Governor caps interest rates on storefront loans
SANTA FE — Governor Michelle Lujan Grisham on Tuesday signed Bill 132 into law, reforming predatory lending practices by lowering the cap on interest rates on small loans from 175% to 36%.
“As we continue to grow our economy and create quality jobs for New Mexicans across the state, protecting New Mexico consumers remains of critical importance,” said Governor Lujan Grisham. “After many years of effort by advocates and lawmakers, I am pleased to finally sign this legislation and provide common sense protections to vulnerable New Mexicans in rural and urban communities across the state. .”
Sponsored by Rep. Susan Herrera, Speaker of the House Brian Egolf, Rep. Joy Garratt, Rep. Phelps Anderson and Rep. Daymon Ely, the legislation enacts a maximum interest rate of 36% applicable under the New Mexico bank installment loans. 1959 and the New Mexico Small Loan Act of 1955, limiting such loans to the same maximum annual percentage allowed by the U.S. Department of Defense for active duty military personnel. The legislation also increases the maximum loan amount from $5,000 to $10,000.
“This bill means an end to the crippling loans that hurt New Mexican families,” said Rep. Herrera.
“This is going to make a real difference in the lives of New Mexicans who are struggling to make ends meet. By capping these interest rates, we can stop the debt trap and help more families move forward,” said Lecturer Egolf. “This historic achievement is the result of years of hard work by Representative Herrera and other champions of our working families.”
“The success of this bill illustrates excellent leadership, from statewide advocates and lawmakers,” said Senator Katy Duhigg, sponsor of the senate. “I am proud to have helped cross the finish line with this measure and to make a real difference for New Mexicans.”