American Fintech Council Backs New Mexico Bill to Lower State Interest Rate Cap

SB 66 would protect vulnerable New Mexicans from being caught in triple digit interest rate debt traps‍

WASHINGTON, D.C. - The American Fintech Council (AFC) is endorsing S.B. 66, a bill introduced by Senator Bill Soules (D-Las Cruces) and cosponsored by Sen. Katy Duhigg (D-Albuquerque). The legislation would cap the cost of consumer loans in New Mexico at an all-inclusive 36% APR. Currently, the state’s maximum APR for these loans is approximately 175%--one of the highest in the country.

“New Mexico has one of the highest installment loan interest rate caps in the country, and these triple-digit rate loans severely impact distressed borrowers and communities of color who are struggling to get by in this COVID economy,” said the American Fintech Council Executive Committee. “Our member companies show every day it is possible to adhere to a 36% APR cap and offer responsible loans based on the borrower’s ability to repay. Our members provide hundreds of millions of dollars of credit annually to tens of thousands of working New Mexicans—all under 36% APR. We commend Senators Soules and Duhigg for their work and applaud New Mexicans for Fair Lending Coalition, NM Native Vote, the New Mexico Center on Law and Poverty, Think New Mexico, and the dozens of consumer advocates across the state’s four corners for working to advance this legislation.”

AFC believes S.B. 66 complements federal legislation that calls for a nationwide cap on consumer loans at 36% APR. AFC is a strong proponent of extending the 36% rate cap of the federal Military Lending Act, which currently protects military families, to all Americans, and working with lawmakers to eliminate triple digit interest rates that put too many distressed families into debt traps.

S.B. 66 is especially important to communities of color and families in Indian County, who are affected disproportionately by both COVID and unaffordable, high-rate lending. According to the New Mexico Center on Law and Poverty, nearly 60% of New Mexico’s payday lenders are located within 10 miles of a pueblo or tribal reservation.