SANTA FE, N.M. (AP) – A measure that would cap the amount of interest and fees charged by the payday loan industry in New Mexico has cleared its latest legislative hurdle.
The House Judiciary Committee endorsed the bill on a 9-1 vote Thursday, meaning the legislation will now be considered by the full House of Representatives.
This marks the most steam such legislation has had in recent years. Typically, any proposals to rein in storefront lending fall flat and never find their way out of committee.
The legislation effectively eliminates payday loans by definition and bans small loans that have terms less than 120 days. It also caps interest rates at 175 percent.
Some consumer advocates have pushed unsuccessfully for a 36 percent cap, but the higher rate has won support from industry lobbyists.