New Mexico lowers interest rate cap on store loans – The Durango Herald

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Gov. Michelle Lujan Grisham high-fives an elementary school student during a signing ceremony at Francis X. Nava Elementary School Tuesday in Santa Fe. Lujan Grisham signed bills to increase teachers’ salaries and benefits. (Cedar Attanasio/Associated Press)

Cedar Attanasio

SANTA FE — Gov. Michelle Lujan Grisham has signed legislation aimed at underwriting loans to local startup companies with taxpayers’ money and a consumer protection law that lowers the maximum interest rate on installment loans of $10,000 or less.

The governor on Tuesday signed legislation allowing the state to allocate $50 million for future investments in New Mexico venture capital projects that can be risky for investors but have the potential for superior returns.

The bill, by Democratic lawmakers including Albuquerque Assemblymen Javier Martínez and Santa Fe Assemblyman Linda Serrato, responds to concerns about New Mexico’s ability to retain and attract early-stage companies.

The governor also signed legislation lowering the maximum interest rate on store loans from 175% to 36%, with some exceptions for loans of $500 or less.

The bill, by lawmakers including Democratic Rep. Susan Herrera of Embudo, also doubles the maximum size of in-store installment loans to $10,000.

Advocates say new restrictions are needed to ensure borrowers don’t fall into vicious cycles of debt that contribute to New Mexico’s poverty. The new credit restrictions will come into effect on January 1, 2023.

Lujan Grisham, a Democrat who is running for re-election in November, has until March 9 to sign legislation outlining a proposed $8.5 billion general government spending plan for July 1 beginning fiscal year. Excess invoices are automatically vetoed.

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