The Roundhouse in Santa Fe. Post file photo
By MILAN SIMONICH
The Santa Fe New Mexican
It’s showdown time in the New Mexico House of Representatives. Rich out-of-state corporations are in one corner. Dirt-poor New Mexicans occupy the other.
It’s no contest as to which side has had the political advantage. Many House members have cared more about appeasing a predatory industry than helping their neediest constituents.
Storefront lenders in New Mexico are legally permitted to charge an annual interest rate of up to 175 percent. It’s a staggering figure that can trap low-income people in debt for years.
The Democrat-dominated state Senate last year approved a bill to lower the maximum annual interest rate to 36 percent. That’s still high but not as contemptible as the existing system.
Republicans and a few self-described progressive Democrats in the House of Representatives collaborated to destroy the Senate bill. The discord kept the 175 percent interest rate in effect — exactly what storefront lenders wanted.
Three Democrats on the House Judiciary Committee led the way in torpedoing last year’s bill for 36 percent rates.
A similar reform measure, House Bill 132, is scheduled to go back before the Judiciary Committee on Wednesday afternoon. It would cap the annual interest rate at 36 percent.
Three Democrats who assisted the industry last year remain on the committee. They are Reps. Micaela Cadena of Mesilla, Eliseo Alcon of Milan and Georgene Louis of Albuquerque.
Lawyers and lobbyists for storefront lenders rewrote the Senate bill with a 99 percent interest rate. They handed off the bill to Alcon, a dutiful foot soldier.
Alcon needed help from fellow Democrats to get his amendment through the committee. He received it from Cadena and Louis.
All of them said a rate of 36 percent might dry up credit for people who didn’t qualify for bank or credit union loans. They ignored testimony from executives of credit unions who said their institutions can make most installment loans for under 36 percent.
Louis ran for Congress soon after taking her stand for 99 percent interest rates. She claimed she was a woman of the people. The people knew better. Louis was defeated.
Louis and Cadena joined with three other Democrats to further rework the Senate bill when it went to the full 70-member House. Louis and Cadena decided on 99 percent interest rates on loans of $1,000 or less. Larger installment loans would be for 36 percent.
Rep. Daymon Ely, D-Corrales, did the industry a bit better. He pushed a successful amendment to make the 99 percent rate apply to loans of $1,100 or less, a change making life more difficult for the little guy.
Ely just signed on as a sponsor of HB 132 for 36 percent rates. He said it’s not an about-face. His goal, he said, has always been to get something better for consumers than the 175 percent rate.
Rep. Patti Lundstrom, D-Gallup, was one of the architects of the idea of a mix of 99 percent and 36 percent rates. Lundstrom received $6,000 from the storefront lending industry in the 2020 election cycle, the most of any individual House member.
The PAC of House Speaker Brian Egolf, D-Santa Fe, took three times as much from storefront lenders. Egolf appointed Lundstrom to the conference committee that was supposed to work on a compromise with the Senate.
Lundstrom now is sponsoring a bill with Cadena and Rep. Dayan Hochman-Vigil, D-Albuquerque, to revive 99 percent interest for loans of $1,100 or less. The rate of 36 percent would apply only to larger loans. Their proposal is House Bill 172.
The bill is a clear signal that Cadena will try Wednesday in the Judiciary Committee to again amend the reform measure seeking a universal interest rate of 36 percent.
Even 175 percent or 99 percent rates displease some lenders.
“The Online Lenders Alliance opposes rate cap bills because they constrict access to credit for consumers,” the organization’s spokesman, Brian Muhlbach, wrote to me in an email.
That’s touching. Companies that want unlimited interest rates are looking out for consumers.
One maverick lawmaker is opposing the corporate line. Rep. Phelps Anderson of Roswell, the only independent in the House, is a sponsor of the bill for a cap of 36 percent.
If only Democratic Gov. Michelle Lujan Grisham were as gutsy as Anderson, a former Republican.
Lujan Grisham loves highlighting herself in press handouts. She sent one Tuesday that stated: “Governor introduces legislation to support rural health care delivery.”
Perhaps she skipped junior high school civics. The governor cannot introduce legislation, but she’s happy to claim otherwise in this election year.
But Lujan Grisham could have been considerable help to poor people by agreeing to let legislators place a bill for 36 percent interest rates on their agenda for the 30-day session. She didn’t do so.
Egolf and other sponsors of HB 132 added an appropriation to the measure to claim it was germane during a legislative session devoted mostly to the state budget. They removed the appropriation request before any committee heard the bill.
Democrats control the Legislature and the Governor’s Office. But many of them claim it’s almost impossible to marshal enough votes to eliminate an interest rate of 175 percent.
Their indifference reminds me of something an old sheriff said in the classic Western High Noon: “People gotta talk themselves into law and order before they do anything about it. Maybe because down deep they don’t care.”
Ringside Seat is an opinion column about people, politics and news. Contact Milan Simonich at msimonich@sfnewmexican.com or 505.0986.3080.
