This story appears in both The Paper and the Santa Fe New Mexican through a partnership to bring our readers the best in reporting from the legislature.
By Milan Simonich The Santa Fe New Mexican
No one would cheer a politician who took a stand in 1975 for desegregation of drinking fountains and public restrooms.
Segregation of public facilities was outlawed by the Civil Rights Act of 1964. The best I can say about a latecomer for desegregation is he decided to step onto the right side of history.
On a similar basis, I cannot applaud New Mexico House Speaker Brian Egolf for at last co-sponsoring a bill to upend predatory lending companies. The proposal would cut the annual interest rate on installment loans from 175 percent to 36 percent.
Egolf, D-Santa Fe, has been in the House since 2009, and he’s been the speaker since 2017. He has long known storefront lending companies charge exorbitant interest rates to the poorest people in New Mexico, enslaving them in debt.
He could have led the way to reduce the interest rate. Instead, Egolf accepted money from the industry, something he dismisses as having no bearing on his actions or inaction.
Egolf offered little resistance last year when Rep. Eliseo Alcon, D-Milan, amended a Senate bill to raise the proposed interest rate from 36 percent to 99 percent. It happened in the House Judiciary Committee, on which Egolf and Alcon serve together.
Alcon’s amendment actually was written by the lending industry’s lobbyists and lawyers. Alcon admitted to his lack of expertise. He prefaced his introduction of the amendment by saying he knew nothing about money, and one look at his bank account would prove it.
Egolf could have asked Alcon why he suddenly believed a 99 percent rate was sensible. And Egolf should have said that rate was an affront to the public.
Credit unions had dived into the legislative debate by announcing they could offer most installment loans for 36 percent or less.
Alcon’s amendment passed with the help of Republicans and two of his fellow Democrats, Reps. Georgene Louis of Albuquerque and Micaela Cadena of Mesilla.
Egolf told me he worked hard behind the scenes to cut interest rates to 36 percent. By his recollection, he contacted many House members to champion the less-crushing interest rate.
Whatever his private efforts, he cemented the demise of last year’s bill by appointing a hardliner for the lending industry, Rep. Patty Lundstrom, to a conference committee. The panel was supposed to try to resolve differences between the House and Senate bills.
But the two sides never met. Each accuses the other of causing the talks to collapse. Their stalemate kept the 175 percent interest rate on the books — exactly what the storefont lending industry wanted.
Lundstrom, D-Gallup, received $6,000 from storefront lenders in the 2020 election cycle, the most of any House member, according to a report by New Mexico Ethics Watch.
Egolf was third among House members in contributions from the industry at $3,650.
The Brian Egolf Speaker Fund — a separate campaign account as a legislative caucus committee — received much more money, according to the Ethics Watch report.
“Storefront lenders also contributed $51,700 to various PACs during the 2020 election cycle. Nearly half of these contributions were to the Brian Egolf Speaker Fund,” Ethics Watch stated.
Egolf told me he didn’t remember any of the contributions. He downplayed the PAC donations in particular.
“That money did not benefit me,” Egolf said. “It went to Democratic House candidates in close, contested races.”
Egolf maintains he wanted to slash interest rates charged by storefront lenders, even if they contributed to his campaign and PAC.
He also said he had no regrets about the reform bill’s collapse last year.
“No, I don’t. Your question doesn’t take into account all the other things I was working on,” Egolf said.
But it’s impossible to ignore that Egolf’s Democrats control the House 45-24-1. They needed 36 votes to guarantee passage of the bill to cut interest rates.
A few House Democrats said there wasn’t enough support to pass the bill. As for Egolf, he claimed he was paying attention to other issues and was not involved in the lending bill after it was rewritten.
Now, Egolf says, he is more engaged in the movement to cut oppressive interest rates.
He is co-sponsoring a measure to reduce the rates to 36 percent. It is House Bill 132.
Egolf called Rep. Susan Herrera, D-Embudo, the bill’s main sponsor. He said he and Rep. Joy Garratt, D-Albuquerque, are co-sponsors.
“I’m doing everything in my power to pass this bill and get it upstairs to the governor,” Egolf said.
Why is Egolf a sponsor of the bill this year?
“I’ve always supported it, and Susan asked me to,” he said.
Egolf has assigned the bill to two committees — Consumer and Public Affairs and then Judiciary, where it was badly rewritten last year.
But the bill might go to Appropriations and Finance Committee instead of Judiciary. Egolf and the bill’s other sponsors have asked for $180,000 to develop a financial literacy program for the public schools.
This maneuver gave the bill life. Democratic Gov. Michelle Lujan Grisham did not add bills to cut storefront lending rates to the Legislature’s agenda for this 30-day session.
By inserting a budget request in their bill, Egolf, Herrera and Garratt have sidestepped the governor. Bills that affect the budget are considered germane without the governor’s approval.
Storefront lenders and their army of lobbyists will campaign to continue charging interest rates of up to 175 percent.
Egolf says he’s out to stop them. He is less fond of talking about what’s taken him so long.