SANTA FE, N.M. (AP) — New Mexico’s highest court cracked down Thursday on small consumer loans carrying quadruple-digit interest rates.
The state Supreme Court said the high-cost “signature loans” violated the state’s Unfair Practices Act and the interest-rate terms were “substantively unconscionable.”
The justices capped interest rates at 15 percent for loans by two companies that had been charging an annual percentage rate from 1,147 percent to 1,500 percent.
A $100 loan with a rate of 1,147 percent would carry a finance charge of about $1,000.
The court ordered the lenders to make restitution, repaying consumers any finance charges they paid above 15 percent.
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