The House Judiciary Committee on Thursday voted 9-1 in favor of capping interest rates at 175 percent on certain types of storefront loans and sent the legislation to the House floor.
House Bill 347, sponsored by Rep. Patty Lundstrom, D-Gallup, has been called the most significant movement in years to have New Mexico regulate what some call “predatory loans.” Though consumer advocates say a triple-digit interest rate would still be predatory, some groups see the bill as a significant improvement over the status quo, in which annual rates that can climb as high as 9,000 percent on some loans.
Industry lobbyists contend that placing the cap any lower would make it difficult for companies to offer loans to people who are high risks and leave poor people without access to emergency cash.
Progress on the bill had been delayed this week when House Speaker Brian Egolf, D-Santa Fe, tried to include tax refund anticipation loans in the legislation. However, this type of loan, which critics say carries some of the highest interest rates, is not covered by the current bill.
Some lawmakers who voted for the bill said they were torn. “I’m choking on 175,” said Rep. Matthew McQueen, D-Galisteo, referring to the maximum rate. “That’s unconscionable, and I sincerely hope we address that in a subsequent session.”
Rep. Daymon Ely, D-Corrales, who cast the lone dissenting vote, said “I just cannot put my name on 175.”
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