44TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 1999

RELATING TO COMMERCIAL TRANSACTIONS; ENACTING THE USURY ACT; PRESCRIBING A MAXIMUM RATE OF INTEREST FOR CERTAIN TRANSACTIONS; PROVIDING REMEDIES.

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

Section 1. SHORT TITLE.--This act may be cited as the "Usury Act".

Section 2. DEFINITIONS.--As used in the Usury Act:

A. "maximum lawful rate of interest" means an annual percentage rate of forty-five percent, plus a processing fee of not more than ten dollars ($10.00) that may be charged for processing an initial extension of credit. The processing fee shall not be charged for processing an extension of credit that refinances all or part of an initial extension of credit;

B. "to collect an extension of credit" means:

(1) to induce a person to repay, in whole or in part, an extension of credit;

(2) to seek repayment of an extension of credit, in whole or in part, from a person; or

(3) to receive repayment of an extension of credit, in whole or in part, from a person; and

C. "to make an extension of credit" means to make or renew a loan or to enter into any other express or implied transaction, when the repayment of the debt or claim, whether acknowledged, disputed, valid or invalid, may be deferred.

Section 3. PROHIBITED PRACTICES--REMEDIES.--

A. It is unlawful for a person to make an extension of credit at a rate of interest in excess of the maximum lawful rate of interest.

B. It is unlawful for a person to collect an extension of credit at a rate of interest in excess of the maximum lawful rate of interest.

C. A person who violates the provisions of Subsection A or B of this section shall forfeit the entire amount of money extended as credit and all interest on that amount.

D. A person who violates the provisions of Subsection A or B of this section shall not bring an action in any court of this state to recover the money he extended as credit or any interest on that amount.

Section 4. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 1999.