GALLUP, N.M. – Short on cash six years ago, Carlotta Chimoni drove from her home in Zuni Pueblo to a small-dollar lender in nearby Gallup and took out a several hundred-dollar installment loan. “We had a family emergency and needed money,” said Chimoni, whose $22,000 teacher’s assistant salary is the only predictable income in her 11-person family.
Endless Debt: Native Americans Plagued by High-Interest Loans
But when Chimoni, 42, was laid up with migraines, she missed consecutive days at work and fell behind on payments. To avoid defaulting, Chimoni rolled the first installment loan into another one – and then another. “I ended up using loans to cover loans,” she said. By early 2014, Chimoni was carrying nearly a dozen loans from seven lenders, most with interest rates over 100 percent.
Hundreds of thousands of small-dollar loans are issued each year in Gallup and other New Mexico towns that border Native American reservations, according to New Mexico state lending data obtained by NBC. Most come with sky-high interest rates that can trap borrowers in an endless cycle of debt. Advocates including Human Rights Watch say that Native American communities appear to be more https://onedayloan.net/payday-loans-ms/ saddled with predatory loans than any other community in the United States.
On The Reservation: Taking Out Loans to Pay Loans
“These lenders are circling the reservations,” said Arvind Ganesan, director of Human Rights Watch’s business and human rights division, who has researched lending practices on reservations in multiple states.