TITLE 12 TRADE, COMMERCE AND BANKING
CHAPTER 18 LOAN COMPANIES
PART 3 MANDATORY
BROCHURE FOR SMALL LOAN BUSINESS
12.18.3.1 ISSUING AGENCY:
Financial Institutions Division of the Regulation and Licensing
Department.
[12.18.3.1 NMAC - N,
10/1/2001; A, 08/13/2004]
12.18.3.2 SCOPE: Loan
companies conducting Small Loan Business in the State of New Mexico.
[12.18.3.2 NMAC - N,
10/1/2001]
12.18.3.3 STATUTORY AUTHORITY:
Section 58-15-11 NMSA 1978.
[12.18.3.3 NMAC - N,
10/1/2001]
12.18.3.4 DURATION:
Permanent.
[12.18.3.4 NMAC - N,
10/1/2001]
12.18.3.5 EFFECTIVE DATE:
October 1, 2001 unless a later date is cited at
the end of a section.
[12.18.3.5 NMAC - N,
10/1/2001]
12.18.3.6 OBJECTIVE: The
objective of this part is to require a mandatory informational brochure to be
readily available for all small loan consumers.
[12.18.3.6 NMAC - N, 10/1/2001]
12.18.3.7 DEFINITIONS: [RESERVED]
[12.18.3.7 NMAC - N, 10/1/2001]
12.18.3.8 MANDATORY BROCHURE FOR SMALL
LOAN BUSINESSES
A. All small loan companies licensed by the state of New Mexico must have an informational brochure readily available to all small loan consumers.
B. The brochure
rack containing the brochure must be placed by the main door entrance. The brochure rack must always be stocked with
the brochure.
C. Using lettering
no smaller than 24-point font, the front of the brochure shall have in bold
capital letters, the words, “IMPORTANT CONSUMER INFORMATION” followed by the
words in bold 14-point font, “This brochure contains some common terms and
definitions, which are intended to help you better understand your credit
transaction. Credit costs money, so it
is important that you fully understand the terms of your credit
transaction. If you come across terms you do not understand, look up the terms, or ask our
personnel to explain the terms to you.
Ask questions. Make certain the
questions that you ask are answered.
Make certain you understand the terms and costs of your loan.”
D. Using lettering
no smaller than 12-point font, the brochure shall state:
(1) Common
Terms and Definitions
(2) Equal
Credit Opportunity Act (ECOA). A federal
regulation which requires lenders to promote the availability of credit to all
creditworthy applicants without regard to race, color, religion, national
origin, sex, marital status, or age (provided the applicant has the capacity to
contract); to whether all or part of the applicant’s income derives from a
public assistance program; or to whether the applicant has in good faith
exercised any right under the Consumer Credit Protection Act. The regulation prohibits creditor practices
that discriminate on the basis of any of these factors.
(3) Contract. A written binding document, describing terms of an agreement between two or more persons. (Keep all paperwork. Later, if there are any questions, you will
have your agreement in writing.)
(4) Annual
percentage rate (APR). The cost of your
credit as a yearly rate. APR is a combination of the interest rate
plus the fees charged on your loan. APR
is higher than the interest rate because it includes both fees and interest as
finance charges. The calculation of APR
is mandated pursuant to Federal Law (12 CFR Part 1026 – Truth in Lending Act
(“TIL-APR”)). It is intended to provide
a single value for a consumer to compare the cost of credit between one lender
and another. Under New Mexico law, an
additional type of annual percentage rate (“NM-APR”) must be disclosed, which
may include additional charges that are not included in the TIL-APR. The NM-APR for a loan in an amount of more
than $500 and up to $10,000 made pursuant to the Small Loan Act of 1955 or the
Bank Installment Loan Act of 1959 cannot exceed thirty-six percent. The NM-APR for a loan in an amount of $500 or
less made pursuant to the Small Loan Act of 1955 or the Bank Installment Loan
Act of 1959 cannot exceed thirty-six percent plus a fee that shall not exceed
five percent of the total principal of the loan and shall not be imposed on any
borrower more than once per 12-month period.
(5) Finance
charge. The dollar amount the credit
will cost you. Finance charges include
interest, and may also include transaction fees and service fees.
(6) Principal. The amount of money owed on a debt, on which
interest is calculated.
(7) Interest. The cost of borrowing money, generally a
percentage of the amount owed.
(8) Balance. The total amount of money owed to a lender.
(9) Default. Failure to pay a debt as agreed to on a contract. When a
loan is in default, the lender may demand full payment of the remaining debt.
(10) Collateral. Security pledged by a borrower to protect the
interests of the lender; in case of default, the lender may take ownership of
the security, if any, pledged by the borrower.
(11) Credit
bureau. A private company that keeps a
record of your credit history for distribution upon request by authorized
parties. When you apply for credit, a lender
may request a credit report to review when considering your application.
(12) Credit
history. A record containing information
about you, including your payment history on previous debts.
(13) Credit
report. A report of the credit history
and other information about you that is kept by credit bureaus, which may
include: your name, address, social
security number, payment history (good and bad), current and previous debts,
employers, income, etc. Accurate
information on a credit report may not be legally
removed. Incorrect information may be
removed by disputing the information to the credit
bureau involved.
E. The brochure
shall have the following words, using lettering no smaller than 12-point font:
“New Mexico Only: This lender is
licensed and regulated by the New Mexico Regulation and Licensing Department,
Financial Institutions Division, P.O. Box 25101, 2550 Cerrillos Road, Santa Fe,
New Mexico 87504. To report any unresolved problems or complaints, contact the
division by telephone at (505) 476-4885 or visit the website: www.rld.nm.gov/financial-institutions/.”
[12.18.3.8 NMAC - N,
10/1/2001; A, 08/13/2004; A, 09/15/2018; A, 03/29/2023]
HISTORY OF 12.18.3 NMAC: [RESERVED]