How Do I Sign New Mexico Banking Work Order

How do i industry sign banking new mexico work order

the state senate this week passed a bill sb 66 that would cap interest rates for short-term loans at 36 percent that might sound high but the current limit is 175 percent believe it or not about one in five new mexico households is considered to be living in poverty the new mexico center on law and poverty says 65 percent of high cost lenders have their storefronts within 15 miles of tribal lands the state instituted that 175 percent cap just a few years ago as we get more data and as more time goes by other states have blown past new mexico and we're now bringing up the rear with one of the highest caps in the country and thomas our lawmakers often look at legislation and point out the worst thing that could happen should they be flipping that perspective to weigh the cost of inaction well you know when it comes to you know payday in general you know it's kind of like it's it's that two-edged sword right you have on one end of the equation uh people who desperately need cash and don't have credit to go through traditional banking systems on the other hand you have folks who well just say 170 475 interest uh which is just you know for someone who has access to credit um you just it blows your mind so you know i think proximity is a big issue and that's been addressed in some of the legislation that's been that's been addressed uh but you know it's uh it's it's easy to say that you know business and industry should not exist um at least 175 percent cap not exist um other states have clearly shown that you can make that industry work with 36 percent or even lower percentages uh that coming from the santa fe reporter and also the military you know 36 percent is now their number it's not it's not you know a free-for-all anymore uh i'll go right to julienne on this you've been doing a lot of coverage now that tom mentioned the reporter um you're you're let me kind of get you to back up just a quick second and your sense of where the temperature of the legislature is to make change of this type anyway this is a big change when you really think about it yeah and so this is a reform measure that as you mentioned has been you know in play folks have been advocating for this change for quite some time it was just in 2017 when new mexico decided to put a cap on this type of lending at all and as you mentioned the cap is it's triple digit which is i think ghastly uh to to folks who are you know getting caught in this kind of spiral and as tom mentioned it it just seems uh to those who have credit an incredibly high number um as you mentioned the federal government has already taken a stance on this when it comes to members of the military you can't issue one of these loans in any state in the nation to a member of the military at higher than 36 percent and i think the backers are saying every new mexican ought to be treated the same as as a member of the military when it comes to this sort of gouging type of interest um so you've seen this measure already move out of the senate it's now stationed in the house it's been assigned to the house commerce and economic development committee and it's also assigned to house judiciary um and i think one of the questions that's going to come up and that is already on the minds of the folks that are pushing for this reform is what degree will the um industry's spending have an impact here as the house debates we know that this industry has made sizable contributions to politicians hundreds of thousands of dollars um in the last decade and uh you know it it's kind of an open question here as we move to the house where the debate is going to center and then of course do we have time uh before march 20th for this to get to the house floor ed interestingly uh when i hear listen to julianne talk about this it really reminds me how deeply ingrained politically and socially storefront lending is in our state i mean this is like a very familiar part of our retail establishments if you drive up and down main streets all over new mexico you know there's a lot of power there in that industry but is there another way to approach this as opposed to just percentage fixes 175 versus 36 that kind of thing is there something else that can be done here well i think the the operative word in this this whole conversation is predatory or or pray you know and and can you say loan shark things have things have changed so significantly since the time that uh we really look at the very high interest rates associated with with this type of lending other states have mandated a lower uh a lower interest rate and some of those companies that are that have shops set up in other states have accepted the lower interest rate but we haven't so this idea that other uh that these these uh loan businesses would move elsewhere well they've already moved elsewhere and accepted the mortgage and are still here there are there are a lot of things that i think we can do this is a this is a real a real problem for those who can who can least afford it um one of the ways to approach this too if if we don't want the legislature to handle this is uh the uh you know you put it on a ballot as a ballot initiative and let the public citizens decide you know how they want to deal with this issue but this is this is a real problem and as i mentioned earlier it preys on those people who can least afford it so because we are probably last uh amongst those states who have really aggressively dealt with this issue i think it's important to take a take a hard stance and do something this this session good point there uh tom interestingly you know this 36 number julian mentions the military of course but we've got california new york texas kansas florida these people are all working under a 36 percent scheme they haven't had people flee out of there and not make loans anymore is this you know this idea that it's going to ding all these mom-and-pop ownerships but it turns out a lot of them are very large corporations they're not necessarily mom and pop storefront operations can't we just bite the bullet and just go there and see how the marketplace shakes out it wouldn't be the first time that's right we've seen government intervene in many different ways over the last year uh in ways that we never even fathomed so you know i you know you could do that as a as a science experiment i think others other states have already gone there and really tested that already you know the the larger issue at play uh i mean obviously the predatory lenders were you know the you know the 175 percent cap you know lenders is definitely a concern but when you look at the the most vulnerable new mexicans who are really relying on you know that as the la as a last resort why are they doing that okay chances are because there there's a in auto shop uh maybe a roofer maybe somebody who's holding something over their head saying hey i need my cash now and so you have this cycle of uh you know that just happens to end with the predatory lending uh you know so you know is it is it all the predatory lenders or all the you know the loan reform that's seated that's that's one aspect of it but there's a there's a whole other sequence of events that takes place before somebody gets to that point hey julianne the catholic church of new mexico and other faith groups say this is a social justice issue senator katie duhigg says allowing a 175 interest rate is like giving poisoned food to a starving person you guys have that quote in your publication as well your sense of how that side of the argument is is impacting the overall argument yeah i mean we've got a lot of feedback from readers who weren't really aware um of the situation and i think that most people when they hear those numbers their reaction is that's not good that's not cool um i think if you look at the other states that have not regulated this industry we're talking about oklahoma and mississippi being the other two states that are not doing a 36 cap there are also three states that um have no regulation about this you know i mentioned new mexico's cap um is still a cap at 175 so um really this is it's not experimental um this this regulation i think the people who are are pushing for this have made that argument fairly strongly um you know on the point of the mom and pop pop storefront um the reporter has asked repeatedly for a mom and pop storefront to make themselves known and and talk about their family business of being affected by this and we keep getting franchises of giant corporations who talk about you know the effects but um if there's a mom and pop storefront lender out there that wants to talk about it um i'm waiting for them to emerge i same here at new mexico pbs we're with you hey ed last question real quick attendant to this effort this comes up a lot this came up actually four years ago with this uh 175 cap legislation is the idea of financial literacy and somehow tying financial literacy efforts lessons or classes something to these loans does that make sense to you in some capacity do it do these people have some obligation to teach people how to better manage their own money or is that something they just don't need to get into well it seems to be a a quasi moral obligation whether the storefronts the small high interest loan places whether it's their personal obligation it is a social obligation uh we know that there are credit unions and banks who are already engaged in that type of financial literacy education often these people individuals who find themselves under water as a result of these payday loans will sometimes go to these banks or credit institution and as a way to uh to get out from from under this debt sometimes these banks and credit unions will loan money on the condition that some sort of financial literacy courses training or education takes place so this really is a key component uh going back to uh some of the points that that tom made is as people sink deeper and deeper there needs to be a way to to recover and education is almost always the key to any issue some folks are talking about required course in high school and all kinds of other things we'll have to leave that there