City employees will have the option to take out short-term loans at favorable interest rates under a new program approved Wednesday night by the City Council.
The employee loan program, proposed by Mayor Alan Webber, who said it will allow workers to avoid predatory payday lending businesses.
Councilors were unanimous but asked some pointed questions about how the program will work, how interest rates will be set and who can participate.
“It sounds almost too good to be true,” said Councilor Carol Romero-Wirth.
“I think that’s fair,” Webber said.
At least seven New Mexico counties and a few cities, including Las Cruces, take part in a similar program.
The growth in participants comes after the state on Jan. 1 instituted a new 175 percent cap on annual interest rates so-called payday lenders can charge, which was viewed positively by industry critics who say the storefront lending industry and its exorbitant rates prey on impoverished individuals who can ill afford to be sucked into the quicksand of debt.