New Mexico § 58-1-82 - Reimbursement for fines and penalties

§ 58-1-82. Reimbursement for fines and penalties

A. It is unlawful for a state bank to pay a fine or penalty imposed by law upon any

other person or any judgment against such person or to reimburse directly or indirectly

any person by whom such fine, penalty or judgment has been paid, except: (1) in the settlement of a bank's own liability or in connection with the acquisition

of property against which a judgment is a lien; (2) if provided in its articles of incorporation, a bank may indemnify its directors,

officers and employees for expenses, fines, penalties and judgments reasonably incurred

in actions to which the directors, officers or employees are parties or potential

parties by reason of the performance of their official duties. The provisions of this paragraph shall not allow the indemnification of directors,

officers or employees of a bank against expenses, penalties or other payments incurred

in an administrative proceeding or action instituted by an appropriate bank regulatory

agency, which proceeding or action results in a final order assessing civil money

penalties or requiring affirmative action by an individual in the form of payments

to the bank; and (3) if provided in its articles of incorporation, a bank may acquire and pay the premiums

for insurance covering the liability of its directors, officers or employees, except

that the provisions of this paragraph shall exclude insurance coverage for a formal

order assessing civil money penalties against a bank director, officer or employee. B. In accordance with his supervisory responsibilities, the director may, in his discretion,

review the threat to bank safety and soundness posed by any indemnification or proposed

indemnification of directors, officers or employees by a bank or for the consistency

of any such indemnification with the standards adopted by that bank in its articles

of incorporation. Based upon this review, the director may direct a prospective modification of a

specific indemnification by a bank through appropriate administrative action.