SANTA FE—After years of hard work by advocates and community members fighting for fair credit for all New Mexicans, a bill requiring a 36% APR cap on storefront loans passed was signed by Governor Michelle Lujan Grisham today.
“For years so many advocates and community members have fought for a fair and affordable interest rate cap. 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.” 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, and to the governor for signing this important legislation for New Mexico families.”
The law goes into effect January 1, 2023.
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.