The bipartisan bill, co-sponsored by Democratic Rep. Patricia Lundstrom of Gallup and three other lawmakers, was intended as compromise after years of debate at the Capitol over payday loans.
Critics of the loans say storefront companies prey on the poor and trap people in a cycle of debt.
Industry representatives contend the loans are a vitally important way for people to borrow money when they have nowhere else to turn.
A competing bill would have capped annual interest rates at 36 percent.
But Lundstrom’s proposal, House Bill 347, won approval 64-2 and now heads to the Senate.
“This is an incredibly important issue,” she said.