HOUSE DEMOCRATS NEWS
Members of the House Democratic caucus tonight introduced an amendment to Senate Bill 66: Permitted Percentage Rates for Loans, that reaches a sought-after compromise that truly reflects the way poverty impacts New Mexico’s hardworking families.
Sponsored by Senators Bill Soules (D-Las Cruces) and Katy Duhigg (D-Albuquerque), Representatives Susan Herrera (D-Embudo) and Gail Armstrong (R-Magdalena), the Senate version of SB 66 decreased the state’s maximum interest rate on small loans from 175% to 36%. Yesterday, the House Judiciary Committee was concerned that this rapid 139% change would limit the supply of microloans that are available to New Mexicans. Seeking a middle ground, the committee changed the new cap to 99% in an effort to ensure that emergency resources, even if high interest, would be available in New Mexico.
Today’s amendment will retain the 99% interest rate on small loans up to $1000, and borrowers will have up to 24 months to repay the loan. If borrowers pay the loan off early, they will save substantial interest. For loans over $1000, the cap will be reduced to the originally proposed 36%. This commonsense amendment was crafted by five House Democratic women leaders from a diverse array of districts, including Reps. Susan Herrera (D-Embudo), Micaela Lara Cadena (D-Mesilla), Patty Lundstrom (D-Gallup), Dayan Hochman-Vigil (D-Albuquerque), and Doreen Gallegos (D-Las Cruces).
“Almost 600,000 of these small installment loans have been taken out in New Mexico over the past year,” said Rep. Herrera. “These numbers tell us that families in our state need the option to access these emergency resources just to make ends meet. If we place the cap too low, they will be denied all loans and have no options left, so this compromise strikes this balance.”
“We listen and learn about how poverty rolls through our communities, and have spent our lives working to disrupt generational and systemic conditions faced by New Mexican families. We remain committed to this cause,” said Rep. Cadena. “Yet, our constituents deserve more than efforts that sound good, we must craft policies that do good. With this amendment, we have a pragmatic compromise that dramatically brings interest rates down, and holds space for the emergency micro lending that provides a lifeline for those that desperately need it. I’m proud of our women leaders in the House, who came together with diverse and expansive expertise to craft this commonsense amendment.”
“In the House, we have a longstanding history of adapting and updating policies as we take in perspectives over the course of the process. It is clear that families need lending options, and we have found a strong compromise to provide that,” said Rep. Lundstrom.
“Many families in New Mexico are struggling financially, and doing everything they can to make ends meet, especially since the pandemic hit,” said Rep. Hochman Vigil. “In our districts, the realities of poverty require access to these critical services. But as policymakers committed to creating opportunities that uplift hardworking families, we must do more to stop the predatory practices that keep families in poverty, and this amendment works to do just that.”
“It was an honor to work together with this talented group of women from our House and to leverage their diverse expertise in crafting this amendment,” said Rep. Gallegos. “Tonight’s compromise should serve as a great example to the legislature and state on how to work together to create real, commonsense solutions that work for the people of our state.”
Members of the public can track legislation on the New Mexico Legislature website, access committee meetings and House floor sessions via the Webcasts tab, or participate by Zoom to provide public comment on committee hearings. During the 2021 Legislative Session, the House of Representatives is focused on passing critical legislation while protecting the health and safety of the public, the staff, and the legislators.