N.M. Code R. § 12.16.41.8

Current through Register Vol. 35, No. 11, June 11, 2024

Section 12.16.41.8 - INVESTMENTS IN COMMUNITY DEVELOPMENT

A. Occasionally banks are asked to contribute to community development corporations, business ventures or community development projects wherein the bank will receive an equity interest in or evidence of debt which may have value in the future, but which is clearly not a bankable asset by ordinary standards. Such "investment" may be made and charged off as a contribution. If the bank wishes to carry the investment as an asset, the examiners will treat it as permissible under this regulation; provided that the following conditions are met:

(1) the project must be of a predominantly civic, community or public nature and not merely private and entrepreneurial;

(2) the bank's investment in any one project does not exceed two percent of its capital and surplus, and its aggregate investment in all such projects does not exceed five percent of its capital and surplus;

(3) such investments are accounted for on the bank's books under "other assets";

(4) such investments are clearly identified as being made under this regulation.

B. A bank must obtain prior written approval of the director of the financial institutions division for investments made under this regulation. The director may use comptroller of the currency banking circular BC-185 as guidance for application procedures and evaluation of potential investments.

N.M. Code R. § 12.16.41.8

11/8/93; Recompiled 10/15/01