The simple interest method shall be used for loans made under the New Mexico Small Loan Act of 1955. Interest charges shall not be paid, deducted or received in advance. Interest charges shall not be compounded. However, if part or all of the consideration for a loan contract is the unpaid principal balance of a prior loan, then the principal amount payable under the loan contract may include any unpaid charges that have accrued within sixty days on the prior loan. Such charges shall be computed on the basis of the number of days actually elapsed.

History: Laws 1983, ch. 95, § 2; 2007, ch. 86, § 9.

Severability clause. — Laws 2007, ch. 86, § 23 provides that if any part or application of this act is held invalid, the remainder or its application to other situations or persons shall not be affected.

The 2007 amendment, effective November 1, 2007, requires the simple interest method for loans and eliminates the requirement that for purposes of computing charges, a month shall consist of thirty consecutive days and the rate of charge for each day shall be one-thirtieth of the monthly rate.

Allowable charges for loans. — Apart from interest charges on loans, only those fees described in Section 58-15-20 NMSA 1978 may be charged for loans made under the Small Loan Act. Neither charges nor interest can be received in advance or compounded. 1985 Op. Att'y Gen. No. 85-01.

Opinions rendered under former law. 1962 Op. Att'y Gen. No. 62-44; 1962 Op. Att'y Gen. No. 62-48; 1967 Op. Att'y Gen. No. 67-11; 1973 Op. Att'y Gen. No. 73-74.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 53A Am. Jur. 2d Money Lenders and Pawnbrokers §§ 6, 7, 14 et seq., 38, 46 et seq.

Maximum amount: construction and application of provisions of small loan acts as regards maximum amount of loan, 99 A.L.R. 923.

Time: construction and application of provision of small loan statute limiting time period for loan contracts, 58 A.L.R.2d 1263.

Compound interest: what is "compound interest" within meaning of statutes prohibiting the charging of such interest, 10 A.L.R.3d 421.

Disclosure: construction and effect of disclosure statutes requiring one extending credit or making loan to give statement showing terms as to amounts involved and charges made, 14 A.L.R.3d 330, 46 A.L.R. Fed. 657.

58 C.J.S. Money Lenders §§ 2, 3, 5, 6, 8.