New Mexico HB 132: INTEREST RATES FOR CERTAIN LOANS

Bill Text

HB 132/a
Page 1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
AN ACT
RELATING TO FINANCIAL INSTITUTIONS; CHANGING THE PERMITTED
PERCENTAGE RATES FOR LOANS PURSUANT TO THE NEW MEXICO BANK
INSTALLMENT LOAN ACT OF 1959 AND THE NEW MEXICO SMALL LOAN
ACT OF 1955; REQUIRING A LICENSE FOR CERTAIN LENDERS;
CHANGING CERTAIN REPORTING REQUIREMENTS; REQUIRING NOTICE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 58-7-3 NMSA 1978 (being Laws 1995,
Chapter 190, Section 15, as amended) is amended to read:
"58-7-3. LOANS COVERED BY ACT.--
A. The New Mexico Bank Installment Loan Act of
1959 applies to a loan that is a precomputed loan repayable
in installments and that is clearly identified on the loan
documents as being made under that act.
B. A loan in an amount equal to ten thousand
dollars ($10,000) or less shall be made only pursuant to the
New Mexico Bank Installment Loan Act of 1959 or the New
Mexico Small Loan Act of 1955. A loan made pursuant to the
New Mexico Bank Installment Loan Act of 1959 shall be
identified in the loan documents as being made pursuant to
that act.
C. The provisions of Subsection B of this section
shall not apply to a federally insured depository
institution."

HB 132/a
Page 2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
SECTION 2. Section 58-7-6 NMSA 1978 (being Laws 1959,
Chapter 327, Section 6, as amended) is amended to read:
"58-7-6. PERMITTED CHARGES--LIMITATION ON
PRESENTMENT.--
A. No amount, other than the total finance charge,
calculated pursuant to Subsections D, E and F of Section
58-7-7 NMSA 1978, which consists solely of interest and a
fully earned processing fee not to exceed the lesser of two
hundred dollars ($200) or ten percent of the principal, shall
be charged or contracted for, directly or indirectly, on or
in connection with a precomputed loan transaction except as
follows:
(1) delinquency charges not to exceed five
cents ($.05) for each one dollar ($1.00) of each installment
more than ten days in arrears may be charged; provided that
the total of delinquency charges on any such installment
shall not exceed ten dollars ($10.00) and that only one
delinquency charge shall be made on any one installment
regardless of the period during which the installment remains
unpaid;
(2) the lender may charge for only the
actual cost of any insurance; provided, however, all
insurance shall be written by companies licensed to operate
within the state and at rates no higher than those approved
by the superintendent of insurance; and provided further that

HB 132/a
Page 3
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
the lender shall not require any insurance to be written or
provided by or through any particular agent, broker or
insurer as a condition to making the loan but shall, at the
borrower's option, permit the insurance to be procured from
any reputable insurer or through any reputable agent
authorized by law to provide it;
(3) in the event that a borrower fails to
maintain in effect any insurance required in connection with
a loan transaction, the lender may purchase the required
insurance or lender's single interest insurance covering the
lender's interest in the property, and the cost of that
insurance shall be added to the loan and may accrue interest
as provided for in the New Mexico Bank Installment Loan Act
of 1959;
(4) such amounts as are necessary to
reimburse the lender for fees paid to a public officer for
filing, recording or releasing any instrument or lien;
(5) if a loan under the New Mexico Bank
Installment Loan Act of 1959 is secured and if the borrower
fails to pay any governmental or other levy arising after the
date of the loan that would create a lien superior to the
lien of the lender on the property standing as security, the
lender, at the lender's option, may pay the levy and add the
amount so paid to the balance due from the borrower;
(6) the actual expenditures, including

HB 132/a
Page 4
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
reasonable attorney fees, for legal process or proceedings to
collect on a precomputed loan; provided, however, that no
attorney fees are permitted where the loan is referred for
collection to an attorney who is a salaried employee of the
holder of the contract; and further provided that attorney
fees shall not be charged or collected unless the note or
other contract has been submitted to an attorney for
collection after the lender has made a diligent and good
faith effort to collect and has failed; and
(7) the actual cost of charges incurred in
making a real estate loan secured by a mortgage on real
estate, including the charges for an abstract of title, title
examination, title insurance premiums, property survey,
appraisal fees, notary fees, preparation of deeds, mortgages
or other documents, escrow charges, credit reports and filing
and recording fees.
B. If there are insufficient funds to pay a check
or other