Money, Interest and Usury

NMSA 1978 ch. 56, art. 8

in effect

NMSA 1978, § 56-8-1 [Lawful money; definition; application.]

56-8-1. [Lawful money; definition; application.] The money of account of this state shall be the dollar, cent and mill; and all public accounts, and the proceedings of all courts in relation to money shall be kept and expressed in money of the above denomination. Laws 1851-1852, p. 254; C.L. 1865, ch. 79, § 1; C.L. 1884, § 1732; C.L. 1897, § 2548; Code 1915, § 3523; C.S. 1929, § 89-101; 1941 Comp., § 53-601; 1953 Comp., § 50-6-1.

NMSA 1978, § 56-8-2 [Denominations to be reduced to lawful basis in actions.]

56-8-2. [Denominations to be reduced to lawful basis in actions.] The above section [56-8-1 NMSA 1978] shall not in any manner affect any demand in money of another denomination, but such demand in any suit or proceeding affecting the same shall be reduced to the above denomination. Laws 1851-1852, p. 254; C.L. 1865, ch. 79, § 2; C.L. 1884, § 1733; C.L. 1897, § 2549; Code 1915, § 3524; C.S. 1929, § 89-102; 1941 Comp., § 53-602; 1953 Comp., § 50-6-2.

NMSA 1978, § 56-8-3 Interest rate; no written contract

56-8-3. Interest rate; no written contract The rate of interest, in the absence of a written contract fixing a different rate, shall be not more than fifteen percent annually in the following cases: A. on money due by contract; B. on money received to the use of another and retained without the owner's consent expressed or implied; and C. on money due upon the settlement of matured accounts from the day the balance is ascertained. 1978 Comp., § 56-8-3, enacted by Laws 1983, ch. 254, § 1.

NMSA 1978, § 56-8-4 Judgments and decrees; basis of computing interest

56-8-4. Judgments and decrees; basis of computing interest A. Interest shall be allowed on judgments and decrees for the payment of money from entry and shall be calculated at the rate of eight and three-fourths percent per year, unless: (1) the judgment is rendered on a written instrument having a different rate of interest, in which case interest shall be computed at a rate no higher than specified in the instrument; or (2) the judgment is based on tortious conduct, bad faith or intentional or willful acts, in which case interest shall be computed at the rate of fifteen percent. B. Unless the judgment is based on unpaid child support, the court in its discretion may allow interest of up to ten percent from the date the complaint is served upon the defendant after considering, among other things: (1) if the plaintiff was the cause of unreasonable delay in the adjudication of the plaintiff's claims; and (2) if the defendant had previously made a reasonable and timely offer of settlement to the plaintiff. C. Nothing contained in this section shall affect the award of interest or the time from which interest is computed as otherwise permitted by statute or common law. D. The state and its political subdivisions are exempt from the provisions of this section except as otherwise provided by statute or common law. Laws 1851-1852, p. 255; C.L. 1865, ch. 79, § 5; C.L. 1884, § 1735; C.L. 1897, § 2551; Code 1915, § 3526; C.S. 1929, § 89-104; 1941 Comp., § 53-604; 1953 Comp., § 50-6-4; Laws 1977, ch. 293, § 1; 1980, ch. 68, § 2; 1983, ch. 254, § 2; 1993, ch. 112, § 1; 2004, ch. 41, § 7.

NMSA 1978, § 56-8-5 Interest; open accounts

56-8-5. Interest; open accounts In current or open accounts there shall not be collected more than fifteen percent interest annually thereon, thirty days after the delivery of the last article or service; provided that the parties may set a higher rate by agreement. Laws 1882, ch. 25, § 2; C.L. 1884, § 1736; C.L. 1897, § 2552; Code 1915, § 3527; C.S. 1929, § 89-105; 1941 Comp., § 53-605; 1953 Comp., § 50-6-5; Laws 1977, ch. 293, § 2; 1980, ch. 68, § 3; 1981, ch. 194, § 1; 1983, ch. 254, § 3.

NMSA 1978, § 56-8-6 Grain purchase contracts; disclosure regarding act of God clause

56-8-6. Grain purchase contracts; disclosure regarding act of God clause If a written contract for the purchase of grain does not include an act of God clause that relieves the seller of the grain from any obligation to fulfill the contract due to acts of God or other unavoidable accidents which prevent the performance of the contract, the purchaser of the grain shall clearly and conspicuously disclose the absence of that act of God clause on the front page of the written contract. The notice required by this section shall be separately and clearly stated in at least ten-point bold-face type. Laws 1991, ch. 246, § 1.

NMSA 1978, § 56-8-7 Procuring loans; rate of commission; exceptions

56-8-7. Procuring loans; rate of commission; exceptions For negotiating or securing any loan, no person, association of persons or corporation shall charge, collect or receive in excess of the following amounts: A. upon any loan not exceeding five hundred dollars ($500), four percent; B. upon any loan exceeding five hundred dollars ($500) and not exceeding two thousand dollars ($2,000), four percent upon the first five hundred dollars ($500) and three percent upon the remainder; and C. upon any loan exceeding two thousand dollars ($2,000), four percent upon the first one thousand dollars ($1,000) and two percent upon the remainder; provided that this section shall not apply to any loan in excess of fifty thousand dollars ($50,000) when such loan is made for business, commercial or agricultural purposes, nor to any loan negotiated or secured by a registrant under the Mortgage Loan Company and Loan Broker Act [Mortgage Loan Company Act] [Chapter 58, Article 21 NMSA 1978]. In such instances, broker's fees shall be negotiable, but shall not exceed six percent of the principal amount of the loan. Laws 1912, ch. 31, § 1; Code 1915, § 1806; C.S. 1929, § 35-4616; 1941 Comp., § 53-613; 1953 Comp., § 50-6-13; Laws 1977, ch. 293, § 3; 1984, ch. 15, § 4.

NMSA 1978, § 56-8-8 [Excessive commission for procuring loan; penalty.]

56-8-8. [Excessive commission for procuring loan; penalty.] That any person, association of persons or corporation violating the preceding section [56-8-7 NMSA 1978] shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not less than one hundred dollars [($100)] nor more than five hundred dollars [($500)], or by imprisonment for not less than thirty nor more than ninety days, or by both such fine and imprisonment; and shall also be liable in damages to the party injured in double the whole amount so charged for negotiating or securing any such loan. Laws 1912, ch. 31, § 2; Code 1915, § 1807; C.S. 1929, § 35-4617; 1941 Comp., § 53-614; 1953 Comp., § 50-6-14.

NMSA 1978, § 56-8-9 Excessive charges prohibited; applicability of maximum rates; definition

56-8-9. Excessive charges prohibited; applicability of maximum rates; definition A. Unless otherwise provided by law, no person, corporation or association, directly or indirectly, shall take, reserve, receive or charge any interest, discount or other advantage for the loan of money or credit or the forbearance or postponement of the right to receive money or credit except at the rates permitted in Sections 56-8-1 through 56-8-21 NMSA 1978. B. No provision of law prescribing maximum rates of interest that may be charged in any transaction shall apply to a transaction in which a corporation, limited liability corporation or other business entity is a debtor, regardless of the purpose for which the corporation was formed and regardless of the fact that an individual is codebtor, endorser, guarantor, surety or accommodation party. No corporation or its codebtor, endorser, guarantor, surety or accommodation party shall have a cause of action or affirmatively plead, counterclaim, set off or set up the defense of usury in any action to recover damages or enforce a remedy on any obligation executed by the corporation, and no civil or criminal penalty that would otherwise be applicable except as provided in Sections 30-43-1 through 30-43-5 NMSA 1978 shall apply on any obligation executed by the corporation. C. A lender may, in the case of business or commercial loans for business or commercial purposes in the amount of five hundred thousand dollars ($500,000) or more, take, receive, reserve or charge on any loan or discount made, or upon any note, bill of exchange or other evidence of debt, interest at a rate agreed to by the parties. D. In addition to the maximum interest or discount that a lender is permitted to charge by law, the lender may charge, take, reserve or receive a premium or points in an amount up to but not exceeding three percent of the face amount of the loan on interim construction loans. The lender may charge and require the borrower to pay the premium upon execution of the loan agreement, whether the proceeds are delivered to the borrower immediately or whether there are to be obligatory or permissive future advances. The lender shall not be required to refund this charge in the event of prepayment of the obligation. For the purposes of this section, "interim construction loan" means a loan secured by a first mortgage and used by the borrower primarily for financing the construction of buildings, structures or improvements on or to the real property on which the first mortgage has been taken. E. A lender may charge, take, reserve or receive points or a premium on any loan secured by real property; provided the points or premium together with the interest or discount charged, taken, reserved or received do not exceed the maximum interest or discount permitted by law. The lender shall not be required to refund this charge in the event of prepayment even if the prepayment would result in a higher charge to the borrower than permitted by law. F. A loan in an amount equal to five thousand dollars ($5,000) or less shall be made only pursuant to the New Mexico Bank Installment Loan Act of 1959 [58-7-1 to 58-7-3, 58-7-5 to 58-7-9 NMSA 1978] or the New Mexico Small Loan Act of 1955 [Chapter 58, Article 15 NMSA 1978]. 1953 Comp., § 50-6-15, enacted by Laws 1957, ch. 209, § 1; 1977, ch. 293, § 4; 1980, ch. 39, § 6; 2017, ch. 110, § 1.

NMSA 1978, § 56-8-10 Farm, ranch and agriculture loans

56-8-10. Farm, ranch and agriculture loans The provisions of Subsections C, D and E of Section 56-8-9 NMSA 1978 are not applicable to loans secured by a first mortgage on farm, ranch or agricultural real estate where the purpose of the loan is primarily for farming, ranching or agricultural purposes. 1953 Comp., § 50-6-15.1, enacted by Laws 1977, ch. 293, § 5.

NMSA 1978, § 56-8-12 Loans by agent; liability of principal

56-8-12. Loans by agent; liability of principal The acts and dealings of an agent in loaning money shall bind the principal, and in all cases where there is illegal interest contracted for by the transaction of any agent, the principal shall be held thereby to the same effect as though he had acted in person, and when the same person acts as agent for the borrower and lender, he shall be deemed the agent of the lender for the purpose of this act [56-8-9, 56-8-12 to 56-8-14 NMSA 1978]. 1953 Comp., § 50-6-17, enacted by Laws 1957, ch. 209, § 3.

NMSA 1978, § 56-8-13 Penalties and forfeitures

56-8-13. Penalties and forfeitures The taking, receiving, reserving or charging of a rate of interest greater than allowed by this act [56-8-9, 56-8-12 to 56-8-14 NMSA 1978], when knowingly done, shall be deemed a forfeiture of the entire amount of such interest which the note, bill or other evidence of debt carries with it or which has been agreed to be paid thereon. In case the greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back by civil action twice the amount of the interest thus paid from the person, corporation or association taking or receiving the same; provided that such action is commenced within two (2) years from the time the usurious transaction occurred. 1953 Comp., § 50-6-18, enacted by Laws 1957, ch. 209, § 4.

NMSA 1978, § 56-8-14 Criminal penalty

56-8-14. Criminal penalty Any person, corporation or association who shall violate the provisions of this act [56-8-9, 56-8-12 to 56-8-14 NMSA 1978] shall be guilty of a misdemeanor, and upon conviction thereof before the district court or a justice of the peace shall be fined the sum of not less than twenty-five ($25.00) dollars, nor more than one hundred ($100.00) dollars. 1953 Comp., § 50-6-19, enacted by Laws 1957, ch. 209, § 5.

NMSA 1978, § 56-8-21 Usury; corporations and limited partnerships

56-8-21. Usury; corporations and limited partnerships A. No corporation shall plead, enforce a remedy, counterclaim, set off or set up the defense of usury to any action brought against it to recover damages or shall enforce a remedy for usury on any obligation executed by the corporation. B. No limited partnership, limited partner or general partner of a limited partnership, shall plead or set up the defense of usury in any action brought against it or him on a limited partnership obligation. No limited partnership, limited partner or general partner of a limited partnership shall enforce a remedy for usury on any limited partnership obligation. C. This section shall apply to a transaction in which a corporation or a limited partnership is debtor regardless of the purpose for which the corporation or limited partnership was formed. 1953 Comp., § 50-6-26, enacted by Laws 1975, ch. 171, § 1.

NMSA 1978, § 56-8-22 Short title

56-8-22. Short title Sections 1 through 9 [56-8-22 to 56-8-30 NMSA 1978] of this act may be cited as the "Residential Home Loan Act." Laws 1980, ch. 64, § 1.

NMSA 1978, § 56-8-23 Purpose of act

56-8-23. Purpose of act The purpose of the Residential Home Loan Act is to make funds for residential home financing available to New Mexicans at national market rates and to secure certain rights and protections for borrowers. Laws 1980, ch. 64, § 2.

NMSA 1978, § 56-8-24 Definitions

56-8-24. Definitions As used in the Residential Home Loan Act: A. "residence" means a dwelling and the underlying real property designed for occupancy by one to four families, and includes mobile homes and condominiums; B. "home loan" means: (1) a loan made to a person, all or a substantial portion of the proceeds of which will be used to purchase, construct, improve, rehabilitate, sell a residence or refinance a loan on a residence and which loan will be secured in whole or in part by a security interest in the residence evidenced by a real estate mortgage; (2) the principal amount secured by a real estate mortgage on a residence when that real estate mortgage was executed by the mortgagor in connection with his purchase of the property, and the obligation secured represents a part of the deferred purchase price; or (3) the deferred balance due under a real estate contract made for the purchase or sale of a residence; C. "director" means the director of the financial institutions division of the commerce and industry department [regulation and licensing department]; D. "person" means any individual or other legal entity; E. "real estate contract" means a contractual document creating rights and obligations between a seller and buyer of a residence under which the seller agrees to transfer legal title to the residence to the buyer after payment over time of all or part of the purchase price of the residence; F. "real estate mortgage" means any document creating a security interest in a residence owned by a person to secure the payment of a home loan as defined in Paragraphs (1) and (2) of Subsection B of this section and includes mortgages and deeds of trust; G. "rate of interest" means the annual interest rate computed on any home loan determined by and calculated over the full contracted term of the home loan and includes in the calculation both the interest on the principal amount of the loan and discount points, premiums, commitment fees and other interest charges made pursuant to a home loan; and H. "federal national mortgage association auction" means a biweekly auction of the federal national mortgage association for commitments to purchase eligible conventional home loans (free market system auction). Laws 1980, ch. 64, § 3.

NMSA 1978, § 56-8-29 Civil penalty for violation of act

56-8-29. Civil penalty for violation of act Any person that knowingly receives or charges a rate of interest greater than that allowed under the Residential Home Loan Act shall forfeit the entire amount of interest that the evidence of indebtedness specifies. If any interest has been paid by the debtor to a person that knowingly received or charged a rate that was in excess of the rate of interest allowed under the Residential Home Loan Act, then the debtor may recover by civil action twice the amount of the interest paid plus his costs of suit and attorney's fees. If any person, other than an institutional lender as defined in Section 4 [repealed] of the Residential Home Loan Act, receives or charges a rate of interest greater than that allowed under the Residential Home Loan Act, but such charging or receipt was under mistake or otherwise without knowledge of the violation, then the evidence of indebtedness is enforceable except that the lender cannot charge or receive more than the maximum rate of interest permitted under the Residential Home Loan Act, and the debtor may recover by civil action only the excess interest plus his costs of suit and attorney's fees. Any action brought under this section must be commenced within two years of the date the evidence of indebtedness was signed by the debtor. Laws 1980, ch. 64, § 8.

NMSA 1978, § 56-8-30 No prepayment penalty on home loans

56-8-30. No prepayment penalty on home loans No provision in a home loan or a loan for a mobile home, the evidence of indebtedness of a home loan, a real estate contract or an obligation secured by a real estate mortgage or other purchase contract requiring a penalty or premium for prepayment of an installment payment or prepayment of the balance of the indebtedness is enforceable. Laws 1980, ch. 64, § 9; 2009, ch. 151, § 1.

Source: New Mexico Compilation Commission (nmonesource.com)URL: https://nmonesource.com/nmos/nmsa-unanno/en/item/18559/index.doFetched: 10/20/2026