New Mexico
House Bill 870 established the first payday loan laws for New Mexico in the fist legislative session of 2001. In the New Mexico bill it states that all payday loan lenders have a minimum term of two weeks for each $50 that they lend. So, if a consumer was to borrow $150, they’d be given at least a month and a half to pay the payday loan back.
In New Mexico, a customer can make partial payments on their cash advance loan, so long as the amount that’s paid is over $5. After a payment is received, a lender is required to give their customers an updated sheet displaying the balance. The maximum amount that anyone can borrow in New Mexico is $300. The minimal amount that a person can borrow in New Mexico is $50.
Before a payday loan lender in New Mexico can disperse funds, they must stamp the check with an endorsement that states: “This check is being negotiated as part of a loan pursuant to the Payday Loan Act, and any holder of this check takes it subject to all claims and defenses of the maker.”
Each payday loan lender must provide their customers with a written agreement that’s clear and understandable. The agreement must be written in English and Spanish and contain the following information:
- Name, address, and telephone number of the payday loan lender as well as the borrower.
- An itemization of fees and interest.
- Disclosures required by the Truth in Lending Act.
- A clear description of the consumer’s payment obligations.
The agreement must also have the following statement in at least 14 bold face type: “You cannot be prosecuted in criminal court to collect this loan.”
In New Mexico, a payday lender also is required to display a chart or example of fees and charges that would be paid on a $300 loan, payable in 14 days. Payday loan laws in New Mexico also require lending institutions to post a sign that says: “Warning: fees and interest charged on payday loans made at this institution are higher than those charged at other financial institutions.”
New Mexico law prohibits any lending institution from threatening their customers with criminal action if they are unable to payback their loans due to insufficient funds. Also, entering a new agreement with a payday loan customer that has an outstanding balance is prohibited as well.