New Mexico § 58-1-24 - Diversification of loans and investments

§ 58-1-24. Diversification of loans and investments

A. A state bank shall not extend credit directly by means of discount notes, issuance

of letters of credit, acceptance of drafts or otherwise, or purchase any bond, note,

bill of exchange or any evidence of indebtedness, when by reason of such extension

of credit or purchase, the totals of the obligations so acquired that are held by

the state bank will exceed: (1) sixty percent of total deposits or seventy-five percent of savings, whichever

is greater, for obligations secured by real estate, together with the current market

value of any real estate owned by the bank and not used in its banking business;

or (2) thirty-five percent of capital and surplus for obligations of the same obligor. B. The limitations of Paragraph (2) of Subsection A of this section shall not apply

to loans and investments otherwise authorized by the Banking Act if the obligations

are: (1) obligations of the United States, general obligations of a state or a political

subdivision thereof or of a federal reserve bank; (2) secured as to principal and interest by the guarantee, insurance or other like

commitment of the United States, an agency of the United States or a federal reserve

bank, whether the commitment provides for payment in cash or in obligations of the

United States; (3) secured by obligations of the United States, a state or a political subdivision

thereof having a value of one hundred percent of the amount thereof; (4) upon notes or drafts having a maturity of not more than twelve months exclusive

of days of grace, drawn in good faith against actually existing values and secured

by an instrument transferring or securing title to goods in process of shipment or

to livestock, or creating a lien on livestock to the amount of the value of the security,

but the limitation on such obligations shall be thirty percent of capital and surplus; (5) upon notes or drafts secured by trust receipts, shipping documents or receipts

of a licensed or bonded warehouse or elevator transferring or securing title to readily

marketable, nonperishable staples to the amount of eighty percent of the value of

the security, and this exemption shall not apply: (a) unless the staples are insured, if it is customary to insure them; or (b) for more than ten months to obligations of the same obligor arising from the same

transaction or secured by the same staples; (6) secured by the assignment of accounts receivable to the extent of eighty percent

of the amount of such accounts not overdue, but the limitation of these obligations

shall be thirty percent of capital and surplus; (7) those arising out of the daily transaction of the business of any clearinghouse

association; or (8) obligations that are fully secured by a pledge of a time certificate of deposit

issued by the same state-chartered bank in an amount equal to or exceeding the amount

of the obligation. C. In calculating, for the purposes of this section, the obligations of a single obligor

or the obligations of a specified class, there shall be included: (1) the direct liability of the maker; the amount of a loan made to a corporation

to the extent that the proceeds of the loan directly or indirectly are to be loaned

to the individual; (2) in the case of obligations of a partnership or association, the obligations of

each general partner or of each member of the association; the amount of a loan made

to a corporation to the extent that the proceeds of the loan directly or indirectly

are to be loaned to the partnership or association; (3) in the case of obligations of a general partner or a member of an association,

the obligations of the partnership or association; (4) in the case of obligations of a corporation, the obligations of any subsidiaries

in which it owns, directly or indirectly, a majority of the outstanding voting stock; (5) in the case of obligations of a corporation, the amount of a loan made to any

other person to the extent that the proceeds of the loan directly or indirectly are

to be: (a) loaned to the corporation; (b) used for the acquisition from the corporation of any securities issued by the

corporation, other than securities acquired by an underwriter for public offering;

or (c) transferred to the corporation without fair and adequate consideration; and (6) the discharge of an equivalent amount of debt previously incurred in good faith

or value shall be deemed fair and adequate consideration.