Shark Attack
Low income families, single moms, veterans, and people of color are common victims of abusive loans. Here are the average payments they made on 2013 loans.*
Payday Loan: $708 to repay $377 over four months.
One Month Title Loan: $1,721 to repay $769.
Four Month Plus Title Loan: $2,868 to repay $1,287.
Secured Installment Loan: $1,140 to repay $649.
*NM Dept of Regulation & Licensing
*36% Interest and Fee Caps
20 states have clamped down on high cost loans. Arkansas, New York and Montana have caps ranging from 17-36%. The US Military has proposed broadening its 36% caps to cover all loan products. An industry predicted crisis of emergency credit shortages has not occurred. Borrowers report being better off.
Studies by the US Department of Defense, the Consumer Financial Protection Bureau, The Pew Charitable Trust, and The Center for Responsible Lending all conclude high cost loans routinely trap borrowers in debt and turn short term cash shortages into long term financial crises. See links below.
New Mexico has more high cost small loan stores than fast food chain locations. With interest rates from 80%-2700%, they are devouring low income borrowers' paychecks, welfare payments, assets, and even their jobs.
And shredding our state's economy along the way!
*Loans Over 175% APR 2013
369,000 loans originated
Over 160,000 borrowers
$105 million interest paid
2,273 vehicles repossessed
Average 340% APR
*Loans from 40 - 175% APR
No data available. But with more than a hundred high volume store locations specializing in these products, we know the numbers are big.
* NM Dept. of Regulation & Licensing
Pew Charitable Trust Small Loan Research
Detailed Graph Below
Support 36% Interest Cap Legislation In New Mexico. SB 72, HB 24, and HB 36