News About the Ever-Changing Payday Advance Industry
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High-cost payday loans are effectively gone in New Mexico. A 2022 reform (HB 132), effective January 1, 2023, cut the cap on small-loan APR from a punishing 175% down to 36% on loans up to $10,000. The drop made the old triple-digit payday and high-cost installment products unprofitable, so most have left the state.
| Status | Legal, but capped at 36% APR — high-cost payday effectively ended |
|---|---|
| APR cap | 36% (down from 175%), effective January 1, 2023 |
| Applies to | Consumer loans of $10,000 or less |
| Reform | HB 132 (2022); amended the New Mexico Small Loan Act |
| Effect | Most high-cost payday/installment lenders exited the state |
| Regulator | Regulation and Licensing Department, Financial Institutions Division |
| Law | New Mexico Small Loan Act, as amended by HB 132 (2022) |
Consumer lending in New Mexico is overseen by the Regulation and Licensing Department's Financial Institutions Division. To report a violation or an illegal lender, use the online complaint form.
With the 36% cap, look to a credit-union small loan or payday-alternative loan, an employer paycheck advance, or nonprofit credit counseling. See our guide to payday loans and alternatives.
A lender can garnish wages in New Mexico only after it sues and wins a court judgment, and federal law then caps how much can be taken. New Mexico does not run a statewide payday-loan database, so limits on how many loans you can hold are harder to track from lender to lender. Your rights when you cannot repay are set by a mix of federal and state law — these guides explain how they work:
Disclaimer: general information, not legal or financial advice. Laws change — verify the current rules with the New Mexico Regulation and Licensing Department, Financial Institutions Division before borrowing. Last reviewed 2026.
Sources
They are legal in name, but a 2023 reform (HB 132) capped small-loan APR at 36%, down from 175%, which made high-cost payday lending unprofitable — so it has largely disappeared.
36% APR on consumer loans of $10,000 or less, effective January 1, 2023.
In practice, no. The 36% cap drove most high-cost lenders out of the state; look to lower-cost alternatives instead.
The Regulation and Licensing Department's Financial Institutions Division.
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