NM Subprime Survey Could Spur Litigation

A survey of subprime lenders and their consumer protection practices by the New Mexico attorney general could result in litigation, according to the state's chief deputy attorney general, Stuart Bluestone.Mr. Bluestone said state Attorney General Patricia Madrid is still evaluating the responses received from lenders and that the AG is not prepared to announce any initiatives. "Whether there will be additional legislation proposed or other litigation that is necessary is still on the table and remains to be decided," he said. In July, the New Mexico AG sent letters to nearly 160 subprime lenders nationwide to see if the industry has adopted the consumer protections spelled out in a 2002 settlement with Household Finance International. Mr. Bluestone made his remarks during a news conference in which several state officials and Rep. Brad Miller, D-N.C., attacked a predatory lending bill sponsored by Reps. Bob Ney, R-Ohio, and Paul Kanjorski, D-Pa., and supported by the subprime lenders. The Ney-Kanjorski bill would pre-empt New Mexico's predatory lending law, Mr. Bluestone said. "That bill would gut our new, effective law, install in its place a weak federal standard, and prevent us from adequately protecting our residents from lending abuses," he declared.