Monday, February 14, 2005
Gov. To Propose Payday Loan Cap
By Andy Lenderman
Journal Politics Writer
SANTA FE Gov. Bill Richardson says he'll introduce a measure to the Legislature this week that will cap interest rates on payday and car title loans.
"I'm going to enter the fray and propose a bill of my own that sets a reasonable cap," Richardson said Sunday in a telephone interview.
Similar measures in the House and Senate have failed or been tabled.
Interest rates on these small loans can be as much as 600 percent. Critics say these loans prey on desperately poor New Mexicans. Those in the payday loan industry say they're providing a valuable service.
Richardson said his bill will also have some fees that will make the interest rate cap more than the 36 percent ceiling proposed by HB 372, sponsored by Rep. Mimi Stewart, D-Albuquerque.
"There's just a lot of abuses and problems in the state" regarding payday loans, Richardson said. Loans in San Juan and McKinley counties are particularly problematic, he said.
Richardson also says the state should spend some of its new money to cover health insurance premium increases for teachers and bigger pay raises for state employees. Advocates for both groups have criticized the governor on those issues.
Richardson, who spent the end of last week attending to Democratic party business in Washington, D.C., said he was pleased with new revenue estimates for the state budget that were released Friday.
State officials say there is $23.6 million more in new money that can be spent on recurring expenses next year. The total state budget is about $4.6 billion.
"I knew that the revenues would be higher," Richardson said. "I didn't know this high. So I was pleasantly surprised."
Richardson said he would make three spending suggestions to lawmakers today, including:
$22 million for state reserves.
$17.5 million to cover expected increases in health insurance costs for public school teachers. Education advocates have criticized Richardson's earlier budget recommendations by saying they didn't have any cash to cover this matter.
More money to give state employees a 3 percent raise. Richardson has also been pressured by the Association of Federal, State, County and Municipal Employees for a bigger pay raise. Talks between the state and the public employees union are stalled.
"I'm not reacting to pressure," Richardson said. "It's just equitable."