Bill to cap advances on predatory loans
Gov. Michelle Lujan Grisham said it was a priority, but she didn’t mention it in the state of the state address and didn’t officially add it to the agenda until Monday after- midday.
New Mexico has over 500 storefront outlets. They usually charge higher interest rates because they are used to people who often don’t have the best credit. People can see them near native communities, like in Gallup, and also around military bases.
The Think New Mexico group, which has had success on a number of reform issues, says New Mexico’s current 175% interest cap is rather laughable.
“But still, at 175%, we find that about 80% of consumers are caught in a cycle of debt. And they have to refinance those loans over and over again and they can never pay them back. So we think they should be reduced to something more reasonable like 36%, which is what Congress passed,” said Fred Nathan of Think New Mexico.
This last point about Congress is important, because the proposed limit of 36% in New Mexico is the maximum interest rate that lenders can charge the military.
The bill was approved by a key committee on Monday and could get a floor vote as early as Monday night, when the House returns at 8 p.m.