N.M. Code R. § 12.20.48.9

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

Section 12.20.48.9 - OTHER SERVICE CORPORATIONS

In addition to investment in service corporations under Section 8 of this Sub-part [now 12.20.48.8 NMAC], an association may invest in the capital stock or other securities of a service corporation organized under the laws of this state if:

A. the corporation's entire capital stock is held by one or more savings and loan associations with a home office in this state;

B. the activities of such corporation, performed directly or through one or more wholly owned subsidiaries or joint ventures, consist solely of one or more of the activities specified in paragraphs 8.4.1 through 8.4.13 of this Sub-part [now Paragraphs (1) through (13) of Subsection D of Section 12.20.48.8 NMAC] and such other activities reasonably related to the activities of an association as the supervisor may approve;

C. In the case of a corporation in which fewer than five savings and loan associations hold capital stock or one association holds more than 40 percent of such stock, the following requirements are met:

(1) the corporation, including any subsidiary, does not have outstanding at any time consolidated debt (to holders of its capital stock and to others) exceeding the following limitations:

(a) unsecured debt - two times the total of its consolidated net worth plus unsecured debt to holders of at least 25 percent of its capital stock;

(b) secured and unsecured debt - ten times the total of its consolidated net worth plus unsecured debt to such stockholders; or if the corporation, including any subsidiary thereof, is engaged solely in activities specified in paragraph 8.4.1.1 of this regulation [now Subparagraph (a) of Paragraph (1) of Subsection D of Section 12.20.48.8 NMAC], 20 times such total;

(c) secured debt will be deemed unsecured for purposes of Subsection 9.3.1 [now Paragraph (1) of Subsection C of 12.20.48.9 NMAC] to the extent that it exceeds the market value of any security therefor at the time the loan is made. The term secured debt as used in Subsection 9.3.1 [now Paragraph (1) of Subsection C of 12.20.48.9 NMAC] shall include the entire amount of any obligation of the service corporation resulting from sale of consumer loans with recourse;

(d) the debt of each subsidiary of the corporation shall also conform to the debt limitations in the subsection;

(2) supervisor approval is obtained before any activity of the service corporation is performed through one or more joint ventures if a director, officer or controlling person of any stockholder of the service corporation has direct or indirect beneficial interest in the joint venture;

(3) supervisor approval is obtained for any investment:

(a) by an association in such a service corporation or in a corporation which will become such a service corporation as a result of such investment; and

(b) by such service corporation directly or indirectly through one or more of its wholly-owned subsidiaries or joint ventures if the purpose of such investment is to acquire a going business for an amount exceeding the fair market value of the tangible net assets of that business from a director or officer of an association which owns any of the capital stock of the service corporation or from an entity in which a director or officer of the association has a direct or indirect beneficial interest or is a director, officer, controlling person, partner or trustee.

N.M. Code R. § 12.20.48.9

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