This week, New Mexico in Focus correspondent Gwyneth Doland reported on legislation that would cap interest rates for some types of short-term lending, such as title loans, at 36 percent.
Gwyneth Doland also reported on the committee hearing Wednesday for our media partner KUNM: Payday Loan Cap On Hold Despite Prayers
Despite the vocal support of a group of religious leaders, a legislative panel decided on a party-line vote Wednesday to set aside two proposals (HB 24 and HB36) that would have limited interest rates on short-term loans.
Lobbyists and other representatives of the industry that limiting the amount of interest they can charge on car title loans, installment loans and tax-return-anticipation loans would put them out of business… kill local jobs… and give their customers nowhere else to turn.
But faith leaders told that high interest rates take unfair advantage of the most vulnerable, trapping them in a cycle of poverty.
Many religious groups will help people who are in crisis and in need of short-term help with bills and emergencies, said Allen Sanchez of the New Mexico Conference of Catholic Bishops. He specifically mentioned the Society of St. Vincent de Paul, a group of Catholic parishioners who help those in need, sometimes with cash assistance.
“If you need $350 bucks to fill that propane tank with gas, that’s where you go,” Allen told committee members. “If you have an electric bill you can talk to the electric company and if that’s not working you can go to Catholic Charities,” he said.
In a press conference held shortly before the committee meeting, House Minority Leader Brian Egolf included the lending reforms as part of a package of economic initiatives put forward by Democrats and described lending at unusually high interest rates as “immoral.”
That theme was echoed by representatives of various faiths who packed the committee chambers. “Predatory usury has plagued humankind since biblical times,” the Rev. Holly Beaumont told the People, Power and Democracy project.
Beaumont had harsh words for the loan companies who charge an average of 340 percent interest in New Mexico, saying, “Those who exploit the most vulnerable among us are, to use biblical language, an abomination to God.” Beaumont gave the committee members a copy of a letter signed by 100 religious leaders in support of capping interest rates at 36 percent.
People, Power and Democracy
A reporting partnership between New Mexico PBS, KUNM and New Mexico In Depth