Soules rejects House changes to small loan bill

New Mexico Sen. Bill Soules, D-Las Cruces, has refused to accept changes made to his bill seeking to put a limit on interest rates for small loans, sending the bill to a conference committee to try to find a resolution.

The Senate, at Soules’ request, refused to concur Thursday, March 18, with changes made to Senate Bill 66. A conference committee of three members from the House and three from the Senate will meet to try to find a solution.

“Once it came out of House Judiciary, it was not my bill anymore,” Soules said.

The bill as originally written would have lowered the annual percentage rate (APR) for small loans from 175 percent to 36 percent, which the U.S. military has established as the maximum rate on loans to active-duty members.

The bill was amended in the House Judiciary Committee, increasing the APR from 36 percent to 99 percent out of fear that small lenders would leave the state, and low-income residents would be left without any options when they needed money in an emergency.

“To me, it’s not about avoiding debt. For some people it’s about survival,” said Rep. Micaela Lara Cadena, D-Mesilla, the committee vice chair. “That doesn’t mean that families should sink at outrageously high interest rates, but I am worried that we are creating a policy that eliminates some financial decisions for New Mexicans but does not create a different mechanism for people to access small amounts of money when they really need it.”

Cadena joined with Reps. Doreen Gallegos, D-Las Cruces; Patricia Lundstrom, D-Gallup; Dayan Hochman-Vigil, D-Albuquerque; and Susan Herrera, D-Embudo, on a floor amendment Wednesday night that retains the 99 percent rate for loans up to $1,000, with two years to repay. The 36 percent rate was retained for loans over $1,000. That was later amended to $1,100.

“Tonight’s compromise should serve as a great example to the Legislature and state on how to work together to create real, commonsense solutions that work for the people of our state,” Gallegos said in a prepared statement.

It was, however, no compromise at all in the eyes of the sponsor. Soules said the vast majority of small loans are for $1,000 or less, and that the 99 percent APR was not acceptable.

The Senate voted 22-15 not to concur, and to send the bill back to the House. Members could withdraw their amendments, but the more likely result will be a conference committee.

Conference committee members from the Senate will be Soules; Katy Duhigg, D-Albuquerque; and Greg Schmedes, R-Tijeras.

“Anything can happen in a conference committee,” Soules said. “It’s a smaller group of people, and you can sit down and negotiate. I really don’t know what’s going to happen.”

Lt. Gov. Howie Morales, who is presiding over Senate floor sessions, said the conference committee will be public, with those interested able to watch on Zoom. It needs to be held soon, as the session ends at noon Saturday, March 20.

Soules said he was disappointed with the changes, but will keep fighting for the 36 percent rate.

“I feel a little like the black knight in Monty Python,” Soules said. “My arms and legs are cut off, but I’m not dead yet.”

Walter Rubel can be reached at waltrubel@gmail.com.