HB 132: Proposes 36% Interest Rate Cap
I will share the good news, first. After a rigorous and long (3 hrs) debate on the House Floor, Monday night, HB 132 passed on a vote of 51-18! In the Senate, the bill has referrals to the Health and Public Affairs and Judiciary committees.
Did the letter from Faith leaders and congregational members have any impact? Absolutely it did as Lutheran Advocacy and the letter was mentioned by House members during the floor debate. Almost 400 names have been collected over 2 Sundays from 28 partner congregations across NM, and via our online option. Keep sharing the need and invite those that haven't to add their name, too!
During the House floor debate, three amendments were added, one of which poses a serious problem. Without going into details, that amendment adds new reporting requirements on the part of credit unions, and could potentially kill the bill. As one legislator stated, it was a "poison pill."
Wednesday night, HB 132 was heard in its first Senate committee, Health and Public Affairs. During the debate, the amendment related to the credit unions was amended out of the bill. HB 132 then passed on an 8-0 vote. Bill sponsors during the debate expressed concern that the bill could likely fail on concurrence with the House over the reporting requirement being taken out.
HB 132 now moves to the Senate Judiciary Committee where another tough debate is expected. If successful there, the bill will move to the Senate Floor, probably early next week. Time is running short as only one week remains in the 30-day session.
Our Call to ACTION this week continues to be communicating your support for this critical legislation, but now directly to your Senator!
Please do as many of the following:
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Call your own Senator to express your support for HB 132. Speak to the staffer that answers the phone and state your support for HB 132. Or, you can email your Senator and do the same. If you have a story or how a family member or friend was hurt by taking such a loan, that could be shared in the email as well. Such personal stories have an impact. Senate Member contact information can be found HERE!
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Place calls to key votes on the Senate Judiciary Committee. This group includes Senators, Cervantes, O'Neill, and Ivey-Soto. We are uncertain of their commitment to remedying this issue, or of keeping the bill intact in its current form. A special call to action if you live in Las Cruces and are part of Sen. Cervantes' district (Senate District 31). Sen. Cervantes serves as Chair of the committee and is key to successful passage through the committee.
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If you haven't already, add your name to a sign-on letter sent from New Mexico Faith Leaders of the NM Conference of Churches and congregation members. This letter is already signed by 22 denominational leaders as well as almost 400 individual advocates of LAM-NM from 28 congregations across NM. This is the easiest action you can take, please add your name! You can read the letter (without names of individuals) HERE! You can add your name to the letter HERE! The letter and names are sent prior to each committee hearing HB 132 and will be as well to the entire Senate prior to a floor debate. This letter is having an impact as evident in it being referred to during the House floor debate.
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Print a copy of our sign-on form and invite members of your congregation, however you are worshiping, to add their name! The first Sunday alone we collected almost 200 names from just a handful of congregations. This past Sunday, another 200 names were added! You can find the sign-on form, HERE! Return what you have collected to me (Kurt) by Monday.
As a reminder, HB 132 is one of our top priority bills as it would greatly reduce predatory lending in New Mexico. You can see the bill, and actions on it taken so far, HERE! The current interest rate cap is 175% with these short-term loans easily available through hundreds of storefront lenders that are located primarily in our most economically vulnerable neighborhoods and communities. Further, 65% of lenders are located within 15 miles of Tribal lands.
We know that New Mexico has one of the highest caps on installment loans in the country. At least 18 states, as well as the U.S. Military, already cap such loans at 36%. In 2020, 550 lenders in NM made 390,236 loans from NM borrowers. These high-cost loans are draining millions of dollars from hard-working NM Families, indeed $179 million in interest and fees in 2020.
We believe that a 36% cap on loans will encourage fair lending and stop debt trap burdens. The industry's business model is built on loans being rolled over to new loans, often multiple times. In the end, what was a loan of a few hundred dollars has turned into a debt of several thousand dollars. Most certainly, many reading this know of first-hand stories from family members or friends who have fallen into debt traps caused by this industry.
Please take the time to thank your representative or senator for their work during this short and intense session!
Here is a link to a recent op-ed that appeared in the ABQ Journal.
A more detailed report by NM Ethics Watch can be found HERE!
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