After declining for weeks, Governor Michelle Lujan Grisham belatedly authorized legislation on Monday to cut annual interest rates charged by storefront loan companies from 175% to 36%.
Lujan Grisham, a Democrat, backtracked after half a dozen members of the House of Representatives challenged the legality of Bill 132, the measure to cut the interest rate to three digits.
The bill was introduced by House Speaker Brian Egolf, D-Santa Fe, and Rep. Susan Herrera, D-Embudo. They first said it didn’t need permission from the governor because it contained a $180,000 credit to help students learn money management. The proposed spending would have made the bill relevant in this 30-day legislative session devoted primarily to budget matters.
But Herrera withdrew the funding proposal during the bill’s first committee hearing. Republicans at the time questioned the maneuver but did not formally protest the bill.
HB 132 authorized the two committees to which he was assigned, and he was to be heard early Monday afternoon by all 70 members of the House of Representatives.
Rep. Eliseo Alcon, D-Milan, challenged the legality of the bill, calling for it to be withdrawn from debate in the House. Several Republican lawmakers have backed Alcon. Rep. Rebecca Dow, R-Truth or Consequences, has publicly accused Egolf of manipulating the law to advance a bill he supports.
The House adjourned for approximately six hours, during which time the Governor suddenly allowed debate on the bill.
Egolf rescheduled it to be heard at night. It was still being debated after 11 p.m., after the House approved an amendment introduced by Rep. Micaela Cadena, D-Mesilla, to allow an application fee of up to 5% on every loan of $500 or less.
Cadena said his motivation was to keep credit available for people who need emergency cash loans. With some 390,000 such installment loans active in New Mexico, people must need them, Cadena said.