SANTA FE, N.M. (AP) – New Mexico state employees would gain access to short-term personal loans that can be repaid through their paychecks under newly proposed legislation.
Democratic state Sen. Bill Tallman of Albuquerque said Monday that the bill is designed to ensure state employees can borrow modest amounts of money without resorting to high-interest loans from storefront lenders.
New Mexico this year is capping annual interest rates on small loans at 175 percent in an effort to combat predatory lending.
Tallman’s proposal would limit interest rates to 30 percent for qualified state employees, and cap repayment at 12 percent of gross salary or wages.
Several local government entities in New Mexico already have joined a program called TrueConnect that provides employees with short-term loans that are repaid from a portion of salary.