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New Mexico Payday loan laws. New Mexico Payday loan legislation. New Mexico has specific payday advance laws. The rate of the loan is determined by the parties.
Effective November 2007: Payday loan laws prohibit renewals and rollovers of payday loans, requires automatic 130-day payment plans for those who cannot repay their payday loan on time, imposes a 10-day cooling off period before individuals can request another loan after being in a payment plan, adds new consumer rights signage in payday loan locations, and requires that information be provided in Spanish.
Consumers also will not be able to take out payday loans that exceed 25 percent of their gross monthly income. Richardson, Lt. Gov. Diane Denish, the Attorney General's Office, as well as leadership in the state House and Senate, and a number of consumer advocates pushed for the new rules during the past three legislative sessions.
To monitor compliance with the new regulations, all payday lenders operating in New Mexico must subscribe to a central computer database that tracks payday loan activity. The applicant's name and identifying information must be entered into the database before a payday loan can be extended.
For a thorough discussion of the payday loan industry and access to our payday loan training materials, we recommend you proceed to Payday and Paycheck Loans.com
If you have an interest in pursuing a payday loan business in New Mexico, we suggest you also research the Credit Services Organization as described here. Although our discussion focuses on the Texas Credit Services Organization Model, you and your team may determine it is appropriate for a multiplicity of states.
This Credit Service Organization Model is quite new to the payday loan industry but, in the opinion of many legal minds, offers great promise.
Compromise reached on proposed payday lending reforms
New Mexico Business Weekly - 4:02 PM MST Tuesday, February 13, 2007
Gov. Bill Richardson has announced a compromise among his office, legislators and advocates for strong payday lending reforms in the effort to get a payday lending regulation bill through the Legislature.
Richardson appointed a bipartisan task force last year to examine the issue and make recommendations. Efforts to pass such legislation have failed in previous sessions.
A bill on payday lending was originally introduced by Rep. Patty Lundstrom, D-McKinley. It is scheduled to go to the House floor soon, says Gilbert Gallegos, spokesman for Richardson's office. When it goes to the floor, a House floor substitute with the changes will be offered. If it passes the House, the bill will be sent to the Senate. Gallegos says key provisions of the compromise include a maximum term for a loan of 35 days and a minimum of 14 days as well as no renewals or rollovers of the loans.
There would be an automatic 130-day, no-cost payment plan and a lender could not litigate against a consumer if the lender did not offer the consumer a no-cost payment plan, or while the consumer is in a payment plan. Payment plans would be required to have approximately equal successive payments and the effective APR would be 42 percent.
Other requirements in the compromise legislation: Each payday loan agreement shall conspicuously disclose in at least 12-point type (font size) the consumer's right to enter into a fee-free payment plan of at least 130 days. Each licensee would have to provide signage conspicuously notifying the consumers of their 130-day fee-free payment plan rights.
Under the compromise, there would be a cap on all payday loans of 25 percent of a borrower's gross monthly income. Consumers would not be allowed to obtain payday loans while in any payment plan and there would be a 10-day cooling off period after a consumer completes a payment plan. Lenders would be able to charge up to $15.50 per $100 borrowed and the nonsufficient funds fee would be capped at $15 once per check. No waivers of payment plans would be allowed.