County Attorney Warns Residents About ‘Payday Loans’

By ABC-7 Reporter Darren Hunt

EL PASO — County Attorney Jose Rodriguez is warning Sun City residents to be careful when turning to “payday loans” for a quick cash injection during these hard economic times.

“It’s business entities taking advantage of people in a time of need,” said Rodriguez.

There are nearly 50 payday loan institutions inthe city. “People are not able to access loans so they have to look for someplace they can borrow money to carry them over,” added Rodriguez.

ABC-7 tried to talk to several people who had just taken out a payday loan, but none of them would talk to us because they were embarrassed about their financial situation. “A good number of these establishments are deliberately targeting minorities: Hispanics, African-Americans and disadvantaged people,” said Rodriguez.

Rodriguez believes these institutions know many of their customers will not be able to pay back the loan and still approve them for the cash.

That can get expensive. Some payday loan companies charge $20 for every$100 they loan.

If you can’t pay them back with your next paycheck, you can ask for an extension. However, that means a higher interest rate that could end up costing $500 to pay off a $100 loan in many instances.

The county attorney is urging for more regulation and warns all those seeking loans to know and understand what they are getting into.