2023 New Mexico Statutes › Chapter 58 - Financial Institutions and Regulations › Article 7 - Installment Loans › Section 58-7-7 - Restrictions.

A. No lender shall make a loan pursuant to the New Mexico Bank Installment Loan Act of 1959 to a borrower who is also indebted to that lender pursuant to the New Mexico Small Loan Act of 1955 [Chapter 58, Article 15 NMSA 1978] unless the loan made pursuant to the New Mexico Small Loan Act of 1955 is paid and released at the time the loan is made.
B. No lender other than a federally insured depository institution shall make a loan pursuant to the New Mexico Bank Installment Loan Act of 1959 if a loan has an initial stated maturity of less than one hundred twenty days.
C. No lender other than a federally insured depository institution shall make a loan pursuant to the New Mexico Bank Installment Loan Act of 1959 unless the loan is repayable in a minimum of four substantially equal installment payments of principal and interest.
D. No lender, other than a federally insured depository institution, shall make a loan pursuant to the New Mexico Bank Installment Loan Act of 1959 that has a permitted annual percentage rate greater than thirty-six percent, calculated pursuant to 12 CFR Part 1026, known as "Regulation Z", this subsection and Subsections E and F of this section; provided that the calculation of the permitted annual percentage rate shall:
(1) include finance charges as defined in 12 CFR Part 1026, known as "Regulation Z", charges for any ancillary product or service sold or any fee charged in connection or concurrent with the extension of credit, any credit insurance premium or fee and any charge for single premium credit insurance or any other fee related to insurance;
(2) include any charge as provided in Paragraph (1) of this subsection even if that charge would be excluded from the calculation of finance charges pursuant to Regulation Z;
(3) not include any amount paid to a public official in relation to the extension of credit, including fees to record liens;
(4) not include a fee on a loan of five hundred dollars ($500) or less; provided further that the fee shall not exceed five percent of the total principal of the loan and shall not be imposed on any borrower more than one time per twelve-month period; and
(5) follow the rules established for calculating the disclosed annual percentage rate for credit transactions pursuant to Regulation Z based on the charges set forth in Paragraphs (1) and (4) of this subsection.
E. Nothing in Subsection D of this section shall permit the imposition of fees, interest or charges of any kind not otherwise permitted by the New Mexico Bank Installment Loan Act of 1959.
F. If the prime rate of interest exceeds ten percent for three consecutive months, then during the month following the third consecutive month in which prime exceeded ten percent, the maximum allowable permitted annual percentage rate set forth in this section shall increase to thirty-six percent plus each percentage point or fraction of a percentage point by which the prime rate of interest exceeded ten percent in the most recent month. When the prime rate of interest falls below ten percent for three consecutive months, the maximum allowable permitted annual percentage rate shall return to thirty-six percent.
G. The director of the financial institutions division of the regulation and licensing department shall post a notice on the division's website within ten days after the provisions of Subsection F of this section become applicable. The notice shall state the date on which any increase or decrease in the maximum allowable permitted annual percentage rate is effective.
H. The maximum allowable permitted annual percentage rate for a loan to a consumer shall be determined as of the date that the loan is made.
I. The provisions of Subsections B and C of this section shall not apply to refund anticipation loans. As used in this subsection, "refund anticipation loan" means a loan that is secured by or that the creditor arranges or expects to be repaid, directly or indirectly, from the proceeds of the consumer's federal or state personal income tax refunds or tax credits, including any sale, assignment or purchase of a tax refund or tax credit at a discount or for a fee.
J. Except as provided by Section 58-7-3.2 NMSA 1978, any rollover, renewal, refinance or modification of an existing loan agreement with a lender, except a modification without any additional cost to the consumer, shall constitute a new loan and shall require new disclosures pursuant to the federal Truth in Lending Act.
History:
1953 Comp., § 48-21-8, enacted by Laws 1959, ch. 327, § 8; 1961, ch. 215, § 2; 1967, ch. 106, § 2; 2017, ch. 110, § 6; 2019, ch. 201, § 3; 2022, ch. 23, § 3.
ANNOTATIONS
Cross references.
— For the federal Truth in Lending Act,
see
15 U.S.C. § 1601 et seq.
The 2022 amendment,
effective January 1, 2023, reduced the annual percentage rate for loans made under the Bank Installment Loan Act of 1959 from one hundred seventy-five percent to thirty-six percent, calculated pursuant to the federal regulation known as Regulation Z and as otherwise provided in this section, prohibited a fee on loans of five hundred dollars or less and limited fee amounts to five percent of the total principal of the loan, allowed for the interest rate on loans to exceed thirty-six percent when the prime loan rate exceeds ten percent for three consecutive months and to revert to thirty-six percent if the prime rate falls below ten percent for three consecutive months, and required the director of the financial institutions division of the regulation and licensing department to publish when lenders may contractually increase or must decrease interest rates based on the history of the prime lending rate; in Subsection D, in the introductory clause, after "New Mexico Bank Installment Loan Act of 1959 that has", deleted "an" and added "a permitted", and after "annual percentage rate greater than", deleted "one hundred seventy-five percent, calculated pursuant to 12 CFR Part 1026, known as 'Regulation Z'" and added "thirty-six percent, calculated pursuant to 12 CFR Part 1026, known as 'Regulation Z', this subsection and Subsections E and F of this section; provided that the calculation of the permitted annual percentage rate shall", and added Paragraphs D(1) through D(5); and added new Subsections E through H and redesignated former Subsections E and F as Subsections I and J, respectively.
The 2019 amendment,
effective January 1, 2020, added Subsection F.
Applicability.
— Laws 2019, ch. 201, § 17 provided that the provisions of this act apply to loans subject to the New Mexico Small Loan Act of 1955 and the New Mexico Bank Installment Loan Act of 1959 that are executed on or after January 1, 2020.
The 2017 amendment,
effective January 1, 2018, provided additional restrictions on installment loans, made federally insured depository institutions exempt from the new provisions, made tax refund anticipation loans exempt from the provisions of new Subsections B and C, and defined "tax refund anticipation loans"; added new subsection designation "A."; in Subsection A, after "made under the", added "New Mexico"; and added Subsections B through E.
Am. Jur. 2d, A.L.R. and C.J.S. references. —
10 Am. Jur. 2d Banks § 684.
9 C.J.S. Banks and Banking § 243.