Letter to the Observer: Debate on consumer protection



Access to credit for many New Mexicans has been a topic of debate in Santa Fe for years, and with the economic turmoil imposed by COVID-19, the debate continues.

When lawmakers and regulators address critical issues like this affecting access to credit for the most vulnerable New Mexicans, consumer protection must be a priority.

Public health orders created winners and losers in our workforce, with winners held harmless because their incomes and benefits were not hampered. The losers, on the other hand, saw honorable revival efforts come and go as Omicron and Delta relentlessly purged our workforce.

Although COVID-19 has eliminated paychecks for many of New Mexico’s poorest residents, it has not eliminated day-to-day living costs such as gas, car payments and medical emergencies.

This was compounded if you fit the “non-essential” employee label during the early years of the pandemic, in which case you likely faced the added pressures of losing access to traditional credit.

New Mexico lawmakers are debating the merits of the 36% rate cap on small dollar loans that could cause reputable small lenders to stop offering their services here in New Mexico.

While this issue is complex, I believe it is possible to lower rates and increase consumer protection in a responsible way that would not hurt access to credit in the communities that need it most. .

I jump into this debate because I’ve seen reports that credit unions in New Mexico would be willing to step in and fill the credit void for our underserved neighbors.

I applaud the idea that credit unions have hinted that their involvement is imminent, however, as a former mayor and legislator, I have heard promises like this before and far too many are broken.

If credit unions are comfortable lending at 36%, why weren’t they offering loan options below the current rate of 175% when it would have been even more helpful to consumers to have lower rates more competitive?

I encourage them to implement this model and start lending today. Obviously, they don’t have to wait for legislation to be passed before they can do that.

Politics cannot be made on the basis of promises. If credit unions failed to deliver on their promise, low-income communities would be left without safe and trustworthy credit options.

There is too much at stake to act carelessly when developing policies that will impact the financial stability of our communities.

Our leaders in Santa Fe must respond responsibly and act to expand access to credit, not restrict it. Rushing for a politically quick fix to cap rates will not guarantee long-term protections or continued access to credit.

Leadership in Santa Fe should continue to bring advocates and industry to the table to reach a compromise on meaningful and productive regulation to benefit the families and communities we serve.

Doing this will serve us all better in the end.

Tom Swisstack
Rio Rancho


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