Court wacks payday-loan rules
August 31, 2006 - Albuquerque, New Mexico
Tough new rules set to go into effect today to regulate payday lenders are on hold after a District Court judge ruled the governor and attorney general exceeded their authority.
District Judge Richard Knowles issued the preliminary injunction Wednesday after deciding state lending law limits regulation of lenders to action by the Legislature.
The community-activist group ACORN rallied outside the FastBucks office at Central and Coors NW to protest the judge's ruling in particular and payday lending in general.
Gov. Bill Richardson and Attorney General Patricia Madrid had attempted to use their administrative powers to limit payday loan rates, fees and rollovers. A bill imposing similar regulations failed to pass during 2006 session of the Legislature.
ACORN and the AG said interest rates on payday loans can top 500 percent a year trapping consumers in a pattern of unlimited recycling of debt.
However the judge ruled restrictions on these loans should be put in place by the Legislature passing laws not the governor imposing them.
Payday companies agreed with that, but ACORN said New Mexico is being singled out because the companies already follow similar restrictions in other states.
"The lenders such as Money Mart, FastBucks, and E-Z Payday Loans follow these same particular rules in other states," Michael Taylor of ACORN said. "We don't understand why they say in this state they're illegal and unjust.
"They're already doing it in other states; why can't they do it within our state?"
Payday companies contend their own survey shows less than two percent of their consumers favor restrictions on the loans
The governor and the AG plan to appeal the judge's ruling.
KRQE News 13, Greg Gurulé, Reporter
Related Stories - ACORN
Related Stories - New Mexico
- House, Senate lawmakers agree on payday loan restrictions [March 16, 2007]
- Payday loan regulation bill passes Senate [March 16, 2007]
- Military looks to change laws regarding payday loans [September 12, 2006]
- Court wacks payday-loan rules [August 31, 2006]
- Consider options before going to a payday lender [July 15, 2006]
- One family shows there is a way out from the payday loan cycle [July 15, 2006]
- Lawmakers work to make payday loans more manageable [July 14, 2006]
- New Mexico Payday Loan Regulation [May 29, 2006] -
- New Mexico puts the brakes on new payday loan licenses [May 25, 2006]
- Judges won't hear payday loan cases [May 19, 2006]
- New Mexico rules to cap payday loan fees [May 18, 2006]
- Payday loan company makes travel donations to ... Richardson [April 1, 2006]
- Tsosie filibusters payday loan bill [February 23, 2006]
- Payday loan bill revised [February 12, 2006]
- House approves bill to regulate payday lending [February 7, 2006]
- Customer warns: 'These places are back breakers' [February 4, 2006]
- Indian Affairs Committee panel proposes payday-loan limit [December 08, 2005]
See: Recent News | Archived News | RSS Newsfeeds | News by State
Go to PLIWatch.org home.