Since eradicating them outright apparently won?t work or isn?t fair, New Mexico Gov. Bill Richardson and Attorney General Patricia Madrid have filed new payday lending regulations that they say are designed to better protect consumers against predatory lending practices.



The regulations, according to an article in the New Mexico Business Journal, would require all payday loans be interest free and charges would be capped at $15.50 per $100 loan. It also would allow consumers to enter into a longer payment plan, a minimum of 130 days, after a second renewal of the loan. Consumers would be allowed to borrow only amounts not greater than 25 percent of their gross monthly incomes.



The regulations would also make it incredibly unattractive for most payday loan operations to remain in business. Which may actually be a more elegant solution than outright banning.



The state Regulation and Licensing Department is currently enforcing a moratorium on new payday lending licenses until all payday lenders set up a centralized computer database that monitors compliance with the new regulations. The database would track who is borrowing, how much they borrow, and where and how many payday loans they have throughout the state.


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