Governor Signs Bill Reducing Interest Rates for Small Loans | Local News
Governor Michelle Lujan Grisham on Tuesday signed into law a bill that dramatically lowers the interest rate cap for so-called storefront lenders.
House Bill 132 aims to prevent predatory lending practices by brick-and-mortar businesses and online lenders that offer small loans to customers with poor credit scores, most of whom are low-income earners, by lowering the rate cap interest at 36%. from 175 percent.
“As we continue to grow our economy and create quality jobs for New Mexicans across the state, protecting New Mexico consumers remains of critical importance,” the governor said in a statement. release released on Tuesday.
“After many years of effort by advocates and lawmakers, I am pleased to finally sign this legislation and provide common sense protections to vulnerable New Mexicans in rural and urban communities across the state. “, she said.
The bill, which received considerable bipartisan support in this year’s legislative session, is seen as a victory by advocates and lawmakers who had worked for years unsuccessfully to pass a measure lowering the cap on rate. HB 132 affects rates on loans up to $10,000. It allows lenders to charge fees of up to 5% for loans up to $500.
“This bill means an end to crippling loans that hurt New Mexican families,” Rep. Susan Herrera, D-Embudo, one of the bill’s sponsors, said in the press release.
Another sponsor, Rep. Brian Egolf, D-Santa Fe, said in a statement that the new law “will make a real difference in the lives of new Mexicans struggling to make ends meet.” By capping these interest rates, we can stop the debt trap and help more families move forward.
The New Mexico Center for Law and Poverty had been calling for an end to high interest rates for years.
In a statement released Tuesday by the nonprofit, attorney Lindsay Cutler said, “For years, many advocates and community members have fought for a fair and affordable interest rate cap. New Mexican families who have experienced crippling financial hardship from abusive loans have come forward to tell their stories and the stories of their communities again and again, year after year. Today, all that hard work has paid off.
According to the center’s research, 65% of small state lenders are located within 15 miles of tribal or pueblo land.
Some lawmakers who opposed the bill said that storefront lenders are often the only sources of loans for struggling residents when money is tight, and they argued the measure would drive many of those lenders to close.
The governor also signed other key pieces of legislation this week. A bill she signed on Monday allows broad access to test strips that can detect the presence of the powerful opioid fentanyl and potentially help prevent fatal overdoses.
The bill lifts restrictions on public access to devices that can test for drug impurities. It also gives state health officials new authority to intervene and curb the spread of diseases like HIV and hepatitis that can be transmitted through intravenous drug use.
Overdoses in New Mexico are increasingly linked to the ingestion of drugs containing fentanyl. States, including Arizona, have already decriminalized test strips designed to detect fentanyl.
New Mexico consistently leads the western United States in rates of opioid-related overdose deaths.
Lujan Grisham also signed legislation that grants new preferences in state procurement to bids from Native American-owned businesses based on tribal lands and increases preference for state- and veteran-owned businesses.
Procurement preferences are reserved for small and medium-sized businesses with annual revenues of up to $6 million, providing an 8% advantage on bid prices to resident and Native American-owned businesses. Businesses owned by military veterans get a 10% advantage, under legislation from Democratic Sen. Benny Shendo of Jemez Pueblo and Rep. Harry Garcia of Grants.
A third bill she signed will increase payments to many retired lawmakers from the state and local government employees pension fund overseen by the Public Employees Retirement Association, with no increase in contributions. New Mexico lawmakers receive a per diem and mileage reimbursements when they work, but no formal salary.
Average annual pension benefits for retired lawmakers are expected to rise from about $11,000 to $14,000.
The Associated Press contributed to this report.