Borrowed Time: Predatory Lenders vs. Native Americans

When President Barack Obama comes to New Mexico on Thursday, he’ll apply the considerable power of his presidency to the problem of credit card consumer abuse.

In a speech at Rio Rancho High, Obama will endorse current federal legislation that would force the powerful credit card companies to outlaw sudden interest rate hikes, unfair penalties and hidden fees while prohibiting them from giving cards to anyone under 21.

This consumer advocacy is welcome, coming from the only people with the power to actually make the hugely profitable industry retract apparently arbitrary policies that hurt millions of Americans.

But the shameful practices of the credit card companies are just one leg of a sticky web of predatory lending practices that include car title loans, payday loans and tax refund anticipation loans.

That point is borne out shockingly in a new report that says New Mexicans living in counties with high Native American populations paid more than $12 million in fees in 2005 to obtain tax refund anticipation loans, or RALs. The loans, which are unregulated in New Mexico, can carry interest rates of up to 500 percent.

The report, Borrowed Time: Use of Refund Anticipation Loans Among EITC Filers in Native American Communities, was done by the Colorado-based First Nations Development Institute and the Center for Responsible Lending.