0001| AN ACT | 0002| RELATING TO INTERSTATE BANKING; PROVIDING FOR THE INTERSTATE ACQUISITION | 0003| OF NEW MEXICO BANKS AND NEW MEXICO BANK HOLDING COMPANIES AND FOR | 0004| INTERSTATE BANK BRANCHING BY MERGER; AMENDING AND ENACTING SECTIONS OF | 0005| THE NMSA 1978. | 0006| | 0007| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0008| Section 1. SHORT TITLE.--Sections 1 through 12 of this act may be | 0009| cited as the "Interstate Bank Acquisition Act". | 0010| Section 2. DEFINITIONS.--As used in the Interstate Bank | 0011| Acquisition Act: | 0012| A. "acquire" means: | 0013| (1) for a company to merge or consolidate with a bank | 0014| holding company; | 0015| (2) for a company to assume direct or indirect | 0016| ownership or control of: | 0017| (a) more than twenty-five percent of any class of | 0018| voting shares of a bank holding company or a bank, if the acquiring | 0019| company was not a bank holding company prior to the acquisition; | 0020| (b) more than five percent of any class of voting | 0021| shares of a bank holding company or a bank, if the acquiring company was | 0022| a bank holding company prior to the acquisition; or | 0023| © all or substantially all of the assets of a | 0024| bank holding company or a bank; or | 0025| (3) for a company to take any other action that | 0001| results in the direct or indirect acquisition by the company of control | 0002| of a bank holding company or a bank; | 0003| B. "affiliate" means that term as defined in 12 U.S.C.A. | 0004| Section 371c(b); | 0005| C. "bank" means that term as defined in 12 U.S.C.A. Section | 0006| 1841(c); | 0007| D. "bank holding company" means that term as defined in 12 | 0008| U.S.C.A. Section 1841(a) and includes a New Mexico bank holding company, | 0009| an out-of-state bank holding company and a foreign bank holding company; | 0010| E. "Bank Holding Company Act" means the federal Bank Holding | 0011| Company Act of 1956, 12 U.S.C.A. Section 1841 et seq.; | 0012| F. "bank supervisory agency" means: | 0013| (1) an agency of another state with primary | 0014| responsibility for chartering and supervising banks; and | 0015| (2) the office of the comptroller of the currency, the | 0016| federal deposit insurance corporation, the board of governors of the | 0017| federal reserve system and any successor to these agencies; | 0018| G. "branch" means that term as defined in Subsection C of | 0019| Section 58-5-2 NMSA 1978; | 0020| H. "company" means that term as defined in 12 U.S.C.A. | 0021| Section 1841(b); | 0022| I. "control" means that term as defined in 12 U.S.C.A. | 0023| Section 1841(a)(2); | 0024| J. "deposit" means that term as defined in 12 U.S.C.A. | 0025| Section 1813(l); | 0001| K. "depository institution" means an institution defined as | 0002| an "insured depository institution" in 12 U.S.C.A. Sections 1813(c)(2) | 0003| and (c)(3); | 0004| L. "director" means the director of the financial | 0005| institutions division of the regulation and licensing department; | 0006| M. "foreign bank holding company" means a bank holding | 0007| company that is organized under the laws of a country other than the | 0008| United States or a territory or possession of the United States; | 0009| N. "home state regulator" means, with respect to an | 0010| out-of-state bank holding company, the primary bank supervisory agency | 0011| of the state in which the company maintains its principal place of | 0012| business; | 0013| O. "New Mexico bank" means a bank that is: | 0014| (1) organized under the laws of this state; or | 0015| (2) organized under federal law and having its | 0016| principal place of business in this state; | 0017| P. "New Mexico bank holding company" means a bank holding | 0018| company that: | 0019| (1) had its principal place of business in this state | 0020| on July 1, 1966 or the date on which it became a bank holding company, | 0021| whichever is later; and | 0022| (2) is not controlled by an out-of-state bank holding | 0023| company; | 0024| Q. "New Mexico state bank" means a bank chartered by the | 0025| state of New Mexico; | 0001| R. "out-of-state bank holding company" means a bank holding | 0002| company that is not a New Mexico bank holding company; | 0003| S. "principal place of business" of a bank holding company | 0004| means the state in which the largest percentage of the total deposits of | 0005| its bank subsidiaries was deposited on the later of July 1, 1966 or the | 0006| date on which the company became a bank holding company; | 0007| T. "state" means the District of Columbia or a state, | 0008| territory or possession of the United States; and | 0009| U. "subsidiary" means that term as defined in 12 U.S.C.A. | 0010| Section 1841(d). | 0011| Section 3. PURPOSE AND INTENT OF ACT.--The purpose of the | 0012| Interstate Bank Acquisition Act is to establish the conditions under | 0013| which a company may acquire a New Mexico bank or a New Mexico bank | 0014| holding company. In enacting it the legislature intends to avoid | 0015| discrimination against out-of-state bank holding companies or foreign | 0016| bank holding companies in any manner that would violate Section 3(d) of | 0017| the Bank Holding Company Act. | 0018| Section 4. PERMITTED ACQUISITIONS.-- | 0019| A. Except as provided in Subsection B of this section, a | 0020| company may not acquire a New Mexico state bank or a New Mexico bank | 0021| holding company without the prior approval of the director unless | 0022| federal law expressly permits the acquisition without that approval. | 0023| B. The prohibition of Subsection A of this section does not | 0024| apply if the acquisition is made: | 0025| (1) solely for the purpose of facilitating an | 0001| acquisition otherwise permitted pursuant to the Interstate Bank | 0002| Acquisition Act; | 0003| (2) in a transaction arranged by the director or | 0004| another bank supervisory agency to prevent the insolvency or closing of | 0005| the acquired bank; or | 0006| (3) in a transaction in which a bank forms its own | 0007| bank holding company, if the ownership rights of the former bank | 0008| shareholders are substantially similar to those of the shareholders of | 0009| the new bank holding company. | 0010| C. In a transaction for which the director's approval is not | 0011| required under this section, the acquiring company shall give written | 0012| notice to the director at least ninety days before the effective date of | 0013| the acquisition unless a shorter period of notice is required under | 0014| applicable federal law. | 0015| Section 5. REQUIRED APPLICATION--FORMS.-- | 0016| A. A company that proposes to make an acquisition pursuant | 0017| to the Interstate Bank Acquisition Act shall: | 0018| (1) file with the director a copy of the application | 0019| that the company has filed with the responsible federal bank supervisory | 0020| agency and any additional information prescribed by the director; and | 0021| (2) pay to the director any application fee prescribed | 0022| by the director. | 0023| B. As long as they are consistent with the effective | 0024| discharge of the director's responsibilities, the application and | 0025| reporting forms established pursuant to the Interstate Bank Acquisition | 0001| Act shall conform to those established for the same purposes by the | 0002| board of governors of the federal reserve system pursuant to the Bank | 0003| Holding Company Act. | 0004| Section 6. STANDARDS FOR APPROVAL.-- | 0005| A. In deciding whether to approve an application for a | 0006| proposed acquisition pursuant to the Interstate Bank Acquisition Act, | 0007| the director shall consider whether the acquisition may: | 0008| (1) be detrimental to the safety and soundness of the | 0009| New Mexico state bank or the New Mexico bank holding company to be | 0010| acquired; | 0011| (2) result in a substantial reduction of competition | 0012| in this state; or | 0013| (3) have a significantly adverse effect on the | 0014| convenience and needs of a community in this state served by the New | 0015| Mexico state bank or the New Mexico bank holding company to be acquired. | 0016| B. Except as otherwise expressly provided in this section, | 0017| the director shall not approve an acquisition pursuant to the Interstate | 0018| Bank Acquisition Act if upon effecting the transaction it would result | 0019| in the applicant, including a depository institution affiliated with the | 0020| applicant, holding an undue concentration of deposits totaling forty | 0021| percent or more of the total deposits in all depository institutions in | 0022| New Mexico. | 0023| C. The director may adopt a regulation establishing a | 0024| procedure authorizing the waiver of the limitation on deposit | 0025| concentration set forth in Subsection B of this section to prevent the | 0001| insolvency or closing of a New Mexico state bank. | 0002| D. The director shall not approve an application for an | 0003| acquisition pursuant to the Interstate Bank Acquisition Act unless | 0004| either the New Mexico bank to be acquired, or at least one New Mexico | 0005| bank subsidiary of the bank holding company to be acquired, has as of | 0006| the proposed date of acquisition been in existence and in continuous | 0007| operation under an active charter for a period of at least five years, | 0008| except that the director may approve an application for an acquisition | 0009| of a consumer credit bank chartered pursuant to the Consumer Credit Bank | 0010| Act even though the consumer credit bank has not been in continuous | 0011| operation under an active charter for a period of at least five years. | 0012| Section 7. PROCEDURES RELATING TO APPLICATIONS.-- | 0013| A. The director shall approve or disapprove an application | 0014| for acquisition pursuant to the Interstate Bank Acquisition Act within | 0015| ninety days after receipt of a completed application unless the director | 0016| requests additional information from the applicant following receipt of | 0017| a completed application in which case the time limit for decision by the | 0018| director is the later of: | 0019| (1) the date set forth in this subsection; or | 0020| (2) thirty days after the director's receipt of the | 0021| requested additional information. | 0022| B. The director may hold a public hearing in connection with | 0023| an application if a significant issue of law or fact has been raised | 0024| with respect to the proposed acquisition. | 0025| C. If the director holds a public hearing in connection with | 0001| an application, the time limit specified in Subsection A of this section | 0002| shall be extended to thirty days after the conclusion of the public | 0003| hearing. | 0004| D. An application is deemed approved if the director takes | 0005| no action on the application within the time limits specified in this | 0006| section. | 0007| Section 8. REPORTS--EXAMINATIONS.-- | 0008| A. To the extent specified by the director by regulation, | 0009| order or written request, each bank holding company that directly or | 0010| indirectly controls a New Mexico state bank or a New Mexico bank holding | 0011| company, or the home state regulator of the company, shall submit to the | 0012| director copies of each financial report filed by the company with any | 0013| bank supervisory agency within fifteen days after the report is filed | 0014| with the agency unless the report is one the disclosure of which is | 0015| prohibited by federal or state law. | 0016| B. To the extent disclosure is permitted by state or federal | 0017| law, a bank holding company that controls a New Mexico state bank or a | 0018| New Mexico bank holding company, or the home state regulator of the | 0019| controlling bank holding company, shall provide the director copies of | 0020| any reports of examination of that bank holding company or of the New | 0021| Mexico bank holding company. | 0022| C. The director may examine a New Mexico bank holding | 0023| company whenever the director has reason to believe that the company is | 0024| not being operated in compliance with the laws of this state or in | 0025| accordance with safe and sound banking practices. The provisions of | 0001| Section 58-1-46 NMSA 1978 shall apply to the examination. | 0002| Section 9. AGENCY ACTIVITIES.-- | 0003| A. If it complies with the requirements of this section, a | 0004| New Mexico state bank may agree to act as an agent for any affiliated | 0005| bank depository institution to receive deposits, renew time deposits, | 0006| close loans, service loans, receive payments on loans and other | 0007| obligations and perform other services for which it has received the | 0008| prior approval of the director. | 0009| B. A New Mexico state bank that proposes to enter into an | 0010| agency agreement pursuant to this section shall file with the director, | 0011| at least thirty days before the effective date of the agreement: | 0012| (1) a notice of intention to enter into an agency | 0013| agreement with an affiliated depository institution; | 0014| (2) a description of the services proposed to be | 0015| performed under the agency agreement; and | 0016| (3) a copy of the agency agreement. | 0017| C. If any proposed service is not specifically designated in | 0018| Subsection A of this section and has not been approved previously in a | 0019| regulation issued by the director, the director shall decide, within | 0020| thirty days after receipt of the notice required by Subsection B of this | 0021| section, whether to approve the offering of the service. If the | 0022| director requests additional information after reviewing the notice, the | 0023| time limit for the director's decision is thirty days after receiving | 0024| the additional information. In deciding whether to approve a proposed | 0025| service, the director shall consider whether the service would be | 0001| consistent with state and federal law and the safety and soundness of | 0002| the principal and agent institutions. The New Mexico state bank shall | 0003| give appropriate notice to the public of each approval. | 0004| D. Any proposed service offered pursuant to Subsection C of | 0005| this section is deemed approved if the director takes no action after | 0006| receiving the notice required by Subsection B of this section within the | 0007| time limits specified in Subsection C of this section. | 0008| E. A New Mexico state bank may not pursuant to an agency | 0009| agreement: | 0010| (1) conduct any activity as an agent that it would be | 0011| prohibited from conducting as a principal under applicable state or | 0012| federal law; or | 0013| (2) have an agent conduct any activity that the bank | 0014| as principal would be prohibited from conducting under applicable state | 0015| or federal law. | 0016| F. The director may order a New Mexico state bank or any | 0017| other depository institution that is subject to the director's | 0018| enforcement powers to cease acting as an agent or principal under an | 0019| agency agreement with an affiliated depository institution if the | 0020| director finds the provisions of the agency agreement or the actions of | 0021| the parties pursuant to it to be inconsistent with safe and sound | 0022| banking practices. | 0023| G. A New Mexico state bank acting as an agent for an | 0024| affiliated depository institution in accordance with this section is not | 0025| a branch bank of that institution. | 0001| Section 10. AUTHORITY TO ISSUE REGULATIONS--COOPERATIVE | 0002| AGREEMENTS--FEES.--To carry out the purposes of the Interstate Bank | 0003| Acquisition Act, the director may: | 0004| A. adopt regulations; | 0005| B. enter into cooperative, coordinating or | 0006| information-sharing agreements with a bank supervisory agency or an | 0007| organization affiliated with or representing a bank supervisory agency; | 0008| C. accept a report of examination or investigation by a bank | 0009| supervisory agency having concurrent jurisdiction over a New Mexico | 0010| state bank or a bank holding company that controls a New Mexico state | 0011| bank in lieu of conducting an examination or investigation of the bank | 0012| or bank holding company; | 0013| D. enter into a sole source contract pursuant to Section | 0014| 13-1-126 NMSA 1978 with a bank supervisory agency having concurrent | 0015| jurisdiction over a New Mexico state bank or a bank holding company that | 0016| controls a New Mexico state bank to engage the services of that agency's | 0017| examiners at a reasonable rate of compensation, or to provide the | 0018| services of the director's examiners to that agency at a reasonable rate | 0019| of compensation; | 0020| E. conduct joint examinations or joint enforcement actions | 0021| with a bank supervisory agency having concurrent jurisdiction over a New | 0022| Mexico state bank or a bank holding company that controls a New Mexico | 0023| state bank, but if the examination or enforcement action involves an | 0024| out-of-state bank holding company, the director shall recognize the | 0025| exclusive authority of the home state regulator over corporate | 0001| governance matters and the primary responsibility of the home state | 0002| regulator with respect to safety and soundness matters; | 0003| F. conduct examinations and enforcement actions of a New | 0004| Mexico state bank or a New Mexico bank holding company that controls a | 0005| New Mexico state bank if the director determines that the action is | 0006| necessary to carry out the director's responsibilities pursuant to the | 0007| Interstate Bank Acquisition Act or to enforce compliance with the laws | 0008| of this state; and | 0009| G. include in regulations adopted provisions for: | 0010| (1) the assessment of supervisory and examination fees | 0011| to be paid by New Mexico banks and New Mexico bank holding companies in | 0012| connection with the director's performance of his duties; and | 0013| (2) sharing of fees assessed pursuant to Paragraph (1) | 0014| of this subsection with a bank supervisory agency or an organization | 0015| affiliated with or representing a bank supervisory agency in accordance | 0016| with an agreement between it and the director. | 0017| Section 11. ENFORCEMENT.--The director may enforce the provisions | 0018| of the Interstate Bank Acquisition Act by an action for injunctive | 0019| relief in the district court of Santa Fe county. The director shall | 0020| give notice promptly to the home state regulator of any action commenced | 0021| by the director against an out-of-state bank holding company and, to the | 0022| extent practicable, shall consult and cooperate with that regulator in | 0023| pursuing and resolving the enforcement action. | 0024| Section 12. SEVERABILITY.--If any part or application of the | 0025| Interstate Bank Acquisition Act is held invalid or to be superseded, the | 0001| remainder or its application to other situations or persons shall not be | 0002| affected. | 0003| Section 13. Section 58-26-4 NMSA 1978 (being Laws 1988, Chapter | 0004| 5, Section 4, as amended) is amended to read: | 0005| "58-26-4. INTERSTATE ACQUISITIONS PERMITTED.--Notwithstanding the | 0006| provisions of Section 58-5-11 NMSA 1978 restricting interstate acquisi- | 0007| tion: | 0008| A. interstate acquisitions of domestic depository institu- | 0009| tions that are savings institutions or domestic holding companies whose | 0010| subsidiary depository institutions are savings institutions are per- | 0011| mitted by out-of-state depository institutions and out-of-state holding | 0012| companies effective January l, l989; provided, however, until July 1, | 0013| 1992, if a domestic depository institution is to be so acquired, the | 0014| acquired institution shall have been continuously operated for at least | 0015| five years, or if a domestic holding company is to be so acquired, at | 0016| least one of its subsidiary depository institutions shall have been con- | 0017| tinuously operated for at least five years; and | 0018| B. an interstate acquisition pursuant to this section may | 0019| not otherwise be contrary to law and shall not result in undue | 0020| concentration of deposits totaling forty percent or more of the total | 0021| deposits in all financial institutions in New Mexico." | 0022| Section 14. SHORT TITLE.--Sections 14 through 27 of this act may | 0023| be cited as the "Interstate Bank Branching Act". | 0024| Section 15. PURPOSE.--The purpose of the Interstate Bank | 0025| Branching Act is to permit interstate bank branching by merger pursuant | 0001| to the provisions of the federal Regle-Neal Interstate Banking and | 0002| Branching Efficiency Act of 1994, PL. 103-328. Section 16. DEFINITIONS.--As used in the Interstate Bank | 0003| Branching Act: | 0004| A. "bank" means that term as defined in 12 U.S.C.A. | 0005| Section 1813(h), but "bank" does not include any "foreign bank" as | 0006| defined in 12 U.S.C.A. Section 3101(7), unless the foreign bank is | 0007| organized under the laws of a territory of the United States, Puerto | 0008| Rico, Guam, American Samoa or the Virgin Islands and its deposits are | 0009| insured by the federal deposit insurance corporation; | 0010| B. "bank holding company" means that term as defined in 12 | 0011| U.S.C.A. Section 1841(a)(1); | 0012| C. "bank supervisory agency" means: | 0013| (1) an agency of another state with primary | 0014| responsibility for chartering and supervising banks; and | 0015| (2) the office of the comptroller of the currency, the | 0016| federal deposit insurance corporation, the board of governors of the | 0017| federal reserve system, and any successor to these agencies; | 0018| D. "branch" means that term as defined in Subsection C of | 0019| Section 58-5-2 NMSA 1978; | 0020| E. "control" means that term as defined in 12 U.S.C.A. | 0021| Section 1841(a)(2); | 0022| F. "director" means the director of the financial | 0023| institutions division of the regulation and licensing department; | 0024| G. "home state" means: | 0025| (1) with respect to a state bank, the state in which | 0001| the bank is chartered; | 0002| (2) with respect to a national bank, the state in | 0003| which the main office of the bank is located; and | 0004| (3) with respect to a foreign bank, the state | 0005| determined to be the home state of the foreign bank pursuant to | 0006| 12 U.S.C.A. Section 3103(c); | 0007| H. "home state regulator" means the bank supervisory agency | 0008| of the state in which an out-of-state state bank is chartered; | 0009| I. "host state" means a state, other than the home state of | 0010| a bank, in which the bank maintains, or seeks to establish and maintain, | 0011| a branch; | 0012| J. "insured depository institution" means that term as | 0013| defined in 12 U.S.C.A. Section 1813(c)(2); | 0014| K. "interstate merger transaction" means: | 0015| (1) the merger or consolidation of banks with | 0016| different home states and the conversion of branches of any bank | 0017| involved in the merger or consolidation into branches of the resulting | 0018| bank; or | 0019| (2) the purchase of all or substantially all of the | 0020| assets and branches of a bank whose home state is different from the | 0021| home state of the acquiring bank; | 0022| L. "main office" means the office declared by a bank to its | 0023| chartering bank supervisory agency to be its main office; | 0024| M. "New Mexico bank" means a bank whose home state is New | 0025| Mexico; | 0001| N. "New Mexico state bank" means a bank chartered under the | 0002| laws of New Mexico; | 0003| O. "out-of-state bank" means a bank whose home state is a | 0004| state other than New Mexico; | 0005| P. "out-of-state state bank" means a bank chartered under | 0006| the laws of any state other than New Mexico; | 0007| Q. "resulting bank" means a bank that has resulted from an | 0008| interstate merger transaction under the Interstate Bank Branching Act; | 0009| and | 0010| R. "state" means a state of the United States, the District | 0011| of Columbia, a territory of the United States, Puerto Rico, Guam, | 0012| American Samoa, the Trust Territory of the Pacific Islands, the | 0013| Virgin Islands or the Northern Mariana Islands. | 0014| Section 17. AUTHORITY OF STATE BANKS TO ESTABLISH INTERSTATE | 0015| BRANCHES BY MERGER.-- | 0016| A. If it obtains the prior approval of the director, a New | 0017| Mexico state bank may establish, maintain and operate one or more | 0018| branches in a state other than New Mexico pursuant to an interstate | 0019| merger transaction in which the New Mexico state bank is the resulting | 0020| bank. | 0021| B. Not later than the date on which the required application | 0022| for the interstate merger transaction is filed with the responsible | 0023| federal bank supervisory agency, the applicant New Mexico state bank | 0024| shall file the documents and information required by Subsections A and B | 0025| of Section 58-4-4 NMSA 1978 and pay a fee in an amount that shall be | 0001| prescribed by the director by rule. | 0002| C. The director shall approve the interstate merger | 0003| transaction and the operation of branches outside of New Mexico by the | 0004| New Mexico state bank if he finds that: | 0005| (1) the proposed transaction will not be detrimental | 0006| to the safety and soundness of the applicant or the resulting bank; | 0007| (2) any new officers and directors of the resulting | 0008| bank are qualified by character, experience and financial responsibility | 0009| to direct and manage the resulting bank; and | 0010| (3) the proposed merger is consistent with the | 0011| convenience and needs of the communities to be served by the resulting | 0012| bank in this state and is otherwise in the public interest. | 0013| D. The interstate merger transaction may be effected only | 0014| after the applicant has received the director's written approval. | 0015| Section 18. INTERSTATE MERGER TRANSACTIONS AND BRANCHING | 0016| PERMITTED.-- | 0017| A. One or more New Mexico banks may enter into an interstate | 0018| merger transaction with one or more out-of-state banks pursuant to the | 0019| Interstate Bank Branching Act, and an out-of-state bank resulting from | 0020| the transaction may maintain and operate as branches in New Mexico the | 0021| former New Mexico banks that participated in the transaction if the | 0022| conditions and filing requirements of that act are met. | 0023| B. Except as otherwise expressly provided in this | 0024| subsection, an interstate merger transaction is not permitted pursuant | 0025| to the Interstate Bank Branching Act if, upon effecting the transaction, | 0001| the resulting bank, including all insured depository institutions that | 0002| would be affiliates, as defined in 12 U.S.C.A. Section 1841(k), of the | 0003| resulting bank, would result in an undue concentration of deposits | 0004| totaling forty percent or more of the total deposits in all depository | 0005| institutions in New Mexico. The director may by regulation adopt a | 0006| procedure to waive the foregoing prohibition to prevent the insolvency | 0007| or closing of a New Mexico state bank. | 0008| C. An interstate merger transaction resulting in the | 0009| acquisition by an out-of-state bank of a New Mexico bank is not | 0010| permitted pursuant to the Interstate Bank Branching Act, unless the New | 0011| Mexico bank on the date of the acquisition has been in continuous | 0012| operation under an active charter for a period of at least five years. | 0013| Section 19. DE NOVO BRANCHING AND ACQUISITION OF INDIVIDUAL | 0014| BRANCHES NOT PERMITTED.--Interstate branching, either de novo or by | 0015| acquisition of one or more branches, not involving all or substantially | 0016| all of the assets and branches of a New Mexico bank is prohibited. | 0017| Section 20. NOTICE AND FILING REQUIREMENTS.--An out-of-state bank | 0018| that will be the resulting bank pursuant to an interstate merger | 0019| transaction involving a New Mexico state bank shall notify the director | 0020| of the proposed merger no later than the date on which it files an | 0021| application for an interstate merger transaction with the responsible | 0022| federal bank supervisory agency. The out-of-state bank shall submit a | 0023| copy of that application to the director and pay a fee in an amount that | 0024| the director shall prescribe by regulation. Any New Mexico state bank | 0025| that is a party to the interstate merger transaction shall comply with | 0001| all applicable state and federal laws. | 0002| Section 21. CONDITION FOR INTERSTATE MERGER PRIOR TO JUNE 1, | 0003| 1997.--An interstate merger transaction prior to June 1, 1997 resulting | 0004| in a New Mexico branch of an out-of-state bank shall not be consummated | 0005| and any out-of-state bank resulting from such a merger shall not operate | 0006| a branch in New Mexico, unless the director first: | 0007| A. finds that the laws of the home state of each | 0008| out-of-state bank involved in the interstate merger transaction permit | 0009| New Mexico state banks, under substantially the same terms and | 0010| conditions as are set forth in the Interstate Bank Branching Act, to | 0011| acquire banks and establish and maintain branches in that state by means | 0012| of interstate merger transactions; | 0013| B. concludes that the resulting out-of-state bank has | 0014| complied with all applicable requirements of New Mexico law and has | 0015| agreed in writing to comply with the laws of this state applicable to | 0016| its operation of branches in New Mexico; and | 0017| C. certifies to the federal bank supervisory agency having | 0018| authority to approve the interstate merger transaction that the | 0019| conditions and requirements of the Interstate Bank Branching Act have | 0020| been met. | 0021| Section 22. POWERS--ADDITIONAL BRANCHES.-- | 0022| A. An out-of-state state bank with branches in New Mexico | 0023| authorized pursuant to the Interstate Bank Branching Act may conduct any | 0024| activities at its branches that are authorized pursuant to the laws of | 0025| this state for New Mexico state banks. | 0001| B. A New Mexico state bank may conduct any activities at any | 0002| branch outside New Mexico that are permissible for a bank chartered by | 0003| the host state where the branch is located. | 0004| C. An out-of-state bank that has acquired branches in New | 0005| Mexico under the Interstate Bank Branching Act may establish or acquire | 0006| additional branches in New Mexico to the same extent that any New Mexico | 0007| bank may establish or acquire a branch in New Mexico pursuant to | 0008| applicable federal and state law. | 0009| Section 23. EXAMINATIONS--PERIODIC REPORTS--COOPERATIVE | 0010| AGREEMENTS--ASSESSMENT OF FEES.-- | 0011| A. To the extent consistent with Subsection C of this | 0012| section, the director may make examinations of any branch established | 0013| and maintained in this state by an out-of-state state bank pursuant to | 0014| the Interstate Bank Branching Act as the director deems necessary to | 0015| determine whether the branch is being operated in compliance with the | 0016| laws of this state and in accordance with safe and sound banking | 0017| practices. The provisions of Section 58-1-46 NMSA 1978 shall apply to | 0018| the examinations. | 0019| B. The director may prescribe requirements for periodic | 0020| reports concerning an out-of-state bank that operates a branch in New | 0021| Mexico pursuant to the Interstate Bank Branching Act. The required | 0022| reports shall be provided by the bank or by the bank supervisory agency | 0023| having primary responsibility for the bank. Reporting requirements | 0024| prescribed by the director pursuant to this subsection shall be: | 0025| (1) consistent with the reporting requirements | 0001| applicable to New Mexico state banks; and | 0002| (2) appropriate for the purpose of enabling the | 0003| director to carry out his responsibilities under the Interstate Bank | 0004| Branching Act. | 0005| C. The director may enter into cooperative, coordinating and | 0006| information-sharing agreements with any other bank supervisory agencies | 0007| or any organization affiliated with or representing one or more bank | 0008| supervisory agencies with respect to the periodic examination or other | 0009| supervision of any branch in New Mexico of an out-of-state state bank, | 0010| or any branch of a New Mexico state bank in any host state, and the | 0011| director may accept the parties' reports of examination and reports of | 0012| investigation in lieu of conducting his own examinations or | 0013| investigations. | 0014| D. The director may enter into a sole source contract | 0015| pursuant to Section 13-1-126 NMSA 1978 with a bank supervisory agency | 0016| having concurrent jurisdiction over a New Mexico state bank or an | 0017| out-of-state state bank operating branches in this state pursuant to the | 0018| Interstate Bank Branching Act to engage the services of the agency's | 0019| examiners or to provide the services of the director's examiners to the | 0020| agency. | 0021| E. The director may conduct joint examinations or | 0022| participate in joint enforcement actions with a bank supervisory agency | 0023| having concurrent jurisdiction over any branch in New Mexico of an | 0024| out-of-state state bank or any branch of a New Mexico state bank in any | 0025| host state. The director may take the actions independently if the | 0001| director deems the actions necessary or appropriate to carry out his | 0002| responsibilities under the Interstate Bank Branching Act or to ensure | 0003| compliance with the laws of this state, but, in the case of an | 0004| out-of-state state bank, the director shall recognize the exclusive | 0005| authority of the home state regulator over corporate governance matters | 0006| and the primary responsibility of the home state regulator with respect | 0007| to safety and soundness matters. | 0008| F. An out-of-state state bank that maintains branches in | 0009| this state may be assessed and shall pay supervisory and examination | 0010| fees in accordance with the laws of this state and regulations of the | 0011| director. The fees may be shared with other bank supervisory agencies | 0012| or any organization affiliated with or representing one or more bank | 0013| supervisory agencies in accordance with agreements between those | 0014| entities and the director. | 0015| Section 24. ENFORCEMENT.--If the director determines that a | 0016| branch maintained by an out-of-state state bank in this state is being | 0017| operated in violation of the laws of this state, is not reasonably | 0018| meeting the credit needs of the community served or is being operated in | 0019| an unsafe and unsound manner, the director may take the same enforcement | 0020| actions he could take if the branch were a New Mexico state bank. The | 0021| director shall give notice promptly to the home state regulator of an | 0022| enforcement action taken against an out-of-state state bank and, to the | 0023| extent practicable, shall consult and cooperate with the home state | 0024| regulator in pursuing and resolving the enforcement action. | 0025| Section 25. REGULATIONS.--The director may adopt regulations | 0001| necessary or appropriate to implement the provisions of the Interstate | 0002| Bank Branching Act. | 0003| Section 26. NOTICE OF SUBSEQUENT MERGER AND OTHER | 0004| TRANSACTIONS.--An out-of-state state bank that has established and | 0005| maintains a branch in this state pursuant to the Interstate Bank | 0006| Branching Act shall give at least thirty days prior written notice or, | 0007| in the case of an emergency transaction, shorter notice consistent with | 0008| applicable state or federal law to the director of any merger, | 0009| consolidation or other transaction that would cause a change of control | 0010| with respect to the bank or any bank holding company that controls the | 0011| bank if the result of the transaction would require an application to be | 0012| filed pursuant to the federal Change in Bank Control Act of 1978, 12 | 0013| U.S.C.A. Section 1817(j) or the federal Bank Holding Company Act of | 0014| 1956, 12 U.S.C.A. Section 1841 et seq. | 0015| Section 27. SEVERABILITY.--If any part or application of the | 0016| Interstate Bank Branching Act is held invalid or to be superseded, the | 0017| remainder or its application to other situations or persons shall not be | 0018| affected. | 0019| Section 28. Section 58-16-1 NMSA 1978 (being Laws 1990, Chapter | 0020| 123, Section 1) is amended to read: | 0021| "58-16-1. SHORT TITLE.--Chapter 58, Article 16 NMSA 1978 may be | 0022| cited as the "Remote Financial Service Unit Act"." | 0023| Section 29. Section 58-16-3 NMSA 1978 (being Laws 1990, Chapter | 0024| 123, Section 3, as amended) is amended to read: | 0025| "58-16-3. DEFINITIONS.-- | 0001| A. As used in the Remote Financial Service Unit Act: | 0002| (1) "account" means an account maintained by a | 0003| cardholder or merchant with a financial institution, which term shall | 0004| include demand deposit, checking, negotiable order of withdrawal (NOW) | 0005| share, share draft or other consumer or asset accounts or pre-authorized | 0006| credit card accounts; | 0007| (2) "account transfer" means a transaction that | 0008| enables movement of funds by a cardholder from one account to another | 0009| account within the same financial institution; | 0010| (3) "acquirer" means the intercept processor that | 0011| acquires financial data relating to a transaction from a card acceptor | 0012| or a merchant and puts the data into a network system and means "agent | 0013| acquirer" unless specifically indicated otherwise; | 0014| (4) "agent acquirer" means any financial institution | 0015| acting as an authorized agent of the acquirer in enabling financial data | 0016| relating to a POS transaction to be acquired by the acquirer from a card | 0017| acceptor or merchant and means "acquirer" unless specifically indicated | 0018| otherwise; | 0019| (5) "ATM transaction" means any one or more of the | 0020| following transactions undertaken at an automated teller machine (ATM): | 0021| (a) a cash advance from an account; | 0022| (b) a cash advance from an authorized line of | 0023| credit; | 0024| (c) a deposit to an account; | 0025| (d) a balance inquiry; | 0001| (e) an account transfer; and | 0002| (f) a normal financial transaction for a | 0003| cardholder involving the issuance of non-cash or cash-equivalent items; | 0004| provided, however, that normal financial transactions at an ATM will | 0005| expressly exclude any POS transaction; | 0006| (6) "authorization" means the issuance of approval, by | 0007| or on behalf of the financial institution holding the cardholder's | 0008| account, to complete a transaction initiated or authorized by the | 0009| cardholder; | 0010| (7) "automated teller machine" or "ATM" means an | 0011| unmanned device that is activated by the cardholder through a specially | 0012| prepared card or by the transmission of a code via a keyboard or keyset | 0013| or both and is capable of one or more of the following transactions: | 0014| (a) dispensing cash to any cardholder from an | 0015| account or against a preauthorized line of credit; | 0016| (b) accepting deposits; | 0017| (c) account transfers; | 0018| (d) satisfying a balance inquiry in the | 0019| cardholder's account or accounts; and | 0020| (e) conducting normal financial transactions | 0021| involving the issuance of non-cash or cash-equivalent items; provided, | 0022| however, that normal financial transactions at an ATM will expressly | 0023| exclude a transaction that can only be initiated and completed at a POS | 0024| terminal; | 0025| (8) "balance inquiry" means a transaction that permits | 0001| a cardholder to obtain the current balance of the cardholder's account | 0002| or accounts; | 0003| (9) "card" means a plastic card or other instrument or | 0004| any other access device issued by a financial institution to a | 0005| cardholder that enables the cardholder to have access to and that | 0006| processes transactions against one or more accounts, and the term shall | 0007| be used when referring either to an ATM access card, a debit card or a | 0008| credit card identifying a cardholder who has established a pre-approved | 0009| credit line with the issuer of the credit card; | 0010| (10) "card acceptor" means the party accepting the | 0011| card and presenting transaction data to an acquirer; | 0012| (11) "cardholder" means a person to whom a card has | 0013| been issued by a financial institution or who is authorized to use the | 0014| card; | 0015| (12) "cash advance" means any transaction resulting in | 0016| a cardholder receiving cash, whether initiated through an ATM or a POS | 0017| terminal; | 0018| (13) "chargeback" means the credit of all or a portion | 0019| of an amount previously posted to a cardholder's account; | 0020| (14) "clearing account" means an account or several | 0021| accounts maintained for the purpose of settlement and payment of fees to | 0022| the network manager; | 0023| (15) "credit" means a claim for funds by the | 0024| cardholder for the credit of the cardholder's account and provides | 0025| details of funds acknowledged as payable by the acquirer or card | 0001| acceptor to the issuer for credit to the cardholder's account; | 0002| (16) "credit card cash advance" means a cash loan | 0003| obtained by a cardholder against a pre-authorized line of credit through | 0004| presentation of a card; | 0005| (17) "data interchange" means the exchange of | 0006| transaction data, authorization requests, transaction records or other | 0007| data between intercept processors and acquirers and issuers through a | 0008| shared system or network; | 0009| (18) "debit" means a transaction initiated by a | 0010| cardholder that results in the debit to the cardholder's account, | 0011| through use of a card or otherwise, and results in a claim for funds | 0012| made by the acquirer or card acceptor against the issuer; | 0013| (19) "director" means the director of the financial | 0014| institutions division of the regulation and licensing department; | 0015| (20) "electronic funds transfer" or "EFT" means a | 0016| system designed to facilitate the exchange of monetary value via | 0017| electronic media utilizing electronic or mechanical signals or impulses | 0018| or a combination of electronic or mechanical impulses and audio, radio | 0019| or microwave transmissions; | 0020| (21) "financial institution" means an insured state or | 0021| national bank, a state or federal savings and loan association or | 0022| savings bank, a state or federal credit union or authorized branches of | 0023| each of the foregoing; | 0024| (22) "in-state financial institutions" means a | 0025| financial institution authorized to engage in and engaged in business in | 0001| New Mexico and having its main office or a staffed branch within the | 0002| state; | 0003| (23) "intercept processor" means any electronic data | 0004| processor operating for a financial institution that passes | 0005| transactions; | 0006| (24) "issuer" means a financial institution that | 0007| issues cards or accepts transactions for a card, is the acceptor of a | 0008| transaction and is typically, but not always, the entity that maintains | 0009| the account relationship with the cardholder; | 0010| (25) "lobby or teller-line ATM" means any ATM located | 0011| within the lobby of a financial institution or in its teller line, | 0012| access to which is available only during regular banking hours; | 0013| (26) "merchant" means a seller of goods or services, | 0014| retailer or other person who, pursuant to an agreement with a financial | 0015| institution, agrees to accept or causes its outlets to accept cards for | 0016| EFT transactions when properly presented, is usually a card acceptor and | 0017| is a seller of goods and services who is regularly and principally | 0018| engaged in the business of selling, leasing or renting goods, selling or | 0019| leasing services for any purpose or selling insurance, whether the | 0020| business is a wholesale or retail business and whether the goods or | 0021| services are for business, agricultural, personal, family or household | 0022| purposes. "Merchant" includes a professional licensed by the state of | 0023| New Mexico, but does not include financial institutions; | 0024| (27) "modem" is a contraction of | 0025| "modulator-demodulator" and means a functional unit that enables digital | 0001| data to be transmitted over analog transmission facilities such as | 0002| telephone lines, radio or microwave transmissions; | 0003| (28) "network" means a computer-operated system of | 0004| transmitting items and messages between ATM or POS terminals, intercept | 0005| processor and financial institutions, and settling transactions between | 0006| financial institutions, and includes without limitation, ATMs, POS | 0007| terminals, all related computer hardware and software, modems, logos and | 0008| service marks; | 0009| (29) "network manager" means the person managing the | 0010| business of a network; | 0011| (30) "off-line" means not on-line; | 0012| (31) "off-premise ATM" means ATMs installed away from | 0013| the building or lobby of a financial institution by a distance of not | 0014| less than five hundred feet; | 0015| (32) "on-line" means a system in which all input data | 0016| enters the computer at a financial institution, an intercept processor | 0017| or the network from its point of origin and that is capable of | 0018| transmitting information back to the point of origin after all input | 0019| data is processed; | 0020| (33) "on-premise ATM" means an ATM that stands in or | 0021| immediately adjacent to the financial institution's building, such as in | 0022| the financial institution's lobby, through the wall or a drive-up ATM | 0023| within five hundred feet of the financial institution's building; | 0024| (34) "person" means an individual, partnership, joint | 0025| venture, corporation or other legal entity however organized; | 0001| (35) "personal identification number" or "PIN" means a | 0002| series of numbers or letters selected for or by the cardholder and used | 0003| by the cardholder as a code or password in conjunction with a card to | 0004| perform a transaction; | 0005| (36) "point-of-sale or POS terminal" means an | 0006| information processing device or machine, located upon the premises | 0007| occupied by one or more merchants, through which transaction messages | 0008| are initiated and electronically transmitted to an acquirer to | 0009| effectuate a POS transaction and that accepts debit cards and credit | 0010| cards; | 0011| (37) "POS transaction" means any of the following | 0012| transactions undertaken at a POS terminal: | 0013| (a) purchases; | 0014| (b) purchases that include cash back to the | 0015| cardholder; | 0016| (c) cash advances at POS terminals; | 0017| (d) returned item transaction message resulting | 0018| in a credit to the cardholder's account; | 0019| (e) a credit; | 0020| (f) an authorization; | 0021| (g) chargebacks at POS terminals; | 0022| (h) card verification whereby the validity of a | 0023| card is determined at POS terminals; | 0024| (i) balance inquiries at POS terminals; and | 0025| (j) force post financial advice at POS terminals | 0001| whereby any other transaction authorized by an issuer-approved stand-in | 0002| processor requires settlement resulting in a debit to the cardholder's | 0003| account. | 0004| Nothing in this paragraph shall be construed to include credit | 0005| card transactions; | 0006| (38) "purchase" means a transaction that, if approved, | 0007| results in a debit transaction for the payment of goods and services or | 0008| may include cash paid to the cardholder of some part of the amount of | 0009| the transaction; | 0010| (39) "receipt" means a hard-copy description of a | 0011| transaction: | 0012| (a) for the purposes of the Remote Financial | 0013| Service Unit Act, if the transaction is an ATM transaction, the receipt | 0014| shall contain, at a minimum: 1) the date of the ATM transaction; | 0015| 2) the amount of the ATM transaction, if any; 3) the account number; | 0016| 4) the type of account accessed; 5) the location of the ATM used in | 0017| the ATM transaction; 6) the identity of any party or account to which | 0018| funds are transferred; and 7) the type of ATM transaction completed; | 0019| and | 0020| (b) for the purposes of the Remote Financial | 0021| Service Unit Act, if the transaction is a POS transaction, the receipt | 0022| shall contain, at a minimum: 1) the date of the POS transaction; | 0023| 2) the amount of the POS transaction, if any; 3) the account number; | 0024| 4) the type of account accessed; 5) the merchant's name and location; | 0025| and 6) the type of POS transaction completed; | 0001| (40) "remote financial service unit" means a POS | 0002| terminal or an ATM; | 0003| (41) "returned item transaction message" means a credit | 0004| message generated by the acquirer or by the merchant that returns the | 0005| value of the returned item to the cardholder's account; | 0006| (42) "settlement" means the process by which funds are | 0007| transferred between financial institutions, intercept processors or | 0008| networks in the flow of a transaction or in the payment of fees | 0009| associated with the transaction; | 0010| (43) "shared ATM or POS terminals" means ATM or POS | 0011| terminals that are shared among financial institutions by formal | 0012| agreement for the purposes of cardholder convenience, reduction of | 0013| capital investment and marketing advantage; | 0014| (44) "single subscriber terminal" means any terminal | 0015| or set of terminals used to connect a single customer of a financial | 0016| institution to its financial institution through which EFT messages are | 0017| sent and completed, other than transactions; | 0018| (45) "switch" means a routing mechanism and any device | 0019| attached thereto that is necessary for the processing of a transaction | 0020| used to communicate information and transactions among participating | 0021| financial institutions or their intercept processors in a shared system | 0022| or network; | 0023| (46) "transaction" means a collection of electronic | 0024| messages concluded by: | 0025| (a) a debit to or a credit from an account; | 0001| (b) a balance inquiry; | 0002| (c) the consummation of a normal financial | 0003| transaction; or | 0004| (d) a rejected attempt of any one of those | 0005| matters provided in Subparagraphs (a) through (c) of this paragraph; | 0006| (47) "unauthorized use of the card of another" means | 0007| the utilization of the card in or through a remote financial service | 0008| unit to affect the balance of or obtain information concerning the | 0009| account of the cardholder by a person other than the cardholder, which | 0010| person does not have the permission of the cardholder for such use; and | 0011| (48) "unauthorized withdrawal from the account of | 0012| another" means the debiting of or removal of funds from a cardholder's | 0013| account, accomplished by means of the utilization of a remote financial | 0014| service unit by a person other than the cardholder, which person does | 0015| not have actual, implied or apparent authority for the debiting or | 0016| removal and from which debiting or removal the cardholder receives no | 0017| benefit. | 0018| B. | 0019| (1) Any of the information provided pursuant to | 0020| Subparagraphs (a) and (b) of Paragraph (39) of Subsection A of this | 0021| section may be provided using codes, numbers or other uniform | 0022| explanations so long as they are explained elsewhere on the receipt. | 0023| (2) No receipt shall be required in any transaction | 0024| involving a negotiable instrument that will itself become a receipt. | 0025| C. Any term used in the Remote Financial Service Unit Act | 0001| but not specifically defined shall have the meaning given to that term | 0002| by the Uniform Commercial Code." | 0003| Section 30. Section 58-16-11 NMSA 1978 (being Laws 1990, Chapter | 0004| 123, Section 11, as amended) is amended to read: | 0005| "58-16-11. RESTRICTIONS ON OWNING, LEASING AND OPERATING.-- | 0006| A. Notwithstanding any provision to the contrary in the | 0007| Remote Financial Service Unit Act, no ATM shall be owned or leased by a | 0008| person other than an in-state financial institution. | 0009| B. Notwithstanding any provision to the contrary in the | 0010| Remote Financial Service Unit Act, no POS terminal shall be operated by | 0011| any person other than a merchant or an in-state financial institution." | 0012| Section 31. EFFECTIVE DATE.--The effective date of the provisions | 0013| of this act is June 1, 1996. | 0014| | 0015| HB | 0016| 38 | 0017| Page  |