Customer warns: 'These places are back breakers'
February 4, 2006 - Farmington, New Mexico
Friday evening Kelly Curtis, 49, walked in to a payday loan company to make a final payment on a loan she had taken out because it was the only place that would give her money when she needed it.
"These places are back breakers," the Farmington resident said. "The interest is really high, but we have bad credit and this is the only place we could get a loan."
Curtis along with other San Juan County residents interviewed said they turn to payday lenders because it's a quick way to get the money they need -- even with the high interest rates.
"I only borrowed during Christmas because I was in a bind," said Anna Montano, 36. "I needed money for my kids, I wanted them to have a good Christmas. But the interest rates are too high. I hope I never have to use them again."
According to Sandi Gilley, a lawyer with Law Access New Mexico, interest rates at many small loan companies can range from 300 percent to 650 percent plus an additional transaction fee that is often not explained.
"It's so horrible," said Gilley. "Clients don't seem to understand how it works. I saw at least 18 stores on Main Street alone driving in to town."
Law Access New Mexico is a non-profit organization that provides free legal services to low-income families. One service Gilley said the organization offers is help with payday loan companies.
"Last year we had more clients with payday loan issues," she said. "Many of these people don't have the means to pay it back because they have limited or no income."
Vicki Faverino, regional manager of Advance Funding, Inc., disagreed, she said she is honest with her customers from the beginning.
"I tell them if they can get money another way, don't borrow from me," Faverino said. "But if they are in bankruptcy, they need cash and we give it to them in 15 minutes."
Faverino added she thinks if the Legislature approves any of the four bills introduced this session aimed at regulating payday lenders it would cripple the business.
"It would hurt people who do not have credit," she said. "I don't think the legislature understands the impact they would have (if they began to regulate) payday loans."
Anyone who walks in the door, Faverino said, can get a loan. According to Faverino, the high interest rates are due to the speed and convenience of the service.
"I'm not doing anything illegal," she said. "I'm honest and up front. I think we need to educate the customers, not have the government intervene."
According to Gilley, Faverino is correct because New Mexico currently does not have any usury laws to regulate these lenders.
"They (legislators) are tackling the issue, but it's been brought up before and nothing has happened," said Gilley.
"I think everyone should be able to make a profit, but they should not be able to prey on people in such need and have no means of paying it back. Instead of helping the individuals financial problems they are making it worse," she added.
The Daily Times, Andrea Koskey, Staff Writer
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]
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