Government signs bill lowering maximum rate on small loans from 175% to 36%
New Mexico Governor Michelle Lujan Grisham signed legislation this week that caps interest rates on small, short-term loans at 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,” Governor Lujan Grisham said. “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. .”
The legislation enacts a maximum interest rate of 36% applicable under the New Mexico Bank Installment Loans Act of 1959 and the New Mexico Small Loans Act of 1955, limiting such loans to the same maximum annual percentage allowed by the US Department of Defense for assets. army service members. The legislation also increases the maximum loan amount from $5,000 to $10,000.
House Speaker Brian Egolf, one of the bill’s sponsors, said it would help end the debt trap that consumers face when borrowing in emergency situations.
“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 President Egolf. “This historic achievement is the result of years of hard work by Representative Herrera and other champions of our working families.”
New Mexico joins states like Illinois who recently exceeded rate caps by 36% on payday loans.