Gov. Michelle Lujan Grisham (D-NM) recently made the move to cap interest rates on storefront loans.
Grisham signed House Bill 132, which will lower the cap on small loan interest rates from 175% to 36%, according to a press release from the Office of the Governor.
“As we continue to grow our economy and create quality jobs for New Mexicans across the state, protecting New Mexico consumers remains critically important,” Lujan Grisham said in the release. “After many years of effort by advocates and legislators, I am glad to finally sign this legislation into law and deliver common-sense protections to vulnerable New Mexicans in rural and urban communities statewide.
By capping the interest rates, the state hopes to help individuals who were forced to accept predatory loans that took advantage of their financial situation.
“This bill signifies an end to crippling loans that harm New Mexican families,” Rep. Susan Herrera (D-Rio Arriba) said, according to the release.
The bill will also increase the maximum loan size to $10,000, up from $5,000.
“This is going to make a real difference in the lives of New Mexicans who struggle to make ends meet," Speaker of the House Brian Egolf (D-Santa Fe) said, according to the release. "By capping these interest rates, we can stop the debt trap and help more families get ahead. This historic achievement is the result of years of hard work by Rep. Herrera and other champions of our working families.”
The legislation is sponsored by Reps. Herrera, Egolf, Joy Garratt (D-Bernalillo), Phelps Anderson (R-Chaves), and Daymon Ely (D-Bernalillo).
“The success of this bill exemplifies excellent leadership, from advocates across the state and from legislators,” Sen. Katy Duhigg (D-Bernalillo) said, according to the release. “I am proud to have helped get this measure across the finish line and make a real difference for New Mexicans.”