Bill > HB425

This bill, titled "Limit certain loan fees & charges," aims to revise regulations surrounding loans in New Mexico, particularly those made under the New Mexico Bank Installment Loan Act of 1959 and the New Mexico Small Loan Act of 1955. Key provisions include establishing that loans of $2,500 or less must be made under one of these two acts, increasing certain delinquency charges for late payments on installment loans, and introducing new rules for processing and handling fees on installment loans, including a processing fee of up to 10% and a handling fee of up to 7.75% per month. The bill also mandates that lenders assess a borrower's ability to repay loans under the Small Loan Act, with monthly payments not exceeding 35% of the borrower's disposable income, and clarifies that state law exclusively governs the terms of these loans, preempting local regulations. Additionally, it sets minimum maturity periods for certain types of loans, such as requiring installment loans to have an initial stated maturity of at least 120 days and short-term installment loans to have a maturity between 90 and 180 days, while also defining and regulating "refund anticipation loans" and "short-term installment loans" with specific fee and interest caps.