Fastbucks and New Mexico Attorney General in legal scuffle
In New Mexico, the lawsuits are flying between the Attorney General and loan company Fastbucks. Attorney General Gary King filed a lawsuit against Fastbucks last year. Fastbucks has counter sued. At issue? New regulations on payday lending that Fastbucks successfully fought in court in 2006.
The original lawsuit against Fastbucks
The lawsuit that started this tete-a-tete in New Mexico was filed by Gary King against Fastbucks and one other instant payday loan company. The suit, which was originally scheduled to go to court on July 6, was a civil suit. The suit claimed that Fastbucks was responsible for “unconscionable” loans. The judge ordered that Fastbucks and the New Mexico Attorney General were to attend mediation, but the Attorney General did not attend the session.
In the Roswell district court, Fastbucks filed a countersuit to the Attorney General’s civil suit. Fastbucks alleges that the Attorney General is suing them to “create legislation with litigation.” The suit also alleges that the case has been filed as a reaction to the failure of the legislation to pass in 2006. This lawsuit does not yet have a court date set. It is possible that the New Mexico Attorney General may file for the judging of the suit to be moved. Because the counter suit was filed in a different district than the original suit, there may be issues of jurisdiction.
The essential arguments
The arguments in the New Mexico case come down to the question of “unconscionable trade practices.” The Attorney General of New Mexico claims that these instant payday loans charge too much money for the lending service they provide. Fastbucks and other stores that deal in payday advances say that they are being unfairly targeted for providing lending to high-risk customers. Providing an instant loan to high-risk lending groups is an expensive proposition, so the interest rates are high. Many states and attorney generals have been taking action against these businesses, saying they take unfair advantage.