45th legislature - STATE OF NEW MEXICO - first session, 2001

RELATING TO COMMERCIAL TRANSACTIONS; PROVIDING MAXIMUM RATES OF INTEREST FOR CERTAIN TRANSACTIONS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. A new Section 56-8-11.1 NMSA 1978 is enacted to read:

"56-8-11.1. [NEW MATERIAL] ANNUAL PERCENTAGE RATE--MOTOR VEHICLE LOANS.--

A. The annual percentage rate on a loan for which the lender takes or retains a security interest or lien on, or the title to, a motor vehicle shall not exceed:

(1) seventeen percent if the principal amount of the loan is less than five hundred dollars ($500);

(2) fifteen percent if the principal amount of the loan is five hundred dollars ($500) or greater but less than two thousand five hundred dollars ($2,500);

(3) thirteen percent if the principal amount of the loan is two thousand five hundred dollars ($2,500) or greater but less than five thousand dollars ($5,000); or

(4) ten percent if the principal amount of the loan is five thousand dollars ($5,000) or greater.

B. The provisions of this section do not apply to transactions regulated pursuant to the Motor Vehicle Sales Finance Act.

C. As used in this section:

(1) "annual percentage rate" means the measure of the cost of credit, expressed as a yearly rate, that relates the amount and timing of value received by the borrower to the amount and timing of payments made, determined in accordance with the federal Truth In Lending Act; and

(2) "motor vehicle" means an automobile, recreational vehicle, recreational travel trailer, trailer, motorcycle, truck, semi-trailer, truck tractor or bus designed and used primarily to transport persons or property on a public highway, farm machinery or a vehicle, new or used, with any power other than muscular power except a boat trailer, aircraft or a vehicle that runs only on rails or tracks, but does not include any motor vehicle having a gross vehicle weight of ten thousand pounds or more purchased primarily for business or commercial purposes."

Section 2. A new Section 56-8-11.2 NMSA 1978 is enacted to read:

"56-8-11.2. [NEW MATERIAL] ANNUAL PERCENTAGE RATE--CONSUMER LOANS--CONSUMER REVOLVING LOANS--HOME EQUITY REVOLVING LOANS.--

A. The annual percentage rate on a consumer loan shall not exceed:

(1) if the original principal amount of the loan is one thousand dollars ($1,000) or less, thirty-six percent; or

(2) if the original principal amount of the loan is greater than one thousand dollars ($1,000):

(a) thirty-six percent on the initial five hundred dollars ($500) of the original principal amount and twenty-four percent on that part of the principal amount greater than five hundred dollars ($500); or

(b) the single blended annual percentage rate that results from applying the total amount of finance charges that the lender would receive through the scheduled maturity of the consumer loan at the annual percentage rate that would otherwise be applicable pursuant to Subparagraph (a) of this paragraph to the different portions of the unpaid principal balance, assuming that the consumer loan will be paid according to its terms.

B. The annual percentage rate on a consumer revolving loan or a home equity revolving loan shall not exceed:

(1) if the credit limit is one thousand dollars ($1,000) or less, thirty-six percent; or

(2) if the credit limit is greater than one thousand dollars ($1,000):

(a) thirty-six percent on that portion of the outstanding balance each monthly billing cycle that is not more than five hundred dollars ($500) and twenty-four percent on that part of the outstanding balance each monthly billing cycle that is greater than five hundred dollars ($500); or

(b) the single blended annual percentage rate that would result in a period finance charge during a monthly billing cycle that is equal to the finance charge that would result from the multiple annual percentage rates authorized in Subparagraph (a) of this paragraph.

C. The provisions of this section do not apply to:

(1) motor vehicle loans subject to Section 56-8-11.1 NMSA 1978;

(2) pawnbroker transactions regulated pursuant to the Pawnbrokers Act; and

(3) a loan made by a person that is not regularly engaged in the business of making loans.

D. As used in this section:

(1) "annual percentage rate" means the measure of the cost of credit, expressed as a yearly rate, that relates the amount and timing of value received by the borrower to the amount and timing of payments made, determined in accordance with the federal Truth In Lending Act;

(2) "consumer loan" means a direct closed-end loan of a principal amount of money equal to ten thousand dollars ($10,000) or less that is subject to a finance charge;

(3) "consumer revolving loan" means an open-end revolving loan that is established pursuant to an agreement with a credit limit that does not exceed ten thousand dollars ($10,000), that the borrower may pay in full at any time but has the privilege of paying in installments and that contemplates or provides that advances may be obtained from time to time by the borrower; and

(4) "home equity revolving loan" means an open-end loan that is made pursuant to an agreement with a credit limit that is not more than ten thousand dollars ($10,000), that is secured by the borrower's principal residence and that provides that advances may be obtained from time to time by the borrower."

Section 3. Section 56-8-13 NMSA 1978 (being Laws 1957, Chapter 209, Section 4) is amended to read:

"56-8-13. PENALTIES AND FORFEITURES.--The taking, receiving, reserving or charging of a rate of interest greater than allowed by [this act] Sections 56-8-9 through 56-8-14 NMSA 1978, when knowingly done, shall be deemed a forfeiture of the entire amount of [such] the interest [which] that the note, bill or other evidence of debt carries with it or [which] that has been agreed to be paid thereon. In case the greater rate of interest has been paid, the person by whom it has been paid or his legal representatives may recover [back] by civil action twice the amount of the interest thus paid from the person [corporation or association] taking or receiving the same; provided that such action is commenced within two [(2)] years from the time the usurious transaction occurred."

Section 4. Section 56-8-14 NMSA 1978 (being Laws 1957, Chapter 209, Section 5) is amended to read:

"56-8-14. CRIMINAL PENALTY.--Any person [corporation or association] who [shall violate] violates the provisions of [this Act shall be] Sections 56-8-9 through 56-8-14 NMSA 1978 is guilty of a misdemeanor and upon conviction [thereof before the district court or a justice of the peace] shall be fined the sum of not less than twenty-five [($25.00)] dollars ($25.00) nor more than one hundred [($100.00)] dollars ($100)."