46th legislature - STATE OF NEW MEXICO - first session, 2003
RELATING TO FINANCIAL TRANSACTIONS; PROVIDING FOR THE REGULATION OF PAYDAY LOANS; AMENDING, REPEALING AND ENACTING CERTAIN PROVISIONS OF THE NEW MEXICO SMALL LOAN ACT OF 1955.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 58-15-2 NMSA 1978 (being Laws 1955, Chapter 128, Section 2, as amended) is amended to read:
"58-15-2. DEFINITIONS.--The following words and terms
when used in the New Mexico Small Loan Act of 1955 [shall] have
the following meanings unless the context clearly requires a
different meaning. The meaning ascribed to the singular form
[shall apply] applies also to the plural:
A. "person" [shall include] includes individuals,
copartners, associations, trusts, corporations and any other
legal entity;
B. "license" [shall mean] means a permit issued
under the authority of the New Mexico Small Loan Act of 1955 to
make loans and collect charges therefor strictly in accordance
with the provisions of [the New Mexico Small Loan Act of 1955]
that act at a single place of business. It shall constitute
and shall be construed as a grant of a [revokable] revocable
privilege only to be held and enjoyed subject to all the
conditions, restrictions and limitations contained in the New
Mexico Small Loan Act of 1955 and lawful regulations
promulgated by the director [of the financial institutions
division] and not otherwise;
C. "licensee" [shall mean] means a person to whom
one or more licenses have been issued [hereunder] under the New
Mexico Small Loan Act of 1955 upon [their] his written
application electing to become a licensee and consenting to
exercise the privilege of a licensee solely in conformity with
the New Mexico Small Loan Act of 1955 and the lawful
regulations promulgated by the director [of the financial
institutions division hereunder] under that act and whose name
[or names appear] appears on the face of the license;
D. "director" means the director of the financial
institutions division of the [commerce and industry] regulation
and licensing department;
E. "department" or "division" means the financial
institutions division of the [commerce and industry] regulation
and licensing department;
F. "payday loan" means a loan in which the business operator cashes a personal check tendered by the customer and agrees in writing to defer presentment of that check until the customer's next payday or another date agreed to by the business operator and the customer, and includes a "deferred deposit loan";
G. "simple interest" means a method of calculating interest in which the amount of interest is computed on the outstanding principal balance of a loan for each given period; and
H. "deferred deposit loan":
(1) includes:
(a) any advance of money or arrangement or extension of credit whereby the lender, for a fee, finance charge or other consideration: 1) accepts a dated instrument from a consumer or an authorization signed by a consumer to transfer or withdraw funds from an account for the specific purpose of repaying a payday or deferred deposit loan; 2) agrees to hold a dated instrument for a period of time prior to negotiating or depositing the instrument; or 3) pays to the consumer, credits to the consumer's account or pays another person on behalf of the consumer the amount of an instrument actually paid or to be paid pursuant to the New Mexico Small Loan Act of 1955; but
(2) does not include an overdraft product or service offered by a banking corporation, savings and loan association or credit union."
Section 2. Section 58-15-3 NMSA 1978 (being Laws 1955, Chapter 128, Section 3, as amended) is amended to read:
"58-15-3. APPLICABILITY OF ACT--EXEMPTIONS--EVASIONS--PENALTY.--
A. No person shall engage in the business of lending in amounts of two thousand five hundred dollars ($2,500) or less without first having obtained a license from the director. Nothing contained in this subsection shall restrict or prohibit a licensee under the New Mexico Small Loan Act of 1955 from making loans in any amount under the New Mexico Bank Installment Loan Act of 1959 in accordance with the provisions of Section 58-7-2 NMSA 1978 or the general laws of this state governing money, interest and usury.
B. Nothing in the New Mexico Small Loan Act of 1955
shall apply to a person making individual advances of two
thousand five hundred dollars ($2,500) or less under a written
agreement providing for a total loan or line of credit in
excess of two thousand five hundred dollars ($2,500) [for which
real estate is pledged as collateral].
C. [Any] A banking corporation, savings and loan
association or credit union operating under the laws of the
United States or of [New Mexico] a state shall be exempt from
the licensing requirements of the New Mexico Small Loan Act of
1955, nor shall that act apply to [any] business transacted by
any such person under the authority of and as permitted by any
such law, nor to any bona fide pawnbroking business transacted
under a pawnbroker's license, nor to bona fide commercial loans
made to dealers upon personal property held for resale.
Nothing contained in the New Mexico Small Loan Act of 1955
shall be construed as abridging the rights of any of those
exempted from the operations of that act from contracting for
or receiving interest or charges not in violation of [any] an
existing applicable statute of this state.
D. The provisions of Subsection A of this section
apply to [any] a person owning any interest, legal or
equitable, in the business or profits of any licensee whose
name does not specifically appear on the face of the license,
except a stockholder in a corporate licensee, and to [any] a
person who seeks to evade its application by any device,
subterfuge or pretense whatsoever, including but not thereby
limiting the generality of the foregoing: the loan,
forbearance, use or sale of credit (as guarantor, surety,
endorser, comaker or otherwise), money, goods or things in
action; the use of collateral or related sales or purchases of
goods or services or agreements to sell or purchase, whether
real or pretended; receiving or charging compensation for goods
or services, whether or not sold, delivered or provided; and
the real or pretended negotiation, arrangement or procurement
of a loan through any use or activity of a third person,
whether real or fictitious.
E. Any person, copartnership, trust and the
trustees or beneficiaries thereof, association or corporation
and the several members, officers, directors, agents and
employees thereof who violate or participate in the violation
of [any] a provision of Subsection A of this section is guilty
of a petty misdemeanor and upon conviction shall be sentenced
pursuant to the provisions of Subsection B of Section 31-19-1
[(B)] NMSA 1978. [Any] A contract or loan in the making or
collection of which [any] an act is done that violates
Subsection A or D of this section is void and the lender has no
right to collect, receive or retain any principal, interest or
charges whatsoever."
Section 3. Section 58-15-5 NMSA 1978 (being Laws 1978, Chapter 6, Section 1, as amended) is amended to read:
"58-15-5. LICENSES--INVESTIGATION OF APPLICATION--ISSUANCE--DENIAL--ISSUANCE OF RENEWAL LICENSE--DENIAL OF RENEWAL LICENSE--FITNESS AND CHARACTER OF APPLICANT--LICENSE FEES--LICENSEE BOUND BY ACT.--
A. Upon the filing of an application, whether it is an original or a renewal, the director shall investigate the facts concerning the application and the requirements provided in this section.
Any applicant for license, upon written notice to do so by
the director, shall, within twenty days after service of the
notice, furnish in writing, under oath, to the director [any
and] all additional information required by the director that
may be relevant or, in the opinion of the director, helpful to
him in conducting his investigation.
Failure to comply with the director's requirement for supplemental information or the willful furnishing of false information is sufficient ground for denial of license.
False or misleading information willfully and intentionally furnished to the director prior to the issuance of any license is ground for suspension or revocation of any license in accordance with the procedures for suspension or revocation of license in the New Mexico Small Loan Act of 1955.
The director shall grant or deny each application for an original license within sixty days from the filing of the application with the required information and fees, unless the period is extended by written agreement between the applicant and the director.
B. In the event the director finds that:
(1) [that] the financial responsibility,
character and general fitness of the applicant for an original
license and of the individual members and beneficiaries
thereof, if the applicant is a copartnership, association or
trust, and of the officers and directors thereof, if the
applicant is a corporation, are such as to command the
confidence of the public and to warrant belief that the
business will be operated lawfully, honestly, fairly and
efficiently within the declared purposes and spirit of the New
Mexico Small Loan Act of 1955;
(2) [that] allowing the applicant to engage in
business will promote the convenience and advantage of the
community in which the business of the applicant is to be
conducted; and
(3) [that] the applicant has available for
operation of the business at the specified location cash or its
equivalent, convertible securities or receivables of thirty
thousand dollars ($30,000) or any combination thereof;
he shall enter an order granting the application, file his
findings and, upon payment of the license fee of [five hundred
dollars ($500)] seven hundred fifty dollars ($750), issue and
deliver a license to the applicant.
C. If the director does not make the findings enumerated in Subsection B of this section, he shall enter an order denying the application, notify the applicant of the denial and retain the application fee. Within thirty days after the entry of such an order, he shall prepare written findings and shall deliver a copy to the applicant.
D. Written application for renewal licenses shall be filed on or before March 31 of each year, and thereupon the director shall investigate the facts and review his files of examinations of the applicant made by his office and of complaints filed by borrowers, if any. If he finds that:
(1) [that] no valid complaints of violations
or abuses of the New Mexico Small Loan Act of 1955 or of the
regulations of the director promulgated under that act have
been filed by borrowers;
(2) [that] his examinations of the affairs of
the applicant indicate that the business has been conducted and
operated lawfully and efficiently within the declared purposes
and spirit of the New Mexico Small Loan Act of 1955; and
(3) [that] the financial responsibility,
experience and general fitness and character of the applicant
remain such as to command the confidence of the public and to
warrant the belief that the business will continue to be
operated lawfully and efficiently within the purposes and
spirit of the New Mexico Small Loan Act of 1955;
he shall deliver a renewal license to the applicant.
E. If the director does not make the findings
enumerated in Subsection D of this section, he may grant a
temporary extension of the license not exceeding sixty days
pending a hearing; shall enter an order fixing a date for
hearing upon the application; shall notify the licensee
thereof, specifying the particular complaints, violations or
abuses or other reasons for his contemplated refusal to renew
the license; and shall afford to the applicant an opportunity
to be heard. At the hearing, the director shall produce his
evidence to establish the truth of the charges of violation or
other grounds specified in the notice, and the applicant shall
be accorded the right to produce evidence or other matters of
defense. If after the hearing the director finds that the
complaints of violations or other grounds specified in the
notice are not well founded, he shall issue the renewal
license. If he finds that the complaints of violations or
other grounds are well founded, he shall enter an order denying
the renewal application and notify the applicant of the denial,
returning the renewal license fee tendered with the
application. Within thirty days after the entry of such an
order, [he] the director shall prepare written findings and
shall deliver a copy of the findings to the applicant. The
order shall be subject to review as provided in Section
58-15-25 NMSA 1978. The court in its discretion and upon
proper showing may order a temporary extension of the license
pending disposition of the review proceedings.
F. In connection with the determination of fitness
and character of an applicant [under] pursuant to provisions of
this section, the fact that the applicant or licensee is a
member of or interested financially in, connected or affiliated
with, controls or is controlled by or owns or is owned by other
corporations, partnerships, trusts, associations or other legal
entities engaged in the lending of money whose policies and
practices as to rates of interest, charges and fees and general
dealing with borrowers are questionable or would constitute
violation of the general usury statutes of this state or of the
declared purposes and spirit of the New Mexico Small Loan Act
of 1955 shall be given such consideration and weight as the
director determines.
G. At the time of issuance of original license and
each annual renewal thereof, the licensee for each licensed
office shall pay to the director as a license fee for the
period covered by the license the sum of [five hundred dollars
($500)] seven hundred fifty dollars ($750) as a minimum, plus
an additional seventy-five cents ($.75) for each one thousand
dollars ($1,000) or fraction thereof of loans outstanding as of
December 31 next preceding, as shown on the applicant's annual
report. In the event that the application for annual renewal
of the license is delinquent, the licensee shall also pay a
delinquency fee of ten dollars ($10.00) per day for each day
the licensee is delinquent in filing the application for
renewal.
H. Each licensee by accepting any license that is issued or renewed or by continuing to operate any licensed office under the New Mexico Small Loan Act of 1955 shall by such action be deemed to have consented to be bound by the lawful provisions of that act and all lawful requirements, regulations and orders of the director promulgated or issued pursuant to any authorization granted in that act."
Section 4. Section 58-15-9 NMSA 1978 (being Laws 1955, Chapter 128, Section 9, as amended) is amended to read:
"58-15-9. EXAMINATION OF LICENSEE'S BOOKS AND RECORDS--WITNESSES.--
A. At least once each year, the director or his
duly authorized representative shall make an examination of the
place of business of each licensee and such of the loans,
transactions, books, papers and records of the licensee insofar
as they pertain to the business licensed under the New Mexico
Small Loan Act of 1955 as [he] the director may deem necessary.
The licensee shall pay to the [commissioner] director for such
annual examination a fee of [two hundred dollars ($200)] four
hundred dollars ($400).
Within a reasonable time after the completion of an examination of a licensed office, the director shall mail to the licensee a copy of the report of the examination, together with any comments, exceptions, objections or criticisms of the director concerning the conduct of the licensee and the operation of the licensed office.
B. For the purpose of discovering violations of the New Mexico Small Loan Act of 1955 or of securing information lawfully required under that act, the director or his duly authorized representative may at any time investigate the business and examine the books, accounts, papers and records used therein, including income tax returns or other reports filed in the office of the director of the revenue processing division of the taxation and revenue department of:
(1) any licensee;
(2) any other person engaged in the business described in Subsection A of Section 58-15-3 NMSA 1978 or participating in such business as principal, agent, broker or otherwise; and
(3) any person whom the director has
reasonable cause to believe is violating any provision of [that
act] the New Mexico Small Loan Act of 1955, whether the person
claims to be within the authority or beyond the scope of that
act.
For the purposes of this section, any person who advertises, solicits or holds himself out as willing to make loan transactions in any amount, except persons, financial institutions or lending agencies operating under charters or licenses issued by any state or federal agency or under any special statute, shall be subject to investigation under the New Mexico Small Loan Act of 1955 and shall be presumed to be engaged in the business described in Subsection A of Section 58-15-3 NMSA 1978 as to any loans of two thousand five hundred dollars ($2,500) or less.
C. To facilitate the examinations and investigations by the director and fully disclose the operations and methods of operation of each licensed office, the licensee shall, in each licensed office, keep on file as part of the records of the office all office manuals, communications or directives containing statements of loan policy to office managers and employees.
If the licensee is an individual, corporation, trust or association, the licensee shall keep in at least one office for information of the director a record of the several individuals, firms, beneficiaries of any trust and corporations deriving or receiving any part of the benefits, net income or profits from the operation of the licensee within New Mexico.
D. For the purposes of this section, the director or his duly authorized representative shall have and be given free access to the offices and places of business, files, safes and vaults of all licensees and shall have authority to require the attendance of any person and to examine him under oath relative to such loans or business or to the subject matter of any examination, investigation or hearing as provided in the New Mexico Small Loan Act of 1955. Notices to appear before the director for examination under oath may be served by registered mail. If the party notified to appear is the licensee, any person named on the face of the license being investigated or any agent, employee or manager participating in the business and he fails to appear for examination or refuses to answer questions submitted, the director may, forthwith and without further notice to the licensee, suspend the license involved pending compliance with the notice. Upon failure of any other person to appear or to answer questions, the director may apply to and invoke the aid of any district court of New Mexico in compelling the attendance and testimony of any such person and the production of books, records, written instruments and documents relating to the business of the licensee. Any district court whose aid is so invoked by the director may, in case of contumacy or refusal to obey any order of the district court issued to compel the attendance of the person or the production of books, records, written instruments and documents, punish the person as for contempt of court.
E. The director shall prescribe rules of procedure for all hearings, examinations or investigations provided for in the New Mexico Small Loan Act of 1955. The director is not bound by the usual common law or statutory rules of evidence or by any technical or formal rules of procedure or pleading and specification of charges other than as specifically provided in the New Mexico Small Loan Act of 1955 but may conduct hearings, examinations and investigations in the manner best calculated to ascertain the substantial rights of the parties interested.
F. The director has the power to administer oaths,
certify official acts and records of his office, issue
subpoenas for witnesses in the name of and under the seal of
his office and compel the production of papers, books, accounts
and documents. He shall issue subpoenas at the instance of any
party to a hearing before the [division] department upon
payment of a fee of two dollars and fifty cents ($2.50) for
each subpoena so issued.
G. Depositions may be taken with or without a commission, and written interrogatories may be submitted in the same manner and on the same grounds provided by law for the taking of depositions or submission of written interrogatories in civil actions pending in the district courts of this state.
H. Each witness who appears before the director by his order shall receive the fees and mileage provided for witnesses in civil actions in the district court. Fees and mileage shall be paid by the state, but no witness subpoenaed at the instance of parties other than the director is entitled to compensation from the state for attendance or mileage unless the director certifies that his testimony is material.
I. Whenever the director has reasonable cause to believe that any person is violating any provision of the New Mexico Small Loan Act of 1955, he may, in addition to all actions provided for in that act and without prejudice thereto, enter an order requiring the person to desist or to refrain from the violation. An action may be brought on the relation of the attorney general and the director to enjoin the person from engaging in or continuing the violation or from doing any act in furtherance of the violation. In any such action, an order or judgment may be entered awarding a preliminary or final injunction as may be deemed proper. In addition to all other means provided by law for the enforcement of a temporary restraining order, temporary injunction or final injunction, the court in which such action is brought shall have power and jurisdiction to impound and to appoint a receiver for the property and business of the defendants, including books, papers, documents and records pertaining thereto or so much thereof as the court may deem reasonably necessary to prevent further violations of the New Mexico Small Loan Act of 1955 through or by means of the use of the property and business. The receiver, when appointed and qualified, shall have powers and duties as to custody, collection, administration, winding up and liquidation of the property and business as are from time to time conferred upon him by the court."
Section 5. Section 58-15-10 NMSA 1978 (being Laws 1955, Chapter 128, Section 10, as amended) is amended to read:
"58-15-10. BOOKS AND RECORDS--ANNUAL REPORTS--ADDITIONAL INFORMATION.--
A. Each licensee shall keep and use in his business
such books, accounts and records in accordance with sound
accounting practices [as in the director's opinion] that will
enable [him] the director to determine whether the licensee is
complying with the provisions of the New Mexico Small Loan Act
of 1955 and with the orders and regulations lawfully made by
the director [under] pursuant to provisions of that act. Each
licensee shall preserve the books, accounts and records for at
least two years after making the final entry on [any] a loan
recorded therein.
B. Each licensee shall, annually on or before March 31, file a report with the director giving such relevant information as he may reasonably require concerning the business and operations during the preceding calendar year for each licensed place of business conducted by the licensee within the state pursuant to the provisions of the New Mexico Small Loan Act of 1955. The report shall be made under oath and shall be in the form prescribed by the director. A summary of the reports shall be included in the published annual report of the director.
C. At the time of filing each annual report, at the
time of the annual examination or at any other time when [any]
a license is in effect, the director may, upon written notice,
require [any] a licensee to furnish within twenty days in
writing, and under oath if so specified by any written notice
issued and served by the director upon the licensee, [any and
all] additional information as to ownership of any office;
operation of any office; books, records, files and papers; and
affiliation or relationship with any other person, firm, trust,
association or corporation as, in the opinion of the director,
may be helpful to [him] the director in the discharge of his
official duties.
D. False or misleading information willfully
furnished to the director by [any] a licensee in [any] an
annual report or pursuant to [any] a notice or requirement of
the director is sufficient ground for suspension and revocation
of license in accordance with the procedures for suspension or
revocation of license set forth in the New Mexico Small Loan
Act of 1955."
Section 6. Section 58-15-12 NMSA 1978 (being Laws 1955, Chapter 128, Section 12, as amended) is amended to read:
"58-15-12. ADVERTISING [SCHEDULE OF CHARGES].--[A. No] A
licensee or other person subject to the New Mexico Small Loan
Act of 1955 shall not advertise, display, distribute or
broadcast or cause or permit to be advertised, displayed,
distributed or broadcast in any manner whatsoever [any] a
false, misleading or deceptive statement or representation with
regard to the charges, terms or conditions for loans in the
amount or of the value of two thousand five hundred dollars
($2,500) or less. The director may require that charges or
rates of charge, if stated by a licensee, be stated fully and
clearly in such manner as he may deem necessary to prevent
misunderstanding [thereof] by prospective borrowers. The
director may permit or require licensees to refer in their
advertising to the fact that their business is under state
supervision, subject to conditions imposed by him to prevent
[any] erroneous impressions as to the scope or degree of
protection provided by the New Mexico Small Loan Act of 1955.
[B. Each licensee shall display in each licensed
place of business, in a place where it will be readily visible
by borrowers, a full and accurate schedule of the rates of
charges upon all classes of loans currently to be made by him,
stated on a percent per annum basis and also on a percent per
month basis.]"
Section 7. Section 58-15-14.1 NMSA 1978 (being Laws 1983, Chapter 95, Section 2) is amended to read:
"58-15-14.1. CHARGES--METHOD OF COMPUTATION.--[Charges
on] The simple interest method shall be used for loans made
under the New Mexico Small Loan Act of 1955. Charges shall not
be paid, deducted or received in advance. Such charges shall
not be compounded. However, if part or all of the
consideration for a loan contract is the unpaid principal
balance of a prior loan, then the principal amount payable
under the loan contract may include any unpaid charges [which]
that have accrued within sixty days on the prior loan. Such
charges shall be computed on the basis of the number of days
actually elapsed. [For the purpose of computing charges,
whether at the maximum rate or less, a month shall be any
period of thirty consecutive days and the rate of charge for
each day shall be one-thirtieth of the monthly rate.]"
Section 8. Section 58-15-17 NMSA 1978 (being Laws 1955, Chapter 128, Section 15, as amended) is amended to read:
"58-15-17. REQUIREMENTS FOR MAKING AND PAYING OF LOANS--INCOMPLETE INSTRUMENTS--LIMITATIONS ON CHARGES AFTER JUDGMENT AND INTEREST.--
A. Every licensee shall:
(1) at the time [any] a loan is made within
the provisions of the New Mexico Small Loan Act of 1955,
deliver to the borrower or, if there are two or more borrowers
on the same obligation, to one of them, a statement in English
on which shall be printed a copy of Section 58-15-14.1 NMSA
1978, disclosing in clear and distinct terms the amount of the
loan, the date the loan was made, a schedule or a description
of the payments, the type of the security, if any, for the
loan, the name and address of the licensed office, the name of
the person primarily obligated for the loan, the amount of
principal, the agreed rate of charge stated on [a percent per
month and] a percent per year basis and the amount in dollars
and cents and other items allowable pursuant to that act, so
stated as to clearly show the allocation of each item included;
(2) for each payment made on account of any such loan, give to the person making it a plain and complete receipt specifying the date and amount of the payment, the amount applied to interest and principal and the balance unpaid. When payment is made in any other manner than by the borrower in person, by an agent of the borrower or by check or money order, the licensee shall mail the receipt to the borrower's last known address or hold the receipt for delivery upon request of the borrower. A copy of all receipts shall be kept on file in the office of the licensee as a part of his records; and
(3) upon payment of the loan in full, mark plainly every note and promise to pay signed by any obligor with the word "paid" or "canceled" and promptly file or record a release of any mortgage if the mortgage has been recorded, restore any pledge and cancel and return any note and any assignment given to the licensee. A licensee may mark and return a copy of the note, promise to pay or any assignment if the copy accurately reproduces the complete original.
B. No licensee shall take [any] a note or promise
to pay that does not disclose the amount of the loan, a
schedule of payments, or a description thereof, and the agreed
charge or rate of charge or any instrument in which blanks are
left to be filled in after execution.
C. If judgment is obtained against [any] a party or
[any] a loan made [under] pursuant to the provisions of the New
Mexico Small Loan Act of 1955, neither the judgment nor the
loan shall carry, from the date of the judgment, [any] charges
against [any] a party to the loan other than court costs,
[attorneys'] attorney fees and interest on the amount of the
judgment at ten percent a year.
D. [Any] A loan made [under] pursuant to the
provisions of the New Mexico Small Loan Act of 1955 that is
filed and approved as a claim in any bankruptcy proceeding
shall, from a date ninety days subsequent to the date of
adjudication, bear interest at the rate of ten percent a year
only. This limitation shall not apply when the bankrupt is not
discharged in bankruptcy or to any obligation not dischargeable
under the provisions of the federal Bankruptcy Act [presently
in force or as hereafter amended].
E. No loan made under the provisions of the New Mexico Small Loan Act of 1955 shall bear interest after ninety days from the date of the death of the borrower in excess of a rate of ten percent a year on the unpaid principal balance of the loan.
F. No loan made under the provisions of the New Mexico Small Loan Act of 1955 shall bear interest after twelve months from the date of maturity of the loan in excess of ten percent a year upon the unpaid principal balance of the loan."
Section 9. Section 58-15-20 NMSA 1978 (being Laws 1955, Chapter 128, Section 18) is amended to read:
"58-15-20. FEES AND COSTS.--
[(a) FILING OR RECORDING FEES] A. Notwithstanding
any provision of [this Act] the New Mexico Small Loan Act of
1955, lawful fees, if any, actually and necessarily paid out by
the licensee to [any] a public officer for the filing,
recording or releasing in [any] a public office [any] of an
instrument securing the loan may be charged to the borrower.
[(b) ATTORNEY FEES] B. Notwithstanding any
provision in [any] a note or other loan contract taken or
received under [this Act] the New Mexico Small Loan Act of
1955, attorney fees shall not be charged or collected except
[where such] when the note or other contract has been [turned]
submitted in good faith to an attorney for collection and after
diligent effort to collect [has failed] on the part of the
licensee has failed.
[(c) COURTS COSTS Where] C. When suit is filed in
[any] a court of competent jurisdiction, court costs shall be
[collectable] collectible in accordance with the laws of New
Mexico applicable thereto.
[(d) NOTARY FEES PROHIBITED] D. Notary fees
incident to the taking of [any] a lien to secure a small loan
or releasing such a lien shall not be charged or collected by
[any] a licensee [nor by any], an officer, agent or employee of
a licensee [nor by] or anyone within [any] an office, room or
place of business in which a small loan office is conducted.
E. Delinquency fees shall not exceed five cents ($.05) for each one dollar ($1.00) of each installment more than ten days in arrears, provided that the total of delinquency charges on any such installment shall not exceed ten dollars ($10.00) and that only one delinquency charge shall be made on any one installment regardless of the period during which the installment remains unpaid."
Section 10. Section 58-15-23 NMSA 1978 (being Laws 1955, Chapter 128, Section 21) is amended to read:
"58-15-23. VIOLATION OF GENERAL USURY LAWS.--The [wilful]
willful violation by [any] a licensee or by [any] an officer,
manager, director, trustee, executive or employee directly
engaged in operating a small loan office under the provisions
of [this Act] the New Mexico Small Loan Act of 1955 of any
usury statute of this state within [any] an office, room or
place of business in which the making of loans as a licensee is
solicited or engaged in or in association or conjunction
therewith [shall be] is ground for suspension and revocation of
license in accordance with the applicable procedures
[applicable thereto as] set forth [herein] in that act."
Section 11. A new section of the New Mexico Small Loan Act of 1955, Section 58-15-32 NMSA 1978, is enacted to read:
"58-15-32. [NEW MATERIAL] REQUIREMENTS FOR PAYDAY LOANS.--
A. No payday loan shall exceed one thousand dollars ($1,000).
B. A payday loan agreement shall include a provision granting the consumer the right to rescind the transaction by returning in cash, or through certified funds, one hundred percent of the amount advanced by a licensee for a payday loan no later than 5:00 p.m. on the first day of business conducted by the licensee following the execution of the payday loan agreement. Unless the provisions of this subsection are followed, a payday loan shall not be subject to the consumer's right of rescission unless both the consumer and the licensee agree to the rescission. If a consumer exercises the right of rescission pursuant to this subsection, no fee for the rescinded transaction shall be charged to the consumer, and the licensee shall not charge or impose on the consumer a fee for exercising the right of rescission pursuant to this subsection.
C. A consumer shall be permitted to make partial payments in any amount on a payday loan at any time.
D. After each payment is made, in full or in part, on a payday loan, the licensee shall give to the person making the payment a signed, dated receipt showing the amount paid, amount credited toward interest and principal and the balance due on the loan.
E. A check written by a consumer for a payday loan shall be payable to the order of the licensee.
F. The licensee shall provide the consumer, or each consumer if there is more than one, with copies of the payday loan agreement in Spanish or English prior to the consummation of the loan.
G. The holder or assignee of a check written by a consumer in connection with a payday loan takes the instrument subject to all claims and defenses of the consumer. A payday loan agreement may not be renewed, refinanced or extended without the mutual written consent of the licensee and the consumer.
H. Small loan companies making payday loans shall have available a consumer information brochure in English and Spanish as determined by the director."
Section 12. A new section of the New Mexico Small Loan Act of 1955, Section 58-15-33 NMSA 1978, is enacted to read:
"58-15-33. [NEW MATERIAL] PAYDAY LOANS--PERMITTED CHARGES.--
A. A licensee may not charge or receive from a consumer, directly or indirectly, interest, fees or charges except as provided in this section.
B. A licensee may charge an administrative fee of not more than five dollars ($5.00) for each new payday loan entered into with a consumer.
C. In addition to the administrative fee, the licensee shall only charge simple interest on the amount of loan proceeds delivered to the consumer in a payday loan. The aggregate amount of interest received by the licensee for a payday loan includes all interest received on the loan, including interest received after any renewals, refinance or extensions. The total aggregate amount may not exceed two times the amount of the original loan agreement principal balance. Once the licensee has received in total aggregate interest equal to two times the original loan agreement principal balance, the payday loan shall be terminated and considered paid in full by the consumer. The interest rate charged on the outstanding balance after initial maturity shall not be greater than the interest rate charged during the initial loan term. Interest on loans shall be computed and paid only as a percentage of the unpaid principal balance.
D. If there are insufficient funds to pay a check on the date of presentment, a licensee may charge a fee not to exceed fifteen dollars ($15.00). Only one fee may be collected on a check even if it has been redeposited and returned more than once. A fee charged pursuant to this subsection is a licensee's only charge for a late payment."
Section 13. A new section of the New Mexico Small Loan Act of 1955, Section 58-15-34 NMSA 1978, is enacted to read:
"58-15-34. [NEW MATERIAL] PAYDAY LOANS--PROHIBITED ACTS.--A licensee shall not:
A. use or threaten to use a criminal process in this or another state to collect on a payday loan;
B. alter the date or other information on a check drawn by a consumer in a payday loan transaction;
C. use a device or agreement that would have the effect of charging or collecting more fees, charges or interest than allowed by law by entering into a different type of transaction with the consumer that has that effect except as specifically permitted by the New Mexico Small Loan Act of 1955;
D. engage in unfair, deceptive or fraudulent practices in the making or collecting of a payday loan;
E. charge a fee to cash a check representing the proceeds of the payday loan;
F. use or attempt to use the check written by the consumer for a payday loan as security for purposes of a state or federal law;
G. make more than one payday loan to a consumer at a time;
H. accept collateral for a payday loan other than the consumer's check;
I. charge interest, fees or charges other than those specifically authorized, including:
(1) charges for insurance; or
(2) collection costs;
J. threaten to take any action against a consumer that is prohibited by the New Mexico Small Loan Act of 1955;
K. include any of the following provisions in a payday loan agreement:
(1) a hold harmless clause;
(2) a confession of judgment clause or power of attorney;
(3) an assignment of or order for payment of wages or other compensation for services;
(4) a provision in which the consumer agrees not to assert a claim or defense arising out of the contract; or
(5) a waiver of a provision of the New Mexico Small Loan Act of 1955;
L. make a payday loan contingent on the purchase of insurance or other goods or services;
M. advertise, display, distribute or broadcast or cause or permit to be advertised, displayed, distributed or broadcast, in any manner, a false, misleading or deceptive statement or representation with regard to the charges, terms or conditions for payday loans;
N. take a check, instrument or form in which blanks are left to be filled in after execution of the check, instrument or form;
O. offer, arrange, act as an agent for or assist a third party in any way in the making of a payday loan unless the third party complies with all applicable federal and state laws and regulations;
R. enter into a payday loan with a consumer who lacks the capacity to consent; or
Q. use provisions in documents associated with a payday loan that are deceptive or misleading."
Section 14. A new section of the New Mexico Small Loan Act of 1955, Section 58-15-35 NMSA 1978, is enacted to read:
"58-15-35. [NEW MATERIAL] SMALL LOAN COMPANIES MAKING PAYDAY LOANS.--Effective January 1, 2005, a licensee that issues payday loans shall file an annual report with the division for data collection purposes on or before the last day of March for the preceding calendar year on forms prescribed by the division. The report shall disclose in detail and under appropriate headings:
A. the location of the licensee;
B. the total dollar amount of assets of the licensee;
C. the total volume of the licensee's payday loans in dollars funded or originated during the year;
D. the total number of the licensee's payday loans funded or originated during the year;
E. the total number of the licensee's payday loans outstanding at the end of the year;
F. the minimum, maximum and average dollar amount of the licensee's payday loans funded or originated during the year;
G. the average annual percentage rate charged to the consumer for all payday loans funded or originated during the year;
H. the average number of payday loans made to each consumer funded or originated during the year;
I. the average number of rollovers, refinances or extensions by each consumer;
J. the total average interest cost of rollover, refinances or extensions to each consumer;
K. the total number of loans defaulted during the year;
L. the total dollar amount of loans defaulted during the year;
M. the average of each consumer's income documented for each new payday loan during the year;
N. documentation required by the licensee prior to issuing a payday loan;
O. summary of standard actions taken by the licensee upon default;
P. copies of loan documents and fee schedules;
Q. the number and type of complaints filed against the licensee; and
R. any additional information that the director requests to determine if the licensee is complying with the provisions of the New Mexico Small Loan Act of 1955."
Section 15. REPEAL.--Sections 58-15-15 and 58-15-19 NMSA 1978 (being Laws 1959, Chapter 201, Section 1 and Laws 1955, Chapter 128, Section 17, as amended) are repealed.