State To Study Storefront Loan Alternatives
Lawmakers voted Wednesday to study a plan that would make small dollar loans available to state employees. At 26 percent interest, the loans would offer options for low income borrowers who have traditionally turned to high interest storefront loans.
When people in New Mexico need money for groceries or medical emergencies, they often turn to storefront lending shops that can charge interest of 300 percent or more.
But people needing those loans could have safer options in the future—this week the Senate ordered the state to study the feasibility of providing lower interest loans as a standard employment benefit for state employees.
"We feel that this is a great step forward," said Ona Porter of Prosperity Works. "If we are successful in demonstrating this model, we really will have fair lending for all of New Mexico and have a tremendous impact on reducing poverty."
If the program is implemented, Porter says, she hopes it will be expanded to municipal, county and private employees in the future.