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SPONSOR: |
Varela |
DATE TYPED: |
02/20/03 |
HB |
878 |
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SHORT TITLE: |
Out-of-State Credit Unions |
SB |
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ANALYST: |
Gilbert |
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APPROPRIATION
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
FY03 |
FY04 |
|
|
|
|
|
NFI |
|
|
(Parenthesis
( ) Indicate Expenditure Decreases)
LFC Files
Regulation and Licensing Department (RLD)
SUMMARY
Synopsis
of Bill
House Bill 878 makes technical clarifications to
provisions of NMSA 1978, § 58-11-2 through NMSA 1978, § 58-11-57. It also
strengthens the Regulation and Licensing Department (RLD) regulatory oversight
of out-of-state credit unions, modifies credit union loan policies requirements
for credit union board members, sets lending limits for executive officers,
board and committee members, allows credit unions to invest in mutual funds
composed of federally guaranteed or government sponsored mortgages and stock
index mutual funds, and outlines procedures for converting from a bank to a
credit union and visa versa.
It also modifies the definition of “immediate
family to include stepchildren and other persons who live in the same residence,
as a single economic unit.
Significant
Issues
Lending requirements and lending limits for executive officers, board and committee members are outlined below:
The credit union board shall require, at a minimum, a completed loan application [including] and a detailed current financial statement of the applicant; provided that submission to the board of directors of an application of an executive officer shall only be required for an applicant serving the credit union as chief executive officer, chief operating officer, chief financial officer or chief lending supervisor. The set limits for the total asset size of the credit union are as follows:
Credit Union Total Assets less than $5.0 million $20,000 credit limit
Credit Union Total Assets $5.0 million to $10.0 million $30,000 credit limit
Credit Union Total Assets over $10.0 million to $50.0 million $40,000 credit limit
Credit Union Total Assets over $50.0 million or greater $50,000 credit limit
The RLD Financial Institutions Division director may revoke an out-of- state credit union’s right to do business in New Mexico if:
q the credit union no longer meets the requirements that it be organized pursuant to laws similar to the Credit Union Act;
q the credit union has violated a law of this state or a rule issued by the director;
q the credit union has engaged in a pattern of unsafe or unsound credit union practices;
q permitting the credit union to continue to conduct business in New Mexico is likely to have a substantial adverse impact on financial, economic or other interests of the residents of the state; or
q the credit union is prohibited from conducting business in the state or territory in which it is organized.
ADMINISTRATIVE IMPLICATIONS
HB 878 assigns the RLD Financial Institutions Division director additional credit union oversight responsibilities.
RLG/sb