0001| SENATE BILL 594
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0002| 43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003| INTRODUCED BY
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0004| SHANNON ROBINSON
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0005|
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0006|
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0007|
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0008|
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0009|
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0010| AN ACT
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0011| RELATING TO CREDIT UNIONS; MAKING CHANGES IN THE PROVISIONS OF
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0012| THE CREDIT UNION REGULATORY ACT, INCLUDING CHANGING ITS SHORT
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0013| TITLE; AMENDING AND REPEALING SECTIONS OF THE NMSA 1978;
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0014| REPEALING LAWS 1987, CHAPTER 311, SECTION 68.
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0015|
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0016| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0017| Section 1. Section 58-11-1 NMSA 1978 (being Laws 1987,
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0018| Chapter 311, Section 1) is amended to read:
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0019| "58-11-1. SHORT TITLE. [Section 1 through 65 of this
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act] Chapter 58, Article 11 NMSA 1978 may be cited as the
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0021| "Credit Union [Regulatory] Act"."
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0022| Section 2. Section 58-11-2 NMSA 1978 (being Laws 1987,
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0023| Chapter 311, Section 2, as amended) is amended to read:
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0024| "58-11-2. DEFINITIONS.--As used in the Credit Union
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0025| [Regulatory] Act:
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0001| A. "board member" means a member of the board of
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0002| directors of a credit union;
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0003| B. "capital" means share accounts, membership
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0004| shares, reserves and undivided earnings;
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0005| C. "credit union" means a cooperative, nonprofit,
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0006| financial institution organized under or subject to the Credit
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0007| Union [Regulatory] Act for the purposes of encouraging thrift
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0008| among its members, creating a source of credit at fair and
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0009| reasonable rates of interest and providing an opportunity for
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0010| its members to use and control their own money on a democratic
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0011| basis in order to improve their economic and social condition;
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0012| D. "deposit account" means a balance held by a
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0013| credit union and established by a person in accordance with
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0014| standards specified by the credit union, including balances
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0015| designated as deposits, deposit certificates, checking accounts
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0016| or other names. Ownership of a deposit account does not confer
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0017| membership or voting rights and does not represent an interest
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0018| in the capital of the credit union upon dissolution or
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0019| conversion to another type of institution;
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0020| E. "director" means the director of the financial
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0021| institutions division of the regulation and licensing
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0022| department;
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0023| F. "division" means the financial institutions
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0024| division of the regulation and licensing department;
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0025| G. "executive officer" means any person [other
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than a member of the board of directors who performs duties
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in] who is responsible for the management of the credit
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0003| union as provided in the bylaws of the credit union and
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0004| includes the chief executive officer, the president, [any]
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0005| a vice president, the credit union manager, [any] an
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0006| assistant manager or [any] a person who is assigned and
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0007| performs the management duties appropriate to those offices;
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0008| H. "governmental unit" means any board, agency,
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0009| department, authority, instrumentality or other unit or
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0010| organization of the United States, this state or any political
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0011| subdivision thereof;
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0012| I. "immediate family" [includes] means persons
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0013| related by blood or marriage as well as foster and adopted
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0014| children;
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0015| J. "insolvent" means the condition that results
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0016| when the cash value of assets is less than the liabilities and
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0017| members' share and deposit accounts;
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0018| K. "insuring organization" means the national
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0019| credit union administration or any other insurer which has been
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0020| approved by the director to provide aid and financial
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0021| assistance to credit unions that are in the process of
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0022| liquidation or are incurring financial difficulty in order that
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0023| the share and deposit accounts in credit unions shall be
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0024| protected or guaranteed against loss without limit or up to a
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0025| specified level for each account;
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0001| L. "membership share" means a balance held by a
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0002| credit union and established by a member in accordance with
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0003| standards specified by the credit union. Each member may own
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0004| only one membership share. Ownership of a membership share
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0005| represents an interest in the capital of the credit union upon
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0006| dissolution or conversion to another type of institution;
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0007| M. "organization" means any corporation,
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0008| association, partnership, society, firm, syndicate, trust or
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0009| other legal entity;
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0010| N. "person" means any individual, organization or
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0011| governmental unit;
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0012| O. "risk assets" means all assets [except:
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(1) cash on hand;
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(2) deposits or shares in federally insured
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banks, savings and loan associations and credit unions;
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(3) assets which are insured by, fully
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guaranteed as to principal and interest by or due from the
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United States or an agency thereof, this state or any political
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subdivision thereof, the federal national mortgage association
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or the government national mortgage association;
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(4) loans to other credit unions;
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(5) loans to students insured under the
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provisions of Title IV, part B of the Higher Education Act of
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1965 (20 U.S.C. 1701 et seq.) or similar insurance programs of
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this state;
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(6) loans that are fully or partially insured
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or guaranteed by the United States, this state or any agency of
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either;
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(7) common trust investments which deal in
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investments authorized by rules, regulations or the Credit
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Union Regulatory Act;
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(8) prepaid expenses;
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(9) accrued interest on nonrisk investments;
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(10) furniture and equipment less
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depreciation;
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(11) land and buildings less depreciation;
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(12) loans fully secured by a pledge of shares
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in the lending credit union, equal to and maintained to at
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least the amount of the loan outstanding;
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(13) loans which are purchased from
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liquidating credit unions and guaranteed by the national credit
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union administration;
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(14) national credit union share insurance
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fund guaranty accounts established with the authorization of
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the national credit union administration under the authority of
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Section 208(a)(1) of the Federal Credit Union Act; and
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(15) investments in shares of the national
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credit union administration central liquidity facility] of
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0024| the credit union except those exempted by the director by
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0025| regulation; [and]
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0001| P. "service facility" means any building, machine
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0002| or device, whether mechanical, electronic or otherwise, that is
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0003| operated or maintained, in whole or in part, to provide
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0004| services to members; and
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0005| [P.] Q. "share account" means a balance held by
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0006| a credit union and established by a member in accordance with
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0007| standards specified by the credit union, including balances
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0008| designated as shares, share certificates, share draft accounts
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0009| or other similar names. Ownership of a share account confers
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0010| membership and voting rights and represents an interest in the
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0011| capital of the credit union upon dissolution or conversion to
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0012| another type of institution."
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0013| Section 3. Section 58-11-3 NMSA 1978 (being Laws 1987,
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0014| Chapter 311, Section 3, as amended) is amended to read:
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0015| "58-11-3. SUPERVISION AND REGULATION.--
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0016| A. The director shall be responsible for the
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0017| supervision and regulation of credit unions organized under the
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0018| Credit Union [Regulatory] Act or previously organized under
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0019| the Credit Union Act.
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0020| B. The director may delegate to any officer or
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0021| employee of the division the power to perform any of his
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0022| duties, except those authorized under Subsection D, E, F, G, H,
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0023| I, J,
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0024| [K or] L or M of this section.
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0025| C. The director may prescribe rules or regulations
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0001| to implement any provision of the Credit Union [Regulatory]
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0002| Act and to define any term not defined in that act. Such rules
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0003| or regulations shall serve to foster and maintain an effective
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0004| level of credit union services and the security of member
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0005| accounts. Prior to establishment of [any] a rule or
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0006| regulation, the director shall give written notice to all
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0007| credit unions affected by the terms and general contents of
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0008| [any] a proposed rule or regulation. The director may hold
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0009| a public hearing to consider whether to adopt a proposed rule
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0010| or regulation. If within twenty days after [such] the
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0011| notice is given at least two credit unions [so] request a
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0012| public hearing [will], it shall be held [with respect to
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the proposal] to consider whether to adopt the proposed rule
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0014| or regulation. The director shall conduct any hearing held to
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0015| consider a proposed rule or regulation.
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0016| D. The director may require a credit union to
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0017| establish or activate the use of membership shares when it is
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0018| deemed necessary for the safety and soundness of that credit
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0019| union.
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0020| [D.] E. The director may restrict withdrawals
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0021| from share accounts or deposit accounts or both from any credit
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0022| union when he finds circumstances make that restriction
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0023| necessary for the proper protection of shareholders or
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0024| depositors.
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0025| [E.] F. The director may, after providing at
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0001| least thirty days' prior notice and a hearing, issue cease and
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0002| desist orders whenever it appears to him upon competent and
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0003| substantial evidence that a credit union is engaged or has
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0004| engaged in an unsafe or unsound practice or is violating or has
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0005| violated a material provision of the credit union's bylaws, any
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0006| law, rule or regulation or any condition imposed in writing by
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0007| the director or any written agreement made with the director.
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0008| [F.] G. The director may remove from office and
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0009| prohibit from further participation in any manner in the
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0010| conduct of the affairs of a credit union any board member,
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0011| executive officer or committee member if the director
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0012| determines that the board member, executive officer or
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0013| committee member:
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0014| (1) has violated any law, rule, regulation or
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0015| final cease and desist order;
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0016| (2) has engaged or participated in an unsafe
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0017| or unsound practice in connection with the credit union; or
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0018| (3) has committed or engaged in any act,
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0019| omission or practice that constitutes a breach of such party's
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0020| fiduciary responsibility, and:
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0021| (a) the credit union has suffered or
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0022| will probably suffer financial loss or other damage;
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0023| (b) the interest of the credit union's
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0024| members have been or could be prejudiced; or
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0025| (c) such party has received financial
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0001| gain or other benefit by reason of such violation, practice or
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0002| breach, and: 1) involves personal dishonesty on the part of
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0003| such party; or 2) demonstrates such party's unfitness to serve
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0004| as a board member, executive officer or committee member or to
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0005| otherwise participate in the conduct of the affairs of a credit
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0006| union.
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0007| [G.] H. Whenever the director makes the
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0008| determination to remove any board member, executive officer or
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0009| committee member from office or to prohibit any further
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0010| participation by the person in the conduct of the affairs of
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0011| the credit union, he shall give notice of his intention in
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0012| writing, stating the grounds for such removal or prohibition
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0013| from participation and providing for a hearing no earlier than
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0014| thirty days or later than sixty days after such notice has been
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0015| served on the board member, executive officer or committee
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0016| member.
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0017| [H.] I. If the director determines that,
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0018| pending the hearing for removal or prohibition from
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0019| participating in the conduct of the affairs of the credit
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0020| union, it is in the best interest of the credit union, he may
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0021| suspend the board member, executive officer or committee
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0022| member. Any suspension order shall be in writing and shall
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0023| become effective upon service.
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0024| [I.] J. Unless a suspension order is stayed by
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0025| a district court in the judicial district where the principal
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0001| office of the credit union is located or in the first judicial
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0002| district court of the state of New Mexico within ten days after
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0003| the service of [such] the order on the party suspended, it
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0004| shall remain in force [and effect] until a final order is
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0005| issued after the hearing for removal. The district courts
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0006| named in this paragraph shall have jurisdiction to stay such
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0007| suspension or prohibition.
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0008|
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0009| [J.] K. The director has the power to subpoena
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0010| witnesses, compel their attendance, require the production of
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0011| evidence, administer oaths and examine any person under oath in
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0012| connection with any subject relating to a duty imposed upon or
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0013| a power vested in the director.
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0014| [K.] L. If it appears that any credit union has
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0015| willfully violated the Credit Union [Regulatory] Act or its
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0016| bylaws or is operating in an unsafe and unsound manner, the
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0017| director may issue an order temporarily suspending the credit
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0018| union's operations. The following provisions shall then apply:
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0019| (1) the board of directors of the credit union
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0020| shall be given notice by certified mail of such suspension,
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0021| which notice shall include a list of the reasons for such
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0022| suspension and a list of the specific violation of the Credit
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0023| Union [Regulatory] Act or the credit union's bylaws, if any.
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0024| The director shall also notify the insuring organization of the
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0025| credit union of any such suspension;
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0001| (2) upon receipt of such suspension notice,
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0002| the credit union shall cease all operations except those
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0003| authorized by the director. The board of directors shall then
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0004| file with the director a reply to the suspension notice and may
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0005| request a hearing to present a plan of corrective actions
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0006| proposed if the board desires to continue operations. The
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0007| board may request that the credit union be declared insolvent
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0008| and a liquidating agent be appointed;
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0009| (3) upon receipt from the suspended credit
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0010| union of evidence that the conditions causing the order of
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0011| suspension have been corrected, the director may revoke the
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0012| suspension notice, permit the credit union to resume normal
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0013| operations and notify the insuring organization of such action;
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0014| (4) if the director, after issuing notice of
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0015| suspension and providing for a hearing, rejects the credit
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0016| union's plan to continue operations, he may issue a notice of
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0017| involuntary liquidation and appoint a liquidating agent. The
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0018| credit union, within thirty days of issuance of [such] the
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0019| notice, may apply to the court of appeals for an order to stay
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0020| execution of such action;
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0021| (5) if within the suspension period the credit
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0022| union fails to answer the suspension notice or request a
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0023| hearing, the director may then revoke the credit union's
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0024| charter, appoint a liquidating agent and liquidate the credit
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0025| union; and
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0001| (6) in the event of liquidation, the assets of
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0002| the credit union or the proceeds from any disposition of the
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0003| assets shall be applied and distributed in the following
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0004| sequence:
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0005| (a) costs and expenses of liquidation;
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0006| (b) secured creditors up to the value of
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0007| their collateral;
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0008| (c) wages due the employees of the
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0009| credit union;
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0010| (d) costs and expenses incurred by
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0011| creditors in successfully opposing the release of the credit
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0012| union from certain debts as allowed by the director or
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0013| liquidating agent;
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0014| (e) taxes owed to the United States or
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0015| any other governmental units;
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0016| (f) debts owed to the United States or
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0017| other governmental units;
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0018| (g) general creditors, secured creditors
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0019| to the extent their claims exceed the value of their collateral
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0020| and owners of deposit accounts to the extent such accounts are
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0021| uninsured; and
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0022| (h) members, to the extent of uninsured
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0023| share accounts and the organization that insured the accounts
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0024| of the credit union.
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0025| [L.] M. The director has the following
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0001| authority with respect to the liquidation or conservatorship of
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0002| any credit union:
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0003| (1) the director may, at his sole discretion
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0004| and without notice, appoint himself, the insuring organization
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0005| or any other person as conservator to immediately take
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0006| possession and control of the business and assets of any credit
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0007| union in any case in which the director determines that such
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0008| action is necessary to conserve the assets of the credit union
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0009| or to protect the interests of the members of that credit
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0010| union. Any credit union may, by a resolution of its board of
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0011| directors, consent to any such action by the director;
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0012| (2) not later than ten days after the date of
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0013| which the director or his designee takes possession and control
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0014| of the business and assets of a credit union pursuant to
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0015| Paragraph (1) of this subsection, the credit union may apply to
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0016| the court of appeals for an order requiring the director to
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0017| show cause why he or his designee should not be enjoined from
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0018| continuing such possession and control;
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0019| (3) except as provided in Paragraph (2) of
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0020| this subsection, the director or his designee may maintain
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0021| possession and control of the business and assets of the credit
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0022| union and may operate the credit union until such time as:
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0023| (a) the director permits the credit
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0024| union to continue business, subject to such terms and
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0025| conditions as he imposes; or
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0001| (b) the credit union is liquidated in
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0002| accordance with this section;
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0003| (4) the director may appoint such agents as he
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0004| considers necessary in order to assist in carrying out the
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0005| duties of the conservator under this section; and
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0006| (5) all expenses incurred by the director in
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0007| exercising his authority under this section with respect to the
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0008| liquidation or conservatorship of any credit union shall be
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0009| paid out of the assets of that credit union."
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0010| Section 4. Section 58-11-5 NMSA 1978 (being Laws 1987,
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0011| Chapter 311, Section 5, as amended) is amended to read:
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0012| "58-11-5. EXAMINATIONS--SUPERVISION FEES.--
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0013| A. The director shall examine or cause to be
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0014| examined each credit union. A credit union and any of its
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0015| board members, executive officers, agents and employees shall
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0016| give the director or his representatives full access to all
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0017| books, papers, securities, records and other desired sources of
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0018| information under their control.
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0019| B. A copy of the report of any such examination
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0020| shall be forwarded to the board of directors of the credit
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0021| union examined within thirty days after completion of the
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0022| report. The report shall contain comments relative to the
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0023| management of the affairs of the credit union and its general
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0024| financial condition. The board of directors shall meet to
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0025| consider matters contained in the report and shall respond to
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0001| the director in writing, acknowledging receipt of the report
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0002| and setting forth corrective measures taken or contemplated
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0003| with respect to any adverse comments by the examiner.
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0004| C. In lieu of examination, the director may accept
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0005| an audit report of the condition of a credit union, conducted
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0006| by a certified public accountant or other qualified person or
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0007| firm approved by the director. The cost of the audit shall be
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0008| borne by the credit union.
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0009| D. Each credit union shall annually pay to the
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0010| director a supervision fee in accordance with the following
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0011| schedule:
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0012| If the credit union's
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0013| total assets are-- The fee is--
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0014| But Not This Of Excess
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0015| Over Over Amount Plus Per Over
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0016| -0- 49,999 400.00
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0017| 50,000 100,000 400.00 1.7227 1,000 50,000
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0018| 100,001 250,000 400.00 1.1021 1,000 100,000
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0019| 250,001 500,000 400.00 0.9095 1,000 250,000
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0020| 500,001 1,000,000 575.13 0.5136 1,000 500,000
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0021| 1,000,001 2,000,000 833.42 0.3959 1,000 1,000,000
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0022| 2,000,001 5,000,000 1,226.04 0.3470 1,000 2,000,000
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0023| 5,000,001 20,000,000 2,267.21 0.1800 1,000 5,000,000
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0024| 20,000,001 50,000,000 4,898.96 0.1680 1,000 20,000,000
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0025| 50,000,001 100,000,000 9,854.85 0.1551 1,000 50,000,000
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0001| 100,000,001 17,642.07 0.1423 1,000 100,000,000
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0002| [plus one hundred dollars ($100) for each branch office in
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operation]. The supervision fee shall be calculated as of
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0004| December 31. The fee shall be paid on or before the March 1
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0005| following the asset computation. For failure to pay the
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0006| supervision fee when due, unless excused for cause by the
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0007| director, the credit union shall pay to the division fifty
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0008| dollars ($50.00) for each day of its delinquency. The director
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0009| may prescribe lower supervision fees by regulation and in
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0010| determining those fees, he may use criteria other than the
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0011| total assets of the credit union paying the fee.
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0012| E. If at any time the director deems it necessary to
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0013| examine a credit union more than once in any calendar year and
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0014| if the credit union is determined to have violated the Credit
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0015| Union Act or other state laws or federal laws or regulations,
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0016| the credit union shall pay to the director reimbursement of the
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0017| actual costs of that examination or those examinations."
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0018| Section 5. Section 58-11-9 NMSA 1978 (being Laws 1987,
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0019| Chapter 311, Section 9, as amended) is amended to read:
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0020| "58-11-9. CONFLICTS OF INTEREST.--No officer or employee
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0021| of the division having supervisory authority over credit unions
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0022| shall be a member, executive officer, director, attorney or
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0023| employee of any credit union incorporated under or subject to
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0024| the provisions of the Credit Union [Regulatory] Act; receive,
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0025| directly or indirectly, any payment of gratuity from any such
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0001| credit union; or be indebted to or engage in the negotiation of
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0002| loans for others with any such credit union."
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0003| Section 6. Section 58-11-10 NMSA 1978 (being Laws 1987,
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0004| Chapter 311, Section 10) is amended to read:
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0005| "58-11-10. FORMATION OF CREDIT UNION.--
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0006| A. Any seven or more residents of this state of legal
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0007| age [who] that share the common bond referred to in Section
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0008| [21 of the Credit Union Regulatory Act] 58-11-21 NMSA 1978
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0009| may organize a credit union and become charter members thereof
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0010| by complying with this section.
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0011| B. The organizers shall prepare, adopt and execute in
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0012| triplicate articles of organization and agree to the terms
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0013| thereof. The articles shall state:
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0014| (1) the credit union's name and the location of
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0015| the proposed credit union's principal place of business;
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0016| (2) that the existence of the credit union shall
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0017| be perpetual; [and]
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0018| (3) the names and addresses of the organizers
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0019| [and the number of shares subscribed to by each]; and
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0020| (4) that each member shall subscribe to one
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0021| share of the credit union.
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0022| C. The organizers shall prepare, adopt and execute in
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0023| duplicate bylaws consistent with the Credit Union
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0024| [Regulatory] Act for the general governance of the credit
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0025| union.
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0001| D. The organizers shall select at least five persons
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0002| who are eligible for membership and who agree to become members
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0003| and serve on the board of directors and at least three other
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0004| persons who are eligible for membership and who agree to become
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0005| members and serve on the supervisory committee. The persons
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0006| selected to serve on the board of directors and supervisory
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0007| committee shall execute an agreement to serve in these
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0008| capacities until the first annual meeting or until the election
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0009| of their respective successors, whichever is later.
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0010| E. The organizers shall forward the triplicate
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0011| articles of organization, the duplicate bylaws and the
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0012| agreements to serve to the director who shall act upon the
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0013| application within sixty days. The director shall issue a
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0014| certificate of approval if the articles and bylaws are in
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0015| conformity with applicable provisions of the Credit Union
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0016| [Regulatory] Act and he is satisfied that:
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0017| (1) the characteristics of the common bond set
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0018| forth in the proposed bylaws are favorable to the economic
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0019| viability of the proposed credit union;
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0020| (2) the reputation and character of the initial
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0021| board of directors and supervisory committee provide assurance
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0022| that the credit union's affairs will be properly administered;
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0023| and
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0024| (3) the share and deposit insurance requirements
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0025| of Section [48 of the Credit Union Regulatory Act] 58-11-48
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0001| NMSA 1978 will be met.
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0002| F. The following [providers] provisions apply to
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0003| issuance and denial of certificate:
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0004| (1) if the director issues a certificate of
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0005| approval, he shall return a copy of the bylaws to the
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0006| organizers and, upon payment of the required fee, file the
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0007| triplicate originals of the articles of organization with the
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0008| state corporation commission; and
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0009| (2) if the director denies a certificate of
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0010| approval, he shall notify the organizers and set forth his
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0011| reasons for the denial. The [incorporators] organizers may
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0012| appeal his decision to the court of appeals within thirty days
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0013| after receipt of the notice of denial.
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0014| G. The organizers shall not transact any credit union
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0015| business until a certificate of approval has been received and
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0016| shall accept no payments on shares or deposit until insurance
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0017| of accounts has been obtained as provided by Section [48 of
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the Credit Union Regulatory Act] 58-11-48 NMSA 1978.
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0019| H. Any credit union, the articles of organization of
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0020| which have been approved by the director, shall commence
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0021| business within six months after satisfactory proof has been
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0022| filed with the director showing that insurance of share and
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0023| deposit accounts has been obtained. Upon showing of good cause
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0024| for failure to commence business within this time, the director
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0025| may grant a reasonable extension to overcome the reason for
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0001| delay. Failure to commence business as required in this
|
0002| section or failure to obtain insurance of accounts within one
|
0003| year from the date of approval of the articles of organization
|
0004| constitutes grounds for forfeiture of the credit union's
|
0005| articles of organization."
|
0006| Section 7. Section 58-11-11 NMSA 1978 (being Laws 1987,
|
0007| Chapter 311, Section 11) is amended to read:
|
0008| "58-11-11. FORMS OF ARTICLES AND BYLAWS.--In order to
|
0009| simplify the organization of credit unions, the director shall
|
0010| cause to be prepared model articles of organization and bylaws,
|
0011| consistent with the Credit Union [Regulatory] Act, which may
|
0012| be used by credit union organizers for their guidance. Such
|
0013| articles of organization and bylaws shall be available to
|
0014| persons desiring to organize a credit union."
|
0015| Section 8. Section 58-11-13 NMSA 1978 (being Laws 1987,
|
0016| Chapter 311, Section 13) is amended to read:
|
0017| "58-11-13. USE OF NAME EXCLUSIVE.--
|
0018| A. The name of every credit union organized under or
|
0019| subject to the Credit Union [Regulatory] Act shall include
|
0020| the phrase "credit union". No credit union shall adopt a name
|
0021| either identical to the name of any other credit union doing
|
0022| business in this state or so similar to the name of any other
|
0023| credit union doing business in this state as to be misleading
|
0024| or to cause confusion.
|
0025| B. No person other than a credit union organized
|
0001| under or subject to the Credit Union [Regulatory] Act, the
|
0002| Federal Credit Union Act or a credit union authorized to do
|
0003| business in this state under Section [16 of the Credit Union
|
Regulatory Act] 58-11-16 NMSA 1978, an association of credit
|
0005| unions or an organization, corporation or association whose
|
0006| membership or ownership is primarily limited to credit unions
|
0007| or credit union organizations shall use a name or title
|
0008| containing the phrase "credit union" or any derivation thereof,
|
0009| represent itself as a credit union or conduct business as a
|
0010| credit union.
|
0011| C. Violation of this section [constitutes] is a
|
0012| fourth degree felony.
|
0013| D. The director may petition the district court of
|
0014| Santa Fe county to enjoin a violation of this section."
|
0015| Section 9. Section 58-11-14 NMSA 1978 (being Laws 1987,
|
0016| Chapter 311, Section 14) is amended to read:
|
0017| "58-11-14. OFFICE FACILITIES.--
|
0018| A. A credit union may change its principal place of
|
0019| business within this state upon thirty days notice to the
|
0020| director.
|
0021| B. A credit union may [maintain other] provide
|
0022| services through service facilities [including automated
|
terminals pursuant to the Remote Financial Service Unit Act, at
|
locations other than its principal office upon approval by the
|
director. The maintenance of such facilities must be rea-
|
|
sonably necessary to furnish service to its members].
|
0003| C. A credit union may [join] individually or in
|
0004| conjunction with [one or more] other credit unions or other
|
0005| financial organizations [in the operation of] operate or
|
0006| maintain automated terminals or other service facilities."
|
0007| Section 10. Section 58-11-15 NMSA 1978 (being Laws 1987,
|
0008| Chapter 311, Section 15) is amended to read:
|
0009| "58-11-15. FISCAL YEAR.--The fiscal year of each credit
|
0010| union organized under or subject to the Credit Union
|
0011| [Regulatory] Act shall end on the last day of December."
|
0012| Section 11. Section 58-11-16 NMSA 1978 (being Laws 1987,
|
0013| Chapter 311, Section 16) is amended to read:
|
0014| "58-11-16. OUT-OF-STATE CREDIT UNIONS.--A credit union
|
0015| organized under the laws of another state or territory of the
|
0016| United States may conduct business as a credit union in this
|
0017| state with the approval of the director. Before granting the
|
0018| approval, the supervisory authority of such credit union shall
|
0019| certify that the out-of-state credit union:
|
0020| A. is a credit union organized under laws similar to
|
0021| the Credit Union [Regulatory] Act;
|
0022| B. is financially solvent;
|
0023| C. has account insurance approved for credit unions
|
0024| incorporated under or subject to the Credit Union
|
0025| [Regulatory] Act; and
|
0001| D. needs to conduct business in this state to
|
0002| adequately serve its members in this state."
|
0003| Section 12. Section 58-11-17 NMSA 1978 (being Laws 1987,
|
0004| Chapter 311, Section 17) is amended to read:
|
0005| "58-11-17. DOING BUSINESS OUTSIDE THIS STATE.--A credit
|
0006| union organized under or subject to the Credit Union
|
0007| [Regulatory] Act may do business outside this state, provided
|
0008| that it is legal for it to do so in the foreign state or
|
0009| territory involved. If the director deems it necessary [the
|
examination of out-of-state offices of those credit unions]
|
0011| to conduct an examination of the out-of-state office of a
|
0012| credit union, the actual expenses of the [examinations]
|
0013| examination shall be paid by the credit union examined if
|
0014| the director determines it has violated the provisions of the
|
0015| Credit Union Act or other state laws or federal laws or
|
0016| regulations."
|
0017| Section 13. Section 58-11-18 NMSA 1978 (being Laws 1987,
|
0018| Chapter 311, Section 18) is amended to read:
|
0019| "58-11-18. POWERS OF CREDIT UNIONS.--In addition to the
|
0020| powers authorized elsewhere in the Credit Union [Regulatory]
|
0021| Act, a credit union may:
|
0022| A. enter into contracts of any nature;
|
0023| B. sue and be sued;
|
0024| C. adopt, use and display a corporate seal;
|
0025| D. acquire, lease, hold, assign, pledge, hypothecate,
|
0001| sell and discount or otherwise dispose of property or assets,
|
0002| either in whole or in part, necessary or incidental to its
|
0003| operations;
|
0004| E. lend funds to members;
|
0005| F. borrow from any source, provided that a credit
|
0006| union [must] shall have prior approval of the director
|
0007| before borrowing in excess of an aggregate of fifty percent of
|
0008| its capital;
|
0009| G. purchase the assets of another credit union,
|
0010| subject to the approval of the director;
|
0011| H. offer various financial services approved by the
|
0012| director;
|
0013| I. hold membership in other credit unions organized
|
0014| under the Credit Union [Regulatory] Act, the Federal Credit
|
0015| Union Act or other acts and in associations and organizations
|
0016| controlled by or fostering the interests of credit unions,
|
0017| including a central liquidity facility organized under state or
|
0018| federal law;
|
0019| J. engage in activities and programs as requested by
|
0020| any governmental unit; [and]
|
0021| K. act as fiscal agent and receive payments on de-
|
0022|
|
0023| posit accounts from a governmental unit; and
|
0024| L. sell or offer to sell insurance to the same extent
|
0025| allowed by law to other state chartered lending institutions."
|
0001| Section 14. Section 58-11-19 NMSA 1978 (being Laws 1987,
|
0002| Chapter 311, Section 19) is amended to read:
|
0003| "58-11-19. INCIDENTAL POWERS.--A credit union may
|
0004| exercise all incidental powers that are convenient, suitable or
|
0005| necessary to enable it to carry out its purposes as provided in
|
0006| [the] its bylaws."
|
0007| Section 15. Section 58-11-20 NMSA 1978 (being Laws 1987,
|
0008| Chapter 311, Section 20) is amended to read:
|
0009| "58-11-20. ADVANTAGEOUS FEDERAL POWERS.--In addition to
|
0010| other powers provided for the director and for credit unions
|
0011| organized under or subject to the Credit Union [Regulatory]
|
0012| Act and notwithstanding any law to the contrary, the director
|
0013| may adopt such rules and regulations as he deems necessary and
|
0014| proper, granting to state credit unions any of the powers and
|
0015| authority that federal credit unions are or may hereafter be
|
0016| authorized, empowered, permitted or otherwise allowed to
|
0017| exercise under federal statutes, rules or regulations."
|
0018| Section 16. Section 58-11-22 NMSA 1978 (being Laws 1987,
|
0019| Chapter 311, Section 22, as amended) is amended to read:
|
0020| "58-11-22. CENTRAL CREDIT UNIONS.--Central credit unions
|
0021| may be organized under the Credit Union [Regulatory] Act, and
|
0022| such credit unions organized under prior law are subject to
|
0023| that act. In addition to the members referred to in Section
|
0024| 58-11-21 NMSA 1978, the membership of a central credit union
|
0025| may include:
|
0001| A. executive officers, board members, committee
|
0002| members and employees of credit unions organized under any
|
0003| credit union act or the executive officers, directors and
|
0004| employees of an employer with insufficient numbers or with
|
0005| executive officers, directors and employees who do not desire
|
0006| to form or conduct the affairs of a separate credit union;
|
0007| B. persons in the field of membership of liquidated
|
0008| credit unions [which] that have entered into or are about
|
0009| to enter into voluntary or involuntary liquidation proceedings;
|
0010| and
|
0011| C. members of the immediate families of members
|
0012| qualified pursuant to Subsection A or B of this section."
|
0013| Section 17. Section 58-11-23 NMSA 1978 (being Laws 1987,
|
0014| Chapter 311, Section 23) is amended to read:
|
0015| "58-11-23. OTHER CREDIT UNIONS.--Any credit union
|
0016| organized under or subject to the Credit Union [Regulatory]
|
0017| Act may accept as a member any other credit union organized
|
0018| under or subject to that act or any other act."
|
0019| Section 18. Section 58-11-24 NMSA 1978 (being Laws 1987,
|
0020| Chapter 311, Section 24) is amended to read:
|
0021| "58-11-24. MEMBER ELIGIBILITY.--Members who cease to be
|
0022| eligible for membership in a credit union for reasons other
|
0023| than expulsion may be permitted to retain their membership in
|
0024| the credit [unions] union, subject to any restrictions
|
0025| which may be established by the [board of directors]
|
0001| bylaws."
|
0002| Section 19. Section 58-11-27 NMSA 1978 (being Laws 1987,
|
0003| Chapter 311, Section 27) is amended to read:
|
0004| "58-11-27. DIRECTION OF AFFAIRS.--
|
0005| A. A credit union shall be directed by a board of
|
0006| directors consisting of an odd number of members, as provided
|
0007| in the bylaws, but not less than five in number, to be elected
|
0008| annually by and from the members. The election shall be held
|
0009| at the annual meeting or in such other manner as the bylaws
|
0010| provide. All members of the board shall hold office for such
|
0011| terms as the bylaws provide.
|
0012| B. The [board of directors shall appoint or the]
|
0013| members shall elect [whichever is] as prescribed in the
|
0014| bylaws a supervisory committee of not less than three
|
0015| [persons] members at [the organization meeting held within
|
thirty days following] each annual election for [such] the
|
0017| terms [as] the bylaws provide.
|
0018| C. [The board of directors shall appoint or the
|
members shall elect a credit committee consisting of an odd
|
number not less than three, for such terms as the bylaws
|
provide. If a credit committee is not appointed or elected, it
|
shall be the duty of the board of directors or a credit manager
|
appointed by the board to assume the duties of the credit
|
committee hereinafter specified. If a credit manager is
|
appointed, he shall serve at the pleasure and under the
|
direction and supervision of the board of directors] The
|
0002| board of directors may delegate any or all of its authority to
|
0003| extend credit, including the determination of interest rates,
|
0004| to one or more committees or an executive officer provided that
|
0005| such person is not a member of the board. A committee may
|
0006| consist of one or more members."
|
0007| Section 20. Section 58-11-29 NMSA 1978 (being Laws 1987,
|
0008| Chapter 311, Section 29) is amended to read:
|
0009| "58-11-29. VACANCIES.--The board of directors of a credit
|
0010| union shall fill any vacancies occurring in the board until
|
0011| successors elected at the next annual election have qualified.
|
0012| If more than fifty percent of the board positions become vacant
|
0013| at any one time, a special meeting of the members shall be
|
0014| called to fill all vacancies. [The board shall also fill
|
vacancies in the credit committee, if any.] The supervisory
|
0016| committee shall fill all vacancies in its own membership as
|
0017| they occur. If all of the supervisory committee positions
|
0018| become vacant at any one time, the board of directors shall
|
0019| fill all vacancies, and those appointed members may serve
|
0020| until the next election. The board shall fill vacancies
|
0021| occurring on all other committees."
|
0022| Section 21. Section 58-11-30 NMSA 1978 (being Laws 1987,
|
0023| Chapter 311, Section 30, as amended) is amended to read:
|
0024| "58-11-30. COMPENSATION OF OFFICIALS.--No board or
|
0025| committee member may be compensated for [his] services
|
0001| performed in the regular course of duties pertaining to that
|
0002| board or committee position. Notwithstanding any provision of
|
0003| the Credit Union Act to the contrary, board or committee
|
0004| members may be compensated for those services provided to the
|
0005| credit union while temporarily serving in an additional
|
0006| capacity other than as a board or committee member.
|
0007| Reasonable life, health, accident and similar insurance
|
0008| protection shall not be considered compensation to a board or
|
0009| committee member. Board and committee members may be
|
0010| reimbursed for reasonable and necessary expenses incidental to
|
0011| the performance of official business of the credit union,
|
0012| provided that such expenses are documented."
|
0013| Section 22. Section 58-11-31 NMSA 1978 (being Laws 1987,
|
0014| Chapter 311, Section 31, as amended) is amended to read:
|
0015| "58-11-31. CONFLICTS OF INTEREST.--No board member,
|
0016| committee member, executive officer, agent or employee of a
|
0017| credit union shall in any manner, directly or indirectly,
|
0018| participate in the deliberation upon or the determination of
|
0019| any question affecting his pecuniary interest, the pecuniary
|
0020| interest of his parents, children or siblings or spouses of any
|
0021| of those individuals or the pecuniary interest of any
|
0022| organization, other than the credit union, in which he is
|
0023| directly or indirectly interested."
|
0024| Section 23. Section 58-11-32 NMSA 1978 (being Laws 1987,
|
0025| Chapter 311, Section 32, as amended) is amended to read:
|
0001| "58-11-32. OFFICERS.--
|
0002| A. At [its organization] an organizational
|
0003| meeting held within thirty days following each annual election,
|
0004| the board of directors shall elect from its own number a
|
0005| chairman, a vice chairman and a secretary. It shall also elect
|
0006| any other board officers that are specified in the bylaws.
|
0007| B. The terms of the board officers shall be one year
|
0008| or until their successors are chosen and have been duly
|
0009| qualified.
|
0010| C. The duties of the board officers shall be
|
0011| prescribed in the bylaws.
|
0012| D. [The board of directors shall appoint a general
|
manager of the credit union to be in active charge of its
|
operations.] The board of directors shall employ, elect or
|
0015| appoint an executive officer of the credit union who shall be
|
0016| responsible for credit union operations. The executive officer
|
0017| may be a member of the board of directors if not receiving paid
|
0018| compensation as executive officer, but may not be an officer of
|
0019| the board of directors. The executive officer will serve at
|
0020| the pleasure of the board of directors.
|
0021| E. The board of directors may provide for other
|
0022| executive officers and prescribe their duties and authority in
|
0023| the bylaws.
|
0024| F. Notwithstanding any other provisions of the Credit
|
0025| Union [Regulatory] Act, a credit union may use any titles it
|
0001| chooses for the officials holding the positions described in
|
0002| this section, provided those titles are not misleading."
|
0003| Section 24. Section 58-11-33 NMSA 1978 (being Laws 1987,
|
0004| Chapter 311, Section 33) is amended to read:
|
0005| "58-11-33. AUTHORITY AND RESPONSIBILITY OF BOARD
|
0006| MEMBERS.--The board of directors shall have the authority and
|
0007| responsibility for providing the general direction of the
|
0008| business affairs, funds and records of the credit union. In
|
0009| addition to all other powers authorized in the Credit Union
|
0010| Act, the board of directors may:
|
0011| A. limit the dollar amount of share and deposit
|
0012| accounts which may be owned by a member, provided such
|
0013| limitations shall equally apply to all members; and
|
0014| B. authorize the credit union to contribute funds to
|
0015| any nonprofit civic, charitable, educational, research or
|
0016| service organization."
|
0017|
|
0018| Section 25. Section 58-11-36 NMSA 1978 (being Laws 1987,
|
0019| Chapter 311, Section 36, as amended) is amended to read:
|
0020| "58-11-36. DUTIES OF BOARD MEMBERS. [It shall be the duty
|
of]
|
0022| A. The board of directors [to] shall:
|
0023| [A.] (1) act upon applications for membership or
|
0024| to appoint one or more membership officers to approve
|
0025| applications for membership under such conditions as the board
|
0001| prescribes. A record of the actions taken by a membership
|
0002| officer shall be made available in writing to the board of
|
0003| directors for inspection. A person denied membership [by a
|
membership officer] may appeal the denial to the board, and
|
0005| the person shall be informed [by the membership officer] of
|
0006| that right of appeal in writing by the credit union;
|
0007| [B.] (2) authorize and require the purchase of
|
0008| adequate fidelity coverage as it determines to be necessary for
|
0009| the board members, committee members, executive officers or
|
0010| employees of the credit union [The director may, by rule,
|
regulation or order, establish which credit union personnel
|
shall be covered by a fidelity bond and in what amounts] with
|
0013| documentation made available to the director about who is
|
0014| covered;
|
0015| [C.] (3) authorize and determine from time to
|
0016| time the interest rates [which] that shall be charged on
|
0017| [loans] extensions of credit to members and authorize any
|
0018| interest refunds on [such classes of loans and] extensions
|
0019| of credit under [such] the conditions [as] the board
|
0020| prescribes;
|
0021| [D.] (4) establish written policies with respect
|
0022| to the terms and conditions for granting [of] loans and the
|
0023| [extending of lines] extension of credit, including the
|
0024| maximum amount [which] that may be [loaned] provided to
|
0025| any one member;
|
0001| [E.] (5) declare dividends on share accounts and
|
0002| membership shares in the manner and form as provided in the
|
0003| bylaws, which dividends shall not exceed the credit union's net
|
0004| earnings, including undivided earnings [and determine the
|
interest rates which shall be paid on deposit accounts;
|
F. if deemed desirable, limit the dollar amount of
|
share and deposit accounts which may be owned by a member,
|
provided any such limitation shall apply equally to all
|
members];
|
0010| [G.] (6) have charge of the investment of funds,
|
0011| except that the board may designate an investment committee or
|
0012| investment officer under written investment policies
|
0013| established by the board;
|
0014| [H.] (7) authorize the employment of persons to
|
0015| carry on the business of the credit union and [fix]
|
0016| establish the compensation of the [general manager]
|
0017| executive officer;
|
0018| [I.] (8) approve an annual operating budget for
|
0019| the credit union;
|
0020| [J.] (9) authorize the conveyance of property;
|
0021| [K. authorize contributions to any nonprofit civic,
|
charitable or service organization;
|
L.] (10) [designate] authorize the designation
|
0024| of depositories for the operating funds of the credit union;
|
0025| [M.] (11) appoint any [special] committees
|
0001| deemed necessary; and
|
0002| [N.] (12) perform such other duties as the
|
0003| members from time to time direct and perform or authorize any
|
0004| action not inconsistent with the Credit Union [Regulatory]
|
0005| Act and not specifically reserved by the bylaws to the members.
|
0006| B. Any member of the supervisory committee or of any
|
0007| other committee established for the purposes of extending
|
0008| credit may be temporarily suspended or removed by the board of
|
0009| directors by a two-thirds vote of the board of directors at a
|
0010| meeting in which a quorum is present for failure to perform
|
0011| those duties in accordance with the Credit Union Act, the
|
0012| articles of organization or the bylaws and for no other reason.
|
0013| The suspension or removal of a supervisory committee member
|
0014| shall be acted upon by the members at a meeting to be held not
|
0015| less than seven or more than twenty-one days after such
|
0016| suspension or removal."
|
0017| Section 26. Section 58-11-38 NMSA 1978 (being Laws 1987,
|
0018| Chapter 311, Section 38, as amended) is amended to read:
|
0019| "58-11-38. SUPERVISORY COMMITTEE.--
|
0020| A. The supervisory committee shall make or cause to
|
0021| be made by a certified public accountant or other qualified
|
0022| person or firm a comprehensive annual audit of the books and
|
0023| affairs of the credit union. It shall submit a report of each
|
0024| annual audit to the board of directors and make the report
|
0025| available to the [division] director, and a summary of the
|
0001| report shall be presented to the members at the next annual
|
0002| meeting of the credit union.
|
0003| B. The supervisory committee shall make or cause to
|
0004| be made such supplementary audits, examinations and
|
0005| verifications of members' share and loan accounts as it deems
|
0006| necessary or as are required by the board of directors and
|
0007| submit reports of those audits to the board of directors. A
|
0008| complete verification of members' share and loan accounts shall
|
0009| be performed at least once every two years in accordance with
|
0010| standards established by the director.
|
0011| C. The supervisory committee by a two-thirds vote of
|
0012| the entire committee may in its sole discretion suspend
|
0013| [any] [member of the credit committee] a person authorized
|
0014| to extend credit if the person is not a paid employee of the
|
0015| credit union and shall report [such] the action to the
|
0016| board of directors for appropriate action. Paid employees of
|
0017| the credit union that are authorized to extend credit may be
|
0018| suspended for any reason but only by the executive officer of
|
0019| the credit union.
|
0020| D. The supervisory committee by a two-thirds vote of
|
0021| the entire committee may suspend any member of the board of
|
0022| directors until the next members' meeting, which shall be held
|
0023| not less than seven or more than twenty-one days after such
|
0024| suspension. At that meeting, the suspension shall be acted
|
0025| upon by the members and the board member removed from or
|
0001| restored to his position.
|
0002| [E. Any member of the supervisory committee or of
|
the credit committee may be suspended or removed by the board
|
of directors by a two-thirds vote of those present for failure
|
to perform his duties in accordance with the Credit Union
|
Regulatory Act, the articles of organization or the bylaws and
|
for no other reason. That suspension or removal of a
|
supervisory committee member shall be acted upon by the members
|
at a meeting to be held not less than seven or more than
|
twenty-one days after such suspension or removal.
|
F.] E. The supervisory committee by a majority
|
0012| vote may call a special meeting of the members to consider any
|
0013| violation or potential violation of the Credit Union
|
0014| [Regulatory] Act, the credit union's articles of organization
|
0015| or bylaws or any practice of the credit union deemed by the
|
0016| supervisory committee to be unsafe, unsound or unauthorized.
|
0017| The bylaws shall prescribe the manner in which a special
|
0018| meeting of the members may be called by the members or by the
|
0019| board of directors."
|
0020| Section 27. Section 58-11-39 NMSA 1978 (being Laws 1987,
|
0021| Chapter 311, Section 39) is amended to read:
|
0022| "58-11-39. MEMBERS' ACCOUNTS.--
|
0023| A. The bylaws of a credit union [shall] may
|
0024| require the members to subscribe to and make payments on
|
0025| membership shares.
|
0001| B. Share accounts, membership shares and deposit
|
0002| accounts shall be subscribed to and paid for in such manner as
|
0003| the bylaws prescribe.
|
0004| C. The par value of shares and membership shares
|
0005| shall be as prescribed in the bylaws.
|
0006| D. Membership shares may not be pledged as security
|
0007| on any [loan] extension of credit."
|
0008| Section 28. Section 58-11-40 NMSA 1978 (being Laws 1987,
|
0009| Chapter 311, Section 40) is amended to read:
|
0010| "58-11-40. DIVIDENDS AND INTEREST.--
|
0011| A. [At intervals and for periods, the board of
|
directors may authorize] Periodically, and after provision
|
0013| for the required reserves, the board of directors may declare,
|
0014| dividends to be paid on share accounts and membership shares.
|
0015| Dividends may be paid from the credit union's undivided
|
0016| earnings; provided, no such payment shall result in or increase
|
0017| a debit balance in the undivided earnings account.
|
0018| B. Dividends may be paid at various rates with due
|
0019| regard to the conditions that pertain to each type of account,
|
0020| such as minimum balance, notice and time requirements.
|
0021| C. Dividends need not be paid on membership shares,
|
0022| but if such a dividend is paid, it shall be added to the
|
0023| membership share held by each member.
|
0024| D. A credit union may receive payments on deposit
|
0025| accounts from its members and other credit unions subject to
|
0001| such terms, rates and conditions as the board of directors
|
0002| establishes.
|
0003| E. Interest may be paid on deposit accounts at
|
0004| various rates with due regard to the conditions that pertain to
|
0005| each type of account, such as minimum balance, notice and time
|
0006| requirements."
|
0007| Section 29. Section 58-11-43 NMSA 1978 (being Laws 1987,
|
0008| Chapter 311, Section 43) is amended to read:
|
0009| "58-11-43. JOINT ACCOUNTS.--
|
0010| A. A member may designate any person to own a share
|
0011| account or deposit account [with him] in joint tenancy with
|
0012| the right of survivorship, as a tenant in common or under any
|
0013| other form of joint ownership permitted by law, but no co-
|
0014| owner, unless also a member in his own right, shall be
|
0015| permitted to vote, obtain loans, hold office or be required to
|
0016| pay a membership fee.
|
0017| B. Payment of part or all of those accounts to any of
|
0018| the co-owners shall, to the extent of such payment, discharge
|
0019| the liability to all unless the account agreement contains a
|
0020| prohibition."
|
0021| Section 30. Section 58-11-44 NMSA 1978 (being Laws 1987,
|
0022| Chapter 311, Section 44, as amended) is amended to read:
|
0023| "58-11-44. TRUST ACCOUNTS.--
|
0024| A. Share accounts and deposit accounts may be owned
|
0025| by a member in trust for a beneficiary or owned by a non-member
|
0001| in trust for a beneficiary who is a member.
|
0002| B. Beneficiaries may be minors, but no beneficiary,
|
0003| unless a credit union member [in his own right], shall be
|
0004| permitted to vote, obtain loans, hold office or be required to
|
0005| pay a membership fee.
|
0006| C. Payment of part or all of a trust account to the
|
0007| party in whose name the account is held shall, to the extent of
|
0008| that payment, discharge the liability of the credit union to
|
0009| that party and to the beneficiary, and the credit union shall
|
0010| be under no obligation to see to the application of that
|
0011| payment.
|
0012| D. In the event of the death of the party who owns a
|
0013| trust account, if the credit union has been given no other
|
0014| written notice of the existence or terms of any trust and has
|
0015| not received a court order as to disposition of the account,
|
0016| account funds and any dividends or interest thereon shall be
|
0017| paid to the beneficiary."
|
0018| Section 31. Section 58-11-46 NMSA 1978 (being Laws 1987,
|
0019| Chapter 311, Section 46) is amended to read:
|
0020| "58-11-46. LIENS.--A credit union shall have a lien on
|
0021| the membership shares, share accounts and deposit accounts and
|
0022| accumulated dividends and interest of a [member in his]
|
0023| member's individual, joint or trust account for any sum owed
|
0024| the credit union from that member or for any [loan]
|
0025| extension of credit endorsed or guaranteed by him. A credit
|
0001| union may refuse to allow withdrawals and shall have a right of
|
0002| immediate set-off with respect to every such account. The
|
0003| [credit committee, credit manager or loan officer] board of
|
0004| directors or any person or committee to which it has delegated
|
0005| the authority to extend credit may waive the credit union's
|
0006| rights to a lien, to immediate set-off, to restrict withdrawals
|
0007| or to any combination of those rights with respect to any share
|
0008| or deposit account or groups of those accounts."
|
0009| Section 32. Section 58-11-48 NMSA 1978 (being Laws 1987,
|
0010| Chapter 311, Section 48) is amended to read:
|
0011| "58-11-48. SHARE AND DEPOSIT INSURANCE.--
|
0012| A. Before the organizers of a credit union submit the
|
0013| organizational documents to the director under Section [10 of
|
the Credit Union Regulatory Act] 58-11-10 NMSA 1978, they
|
0015| shall apply for insurance of share accounts and deposit
|
0016| accounts by the national credit union [administration]
|
0017| administration's share insurance fund or, alternatively, for
|
0018| insurance from an insuring organization approved by the
|
0019| director. Any membership share issued by a credit union shall
|
0020| be excluded from the requirement for insurance.
|
0021| B. A credit union [which] that has been denied or
|
0022| has lost its commitment for that insurance or [which]
|
0023| that has been notified of cancellation of that insurance
|
0024| shall within thirty days commence steps to either liquidate or
|
0025| merge with an insured credit union.
|
0001| C. No credit union shall commence business unless
|
0002| such credit union has obtained insurance of its share accounts
|
0003| and deposit accounts.
|
0004| D. The director shall make available reports of
|
0005| condition and examination findings to the national credit union
|
0006| administration or to the appropriate insuring organization and
|
0007| may accept any report of examination made on behalf of such
|
0008| organization."
|
0009| Section 33. Section 58-11-49 NMSA 1978 (being Laws 1987,
|
0010| Chapter 311, Section 49, as amended) is amended to read:
|
0011| "58-11-49. LOAN POLICIES.--
|
0012| A. A credit union may [lend] extend credit to
|
0013| members for such purposes and upon such conditions as the
|
0014| bylaws may provide.
|
0015| B. The interest rates on [loans] extensions of
|
0016| credit shall be authorized and determined by the board of
|
0017| directors [subject to the provisions of Sections 56-8-11.1 and
|
56-8-11.2 NMSA 1978] or any person or committee to which it
|
0019| has delegated that authority.
|
0020| C. A credit union may assess charges to members, in
|
0021| accordance with the bylaws, for failure to meet their
|
0022| obligations to the credit union in a timely manner.
|
0023| D. Except as provided in Subsection H of this
|
0024| section, every application for [a loan] an extension of
|
0025| credit and every approved extension of credit shall be made in
|
0001| writing [upon a form prescribed by the board of directors.
|
Each loan shall be evidenced by a written document] in a
|
0003| standard format consistent with the extension of credit
|
0004| policies approved by the board of directors.
|
0005| E. No loan shall be made to any member in an
|
0006| aggregate amount in excess of ten percent of the credit union's
|
0007| total assets as determined by the director.
|
0008| F. Security, within the meaning of the Credit Union
|
0009| [Regulatory] Act, may include, without limitation because of
|
0010| enumeration, the endorsement of a note by a surety or
|
0011| guarantor, assignment of an interest in real or personal
|
0012| property or any other collateral deemed acceptable by the board
|
0013| of directors. The types of security acceptable shall be
|
0014| determined by the written [lending] policies established by
|
0015| the board of directors [under] pursuant to Section 58-11-36
|
0016| NMSA 1978.
|
0017| G. A member may receive [a loan] an extension of
|
0018| credit in installments or in one sum and may pay the whole or
|
0019| any part [of his loan] on any day on which the office of the
|
0020| credit union is open for business.
|
0021| H. Upon written application by a member, the [credit
|
committee, credit manager or loan officer] board of directors
|
0023| or any person or committee to which it has delegated authority
|
0024| to extend credit may approve a self-replenishing line of
|
0025| credit, and [loan] advances may be granted to the member
|
0001| within the limit of such line of credit. Whenever a line of
|
0002| credit has been approved, no additional credit application is
|
0003| required as long as the aggregate indebtedness does not exceed
|
0004| the approved limit; provided, however, each line of credit
|
0005| shall be reviewed in accordance with the credit union's
|
0006| [loan] policy governing extensions of credit.
|
0007| I. A credit union may participate in [loans]
|
0008| extensions of credit to credit union members jointly with
|
0009| other credit unions or other financial organizations pursuant
|
0010| to written policies established by the board of directors. A
|
0011| credit union which originates such [a loan] an extension
|
0012| shall retain an interest of at least ten percent of the face
|
0013| amount of the [loan] extension of credit.
|
0014| J. A credit union may:
|
0015| (1) participate in any guaranteed loan program
|
0016| of the federal government or of this state under the terms and
|
0017| conditions specified by the law under which such a program is
|
0018| provided; and
|
0019| (2) purchase the conditional sales contracts,
|
0020| notes and similar instruments of its members.
|
0021| K. A credit union may make [loans] an extension of
|
0022| credit to any of its executive officers, board members and
|
0023| members of its supervisory and [credit] other committees,
|
0024| provided that:
|
0025| (1) the [loan] extension of credit complies
|
0001| with all lawful requirements under the Credit Union
|
0002| [Regulatory] Act with respect to loans to other members,
|
0003| [and] is not on terms more favorable than those extended to
|
0004| other borrowers and is in compliance with loan policies
|
0005| established by the board for other borrowers;
|
0006| (2) the following provisions have been met:
|
0007| (a) the [loan] extension of credit is
|
0008| approved by [the credit committee, credit manager or loan
|
officer and by the board of directors after the submission to
|
them of a detailed current financial statement or loan
|
application form signed by the applicant; and] the board of
|
0012| directors or any person or committee to which it has delegated
|
0013| authority to extend credit;
|
0014| (b) the applicant takes no part in the
|
0015| consideration of his application and does not attend any
|
0016| committee or board meeting while his application is under
|
0017| consideration; and
|
0018| (3) if the aggregate extension of credit to the
|
0019| applicant, including the extension applied for and excluding
|
0020| share or deposit secured loans, exceeds twenty thousand dollars
|
0021| ($20,000), the extension of credit must be approved by the
|
0022| board of directors after submission by the applicant of a
|
0023| completed application, including a detailed current financial
|
0024| statement of the applicant.
|
0025| L. A credit union may permit executive officers,
|
0001| board members and members of its committees to act as co-
|
0002| makers, guarantors or endorsers of loans to other members
|
0003| subject to the requirements of Subsection K of this section.
|
0004| [L.] M. A credit union may permit executive
|
0005| officers, board members and members of its [supervisory and
|
credit] committees to act as co-makers, guarantors or
|
0007| endorsers of [loans] extensions of credit to other members,
|
0008| subject to the requirements of Subsection K of this section."
|
0009| Section 34. Section 58-11-53 NMSA 1978 (being Laws 1987,
|
0010| Chapter 311, Section 53, as amended) is amended to read:
|
0011| "58-11-53. MONEY-TYPE INSTRUMENTS.--A credit union may
|
0012| collect, receive and disburse money in connection with the
|
0013| providing of negotiable checks, money orders, travelers checks
|
0014| and other money-type instruments for its members and the
|
0015| providing of services through service facilities, including
|
0016| automated terminal machines and for such other purposes as may
|
0017| provide benefit or convenience to its members. A credit union
|
0018| may charge reasonable fees for those services."
|
0019| Section 35. Section 58-11-56 NMSA 1978 (being Laws 1987,
|
0020| Chapter 311, Section 56, as amended) is amended to read:
|
0021| "58-11-56. INVESTMENTS.--Funds not required to satisfy
|
0022| member [loan] demands for extensions of credit may be
|
0023| invested in:
|
0024| A. securities, obligations or other instruments of or
|
0025| issued by or fully guaranteed as to principal and interest by
|
0001| the United States or any agency of the United States or in any
|
0002| trust investing solely, directly or indirectly in the same;
|
0003| B. securities, obligations or other instruments of
|
0004| this state or any political subdivision of this state;
|
0005| C. deposits or other accounts of state or federally
|
0006| chartered financial institutions the accounts of which are
|
0007| insured by an agency of the United States;
|
0008| D. loans or extensions of credit to or shares or
|
0009| deposits of other credit unions, central credit unions or
|
0010| corporate credit unions, the accounts of which are insured by
|
0011| the national credit union administration's share insurance
|
0012| fund;
|
0013| E. deposits in, loans to or shares of any federal
|
0014| reserve bank or of any central liquidity facility established
|
0015| under federal law;
|
0016| F. shares, stocks, loans or extensions of credit to
|
0017| or other obligations of any organization, corporation or
|
0018| association providing services which are associated with the
|
0019| general purposes of the credit union or which engages in
|
0020| activities incidental to the operations of a credit union.
|
0021| Those investments in the aggregate shall not exceed five
|
0022| percent of the credit union's capital;
|
0023| G. shares of a cooperative society organized under
|
0024| the laws of this state or of the laws of the United States in a
|
0025| total amount not exceeding ten percent of the capital of the
|
0001| credit union, subject to prior approval by the director;
|
0002| [and]
|
0003| H. fixed assets, not to exceed six percent of the
|
0004| credit union's capital and deposits, unless with the written
|
0005| approval of the director. For the purpose of this subsection,
|
0006| "fixed assets" means structures, land, computer hardware and
|
0007| software and heating and cooling equipment that are affixed to
|
0008| the premises; and
|
0009| I. investments or activities that the director
|
0010| determines are a part of or incidental to the operations of a
|
0011| credit union notwithstanding any provision to the contrary in
|
0012| the Credit Union Act."
|
0013| Section 36. Section 58-11-57 NMSA 1978 (being Laws 1987,
|
0014| Chapter 311, Section 57, as amended) is amended to read:
|
0015| "58-11-57. RESERVE REQUIREMENTS.--
|
0016| A. Immediately before the payment of dividends and at
|
0017| the end of each accounting period, the gross earnings of a
|
0018| credit union shall be determined. From this amount, there
|
0019| shall be set aside as a regular reserve in accordance with the
|
0020| following schedule:
|
0021| (1) a credit union in operation for more than
|
0022| four years and having assets of five hundred thousand dollars
|
0023| ($500,000) or more shall set aside ten percent of gross income
|
0024| until the regular reserve equals four percent of the total risk
|
0025| assets, then five percent of gross income until the regular
|
0001| reserve equals six percent of the total risk assets;
|
0002| (2) a credit union in operation less than four
|
0003| years or having assets of less than five hundred thousand
|
0004| dollars ($500,000) shall set aside ten percent of gross income
|
0005| until the regular reserve equals seven and one-half percent of
|
0006| the total risk assets, then five percent of gross income until
|
0007| the regular reserve equals ten percent of the total risk
|
0008| assets; and
|
0009| (3) whenever the regular reserve falls below the
|
0010| stated percent of total risk assets, it shall be replenished by
|
0011| regular contributions in [such] those amounts as [may]
|
0012| determined by the director to be needed to maintain the
|
0013| stated reserve requirements.
|
0014| B. When the regular reserve is not established as
|
0015| required and dividends are paid by a credit union, the director
|
0016| may suspend the operation of the credit union or take other
|
0017| appropriate lawful action until the reserve requirements are
|
0018| met.
|
0019| C. The director may decrease or waive entirely the
|
0020| reserve requirements for an individual credit union in one or
|
0021| more accounting periods when in his judgment such action is
|
0022| necessary or desirable.
|
0023| D. The regular reserve shall belong to the credit
|
0024| union and shall be used to meet losses on loans and other risk
|
0025| assets, including the principal, and to meet such other classes
|
0001| of losses as are approved by the director. The reserve shall
|
0002| not be distributed except on liquidation of the credit union or
|
0003| in accordance with a plan approved by the director.
|
0004| E. Any one-time or periodic membership fees
|
0005| established by the board of directors shall be credited, after
|
0006| payment of organization expenses, to a reserve for
|
0007| contingencies account, undivided earnings or regular reserve."
|
0008| Section 37. Section 58-11-58 NMSA 1978 (being Laws 1987,
|
0009| Chapter 311, Section 58) is amended to read:
|
0010| "58-11-58. DISSOLUTION.--
|
0011| A. A credit union may elect to dissolve voluntarily
|
0012| and liquidate its affairs in the manner prescribed in this
|
0013| section.
|
0014| B. If it decides to begin the procedure, the board of
|
0015| directors shall adopt a resolution recommending the credit
|
0016| union be dissolved voluntarily and directing that the question
|
0017| of liquidation be submitted to the members.
|
0018| C. Within ten days after the board of directors
|
0019| decides to submit the questions of liquidation to the members,
|
0020| the chairman of the board or [president] executive officer
|
0021| shall notify the director and the insuring organization in
|
0022| writing, setting forth the reasons for the proposed liquida-
|
0023|
|
0024| tion. Within ten days after such notice, a special meeting of
|
0025| the members shall be called to vote on whether [or not] to
|
0001| liquidate the credit union. Within ten days after the members
|
0002| act on the question of liquidation, the chairman of the board
|
0003| or [president] executive officer shall notify the director
|
0004| and the insuring organization in writing as to the action of
|
0005| the members on the proposal.
|
0006| D. When the board of directors decides to submit the
|
0007| question of liquidation to the members, payments on, withdrawal
|
0008| of and making any transfer of share and deposit accounts to
|
0009| loans and interest, making investments of any kind and granting
|
0010| loans may be restricted or suspended pending action by members
|
0011| on the proposal to liquidate. On approval by the members of
|
0012| the proposal, all business transactions shall be permanently
|
0013| discontinued. Necessary expenses of operations shall, however,
|
0014| continue to be paid on authorization of the board of directors
|
0015| or liquidating agent during the period of liquidation.
|
0016| E. For a credit union to enter voluntary liquidation,
|
0017| approval by a majority of the members in writing or by a two-
|
0018| thirds majority of the members present at a meeting of the
|
0019| members is required. When authorization for liquidation is to
|
0020| be obtained at a meeting of the members, notice in writing
|
0021| shall be given to each member, by first class mail, at least
|
0022| ten days prior to that meeting.
|
0023| F. A liquidating credit union shall continue in
|
0024| existence for the purpose of discharging its debts, collecting
|
0025| on loans and distributing its assets and doing all acts
|
0001| required in order to wind up its business and it may sue and be
|
0002| sued for the purpose of enforcing those debts and obligations
|
0003| until its affairs are fully concluded.
|
0004| G. The board of directors or the liquidating agent
|
0005| shall distribute the assets of the credit union or the proceeds
|
0006| of any disposition of the assets in the sequence described in
|
0007| Section [3 of the Credit Union Regulatory Act] 58-11-3 NMSA
|
0008| 1978.
|
0009| H. When the board of directors or the liquidating
|
0010| agent determines that all assets from which there is a
|
0011| reasonable expectancy of recovery have been liquidated and
|
0012| distributed as set forth in this section, they shall execute a
|
0013| certificate of dissolution on a form prescribed by the director
|
0014| and file the same, together with all pertinent books and
|
0015| records of the liquidating credit union, with the director,
|
0016| whereupon the credit union shall be dissolved."
|
0017| Section 38. Section 58-11-59 NMSA 1978 (being Laws 1987,
|
0018| Chapter 311, Section 59, as amended) is amended to read:
|
0019| "58-11-59. MERGER OF CREDIT UNIONS.--
|
0020| A. A credit union organized under or subject to the
|
0021| Credit Union [Regulatory] Act may, with the approval of the
|
0022| director and regardless of common bond, merge with one or more
|
0023| other credit unions subject to that act, the laws of another
|
0024| state or territory of the United States or the laws of the
|
0025| United States.
|
0001| B. When two or more credit unions merge, they shall
|
0002| either designate one [of them] credit union as the
|
0003| continuing credit union or they shall structure a totally new
|
0004| credit union and designate it as the new credit union. If the
|
0005| latter procedure is followed, the new credit union shall be
|
0006| organized under Section 58-11-10 NMSA 1978. All participating
|
0007| credit unions other than the continuing credit union shall be
|
0008| designated as merging credit unions.
|
0009| C. Any merger of credit unions shall be done
|
0010| according to a plan of merger. After approval by the boards of
|
0011| directors of all participating credit unions, the plan shall be
|
0012| submitted to the director for preliminary approval. If the
|
0013| plan includes the creation of a new credit union, all documents
|
0014| required by Section 58-11-10 NMSA 1978 shall be submitted as
|
0015| part of the plan. In addition, each participating credit union
|
0016| shall submit:
|
0017| (1) the time and place of the meeting of the
|
0018| board of directors at which the plan was agreed upon;
|
0019| (2) the vote of the board of directors in favor
|
0020| of the adoption of the plan; and
|
0021| (3) a copy of the resolution or other action by
|
0022| which the plan was agreed upon.
|
0023| The director shall grant preliminary approval if the plan
|
0024| has been properly approved by each board of directors and if
|
0025| the documentation required to form a new credit union, if any,
|
0001| complies with Section 58-11-10 NMSA 1978.
|
0002| D. After the director grants preliminary approval,
|
0003| each merging credit union shall, unless waived by the director,
|
0004| conduct a membership vote on its participation in the plan.
|
0005| The vote shall be conducted either at a special membership
|
0006| meeting called for that purpose or by mail ballot. If a
|
0007| majority of the members voting approve the plan, the credit
|
0008| union shall submit a record of that fact to the director,
|
0009| indicating the vote by which the members approved the plan and
|
0010| either the time and place of the membership meeting or the
|
0011| mailing date and closing date of the mail ballot.
|
0012| E. The director may waive the membership vote
|
0013| described in Subsection D of this section in the case of a
|
0014| given credit union if he determines that it is in the best
|
0015| interests of the membership or that the credit union is
|
0016| insolvent or in imminent danger of becoming insolvent.
|
0017| F. The director shall grant final approval of the
|
0018| plan of merger after determining that the requirements of
|
0019| Subsection D of this section in the case of each merging credit
|
0020| union have been met. If the plan of merger includes the
|
0021| creation of a new credit union, the director shall approve the
|
0022| organization of the new credit union under Section 58-11-10
|
0023| NMSA 1978 as part of the approval of the plan of merger. The
|
0024| director shall notify all participating credit unions of the
|
0025| approval of the plan.
|
0001| G. Upon final approval of the plan by the director,
|
0002| all property, property rights and members' interests in each
|
0003| merging credit union shall vest in the continuing or new credit
|
0004| union, as applicable, without deed, endorsement or other
|
0005| instrument of transfer, and all debts, obligations and
|
0006| liabilities of each merging credit union shall be deemed to
|
0007| have been assumed by the continuing or new credit union. The
|
0008| rights and privileges of the members of each participating
|
0009| credit union shall remain intact; however, if a person is a
|
0010| member of more than one of the participating credit unions,
|
0011| that person shall be entitled to only a single set of
|
0012| membership rights in the continuing or new credit union.
|
0013| H. If the continuing or new credit union is chartered
|
0014| by another state or territory of the United States, it shall be
|
0015| subject to the requirement of Section 58-11-16 NMSA 1978.
|
0016| I. Notwithstanding any other provision of law, the
|
0017| director may authorize a merger or consolidation of a credit
|
0018| union [which] that is insolvent or is in danger of
|
0019| insolvency with any other credit union or may authorize a
|
0020| credit union to purchase any of the assets of or assume any of
|
0021| the liabilities of any other credit union [which] that is
|
0022| insolvent or in danger of insolvency if the director is
|
0023| satisfied that:
|
0024| (1) an emergency requiring expeditious action
|
0025| exists with respect to that other credit union;
|
0001| (2) other alternatives are not reasonably
|
0002| available; and
|
0003| (3) the public interest would best be served by
|
0004| approval by that merger, consolidation, purchase or assumption.
|
0005| J. Notwithstanding any other provision of law, the
|
0006| director may authorize an institution whose deposits or
|
0007| accounts are insured by an agency of the federal government to
|
0008| purchase any of the assets of or assume any of the liabilities
|
0009| of a credit union which is insolvent or in danger of
|
0010| insolvency, except that prior to exercising this authority, the
|
0011| director shall attempt to effect a merger or consolidation
|
0012| with, or purchase and assumption by, another credit union as
|
0013| provided in Subsection I of this section.
|
0014| For purposes of the authority contained in this
|
0015| subsection, insured share and deposit accounts of the credit
|
0016| union may, upon consummation of the purchase and assumption, be
|
0017| converted to insured deposits or other comparable accounts in
|
0018| the acquiring institution."
|
0019| Section 39. Section 58-11-61 NMSA 1978 (being Laws 1987,
|
0020| Chapter 311, Section 61) is amended to read:
|
0021| "58-11-61. TAXATION.--
|
0022| A. A credit union organized under or subject to the
|
0023| Credit Union [Regulatory] Act is exempt from taxation to the
|
0024| extent that a credit union chartered under federal law is
|
0025| exempt.
|
0001| B. The shares of a credit union shall not be subject
|
0002| to stock transfer taxes, either when issued or when transferred
|
0003| from one member to another.
|
0004| C. The participation by a credit union in any
|
0005| government program providing unemployment, social security, old
|
0006| age pension or other benefits shall not be deemed a waiver of
|
0007| the tax exemptions [hereby] granted by this section."
|
0008| Section 40. Section 58-11-64 NMSA 1978 (being Laws 1987,
|
0009| Chapter 311, Section 64) is amended to read:
|
0010| "58-11-64. PAYMENT FROM ACCOUNT OF DECEASED
|
0011| MEMBER. Notwithstanding any other law or regulation upon re-
|
0012|
|
0013| ceiving a certified copy of a death certificate and an
|
0014| affidavit from the person applying for money stating that a
|
0015| member is dead and the affiant is a surviving spouse or next of
|
0016| kin and that the entire amount that the applicant wishes to
|
0017| withdraw does not exceed the sum of two thousand dollars
|
0018| ($2,000), the credit union may pay to the affiant the amount so
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0019| held by the credit union, not in excess of two thousand dollars
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0020| ($2,000), and the affiant's receipt shall release the credit
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0021| union from all liability thereof."
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0022| Section 41. REPEAL.--Sections 58-11-34 and 58-11-37 NMSA
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0023| 1978 (being Laws 1987, Chapter 311, Sections 34 and 37, as
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0024| amended) are repealed.
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0025| Section 42. REPEAL.--Laws 1987, Chapter 311, Section 68
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0001| is repealed.
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0002| Section 43. EFFECTIVE DATE.--The effective date of the
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0003| provisions of this act is July 1, 1997.
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0004| - 55 -
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0005|
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0006| FORTY-THIRD LEGISLATURE
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0007| FIRST SESSION, 1997
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0008|
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0009|
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0010| February 13, 1997
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0011|
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0012| Mr. President:
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0013|
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0014| Your CORPORATIONS & TRANSPORTATION COMMITTEE, to
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0015| whom has been referred
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0016|
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0017| SENATE BILL 594
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0018|
|
0019| has had it under consideration and reports same with
|
0020| recommendation that it DO PASS, and thence referred to the
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0021| FINANCE COMMITTEE.
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0022|
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0023| Respectfully submitted,
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0024|
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0025|
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0001|
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0002| __________________________________
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0003| Roman M. Maes, III, Chairman
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0004|
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0005|
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0006|
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0007| Adopted_______________________ Not Adopted_______________________
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0008| (Chief Clerk) (Chief Clerk)
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0009|
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0010|
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0011| Date ________________________
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0012|
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0013|
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0014| The roll call vote was 8 For 0 Against
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0015| Yes: 8
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0016| No: None
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0017| Excused: McKibben, Maes
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0018| Absent: None
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0019|
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0020|
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0021| S0594CT1
|
0022|
|
0023| FORTY-THIRD LEGISLATURE
|
0024| FIRST SESSION
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0025|
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0001|
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0002| February 21, 1997
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0003|
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0004|
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0005| SENATE FLOOR AMENDMENT number _______ to SENATE BILL 594
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0006|
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0007| Amendment sponsored by Senator Shannon Robinson
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0008|
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0009|
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0010| 1. On page 21, line 7, strike "OFFICE" and insert in lieu
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0011| thereof "SERVICE".
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0012|
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0013| 2. On page 44, liens 2 through 5, strike Subsection L in its
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0014| entirety.
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0015|
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0016| 3. Reletter the succeeding subsection accordingly.
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0017|
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0018|
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0019|
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0020|
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0021|
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0022| __________________________
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0023| Shannon Robinson
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0024|
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0025|
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0001|
|
0002| Adopted ___________________ Not Adopted _______________________
|
0003| (Chief Clerk) (Chief Clerk)
|
0004|
|
0005|
|
0006| Date _________________
|
0007| State of New Mexico
|
0008| House of Representatives
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0009|
|
0010| FORTY-THIRD LEGISLATURE
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0011| FIRST SESSION, 1997
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0012|
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0013|
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0014| March 11, 1997
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0015|
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0016|
|
0017| Mr. Speaker:
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0018|
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0019| Your BUSINESS AND INDUSTRY COMMITTEE, to whom has
|
0020| been referred
|
0021|
|
0022| SENATE BILL 594, as amended
|
0023|
|
0024| has had it under consideration and reports same with
|
0025| recommendation that it DO PASS, and thence referred to the
|
0001| CONSUMER AND PUBLIC AFFAIRS COMMITTEE.
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0002|
|
0003| Respectfully submitted,
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0004|
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0005|
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0006|
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0007|
|
0008| Fred Luna, Chairman
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0009|
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0010|
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0011| Adopted Not Adopted
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0012|
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0013| (Chief Clerk)
|
0014| (Chief Clerk)
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0015|
|
0016| Date
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0017|
|
0018| The roll call vote was 10 For 0 Against
|
0019| Yes: 10
|
0020| Excused: Alwin, Getty, Olguin
|
0021| Absent: None
|
0022|
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0023|
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0024|
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0025| G:\BILLTEXT\BILLW_97\S0594
|