ARLINGTON, Va. (February 16, 2022)—After the New Mexico Legislature passed H.B. 132, legislation that would eliminate credit options for hundreds of thousands of New Mexico consumers, Online Lenders Alliance Executive Director Andrew Duke issued the following statement:
“Unfortunately, today marks a shift in the wrong direction for New Mexico consumers, particularly the many New Mexico consumers who use alternative financial services to make ends meet. Approximately 400,000 consumers in New Mexico use small dollar installment loans and 95 percent of those loans would be prohibited under this bill – harming the consumers who need and use them most, and pushing them into more expensive and less desirable alternatives like late bill payments or overdrafts.
“This bill does not lower the cost of credit—just the availability of credit. It was passed on an illusory promise that New Mexico credit unions would pick up the slack, providing the short-term or small-dollar loans that hundreds of thousands of consumers rely on that are no longer allowed under this law. Survey data shows that a high percentage of existing credit union members in New Mexico use alternative credit lenders – highlighting the fact that their credit union does not or will not meet their needs.
“It is telling that New Mexico credit unions fought the effort to require them to report on their actual progress in filling this void and fulfilling their promises. New Mexico policy makers have a responsibility to monitor this market closely and hold the state’s credit unions accountable.”