Small Loan Companies
Small Loan Companies
Small loan companies are businesses or persons engaged in making loans to New Mexico borrowers of five-thousand dollars ($5,000) or less. These companies typically offer a variety of different loan products that may include short-term installment loans, refund (tax) anticipation loans, and/or small dollar business (commercial) loans.
Small loan companies are subject to annual licensing and examination requirements pursuant to the New Mexico Small Loan Act of 1955 § 58-15-1, et seq., NMSA 1978. Banks and Credit Unions are exempt from the requirements. FID’s consolidated report on small loans made each calendar year is available on the annual reports section of this website.
Please click here for the most current small loan directory.
The Financial Institutions Division provides consumers with informational brochures that are intended to assist borrowers with understand their credit transactions.
Consumer Information – Common Terms and Definitions Brochure
Rule of 78s Interest Calculation
Below is a synopsis of loan products typically offered by small loan companies in New Mexico.
Installment Loan Product: As defined by § 58-15-2(F) NMSA 1978, an “installment loan” means a loan in an amount less than or equal to five thousand dollars ($5,000) that is to be repaid in a minimum of four substantially equal payments of principal and interest to pay off a loan in its entirety with an initial stated maturity of not less than one hundred twenty days to maturity. “Installment loan” does not mean a refund anticipation loan.
Refund Anticipation Loan Product: As defined by § 58-15-2(J) NMSA 1978, a “refund anticipation loan” means a loan that is secured by or that the creditor arranges or expects to be repaid from, directly or indirectly, the proceeds of the consumer’s federal or state personal income tax refunds or tax credits, including any sale, assignment, or purchase of a tax refund or tax credit at a discount or for a fee.
Small dollar Business (Commercial) Loan Product: A “small dollar business loan” is a loan in the amount of up to five thousand dollars ($5,000) or less that is specifically intended to fund various aspects of a business that may include, but is not limited to, working capital, operations, expansion, or start-up costs.
Operational Controls and Risk Management Procedures
All licensees under the New Mexico Small Loan Act of 1955 must demonstrate appropriate financial responsibility, character, and general fitness as to command the confidence of the public and warrant belief that the business will be operated lawfully, honestly, fairly, and efficiently. The Operational Controls and Risk Management Recommendations listed herein are designed to assist applicants and licensees in their continuing efforts to meet these goals.
Electronic Media Requirements (All Websites, Social Media Pages, and Mobile Apps)
The requirements listed herein provide guidance to all licensees under the New Mexico Small Loan Act of 1955 operating electronic media sites.
Small Loan Annual Reporting Requirement (2021)
In accordance with the provisions of the New Mexico Small Loan Act of 1955 (§ 58-15-10.1 NMSA 1978), all small loan licensees must complete and submit this information annually to the FID no later than April 15. Please note that the data set reporting requirement for loans made in calendar year 2020 and beyond corresponds to the expanded data set in terms of small loan reporting and disclosure changes that went into effect on January 1, 2020. Please see the HB 150 2020 Regulatory Alert and the HB 150 2020 final bill for additional detail.
Signature of Certification
NOTE: Any licensee that did not originate a single loan in calendar year 2020, is required to submit a letter on company letterhead and the completed Signature of Certification document certifying that no loans were originated within calendar year 2020.