Consumer Credit Regulation: 10.2.6.2.2 Examples of the application of an unconscionability standard to high-rate installment loans
State ex rel. King v. B&B Investment Group144 is an example of the application of a prohibition of unconscionability in a state deceptive practices statute to a high-cost installment loan. In that case, a suit brought by the state attorney general, the New Mexico Supreme Court in 2014 held that a subprime lender’s unsecured loans were procedurally and substantively unconscionable. The lender had formerly made payday loans in the state, but moved into unsecured installment lending when the state enacted payday loan reforms.