New Mexico Legislature Passes 36% APR Cap Bill
Last week, lawmakers in the New Mexico state legislature passed a bill reducing the state’s maximum allowable annual interest rates from 175 percent to 36 percent, ending a years-long debate between the state House and Senate.
Before it was passed, the New Mexico Senate removed a provision in the bill for new reporting requirements on credit unions. Representative Susan Herrera (D-Embudo) supported the amendment as the reporting wouldn’t produce meaningful data, and urged the state House to approve the bill as amended by the State Senate.
Critics of the bill said that lowering annual interest rate caps would cause job losses and could make it more difficult for individuals to access credit. They also argued that it would force many consumers who use alternative financial services to seek other sources of credit.
However, the final legislation cleared the House by a vote of 51 supporting to 18 opposed and passed the Senate by a margin of 19 to 8. It was also supported by Governor Michelle Lujan Grisham, who has until March 9 to either sign or veto the bill.
“This legislation addresses an important issue that affects the most vulnerable New Mexicans in both rural and urban communities, which is why I included such action in my 2021 legislative priorities,” she said. “I’m glad to see the Legislature reach a consensus on the measure and I applaud the members for voting to protect New Mexico consumers.”