Progressive Payday? New Mexico Democrat Probed for High-Interest Loans to Workers

By Taylor Millard

“Do as I say, not as I do” is a well-worn saying among progressive Democrats out of New York City and California.

But in a new twist, a New Mexico Democrat may now be the one uttering those words as she falls under investigation for allegedly having contravened her state’s law against lending money at interest rates exceeding 36 percent APR.

Former State Rep. Tara Jaramillo had only just been elected, and not yet sworn in, when her fellow Democrats passed House Bill 132. Now, Jaramillo is being accused of having made loans to employees with interest rates higher than allowed via payday advance loans via her company, Positive Outcomes, Inc. 

Positive Outcomes is a New Mexico-based company providing physical therapy, early childcare, and personal care services.

The scheme is purported to have disproportionately impacted low-income and Native American caregivers employed by the firm.

The New Mexico Department of Workforce Solutions is now investigating, after what some observers consider a too-long delay that may have involved the administration of fellow Democrat Gov. Michelle Lujan Grisham having slow-walked the probe.

According to attorney Tom Grover, "The timeline of events and actions in this investigation is quite unusual as the state's administrative code provides for the process and strict timeline requirements for the start, investigation, and completion of such matters.” 

Grover added, “To me, having practiced in the administrative law realm for quite a while, it tells [us] the agency is being neglectful of the matter, or simply doesn't care."

Jaramillo was elected in 2022 and defeated last year in a hotly contested race. 

During the hard-fought 2024 campaign, she was endorsed by a slew of progressive groups, including ProgressNow, the Sierra Club, and Planned Parenthood.

Critics say the alleged lending by Positive Outcomes puts the lie to Jaramillo’s self-proclaimed progressive values—and may evidence a key flaw in the law itself.

“Because of the way APR calculations work—making the APR for, say, a loan at a cost of $50 for two days much higher than a loan at a cost of $50 for twenty days—some New Mexico Democrats may just never have clocked that they could be banning low-cost early wage access schemes,” said one consultant who worked against HB 132 ahead of its passage.

“Then again,” the consultant added, “New Mexico Democrats explicitly went out of their way to exclude bank and credit union overdrafts from the law, and overdrafts are a classic, super-high-APR form of lending. So maybe they knew.”

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HB 132 was indeed opposed by numerous traditional financial institutions like these, and the hope had been that they would fill the void left by more traditional payday loan operators.

That has not happened, though. As Alex Horowitz, a consumer finance researcher at Pew Charitable Trusts, told the Albuquerque Journal in the aftermath of HB 132 taking effect, people who aren’t already bank customers generally cannot access loans. “They can’t get these loans,” Horowitz told the Journal. “These are only for the bank’s customers.”

That conclusion comports with the findings of research from the Southwest Public Policy Institute. As SPPI’s Patrick Brenner put it, “the Law of Unintended Consequences appears to be at work in New Mexico.”

It is unclear what will happen with the law, the Jaramillo investigation, or indeed its effects on Jaramillo’s potential ongoing career in New Mexico politics.

While she did lose her race in 2024, local speculation is that she could run again in 2026. 

Her campaign website does remain active.

As for Lujan Grisham, she is ineligible to run for reelection due to term limits. And she does not seem overly concerned about her legacy, taking fire from the state capital’s newspaper over a spate of travel that has seen her spending more time outside the Land of Enchantment than in it.

That could mean a molasses-slow investigation of a fellow party member—good news for Jaramillo, and maybe New Mexico Democrats outside the Lujan Grisham clique or Republicans who are eager for any opportunity to make inroads in the Land of Enchantment, but bad for any employees who feel they’ve been wronged and are looking to ensure she is held accountable if, as is alleged, the law was violated.

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