November 9, 2007
The state law on payday loans with effect
SANTA FE (AP) - New restrictions on lending to force payday this week, including a cap on the fees lenders can charge consumers.
From Payday loans are short-term cash advances against a borrower’s paycheck future when a lender or holder of a borrower’s personal check and agree with him later in cash to cover debt . Loans can be up to $ 2500.
A new state law that takes effect Thursday that rates caps, limits on the length of a loan and limits the total amount that consumers can borrow.
Financial Regulations for implementing the provisions of the Act also come into force.
Consumer Advocates argue that the poor are the target of lenders that offer payday short-term, high-interest loans.
But the Center for Responsible Lending New Mexico argues that the law does not impose a cap on the cost of loans and borrowers will not prevent it from becoming mired in debt.