Shakeup in small loan industry looks to cut interest rates
May 15, 2018 07:26 PM
FARMINGTON, N.M. -- Cars cost money. School costs money. To put it simply, life costs money.
So when people go to small loan lenders to borrow money and don't look at the interest rates or the renewal clauses in contracts, many families often end up in worse financial situations than before.
"In short every borrower, no matter your financial sophistication or demographic status in life, you should be able to walk into a loan shop and know exactly the terms," Christopher Sanchez with the New Mexico Center of Law and Poverty said.
To combat predatory lending, the New Mexico Financial Institutions Division is now discussing new rule changes with the public. As of Jan. 1, for example, interest rates for loans $5,000 or less can no longer exceed 175 percent, according to the division. Historically interest rates have gone well into the hundreds.
But many think a lot more needs to change, especially when it comes to Native American borrowers.
"The industry representatives do not provide the necessary information for the consumer to make the best decision," Leonard Gorman with the Navajo Nation Human Rights Committee said.
Proposed changes include providing loan information in additional languages, as well as clarifying information on loans provided in brochures in stores.
Created: May 15, 2018 07:26 PM
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