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AFSA Statement on New Mexico H.B. 132

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AFSA Statement on New Mexico H.B. 132

Today (Saturday, January 29, 2022) the New Mexico House of Representatives Consumer and Public Affairs Committee will consider H.B. 132, which caps interest rates at 36% for consumer loans. The following statement can be attributed to Danielle Fagre Arlowe, Senior Vice President for State Government Affairs for the American Financial Services Association:

“H.B. 132 is not only a bad bill for the citizens of New Mexico; it is a cruel bill. In a time when thousands of New Mexican households have little-to-no savings, H.B. 132 would deny those with poor credit scores or no credit scores access to consumer credit products to address real financial needs. In other states where policymakers supported similar interest rate cap proposals, consumers were left with less access to credit, increased bounced checks, and fell further behind in covering expenses.

“Traditional installment loans are safe, reliable and transparent for consumers. Imposing additional restrictions on New Mexico installment lenders will not affect the demand for credit. While borrowers among New Mexico’s elite may find other sources of credit or afford larger loans, lower income individuals will likely be left in credit deserts or forced to turn to
unregulated or illegal options.

“Rather than eliminate what for many New Mexicans may be their only consumer credit option, policymakers should take the time to understand the needs of their constituents and to ensure they have access to safe and affordable credit options. We stand ready to work with the New Mexico legislature and the Governor’s office to grow, not hinder, consumer access to safe and reliable credit products.”

January 29th, 2022 by