2011 New Mexico Statutes
Chapter 58: Financial Institutions and Regulations
Article 15: Small Loan Business, 58-15-1 through 58-15-39
Section 58-15-37: Payday loans; verification.
58-15-37. Payday loans; verification.
A. Before entering into a payday loan agreement with a consumer, a licensee shall use a commercially reasonable method of verification to verify that the proposed loan agreement is permissible under the provisions of the New Mexico Small Loan Act of 1955 [58-15-31 NMSA 1978].
B. No later than November 1, 2007, the director shall certify that one or more consumer reporting service databases are commercially reasonable methods of verification. The list of consumer reporting services that the director has certified as providing commercially reasonable methods of verification shall be posted on the division's web site and shall be mailed to each licensee by first class mail at the address of record as shown on the division's licensing files.
C. Each licensee who provides payday loan products shall comply with Subsection A of this section no later than November 30, 2007.
D. A consumer seeking a payday loan may make a direct inquiry to the consumer reporting service to request a more detailed explanation of the basis for a consumer reporting service's determination that the consumer is ineligible for a new payday loan, and the consumer reporting service shall provide a reasonable response to the consumer.
E. In certifying a commercially reasonable method of verification, the director shall ensure the certified database:
(1) provides real-time access through an internet connection or, if real-time access through an internet connection becomes unavailable due to technical problems incurred by the consumer reporting service, through alternative verification mechanisms, including verification by telephone;
(2) is accessible to the division and to licensees in real time in order to ensure compliance with the New Mexico Small Loan Act of 1955 regardless of where the consumer requests a payday loan in New Mexico and in order to provide any other information the director deems necessary;
(3) requires licensees to input whatever information is required by the New Mexico Small Loan Act of 1955;
(4) contains a real-time regulator interface that allows the division access to the consumer reporting service database for the required monitoring and reporting function, including the ability to determine consumer eligibility and to generate reports for licensee examinations, regulatory reporting and program monitoring;
(5) provides licensees with no more than a statement that a consumer is eligible or ineligible for a new payday loan and the reason for the determination;
(6) provides adequate safeguards to ensure that consumer information contained in the database is kept strictly confidential;
(7) provides sufficient information to enable a licensee to determine whether a proposed payday loan would meet the requirements for payday loans set forth in the New Mexico Small Loan Act of 1955;
(8) ensures that information submitted to the certified database is kept confidential and shall not be released or otherwise made available to the public;
(9) demonstrates a working system to the division prior to the certification of the database; and
(10) is generated by a registered consumer reporting service that is subject to the applicable rules and regulations applied by the federal trade commission under the Fair Credit Reporting Act.
F. A licensee shall update the certified database by inputting all information required under Paragraph (3) of Subsection E of this section at the time that:
(1) a payday loan is made;
(2) a consumer elects to enter into a payment plan;
(3) a consumer's payday loan is paid in full; or
(4) a licensee determines a payday loan is in default.
G. A licensee may rely on the information contained in the certified database as accurate and is not subject to any penalty or liability as a result of relying on inaccurate information contained in the database.
H. In determining whether a consumer reporting service should be certified as a commercially reasonable method of verification, the director shall consider whether such consumer reporting service is adequately capitalized, demonstrates the resources and the ability to perform the services required pursuant to this section and has appropriate surety to ensure performance of its obligations pursuant to this section and to reasonably protect claimants in the event that actions or inactions on the part of the consumer reporting service results in damages to licensees or consumers.
I. The provisions of Section 14-7-1 NMSA 1978 shall not apply to access by the division to information for purposes of compliance monitoring or preparation of reports contained in a certified database established pursuant to this section.
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