New Mexico lowers interest rate cap for storefront loans

SANTA FE, NM (AP) — Governor Michelle Lujan Grisham has signed legislation to underwrite loans to local startups with taxpayer dollars and a consumer protection bill that lowers the interest rate maximum on installment loans of $10,000 or less.

The governor signed legislation on Tuesday that allows the state to earmark $50 million for future investments in New Mexico-based venture capital projects that may be risky for investors but have the potential for superior returns. on average.

The bill from Democratic lawmakers, including Representatives Javier Martínez of Albuquerque and Linda Serrato of Santa Fe, addresses concerns about New Mexico’s ability to retain and attract early-stage companies.

The governor also signed legislation that lowers the maximum interest rate on storefront loans to 36% from 175%, with some exceptions for loans of $500 or less.

The bill from lawmakers, including Democratic Representative Susan Herrera of Embudo, also doubles the maximum size of storefront installment loans to $10,000.

Proponents say new restrictions are needed to ensure borrowers don’t fall into vicious cycles of debt that contribute to poverty in New Mexico. The new lending restrictions come into effect on January 1, 2023.

Lujan Grisham, a Democrat seeking re-election in November, has until March 9 to sign legislation that includes a draft $8.5 billion state general fund spending plan for the fiscal year beginning March 1. July. The remaining invoices are automatically vetoed.

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