GALLUP—The New Mexico Financial Institutions Division will hear public comment in Gallup on Tuesday regarding its proposed regulations on HB 347, which imposes a 175 percent APR interest rate cap on small loans. Before passage of this law, most small loans were unregulated and interest rates were even higher.
The law also ensures that borrowers have the right to clear information about loan total costs, allows borrowers to develop credit history via payments made on small-dollar loans, and stipulates that all such loans, except refund anticipation loans, have an initial maturity of 120 days and cannot be subject to a repayment plan smaller than four payments of loan principal and interest.
While the law and proposed regulations signal progress for fair loan terms, much more work remains to be done to ensure a more inclusive economy for all New Mexicans. Storefront lenders have long aggressively targeted low-income families and Native communities in the state, pushing loans with high-interest rates or arbitrary fees and no regard for an individual’s ability to repay. Gallup has the highest concentration of storefront lenders in the state with nearly 50 licensed lenders for a population of less than 23,000.
Among other recommendations at the Tuesday hearing, the New Mexico Center on Law and Poverty will urge the FID to improve the regulations to close loopholes around loan renewals and increase transparency in how the division regulates small loan companies.
The FID’s proposed regulations can be found here: www.rld.state.nm.us/financialinstitutions/
The Center’s comments on the proposed regulations can be found here: https://wp.me/a7pqlk-10H
The Center’s suggested changes to the proposed regulations can be found here: https://wp.me/a7pqlk-10I
FID Hearing on proposed HB 347 regulations
Tuesday, May 15, 2018 at 11:00 a.m.
Rehoboth McKinley Christian Health Care Services Building
Solarium Room, 3rd Floor
1901 Red Rock Drive
Gallup, New Mexico 8730