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Capped at 36% APR since January 2023 — down from 175%. The calculation is all-in, and the anti-evasion clause is aimed at the bank-partnership route around it.
House Bill 132, effective 1 January 2023
Before HB 132, state-chartered banks and licensed small loan lenders in New Mexico could charge up to 175% APR on loans up to $5,000. The new law cut that to 36% and simultaneously raised the loan ceiling to $10,000.New Mexico · Legal analysisHB 132 — both the Bank Installment Loan Act and Small Loan Act previously allowed a maximum APR of 175% on loans up to $5,000; the bill raised the maximum loan amount to $10,000 and limited the rate to 36% APR
That is one of the sharpest single-step reductions any state has made.
Bank Installment Loan Act of 1959 · New Mexico Small Loan Act
New Mexico’s 36% is an all-in figure. It expressly includes charges for ancillary products or services, credit insurance premiums and single-premium credit insurance — and the statute says these count even if they would be excluded from the finance charge under Regulation Z.New Mexico · Legal analysisHB 132 — in calculating the 36% APR cap, charges for ancillary products, credit insurance premiums and single premium credit insurance must be included even if they would be excluded under the Regulation Z finance charge calculation
Fees paid to a public official, such as lien recording, are excluded. Everything else the borrower pays is in.
The cap can adjust upward only if the prime rate exceeds 10% for three consecutive months.
HB 132 expanded the Small Loan Act’s anti-evasion provision to track those in Illinois and Maine. It reaches a person who markets, brokers, arranges or facilitates the loan while holding a right or first refusal to purchase it — and, more broadly, anyone where the totality of circumstances shows they are the real lender.
The factors it names are worth knowing: whether the person indemnifies or insures an exempt entity against the loan’s risks, predominantly designs, controls or operates the loan programme, or claims to act as an agent for an exempt entity while lending directly in other states.
That is aimed squarely at the bank-partnership model — the standard route around a state rate cap.
You can revoke authorisation and instruct your bank to stop the payment, whatever your agreement says.
What Regulation E says about automatic payments →
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A payday loan is a consumer debt. If it goes unpaid, two New Mexico rules decide what a lender can do next: how long it has to sue you, and how much of your pay a court can order taken.
Being sued over an old payday loan? A collector can still file, but the time limit is a defence you can raise — and you cannot be jailed for the debt. What can and cannot happen if you don’t pay →