Fair Lending

All New Mexicans deserve access to fair loans under reasonable terms.

Our Stance

In New Mexico, there have historically been few regulations placed on the storefront or small loan industry. Targeting low-income New Mexicans, storefront lenders offer loans, often with four-digit interest rates, with no regard for an individual’s ability to repay them. This can lead to what is often referred to as the “debt trap” in which borrowers have to renew, rollover, or take out multiple loans just to pay off the first.

Predatory loans like these have had a widespread negative impact in our state. 30% of New Mexico households have reported using one or more of these alternative financial services.
These practices have also stifled New Mexico’s economy. In 2016, New Mexican consumers paid more than $121 million in loan fees to unscrupulous lenders–money that otherwise would have remained in borrowers’ pockets and spent at local businesses.

Our Advocacy

In 2017, our legislature passed a bill (HB 347) enacting the first state regulations on all small loans up to $5,000. The legislation, which went into effect on January 1, 2018, established several key consumer protections for the very first time, including a 175% APR cap. While the new law is progress toward ensuring that all New Mexicans have access to fair credit, the 175% APR cap remains unfairly and unnecessarily high and continues to prevent families from building toward a stronger financial future.

The New Mexico Center on Law and Poverty and our allies are working to hold the Financial Institutions Division of the Regulation and Licensing Department, the state agency charged with enforcing HB 347, accountable for the proper implementation and strong enforcement of this critical consumer protection law. We are also working to build support for lowering the 175% APR cap and implementing additional regulations and reforms so that all New Mexicans can fully participate in our state’s economy.

Our Resources