1. A. No amount, other than the total finance charge, calculated pursuant to Subsections D, E and F of Section 58-7-7 NMSA 1978, which consists solely of interest and a fully earned processing fee not to exceed the lesser of two hundred dollars ($200) or ten percent of the principal, shall be charged or contracted for, directly or indirectly, on or in connection with a precomputed loan transaction except as follows:

   1. (1) delinquency charges not to exceed five cents ($.05) for each one dollar ($1.00) of each installment more than ten days in arrears may be charged; 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;
   2. (2) the lender may charge for only the actual cost of any insurance; provided, however, all insurance shall be written by companies licensed to operate within the state and at rates no higher than those approved by the superintendent of insurance; and provided further that the lender shall not require any insurance to be written or provided by or through any particular agent, broker or insurer as a condition to making the loan but shall, at the borrower's option, permit the insurance to be procured from any reputable insurer or through any reputable agent authorized by law to provide it;
   3. (3) in the event that a borrower fails to maintain in effect any insurance required in connection with a loan transaction, the lender may purchase the required insurance or lender's single interest insurance covering the lender's interest in the property, and the cost of that insurance shall be added to the loan and may accrue interest as provided for in the New Mexico Bank Installment Loan Act of 1959;
   4. (4) such amounts as are necessary to reimburse the lender for fees paid to a public officer for filing, recording or releasing any instrument or lien;
   5. (5) if a loan under the New Mexico Bank Installment Loan Act of 1959 is secured and if the borrower fails to pay any governmental or other levy arising after the date of the loan that would create a lien superior to the lien of the lender on the property standing as security, the lender, at the lender's option, may pay the levy and add the amount so paid to the balance due from the borrower;
   6. (6) the actual expenditures, including reasonable attorney fees, for legal process or proceedings to collect on a precomputed loan; provided, however, that no attorney fees are permitted where the loan is referred for collection to an attorney who is a salaried employee of the holder of the contract; and further provided that attorney fees shall not be charged or collected unless the note or other contract has been submitted to an attorney for collection after the lender has made a diligent and good faith effort to collect and has failed; and
   7. (7) the actual cost of charges incurred in making a real estate loan secured by a mortgage on real estate, including the charges for an abstract of title, title examination, title insurance premiums, property survey, appraisal fees, notary fees, preparation of deeds, mortgages or other documents, escrow charges, credit reports and filing and recording fees.
2. B. If there are insufficient funds to pay a check or other type of debit on the date of presentment by the lender, a check or debit authorization request shall not be presented to a financial institution by a lender for payment more than one time per payment due unless the consumer agrees in writing, after a check or other type of debit has been dishonored, to one additional presentment or deposit.
3. C. The charges permitted under this section may be added to the balance due from the borrower.

History: 1953 Comp., § 48-21-6, enacted by Laws 1959, ch. 327, § 6; 1975, ch. 252, § 4; 1977, ch. 362, § 1; 1983, ch. 96, § 3; 2017, ch. 110, § 5; 2019, ch. 201, § 2; 2022, ch. 23, § 2.

ANNOTATIONS

The 2022 amendment, effective January 1, 2023, provided that the total finance charge shall be calculated pursuant to NMSA 1978, § 58-7-7(D) through § 58-7-7(F); and in Subsection A, in the introductory clause, after "total finance charge", added "calculated pursuant to Subsections D, E and F of Section 58-7-7 NMSA 1978", and in Paragraph A(6), after "has been submitted", deleted "in good faith".

The 2019 amendment, effective January 1, 2020, limited the collection of certain charges related to attorney fees for legal process or proceedings to collect on a precomputed loan; in Subsection A, after "in connection with", deleted "any such installment loan" and added "a precomputed loan transaction", in Paragraph A(1), after "arrears", added "may be charged", in Paragraph A(6), after "proceedings to collect", deleted "any such installment" and added "on a precomputed", and after "contract, and", added "further provided that attorney fees shall not be charged or collected unless the note or other contract has been submitted in good faith to an attorney for collection after the lender has made a diligent and good faith effort to collect and has failed; and"; and in Subsection B, after "more than one time", added "per payment due".

Applicability. — Laws 2019, ch. 201, § 17 provided that the provisions of Laws 2019, ch. 201 apply to loans subject to the New Mexico Small Loan Act of 1955 and the New Mexico Bank Installment Loan Act of 1959 that are executed on or after January 1, 2020.

The 2017 amendment, effective January 1, 2018, allowed finance charges on installment loans and placed a limit on the amount of the finance charge, removed a twenty-five dollar ($25.00) maximum charge for defraying the costs of disclosure statements from the list of permitted charges on installment loans, and placed a limit on the number of times a lender may present to a financial institution a check or debit authorization request for payment when there are insufficient funds to pay a check or other type of debit; in the section heading, deleted "Additional" and added "Permitted", and added "limitation on presentment"; added new subsection designation "A." and redesignated former Subsections A through G as Paragraphs A(1) through A(7), respectively; in Subsection A, in the introductory clause, after "No", deleted "additional", and after "amount", added "other than the total finance charge, which consists solely of interest and a fully earned processing fee not to exceed the lesser of two hundred dollars ($200) or ten percent of the principal", in Paragraph A(2), changed two occurrences of "must" to "shall", in Paragraph A(3), after "as provided for", deleted "herein" and added "in the New Mexico Bank Installment Loan Act of 1959", and in Paragraph A(7), after "including", deleted "but not limited to", and after "recording fees", deleted "and"; deleted former Subsection H, which provided for a one-time permitted charge for defraying the costs of disclosure statements; and added a new Subsection B and designated the last sentence of the section as Subsection C.

Credit card fee legal and not deemed finance charge. — An annual fee charged solely for the privilege of obtaining a credit card, regardless of whether the card is used in a loan transaction, is not to be considered a finance charge and is not, in itself, illegal in New Mexico. 1980 Op. Att'y Gen. No. 80-27.

Interest and other charges. — With the repeal of the interest ceiling, there are no limits on interest rates for installment loans, provided that the rate charged is agreed to in writing and that the lender fully complies with disclosure requirements; as to charges other than interest, the restrictions of this article apply to precomputed loans or those loans which are identified on the loan documents as being made under this article. 1985 Op. Att'y Gen. No. 85-01.

"Non-filing insurance" fee. — A small loan licensee, doing business under this act may charge a "non-filing insurance" fee in lieu of charging fees for filing security agreements with county officials. 1987 Op. Att'y Gen. No. 87-08.

Am. Jur. 2d, A.L.R. and C.J.S. references. — Construction, application and effect of provisions of small loan acts regarding fees, charges, etc., in addition to interest, 13 A.L.R. 1244.

What constitutes "finance charge" under § 106(a) of the Truth in Lending Act (15 USCA § 1605(a)) or applicable regulations, 154 A.L.R. Fed. 431.