CHAMA—The New Mexico Legislative Indian Affairs Committee will hold an interim legislative hearing in Chama on Monday regarding the Financial Institutions Division’s proposed regulations on HB 347, which imposes a 175 percent APR interest rate cap on small loans. The New Mexico Center on Law and Poverty and Prosperity Works will ask the committee to pass a resolution requesting the FID provide information about how it is enforcing this new law and present that report to the committee later this fall.
Before passage of HB 347 in the 2017 legislative session, most small loans were unregulated and interest rates were even higher. HB 347 ensures that borrowers have the right to clear information about total loan costs, allows borrowers to develop a credit history when they make payments on small-dollar loans, and sets minimum contract terms for small loans including at least four payments and 120 days to pay off most loans. Refund anticipation loans are exempt from those requirements.
While the law and proposed regulations signal progress for fair loan terms, much more work remains to be done to ensure fair access to credit for all New Mexicans. Storefront lenders with predatory business practices that trap people in a cycle of unaffordable debt have deep roots in the state and have aggressively targeted generations of low-income families and Native communities, pushing loans with high-interest rates or arbitrary fees with no regard for an individual’s ability to repay.
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
Indian Affairs Committee interim legislative hearing on proposed HB 347 regulations, which impose a 175 percent interest rate cap on small loans.
Monday, July 2, 2018 at 12:30 p.m.
Lodge and Ranch at Chama
16253 S Chama Highway 84, Chama, NM 87520
Chama, NM 87520
Indian Affairs Committee
New Mexico Center on Law and Poverty
Member of the public