New Mexico (“NM”) interest rate laws are stated in NM Annotated Statutes, Chapter 56 (Commercial Instruments and Transactions), Article eight (Money, Interest and Usury). Under Section 56-8-3, the state legal maximum interest rate is 15 percent per annum in the absence of a written agreement fixing a different rate. Under Section 56-8-4, interest rate on a money judgment is eight and three-fourths percent per year. If the money judgment was passed in a case involving tortious conduct, bad faith or intentional or willful acts the interest will be 15 percent. If the money judgment was passed on a written contract with a different rate of interest, the interest on judgment will be the same as that in contract.
Charging higher rate of interest than the permitted state legal maximum interest rate is usury. Under Section 56-8-13, excess interest charged is not enforceable and the lender can only recover the principal amount. The lender will have to forfeit the entire interest charged in excess, and if the excess interest was already paid the borrower may recover twice the interest paid.
Corporations and limited partnerships under Sections 56-8-9 and 56-8-21, and pawn brokers under Section 56-12-13 are exempted from the state prescribed interest rate.
N.M. Stat. Ann. § 56-8-3 reads:
§ 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.
N.M. Stat. Ann. § 56-8-13 reads:
§ 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.
N.M. Stat. Ann. § 56-8-4 reads in part:
“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.”
N.M. Stat. Ann. § 56-8-21 reads:
“§ 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.”