Bill awaits the governor’s signature
SANTA FE—After years of hard work by advocates and community members fighting for fair credit for all New Mexicans, a bill requiring an all-inclusive 36% APR cap on storefront loans passed the Legislature today.
House Bill 132 passed the House by a vote of 51 to 18. It passed the Senate by a vote of 19 to eight.
“For decades New Mexico has allowed huge out-of-state companies to charge hundreds of millions of dollars in interest, specifically targeting our native communities, but thanks to the hard work of so many partners, of the sponsors, and of the Legislature, we may finally pass real consumer protections for our people,” said Austin Weahkee from NM Native Vote.
Governor Lujan Grisham has issued an executive message and it is expected that she will sign the bill. If the bill is signed into law, it will go into effect on January 1, 2023.
“A fair interest rate cap for all New Mexicans has been a long time coming,” said Lindsay Cutler, an attorney with the New Mexico Center on Law and Poverty. “We are incredibly grateful to the leadership of the sponsors of HB 132, Representatives Herrera, Garratt, Anderson, Ely and Speaker Egolf, as well as Senators Duhigg and Soules for their hard work to get the bill through the legislative process. For years so many advocates and community members have fought for this day. New Mexican families who’ve experienced crushing financial hardships because of predatory loans have come forward to tell their stories and the stories of their communities over and over, year after year. Today all that hard work has paid off.”
65% of lenders in New Mexico are located within 15 miles of Tribal lands. In McKinley County alone, there are more than 40 storefront lenders that made 69,618 loans in 2020 – nearly one loan for every resident. The Navajo Nation President and Council have expressed their strong support for a 36% cap.
New Mexico currently has one of the highest interest rate caps on installment loans in the country. Lenders across the state are taking advantage of triple-digit interest rates and draining hundreds of millions of dollars from hardworking New Mexicans each year. A family who borrows a storefront loan for just a few hundred dollars at the current rate cap of 175% APR will end up paying hundreds, even thousands of dollars in interest and fees.
“No one should be allowed to charge triple-digit interest rates,” said Ona Porter, Founder Emerita of Prosperity Works. “No one should have to choose between paying their rent and making payments on a triple-digit loan that often keeps them trapped endlessly. New Mexicans deserve access to fair and responsible credit.”