2023 New Mexico Statutes › Chapter 58 - Financial Institutions and Regulations › Article 15 - Small Loan Business › Section 58-15-5 - Licenses; investigation of application; issuance; denial; issuance of renewal license; denial of renewal license; fitness and character of applicant; license fees; licensee bound by act.

A. Upon the filing of an application, whether it is an original or a renewal, the director shall investigate the facts concerning the application and the requirements provided in this section.
B. An applicant for license, upon written notice to do so by the director, shall, within twenty days after service of the notice, furnish in writing, under oath, to the director all additional information required by the director that may be relevant or, in the opinion of the director, helpful in conducting the investigation.
C. Failure to comply with the director's requirement for supplemental information or the willful furnishing of false information is sufficient grounds for denial of license.
D. False or misleading information willfully and intentionally furnished to the director prior to the issuance of any license is grounds for suspension or revocation of any license in accordance with the procedures for suspension or revocation of license in the New Mexico Small Loan Act of 1955.
E. The director shall grant or deny each application for an original license within sixty days from the filing of the application with the required information and fees, unless the period is extended by written agreement between the applicant and the director.
F. In the event the director finds that:
(1) the financial responsibility, character and general fitness of the applicant for an original license and of the individual members and beneficiaries thereof, if the applicant is a copartnership, association or trust, and of the officers and directors thereof, if the applicant is a corporation, are such as to command the confidence of the public and to warrant belief that the business will be operated lawfully, honestly, fairly and efficiently within the declared purposes and spirit of the New Mexico Small Loan Act of 1955;
(2) allowing the applicant to engage in business will promote the convenience and advantage of the community in which the business of the applicant is to be conducted; and
(3) the applicant has available for operation of the business at the specified location cash or its equivalent, convertible securities or receivables of thirty thousand dollars ($30,000) or any combination thereof; the director shall enter an order granting the application, file the director's findings and, upon payment of the license fee of five hundred dollars ($500), issue and deliver a license to the applicant.
G. If the director does not make the findings enumerated in Subsection F of this section, the director shall enter an order denying the application, notify the applicant of the denial and retain the application fee. Within thirty days after the entry of such an order, the director shall prepare written findings and shall deliver a copy to the applicant.
H. A written application for license renewal shall be filed on or before March 31 of each year, and thereupon the director shall investigate the facts and review the files of examinations of the applicant made by the director's office and of complaints filed by borrowers, if any. The director shall deliver a renewal license to the applicant if the director finds that:
(1) no valid complaints of violations or abuses of the New Mexico Small Loan Act of 1955 or of the regulations of the director promulgated under that act have been filed by borrowers;
(2) examinations of the affairs of the applicant indicate that the business has been conducted and operated lawfully and efficiently within the declared purposes and spirit of the New Mexico Small Loan Act of 1955; and
(3) the financial responsibility, experience and general fitness and character of the applicant remain such as to command the confidence of the public and to warrant the belief that the business will continue to be operated lawfully and efficiently within the purposes and spirit of the New Mexico Small Loan Act of 1955.
I. If the director does not make the findings enumerated in Subsection H of this section, the director may grant a temporary extension of the license not exceeding sixty days pending a hearing; shall enter an order fixing a date for hearing upon the application; shall notify the licensee thereof, specifying the particular complaints, violations or abuses or other reasons for the director's contemplated refusal to renew the license; and shall afford to the applicant an opportunity to be heard. At the hearing, the director shall produce evidence to establish the truth of the charges of violation or other grounds specified in the notice, and the applicant shall be accorded the right to produce evidence or other matters of defense. If after the hearing the director finds that the complaints of violations or other grounds specified in the notice are not well-founded, the director shall issue the renewal license. If the director finds that the complaints of violations or other grounds are well-founded, the director shall enter an order denying the renewal application and notify the applicant of the denial, returning the renewal license fee tendered with the application. Within thirty days after the entry of such an order, the director shall prepare written findings and shall deliver a copy of the findings to the applicant. The order shall be subject to review as provided in Section 58-15-25 NMSA 1978. The court in its discretion and upon proper showing may order a temporary extension of the license pending disposition of the review proceedings.
J. In connection with the determination of fitness and character of an applicant pursuant to the provisions of this section, the fact that the applicant or licensee is a member of or interested financially in, connected or affiliated with, controls or is controlled by or owns or is owned by other corporations, partnerships, trusts, associations or other legal entities engaged in the lending of money whose policies and practices as to rates of interest, charges and fees and general dealing with borrowers are questionable or would constitute violation of the general usury statutes of this state or of the declared purposes and spirit of the New Mexico Small Loan Act of 1955 shall be given such consideration and weight as the director determines.
K. At the time of issuance of original license and each annual renewal thereof, the licensee for each licensed office shall pay to the director as a license fee for the period covered by the license the sum of five hundred dollars ($500) as a minimum, plus an additional seventy-five cents ($.75) for each one thousand dollars ($1,000) or fraction thereof of loans outstanding as of December 31 next preceding, as shown on the applicant's annual report. In the event that the application for annual renewal of the license is delinquent, the licensee shall also pay a delinquency fee of ten dollars ($10.00) per day for each day the licensee is delinquent in filing the application for renewal.
L. In addition to the fees provided for in Subsection K of this section, at the time of issuance of original license and each annual renewal thereof, the licensee for each licensed office shall pay to the director as an additional fee for the period covered by the license the sum of two hundred dollars ($200), which fee shall be deposited into the financial literacy fund.
M. A licensee by accepting a license that is issued or renewed or by continuing to operate a licensed office under the New Mexico Small Loan Act of 1955 shall by such action be deemed to have consented to be bound by the lawful provisions of that act and all lawful requirements, regulations and orders of the director promulgated or issued pursuant to any authorization granted in that act.
History:
1978 Comp., § 58-15-5, enacted by Laws 1978, ch. 6, § 1; 1987, ch. 292, § 2; 1993, ch. 210, § 5; 2007, ch. 86, § 4; 2017, ch. 110, § 13.
ANNOTATIONS
Cross references.
— For exemption of banks, saving and loan associations, and credit unions from licensing requirement,
see
58-15-3 NMSA 1978.
The 2017 amendment,
effective January 1, 2018, provided for an additional two hundred dollar ($200) annual license fee to be paid by the licensee of each licensed office and to be deposited into the financial literacy fund; and added a new Subsection L and redesignated the succeeding subsection accordingly.
Applicability.
— Laws 2017, ch. 110, § 26 provided that the provisions of Laws 2017, ch. 110 shall apply to loans subject to the New Mexico Small Loan Act of 1955 and the New Mexico Bank Installment Loan Act of 1959 executed on or after January 1, 2018.
The 2007 amendment,
effective November 1, 2007, simplifies the language and organization of this section.
Severability clause.
— Laws 2007, ch. 86, § 23 provided that if any part or application of the act is held invalid, the remainder or its application to other situations or persons shall not be affected.
The 1993 amendment,
effective June 18, 1993, in Subsection A, deleted language relating to the procedure for application for a license under the New Mexico Small Loan Act of 1955 and made a stylistic change; substituted "March 31" for "May 1" in Subsection D; added the last sentence to Subsection G; and made stylistic changes throughout the section.
Courts not to consider certain matters regarding small loan companies.
— Whether small loan companies serve the public interest and, if so, whether experience justifies a restriction on the number licensed may be debatable, but these are not considerations for the courts.
S.I.C. Finance-Loans of Menaul, Inc. v. Upton
, 1966-NMSC-012, 75 N.M. 780, 411 P.2d 755.
License issuance or denial deemed administrative.
— The general welfare of the public is the primary concern of the legislature in providing for the regulation and control of small loan businesses, and to that end the issuance or denial of an application for a small loan license is an administrative act and not a judicial function.
S.I.C. Finance-Loans of Menaul, Inc. v. Upton
, 1966-NMSC-012, 75 N.M. 780, 411 P.2d 755.
Purpose of "convenience and advantage" clause.
— The "convenience and advantage" clause of this section was adopted to make sure that the needs of the community to be served by small loan businesses were not outrun by the number of such establishments at the risk of defeating the beneficent purposes of the Small Loan Act.
S.I.C. Finance-Loans of Menaul, Inc. v. Upton
, 1966-NMSC-012, 75 N.M. 780, 411 P.2d 755.
Other factors to be considered
in licensing are the needs of the general public in the community as a whole and in the particular area to be served, the number and location of other small loan licensees and the effect upon them and, in turn, on the service and costs to the public of an additional licensee.
S.I.C. Finance-Loans of Menaul, Inc. v. Upton
, 1966-NMSC-012, 75 N.M. 780, 411 P.2d 755.
Facts justifying denial of license.
— Where facts showed that the presently existing small loan licensees were adequately serving the small loan needs of the community; that the general economy of the area was leveling off; that, of the 18 small loan licensees in the city, two were not presently operating, and several showed decreases in loans outstanding; that delinquencies in payments of loans, suits and repossessions showed an increase and that the general indices and criteria measuring factors of economic advancement did not indicate such growth at the present or in the immediate future as would give rise to the conclusion that allowing the applicant to engage in business would promote the convenience and advantage of the community in which the business of the applicant was to be conducted, the denial of a license to open a small loan business was justified.
Nationwide Fin. Co. v. State Bank Exm'r
, 1966-NMSC-070, 76 N.M. 191, 413 P.2d 471.
Discretion of director.
— Under this section, the examiner or commissioner (now director) is given fact-finding powers, the exercise of which permits certain discretion in determining the conditions in the community where the business is to be conducted.
S.I.C. Finance-Loans of Menaul, Inc. v. Upton
, 1966-NMSC-012, 75 N.M. 780, 411 P.2d 755.
Scope of review in supreme court.
— On appeal from an administrative body, the review of the supreme court, like that of the district court, is limited to determining whether the facts found by the commissioner (now director) have substantial support in the evidence, and if so, whether the law was properly applied.
S.I.C. Finance-Loans of Menaul, Inc. v. Upton
, 1966-NMSC-012, 75 N.M. 780, 411 P.2d 755.
Factors reviewing court to consider.
— In determining whether the commissioner's (now director's) findings are supported by substantial evidence and whether the conclusions based thereon are arbitrary and unreasonable, attention should first be directed to the necessity for regulation of small loan businesses and for the inclusion in the majority of small loan acts of the "convenience and advantage" clause.
S.I.C. Finance-Loans of Menaul, Inc. v. Upton
, 1966-NMSC-012, 75 N.M. 780, 411 P.2d 755.
Fees.
— The financial institutions division may not charge a fee based upon loans made pursuant to the Installment Loan Act. 1988 Op. Att'y Gen. No. 88-29.
Am. Jur. 2d, A.L.R. and C.J.S. references. —
53A Am. Jur. 2d Money Lenders and Pawnbrokers §§ 8, 14 et seq., 24, 25.
58 C.J.S. Money Lenders §§ 4, 5.