Payday Loan Writer
Gov. Bill Richardson isn't pleased. He says his administration will tackle what the Legislature declined to do during its just completed session: regulate payday lending.
Richardson has directed the state Regulation and Licensing Department to issue rules that will do much of what had been proposed in a bill that died when the legislature adjourned last week.
The regulations will establish caps on fees as well as limit the number of cash loan renewals and rollovers of payday loans.
In addition, The Albuqerue Tribune reported that the administration is imposing a moratorium on new licenses for payday lenders.
Critics contend payday lenders target the poor and that consumers can become trapped with debts because of the high-cost loans. The governor's regulatory attempt is separate from proposed rules developed by Attorney General Patricia Madrid to cap interest rates on payday loans and impose other restrictions on lending practices. However, lenders have filed lawsuits challenging the regulations by the attorney general.
Regulation and Licensing Superintendent Edward Lopez said the agency's Financial Institutions Division licenses cash advance lenders and has the authority under the state's Small Loan Act to regulate their lending practices.
Lopez said details of the regulations have not been worked out. Initially, the proposals will be published for public comment and then the agency will adopt and implement final loan regulations.
The regulations will take at least a month or two to implement, said William Verant, director of the Financial Institutions Division.
Richardson said he preferred to change state law to make lending restrictions permanent but decided to act administratively after legislation failed.
"We can go back to the Legislature to make changes in state law, but I'm not going to wait for the Legislature to take action," Richardson said at a news conference.