Speaker Egolf finally ramps up predatory lending | Legislation | New Mexico Legislative Session


No one would cheer a politician who campaigned for the desegregation of drinking fountains and public toilets in 1975.

Separation of public facilities was prohibited by the Civil Rights Act 1964. The best I can say about a latecomer to desegregation is that he has chosen to step on the right side of history.

On a similar basis, I cannot applaud New Mexico House Speaker Brian Egolf for finally backing a bill to turn predatory lending companies on its head. The proposal would lower the annual interest rate on installment loans from 175 percent to 36 percent.

Egolf, D-Santa Fe, has been in the House of Representatives since 2009 and Speaker since 2017. He has long known that store loan companies charge the poorest people in New Mexico exorbitant interest and enslave them in debt.

He could have pointed the way to lower the interest rate. Instead, Egolf took money from the industry, which he dismisses as having no control over his actions or inaction.

Egolf offered little resistance last year when Rep. Eliseo Alcon, D-Milan, amended a Senate bill to raise the proposed interest rate from 36 percent to 99 percent. It happened on the House Judiciary Committee, which Egolf and Alcon sit on together.

Alcon’s amendment was actually written by the credit industry lobbyists and advocates. Alcon admitted his lack of expertise. He prefaced his introduction of the amendment by saying he knew nothing about money and a look at his bank account would prove it.

Egolf could have asked Alcon why he suddenly thought a rate of 99 percent made sense. And Egolf should have said that this quota was an affront to the public.

Credit unions dove into the legislative debate by announcing they could offer most installment loans for 36 percent or less.

Alcon’s amendment was passed with the help of Republicans and two of his fellow Democrats, Rep. Georgene Louis of Albuquerque and Micaela Cadena of Mesilla.

Egolf told me he worked hard behind the scenes to bring interest rates down to 36 percent. He recalls contacting many members of the House of Representatives to advocate for a less stifling interest rate.

Whatever his private efforts, he cemented the demise of last year’s bill by appointing a credit industry hardliner, Rep. Patty Lundstrom, to a conference committee. The panel should try to resolve differences between bills in the House and Senate.

But the two sides never met. Each accuses the other of causing the talks to fail. Their standoff kept the 175 percent interest rate on the books — exactly what the retail lending industry wanted.

Lundstrom, D-Gallup, received $6,000 from in-store lenders in the 2020 election cycle, the most of any member of the House of Representatives, according to a report by New Mexico Ethics Watch.

Egolf ranked third among members of the House for industry contributions with $3,650.

The Brian Egolf Speaker Fund — a separate campaign account as a Legislative Committee — received much more money, according to the Ethics Watch report.

“During the 2020 election cycle, storefront lenders also contributed $51,700 to various PACs. Almost half of those contributions went to the Brian Egolf Speaker Fund,” said Ethics Watch.

Egolf told me he didn’t remember any of the posts. He downplayed the PAC donations in particular.

“That money didn’t benefit me,” Egolf said. “It went to Democratic House candidates in close, contested races.”

Egolf claims he wanted to lower interest rates charged by in-store lenders, even if they contributed to his campaign and PAC.

He also said he had no regrets over the collapse of the reform bill last year.

“No, I will not do that. Your question doesn’t take into account all the other things I’ve been working on,” Egolf said.

But it’s impossible to ignore that Egolf’s Democrats control the House 45-24-1. They needed 36 votes to guarantee passage of the rate cut bill.

Some House Democrats said there was not enough support to pass the law. As for Egolf, he claimed he was watching out for other issues and wasn’t involved with the credit bill after it was rewritten.

Now, Egolf says, he’s more involved in the movement to lower stifling interest rates.

He is co-sponsoring a move to bring rates down to 36 percent. It’s House Bill 132.

Egolf called Representative Susan Herrera, D-Embudo, the bill’s lead sponsor. He said he and Rep. Joy Garratt, D-Albuquerque, are co-sponsors.

“I’m doing everything in my power to get this bill passed and bring it up to the governor,” Egolf said.

Why is Egolf sponsoring the bill this year?

“I’ve always supported it, and Susan asked me to,” he said.

Egolf has assigned the bill to two committees – consumers and public affairs and then justice, where it was poorly rewritten last year.

But the bill could go to the Appropriations and Finance Committee instead of the judiciary. Egolf and the other sponsors of the bill have asked for $180,000 to develop a financial education program for public schools.

This maneuver gave life to the bill. Democratic Gov. Michelle Lujan Grisham has not included bills to cut retail lending rates on the Legislature’s agenda for this 30-day session.

By inserting a budget request into their bill, Egolf, Herrera and Garratt have evaded the governor. Bills affecting the budget are considered effective without the approval of the governor.

Retail lenders and their army of lobbyists will lobby to continue charging interest rates of up to 175 percent.

Egolf says he wants to stop them. He’s less keen on talking about what took him so long.

Ringside Seat is an opinion column about people, politics and news. Contact Milan Simonich at msimonich@sfnewmexican.com or 505-986-3080.


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