2023 New Mexico Statutes › Chapter 58 - Financial Institutions and Regulations › Article 15 - Small Loan Business › Section 58-15-17 - Requirements for making and paying of loans; incomplete instruments; limitations on charges after judgment and interest.

A. Every licensee shall:
(1) at the time a consumer becomes contractually obligated on a loan pursuant to the New Mexico Small Loan Act of 1955, deliver to the borrower or, if there are two or more borrowers on the same obligation, to one of them, a statement on which shall be printed a copy of Section 58-15-14.1 NMSA 1978 and which shall disclose in clear and distinct terms:
(a) the amount of the loan;
(b) the date the loan was made;
(c) a schedule or a description of the payments;
(d) the type of the security, if any, for the loan;
(e) the name and address of the licensee;
(f) the name of the person primarily obligated for the loan;
(g) the amount of principal;
(h) the annual percentage rate as disclosed pursuant to 12 CFR Part 1026, known as "Regulation Z", and the amount in dollars and cents;
(i) all other disclosures required pursuant to state and federal law; and
(j) the charge for any other item allowable and included pursuant to the New Mexico Small Loan Act of 1955, so stated as to clearly show the allocation of each item included;
(2) for each payment made on account of a loan, give to the person making the payment a plain and complete receipt specifying the date and amount of the payment, the amount applied to interest and principal and the balance unpaid. When payment is made in any other manner than by the borrower in person, by an agent of the borrower or by check or money order, the licensee shall mail the receipt to the borrower's last known address or retain and deliver the receipt upon request of the borrower. A licensee may deliver the receipt electronically to the borrower via text message or email, if requested to do so in writing by the borrower. A borrower may withdraw authorization for electronic delivery of receipts in writing at any time. A licensee shall not require a borrower to receive receipts electronically. The licensee shall maintain a copy of each receipt in the office of the licensee as a part of the licensee's records; and
(3) upon repayment of the loan in full, mark plainly every note and promise to pay signed by any borrower with the word "paid" or "canceled" and promptly file or record a release of any mortgage if the mortgage has been recorded, restore any pledge and cancel and return any note and any assignment given to the licensee. A licensee may mark and return a copy of the note, promise to pay or any assignment if the copy accurately reproduces the complete original.
B. A licensee shall not take a note or promise to pay that does not disclose the amount of the loan, a schedule of payments, or a description thereof, and the agreed charge or rate of charge or any instrument in which blanks are left to be filled in after execution.
C. A judgment against a party on a loan made pursuant to the New Mexico Small Loan Act of 1955 shall not include, and the loan shall not include, from the date of the judgment, charges against a party to the loan other than costs, attorney fees and post-judgment interest as provided by law.
D. A loan made pursuant to the New Mexico Small Loan Act of 1955 that is filed and approved as a claim in any bankruptcy proceeding shall bear interest at the rate of ten percent per year beginning on the ninetieth day following the date of adjudication. This limitation shall not apply when the bankrupt is not discharged in bankruptcy or to any obligation not dischargeable under the provisions of the United States Bankruptcy Code presently in force.
E. A loan made pursuant to the provisions of the New Mexico Small Loan Act of 1955 shall not bear interest in excess of ten percent per year on the unpaid principal balance of a loan after ninety days following the date of the death of the borrower.
F. A loan made pursuant to the New Mexico Small Loan Act of 1955 shall not bear interest in excess of ten percent per year upon the unpaid principal balance of the loan after twelve months following the date of maturity of the loan.
G. A lender shall not make a loan pursuant to the New Mexico Small Loan Act of 1955 if a loan has an initial stated maturity of less than one hundred twenty days unless the loan is a refund anticipation loan.
H. A lender shall not make a loan pursuant to the New Mexico Small Loan Act of 1955 unless the loan is an installment loan or a refund anticipation loan.
I. A lender shall not make a loan pursuant to the New Mexico Small Loan Act of 1955, other than a refund anticipation loan, unless the loan is repayable in a minimum of four substantially equal installment payments of principal and interest.
J. A lender shall not make a loan pursuant to the New Mexico Small Loan Act of 1955 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 K and L 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.
K. Nothing in Subsection J of this section shall permit the imposition of fees, interest or charges of any kind not otherwise permitted by the New Mexico Small Loan Act of 1955.
L. 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.
M. The director of the division shall post a notice on the division's website within ten days after the provisions of Subsection L 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.
N. 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.
O. Upon request from the borrower, all lenders licensed pursuant to the New Mexico Small Loan Act of 1955 shall give or forward to the borrower copies of all loan agreements concerning that borrower, a copy of all receipts maintained in that borrower's loan file and a written statement of that borrower's loan history, including all fees charged, amortization schedules, that borrower's payment history, including the dates and amounts of payments made, and the total amount unpaid pursuant to each contract. All lenders shall retain for seven years from the date of loan file origination or loan payoff, whichever is the later, the documentation specified in this subsection.
P. Any rollover, renewal, refinance or modification of an existing loan agreement with a licensee, except a modification without any additional cost to the borrower, shall constitute a new loan and shall require new disclosures pursuant to the federal Truth in Lending Act.
History:
1953 Comp., § 48-17-44, enacted by Laws 1955, ch. 128, § 15; 1996, ch. 50, § 1; 2007, ch. 86, § 10; 2017, ch. 110, § 17; 2019, ch. 201, § 12; 2022, ch. 23, § 11.
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 New Mexico Small Loan Act of 1955 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 J, after "New Mexico Small Loan Act of 1955 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 K and L of this section; provided that the calculation of the permitted annual percentage rate shall", and added Paragraphs J(1) through J(5); and added new Subsections K through N and redesignated former Subsections K and L as Subsections O and P, respectively.
The 2019 amendment,
effective January 1, 2020, required lenders to disclose certain charges, provided for the issuance of an electronic receipt for loan payments at the option of the borrower, provided that a loan filed and approved as a claim in a bankruptcy proceeding shall bear interest at the rate of ten percent, provided the annual interest on the unpaid principal balance of a loan after the death of the borrower and after twelve months following the loan's maturity date is limited to ten percent, provided that on request from the borrower, a lender shall provide the borrower with copies of loan agreements and related documents, and the lender shall retain loan documentation for seven years, and expanded disclosure requirements; in Subsection A, Subparagraph A(1)(j), deleted "other items allowable pursuant to that act" and added "the charge for any other item allowable and included pursuant to the New Mexico Small Loan Act of 1955", in Paragraph A(2), after "last known address or", deleted "hold the receipt for delivery" and added "retain and deliver the receipt", deleted "A copy of all receipts shall be kept on file" and added "A licensee may deliver the receipt electronically to the borrower via text message or email, if requested to do so in writing by the borrower. A borrower may withdraw authorization for electronic delivery of receipts in writing at any time. A licensee shall not require a borrower to receive receipts electronically. The licensee shall maintain a copy of each receipt"; in Subsection D, after "bankruptcy proceeding shall", deleted "from a date ninety days subsequent to the" and added "bear interest at the rate of ten percent per year beginning on the ninetieth day following the", and after "adjudication", deleted "bear interest at the rate of ten percent a year only"; in Subsection E, deleted "No" and added "A", after "1955 shall", added "not", after "bear interest", deleted "after ninety days from the date of the death of the borrower in excess of a rate of ten percent a year on the unpaid principal balance of the loan" and added "in excess of ten percent per year on the unpaid principal balance of a loan after ninety days following the date of the death of the borrower"; in Subsection F, deleted "No" and added "A", after "1955 shall", added "not", after "bear interest", added "in excess of ten percent per year upon the unpaid principal balance of the loan", and after "maturity of the loan", deleted "in excess of ten percent a year upon the unpaid principal balance of the loan"; in Subsections G through J, deleted "No" and added "A", after "shall", added "not"; and added Subsections K and L.
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, clarified that federal law requires every licensee to deliver to a borrower a statement in English or Spanish containing certain information regarding the loan, included the annual interest rate to the list of information that must be contained in the statement that licensees are required to provide to a borrower, placed additional restrictions on making certain installment loans, and made tax refund anticipation loans exempt from these provisions; in Subsection A, Paragraph A(1), in the introductory clause, after "English or Spanish, as", deleted "requested by the borrower" and added "required by federal law", in Subparagraph A(1)(h), after the first occurrence of "the", deleted "agreed rate of charge stated on a percent per year basis" and added "annual interest rate as disclosed pursuant to 12 CFR Part 1026, known as 'Regulation Z'"; in Subsection D, after "the provisions of the", added "United States", and after "Bankruptcy", deleted "Act" and added "Code"; and added Subsections G through J.
The 2007 amendment,
effective November 1, 2007, requires that a licensee deliver a disclosure statement in Spanish if requested by the borrower and that the disclosure statement include all disclosures required by state or federal law and prohibits a judgment or loan from carrying charges other than costs, attorney fees and post-judgment interest as provided by law after a judgment is entered.
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 1996 amendment,
effective May 15, 1996, added the section heading, in Paragraph A(3) deleted "filed or" in the first sentence and rewrote the last sentence, and made stylistic changes throughout the section.
Financing statement tantamount to mortgage.
— A chattel mortgage is commonly accepted as being a pledge of particular property for the payment of a debt. The financing statements required to be filed under the Uniform Commercial Code are, in effect, mortgages because they create a lien on the property pledged. Concluding, then, that financing statements are tantamount to mortgages, a release of such a lien must be filed whenever a note is paid in full, as provided for in Subsection A(3) of this section. 1962 Op. Att'y Gen. No. 62-50 (overruled 1970 Op. Att'y Gen. No. 70-78).
When mere refinancing.
— Small loan companies are no longer required to file termination statements and new financing statements merely because a loan has been refinanced. 1970 Op. Att'y Gen. No. 70-78.
Am. Jur. 2d, A.L.R. and C.J.S. references. —
53A Am. Jur. 2d Money Lenders and Pawnbrokers §§ 6, 7, 38, 46 et seq.
58 C.J.S. Money Lenders §§ 2 to 8.