Santa Fe, NM (KKOB) — Bank of America, Wells Fargo, and U.S. Bank, which together represent approximately one in four bank branches in New Mexico, are now offering affordable small loans to their customers in New Mexico and across the country.
As of January 1, 2023, a state law limits annual interest rates on small loans in New Mexico to 36%.
“Some high-interest lenders argued that the 36% interest rate limit would reduce access to affordable credit in the state,” said Fred Nathan, Executive Director of the nonpartisan think tank Think New Mexico, which published a policy report in 2020 making the case for the 36% interest rate cap. “Instead, access to affordable credit has expanded.”
Loans offered by the national banks are for amounts up to $500, $750, or $1,000, depending on the bank, similar to the size of loans previously provided by high-interest lenders. Customers of the banks are able to quickly and easily access the funds, as the banks offer either automatic pre-approval or a short application process, with the funds disbursed into a customer’s bank account almost instantly.
Bank of America, Wells Fargo, and U.S. Bank account for 104 of the 421 bank branches in New Mexico, according to the Federal Deposit Insurance Corporation. These banks join New Mexico’s 40 credit unions, with around 150 locations across the state, which have already been offering access to small loans at affordable rates.
Additional information on the small loans offered by national banks is available from the Pew Trusts at:https://www.pewtrusts.org/en/research-and-analysis/articles/2023/01/24/six-of-the-eight-largest-banks-now-offer-affordable-small-loans