An Interest Rate Cap Will Hurt Small Borrowers

Tomorrow, the Senate Banking Committee, led by Chairman Sherrod Brown (D-Ohio), is hosting a hearing titled, “Protecting Americans from Debt Traps by Extending the Military’s 36% Interest Rate Cap to Everyone.”

Politicians often claim to be helping “the poor” with the policies they enact. But people with the resources to take extended time away from their work and spend months in committee hearings are inherently not “representative” of the people of New Mexico. They need to be reminded that most people live “paycheck to paycheck” and struggle to manage an expense from time to time.

If Congress and President Biden approve of extending the Military Lending Act’s (MLA) 36% rate cap for all consumers, not just military veterans, this would devastate the financially vulnerable by reducing their access to credit. It could very well push our most disadvantaged citizens to underground financial products in an unregulated, shadow economy.

“Proponents believe a cap on fees and interest would help consumers, especially subprime borrowers with less-than-perfect credit histories, by limiting what they pay on payday loans and other less-regulated short-term credit,” Credit Union National Association (CUNA) and other coalition members wrote in a letter to the Committee last week. “In reality, its impact would extend far beyond payday lenders to the broader consumer credit market to cover affordable small dollar loans (including “accommodation” loans) that depository institutions are being encouraged to offer, credit cards, personal loans, and overdraft lines of credit. As a result, many consumers who currently rely on credit cards or personal loans would be forced to turn elsewhere for short-term financing needs, including pawn shops, online lenders—or worse—loan sharks, unregulated online lenders, and the black market.”

Few banks offer personal loans and credit union loans designed for subprime borrowers. Referred to as “payday alternative loans,” these borrowers represent less than 1% of the 100 million Americans who make up the non-prime consumer market. The reality is that most traditional lenders simply will not or cannot make these loans to borrowers with lower credit scores.

One-size-fits all interest rate caps will cut off access to credit and eliminate choices in lending products. We urge Congress to refrain from further restricting the ability of borrowers from accessing credit of their choosing when emergencies arise and pushing them to worse outcomes.

Senator Ben Ray Luján(202) 224-6621(575) 526-5475
Senator Martin Heinrich(202) 224-5521(505) 346-6601
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New report: New Mexico is #1 “Economically-failing state” (neighboring Utah named #1 thriving state)

The following is from GOBankingRates as reported on Yahoo News here. 

GOBankingRates took a look at a variety of economic factors, from year-over-year GDP and unemployment rates to wage changes and the percentage of a state’s population that is living in poverty. States were divided into the top 15 and the bottom 15 and ranked in reverse order. Thus, the state in the worst current economic shape appears as No. 1 at the end of the “failing economies” section, while the only state in the nation thus far that shows a year-over-year percentage gain in employment appears as No. 1 under the “thriving economies” section.

New Mexico is the Number 1 “failing” economy while neighboring Utah is the Number 1 “thriving” economy. The power of public policy.

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Tipping Point NM episode 321: Failing Education System, Back to School Rules, Soccer Stadium and more

On this week’s podcast discussion, Paul and Wally discuss the Gov.’s new “back to school” policies including mask requirements for elementary students/teachers and vaccine verification for junior high and high school students.

Last week was a very busy media week for RGF. It included a conversation with Fox Business Channel on film subsidies, Paul in the ABQ Journal discussing how Sen. Martin Heinrich is coming for your natural gas appliances, Patrick Brenner discusses Richard Branson abuse of New Mexico taxpayers in The Federalist.

One radical environmentalist NM Senator Soules is a big hypocrite when it comes to private jets.

“Shockingly” New Mexico’s education system has failed to improve under the Yazzie lawsuit. Paul discusses how Regis Pecos was one of Speaker Lujan’s top advisors but when we came to him with education reforms he didn’t do anything.

Mayor Keller plans to force taxpayers to pay $65 to $70 million for a stadium for the United soccer team and that doesn’t include land acquisition or cost overruns. 

Journal cartoon “nails” a lot about NM politics. Paul explains.  

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Democrat legislators admit New Mexico schools are failing & more money hasn’t helped

While the Rio Grande Foundation continues to monitor the rapidly-unfolding situation regarding school reopening and COVID 19 policy, the broader issues within New Mexico’s education system made headlines recently. We wanted to make sure to highlight them.

Recent interim testimony involving the Yazzie case by a prominent Native American leader led to some seeming realizations among New Mexico legislators that the government schools we spend so much money on are failing. Here are a few quotes:

Rep. Derrick Lente, D-Sandia Pueblo, “Native American children have been left to rot because of where they come from” for many years.”

“How much longer do our children have to fail for us to get this right?” Lente asked.

Rep. Javier Martinez, D-Albuquerque said he had “started to question whether more money is actually needed beyond what we’ve invested.”

“I think we’re losing steam,” Martinez said, “I’d hate to be back here in 20 years talking about how nothing has changed.”

Back in 2017, the Rio Grande Foundation argued publicly that more money (thanks to the lawsuit) was not going to “move the needle” on K-12 results. It looks like several “progressive” legislators are at least coming to realize that.

Unfortunately, unions are some of the biggest contributors to Democrats’ elections. So, while they MAY say some reform-minded things for public consumption, we haven’t seen them even contemplate serious education reform for more than a decade and the failure of additional money to improve New Mexico’s poor education results is unlikely to move the needle toward actual reform in the Legislature. We will work as hard as we can to put reform on the agenda nonetheless.

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The COVID situation is hardly a “crisis”: MLG expected to make “back to school” decision this week: UPDATED

According to numerous news reports Anthony Fauci and the Biden Administration are considering reimposing mask mandates to include vaccinated Americans.

Meanwhile, Gov. Lujan Grisham is expected to reveal her Administration’s plans for back to school including masking or not-masking of kids in classrooms and outdoors. This should happen in a matter of days. New Mexico is one of 7 states in the nation with a statewide mask mandate in place for children and interested observers expect Gov. Lujan Grisham to continue with strict policies.

But, there is NO CRISIS when it comes to COVID deaths in the US as the following chart from Word O Meters makes clear:Kids are hardly vulnerable to COVID and there are questions over whether giving the vaccine (if/when approved) to kids under the age of 12 is safer than possible exposure to COVID.

Notably, 90% of people 65 and older are vaccinated.  That group has been far and away the most vulnerable to the Virus.

Many New Mexicans, especially those concerned about the impact of indefinite and unnecessary masking of our kids, are protesting throughout the State on Saturday according to John Block of Piñon Post.

On Saturday, July 31, citizens are organizing protests against school mask policies statewide, from Albuquerque to Carlsbad. So far, seven cities are participating, but the list of areas joining in the effort is expected to grow.

  • ALBUQUERQUE – 10am – 1005 Osuna, Vista del Norte Park – Contact Erin at or Karen at
  • ARTESIA – 10am – corner of Main & 7th – Contact Stacey at 575-343-1234
  • CARLSBAD – 1pm – Eddy County Courthouse Lawn – Contact Christy Bryant at 575-361-7779
  • FARMINGTON – 10am – Main Street, Grassy Area in Front of Applebee’s, Near the Mall– Contact Lorna at 480-589-3856
  • LAS CRUCES – 10am – Albert Johnson Park on corner of Main and Picacho – Contact Daniel at
  • RIO RANCHO – 10am – Corner of Southern and 528
  • SANTA FE – 10:30am – Salvador Perez Train Park at 601 Alta Vista – Contact Kristi at 505-204-8261 or

UPDATES: In less than 24 hours since this post was made, the Lujan Grisham Administration released its “back to school” rules for COVID in New Mexico schools, including private ones.

And, while the CDC hasn’t acted yet, widespread media reports indicate that the CDC will recommend that EVERYONE in K-12 schools wear a mask.

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Sir Richard Branson Should Pay His Own Way Into Space Instead Of Robbing New Mexicans

The following appeared on July 21, 2021 in The Federalist:

The world is in awe that billionaire Sir Richard Branson has finally accomplished his 17-year goal of achieving spaceflight. On July 11, 2021, Virgin Galactic’s spaceship Unity reached 53.5 miles above the Earth with a crew including Branson. They spent a few minutes in zero gravity and returned safely to the runway of Spaceport America near the small town of Truth or Consequences, New Mexico. Congratulations!

The international scene is abuzz with this latest and undeniably impressive addition to Branson’s resume: but at what cost? Branson launched his flight from Spaceport America, a project initially conceived as early as 1992 when the Southwest Space Task Force was formed to develop and advance New Mexico’s space industry. The project received seed funding through a taxpayer-approved initiative in April 2007 when voters in Doña Ana County approved the spaceport tax.

Almost every year since, supporters of Spaceport America have announced the “upcoming launch” from their facility or the need for additional tax dollars to expand the Spaceport and its capabilities. To bolster their claims for additional tax money, Spaceport America commissioned a study by the consulting firm Moss Adams of Albuquerque. The study made headlines with the implausible claim that Spaceport America began producing net benefits for New Mexico as early as 2013.

In March 2020, the Rio Grande Foundation tallied up the total costs to taxpayers, determining that New Mexicans have borne a total project cost of $275 million, while revenues approach only $54.3 million for the state over the last 12 years. The vast majority of taxpayer-funded spending related to capital projects and nearly $10 million in operational expenditures. In fact, new information shows New Mexico shelled out an additional $1.5 million in advertising expenses related to the Virgin Galactic flight.

Branson is already a billionaire. Why are New Mexico’s politicians lining the pockets of these already wealthy and successful entrepreneurs through taxpayer-funded, industry-specific subsidies? The impact of corporate welfare disproportionately affects the economically disadvantaged, especially in impoverished communities like Doña Ana County and New Mexico as a whole.

In 2019, the state suffered from one of the highest poverty rates in the nation. The impact of the coronavirus pandemic and the corresponding economic lockdown of the past 15 months has certainly exacerbated our financial woes.

In fact, New Mexico trails the southwest in employment recovery. A recent report by WalletHub highlights the state’s 620 percent increase in unemployment claims, referring to the change in the number of initial unemployment insurance claims in the week of July 5, 2021 compared to the week of July 8, 2019. How can a state in this state afford to help send a billionaire to space?

Sir Richard Branson is now an astronaut. But from my perspective as a New Mexican and taxpayer, he sure seems like a wild-west robber baron, holding up taxpayer stagecoaches of the poorest state in the country to fulfill his personal vendetta of beating fellow billionaires Jeff Bezos and Elon Musk in the billionaire space race. He’s “Six-Gun” Branson, 21st-century robber baron, a stark reminder of our 19th-century industrial past.

In the end, his mission was accomplished. But Six-Gun Branson has only proven that he can launch his spacecraft from any airport with sufficient runway length. I’d hazard a guess that soon he’ll be riding off into the sunset while my fellow New Mexicans are left holding the $275 million bag.

Patrick Brenner is the vice president of the Rio Grande Foundation, New Mexico’s free-market research institute and think tank. An advocate for open government, he leads the foundation’s government transparency and accountability efforts.

Photo Hardo Muller / Flickr

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New Mexico politics summed up in one handy Trever cartoon

To say that we’re fans of Albuquerque Journal editorial cartoonist John Trever may be a bit of an understatement. But the Sunday cartoon (below) is particularly genius because of its multiple meanings about the way New Mexico politics and policies work.

  1. Private success vs. Public sector failure: While we have certainly criticized Bill Richardson’s decision to build a $200+ million Spaceport for Richard Branson, in the bigger picture both Bransons’ and Bezos’ successes are achievements for the private space industry. New Mexico’s schools are overwhelmingly government-run and funded. It would be nice if those who are rightly frustrated by the failures of this system would join us in focusing their efforts on bringing private sector competition and competence to bear on the difficult challenge of improving literacy in NM.
  2. A SECOND interpretation of the cartoon is yet another common theme of New Mexico government. Rather than doing the basics (like education) well, elected officials prefer to pursue expensive, high profile projects that really aren’t appropriate functions of government. The Spaceport is one such example, but Mayor Keller’s plans to build a new soccer stadium (with a starting price tag of at least $65-$70 million just to build, let alone property acquisition and inevitable cost-overruns) is another. Again, crime and public safety are crises demanding resources and attention, but Keller would rather build a stadium instead.

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The environmental hypocrisy of one of New Mexico’s top Democrats

Las Cruces state Senator Bill Soules paints himself as a radical supporter of the environment. In 2021 Soules introduced a proposal to eliminate ALL nuclear energy, coal- or gas-fired energy production within New Mexico. He also tried to force the State to purchase 75% electric vehicles. 

But Soules seems to set aside his environmental stance as long as the issue involves New Mexico’s Spaceport. Set aside the use of fossil fuels for Richard Branson to GET to space which involves the use of large quantities of CO2 emitting rocket fuel.

The folks attending Branson’s launch (and those likely to travel to isolated Upham, New Mexico for future launches) won’t travel by car, they’ll fly on private jets. According to a report from the UK, Private jets: can the super-rich supercharge zero emission aviation?  a four-hour private flight emits as much as the average person does in a year.

See Sen. Soules’ post-launch Twitter post (with “glowing” commentary on the number of private jets) below:

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