Payday loan company counter sues NM AG

ALBUQUERQUE (KRQE) - A lawsuit will be filed Monday to determine if Attorney General Gary King is protecting consumers from predatory lending or overstepping his bounds.

Fastbucks will file a countersuit against King after he sued the company and claimed it was taking advantage of people.

King's lawsuit was filed last year. It calls Fastbucks' practices "unconscionable," and claims the company is charging interest rates in excess of 500 percent.

The Attorney General's Office is asking a judge to declare the terms of many Fastbucks loan unfair, make current loan agreements void and make the company pay restitution to customers.

David Streubel represents Fastbucks. He will file the countersuit on Monday.

"King is trying to accomplish through the courts what he could not accomplish in the legislature," Streubel said.

Fastbucks' suit claims malicious abuse of process.

Streubel said his clients are following the laws governing micro-loans and payday loans passed in 2007 by the state's legislature.

Those rules limit certain fees, length of loans, who they can loan to based on income and requires the company to offer an out within 24 hours and payment plan for those in default.

Streubel said King is trying to go even further, which is a power intended for the legislature.

"They have considered micro loans every session since and have decided the industry is working pretty well," Streubel said.

Fastbucks' attorney responded to King's claims by saying the company provides a valuable service.

"Often the ability to get instant cash is the difference between getting evicted from their home, getting utilities turned off, getting food and medicine for their families," Streubel said.

King's office said it couldn't respond to the lawsuit because it hadn't been served yet. The AG will decide if he can discuss it after thoroughly reviewing its claims.