N.M. Code R. § 12.20.48.10

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

Section 12.20.48.10 - AMOUNT OF INVESTMENT

A. An association may invest in the capital stock, obligations or other securities of service corporations, provided that its aggregate outstanding investment does not exceed three percent of assets, and any investment in excess of two percent of assets serves primarily community, inner-city or community development purposes. The investment limitations of this subsection shall include all loans secured and unsecured, and all guarantees or takeout commitments of such loans, to service corporations or any subsidiaries thereof, and to joint ventures of such service corporations or subsidiaries, whether or not the association is a stockholder therein. An association with an aggregate outstanding investment in excess of two percent of assets shall designate investments that serve primarily community, inner-city or community development purposes, which shall include the following:

(1) investments in governmentally insured, guaranteed, subsidized or otherwise sponsored programs for housing, small farms or businesses that are local in character;

(2) investments for the preservation or revitalization of either urban or rural communities;

(3) investments designed to meet the community development needs of, and primarily benefit, low- and moderate-income communities; or

(4) other community, inner-city or community development related investments approved by the supervisor.

B. In addition to amounts which it may invest under Subsection 10.1 [now Subsection A of 12.20.48.10 NMAC], an association which has a net worth of at least five percent of withdrawable accounts and which has a ratio of scheduled items (other than assets acquired in a merger instituted for supervisory reasons) to specified assets of not more than 2.5 percent (except as provided in Subsection 10.4) [now Subsection D of 12.20.48.10 NMAC] may loan additional amounts as follows:

(1) an aggregate outstanding amount not to exceed 20 percent of the association's net worth may be invested in conforming loans made to service corporations, or subsidiaries thereof, and to joint ventures, of such service corporations and subsidiaries; and

(2) an aggregate outstanding amount, including loans included in paragraph 10.2.1 [now Paragraph (1) of of Subsection B of 12.20.48.10 NMAC], not to exceed 50 percent of such association's net worth may be invested in conforming loans made to a service corporation of which the association owns or holds with power to vote not more than ten percent of the capital stock or to a joint venture in which service corporations in which the association is a stockholder, including subsidiaries of such service corporations:

(a) own or hold with power to vote not more than a total of ten percent of the capital stock, or

(b) are limited partners and have contributed not more than ten percent of such joint venture's capital.

C. The limitation in Subsection 10.1 [now Subsection A of 12.20.48.10 NMAC] does not apply to conforming loans to a service corporation which qualifies under Section 10 of this Sub-part [now 12.20.48.10 NMAC] or to any service corporation in which the lending association does not have any investment made under authority of this subpart [now part].

D. An association whose net worth equals at least five percent of withdrawable accounts may apply to the supervisor for an exception from the scheduled items limitation in Subsection 10.2 of this Sub-part [now Subsection B of 12.20.48.10 NMAC]. The application shall be supported by information evidencing the association's sound investment, lending, appraisal and underwriting policies and favorable operating results. The application shall be filed with the supervisor. The application is approved, if, within 30 calendar days after the date the supervisor receives it, he has not notified the applicant that approval is withheld.

E. Examination: An association may invest in the capital stock, obligations or other securities of a service corporation only if the service corporation has executed and filed with the supervisor a written agreement that the service corporation will permit and pay the cost of examination of it by the supervisor to determine the propriety of any investment by an association under this Sub-part [now part].

F. Disposal of investment: Whenever a service corporation, including any subsidiary thereof, engages in an activity which is not permissible for or exceeds limitations on a service corporation in which an association may invest, or whenever the capital stock ownership requirements of this Sub-part [now part] are not met, an association having an interest in the corporation, including any subsidiary thereof, shall dispose of its investments promptly unless, within 90 days after the supervisor mails written notice to the association, the impermissible activity is discontinued, the limitation is complied with or the capital stock ownership requirements are met.

G. Corporate name: No association may invest in, or retain any investment in, the capital stock, obligations or other securities of any service corporation whose corporate name for the designation of whose subsidiary or office:

(1) includes the words "National", "Federal" or "United States" or the initials "U.S."; or

(2) could identify it with any entity which has not invested in it.

H. Any application made to the supervisor under this Sub-part [now part] shall be in the form he prescribes. One or more associations which propose investment in a service corporation which is not yet organized may make any application required by the Sub-part [now part].

I. Activities and limitations specified in this Sub-part [now part] may be revised from time to time.

J. Service corporations in which associations may invest shall not be used to acquire scheduled items except that such a service corporation may, for the purpose of providing housing, acquire real estate owned by an association domiciled in this state.

N.M. Code R. § 12.20.48.10

11/17/80; 9/15/97; Recompiled 10/15/01