Storefront lending operations are prevalent in border towns like Gallup, New Mexico, near the Navajo Nation. Image from Google Maps

Fast cash businesses extended nearly 300,000 loans in New Mexico in 2013, ensnaring tribal members in the process, KUNM reports.

Ben Francisco, a member of the Navajo Nation who is in his 90s, took out some of those "storefront" loans. The interest rates run in the triple digits and, after turning over his retirement and social security checks to pay off his debts, he doesn't have any money to get by.

"I’ve seen people go hungry, I’ve seen people lose their homes over this," Jean Phillips, an attorney for New Mexico Legal Aid who is helping Francisco, told KUNM.

Marvin Ginn, who runs Native Community Finance at Laguna Pueblo, sees people on the reservation falling into the same trap. He said the storefront lenders target people in areas where traditional banking options may not exist.

"The business plan of these predatory lenders is they go to where the access to capital is difficult or hard," Ginn told KUNM. "The highest interest I’ve refinanced was 1,018 percent. The most recent highest in the past two or three months has been 719 percent."

According to a report presented to the New Mexico Legislature, 60 percent of Native Americans use storefront lending or pawnshop financing. The shops are prevalent in border towns -- there were 46 in Gallup, near the Navajo Nation, or 1 per 500 people, and 55 in Farmington, also near the Navajo Nation, or 1 per 840 people, in 2012.

An attempt to cap the interest rate at 36 percent failed in the Legislature this year.

Get the Story:
Problems Linger For Borrowers Of Fast Cash (KUNM 3/4)
State Sen. Bill Soules vows another attempt to cap storefront loan rates next year (The Santa Fe New Mexican 3/2)

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