COMMENTARY: Recently, the District Court in Santa Fe announced its decision requiring FastBucks, a high-cost payday and installment lender, to pay $32 million in restitution to consumers it harmed with its unconscionable business practices.
This decision was a significant victory for borrowers victimized by loans with annual interest rates in excess of 500 percent. The decision was the conclusion of a court case originally filed in 2009 and successfully prosecuted in 2012 by the consumer protection attorneys.
In announcing this decision, Attorney General Hector Balderas said, “[t]his $32 million restitution judgment for New Mexico consumers is a great step toward eliminating predatory business practices that prey on New Mexico families.”
The irony of this statement is apparently lost on Mr. Balderas, who only a few months ago explained his gutting of the consumer protection division, including drastic cutbacks in staffing and cases, by saying that it was “outdated in its approach and focused on the wrong job.”
The record of achievement of the consumer protection division before his election demonstrates otherwise.
From 2007–2014, before Mr. Balderas took office, the consumer protection attorneys:
· prosecuted the agency’s first-ever lawsuits attacking the unconscionable lending practices of two of New Mexico’s worst predatory lenders — an effort that resulted in the New Mexico Supreme Court’s landmark decision in State ex rel. King v. B&B Investment Group and the decision holding FastBucks liable for $32 million for its unconscionable practices;
· recovered millions of dollars for consumers through public enforcement actions and dispute resolution efforts;
· prosecuted car dealers for selling previously wrecked cars to consumers without disclosing the cars’ histories;
· prosecuted a debt buyer for attempts to collect debt that was unenforceable in court proceedings without disclosing that information to consumers;
· prosecuted mortgage rescue companies and debt settlement companies that took money from consumers without providing any services of value; and,
· prosecuted mortgage lenders for unlawful foreclosure practices and other illegal practices against New Mexican homeowners.
This record of achievement – of holding businesses accountable for unfair, deceptive or unconscionable practices and putting money back into the pockets of New Mexico consumers – is something that we, as consumers, should admire and that Hector Balderas should not belittle or ignore. The work undertaken by consumer division as previously constructed and charged was the right work, an example of good government at its best.
This stands in stark contrast to Balderas’s record. Almost two years into his administration, Mr. Balderas has failed to demonstrate a meaningful commitment to enforcing the law to protect consumers from unfair, deceptive or unconscionable business practices. The small handful of cases in which he’s recovered any money for consumers were initiated and prosecuted before he took office.
Still, if Mr. Balderas’s recent statement about predatory lending is to mean anything, he could start by pursuing aggressive enforcement actions against other predatory lenders, whose loans and lending practices violate the Supreme Court’s decision in State v. B&B Investment Group.
He could continue cracking down on shady car dealers, mortgage servicers, and debt collectors looking to make a quick buck by breaking the rules of fair and honest dealing. He could pursue cases that put money back in the pockets of victimized consumers and put a permanent halt to illegal business conduct.
That’s the right approach, and it is the job he was elected to do.
Ona Porter is the president and CEO of Prosperity Works.