Installment loans the hardest for New Mexico residents
New Mexico residents are worried about the increase in indebtedness of people living in the state on so-called payday loans. The state reportedly has one of the highest interest rates on such loans in the country. A loan issued for the purchase of a car or a house can ultimately acquire interest in the amount of 175%.
Already, residents of the state have turned to the governor with an official letter expressing demands to limit the collection of such percentages from the poorest segments of the population.
At one time, President George W. Bush limited the interest on loans for active members of the military and their families to 36%, – recalls one of the residents of the state. “So why can’t our governor do this for his voters?”
Such a law was indeed passed by President Bush back in 2006, but then he encouraged people to join the army to serve in Iraq and Afghanistan. Now, after the withdrawal of troops from the Central Asian region, the need for an increased number of soldiers has disappeared. And the bill, not in words, but indeed, is not supported by so many politicians, both within the state and at the federal level.
Do you want to survive, help yourself?
Residents of many states of the country have long been unhappy with the situation associated with the huge interest on installment loans from the United States. From New York to California, voices are increasingly being heard to tackle this important issue. But only the residents of New Mexico decided to take desperate measures and, having united in mutual aid alliances, began to issue loans to their citizens at lower interest rates. These loans are issued to individuals who live exclusively in New Mexico and are calculated from wages at an interest rate of 20 to 25%. Excellent conditions, but, unfortunately, not all residents can afford to use such a gift. The funds raised by the members of the mutual aid union are still not enough for everyone, and residents continue to take out loans at crazy interest rates.
Most of all, residents are angry that the main parties of the country, both Democratic and Republican, constantly advocate limiting interest rates on loans for the poor, but bills on this issue are practically not passed at the federal level.
“This money from the huge interest on loans goes out of state,” complains another from the southern state. “Everyone knows that 89% of all the predatory loan organizations are located outside New Mexico. And in the end, we must suffer, people who grew up here and who are not indifferent to the fate of ordinary workers. ”
Polls show that more than 80% of residents of the state support the movement to limit the loan rate to 36%, which means that many in the region are unhappy with the current situation.
Do credit institutions care?
Meanwhile, according to The Wall Street Journal, lenders do not pay much attention to such speeches. The golden season has come for them, as the Christmas holidays come, and people, even the poorest, are used to spending large sums at this time of year. Especially for the holidays, many credit institutions throughout the country issue special loans “buy now, pay later”, which have become a frequent occurrence in recent years.
Usually they are used by people of the poor who cannot afford loans from reputable institutions and under good conditions. And although representatives of the institutions assure that this is rather a charity event, and that loan rates in such cases are insignificant and have a low interest rate, experts do not think so.
First, lending companies determine the debt recovery options for certain users and receive borrowers’ personal confidential information. Secondly, the high popularity of such loans, combined with the large sums of spending by US citizens during the Christmas holidays, will allow credit companies to earn huge interest again. So one can hardly speak of charity here. It is business, nothing personal.