2023 New Mexico Statutes › Chapter 58 - Financial Institutions and Regulations › Article 9 - Trust Companies › Section 58-9-10 - Impairment of capital; unsafe conditions; receivership.

A. If it appears to the director that the capital of a trust company is either reduced or impaired below the minimum capital requirements set forth in Section 58-9-6 NMSA 1978, except for nonprofit corporations, the director shall order the company to make good any deficit within sixty days of the date of the order and may restrict and regulate the operation of the trust business until the capital is restored.
B. If the deficiency in capital has not been made good within the prescribed time, the director may apply to the district court in the county in which the principal office of the company is located to have a receiver appointed for the liquidation or rehabilitation of the company. The expense of the receivership shall be paid out of the assets of the trust company.
C. The director may investigate, upon complaint or otherwise, if it appears that a trust company is conducting business in an unsafe, unsound, financially irresponsible or injurious manner or in violation of the Trust Company Act, or the rules promulgated pursuant to that act, the Uniform Probate Code [Chapter 45 NMSA 1978], the Uniform Prudent Investor Act [45-7-601 to 45-7-612 NMSA 1978] or the Uniform Trust Code [Chapter 46A NMSA 1978], or when it appears that any person is engaging in trust business without being certified pursuant to the Trust Company Act.
D. If it appears upon sufficient ground or evidence satisfactory to the director that a trust company has engaged in or is about to engage in any act or practice in violation of the Trust Company Act, or any rule or order pursuant to that act, or the Uniform Probate Code, the Uniform Prudent Investor Act or the Uniform Trust Code, to the extent that the security of the assets and trust accounts or the protection of persons utilizing the trust services have been or may be jeopardized, the director may summarily order the trust company to cease and desist from that act or practice, or the director may apply to the district court of the first judicial district of Santa Fe county to enjoin the trust company in engaging in the act or practice and to enforce compliance with the Trust Company Act, the Uniform Probate Code, the Uniform Prudent Investor Act or the Uniform Trust Code, or for any other appropriate equitable relief. Upon a proper showing, if a temporary restraining order, a preliminary injunction or a permanent injunction is granted, a receiver may be appointed for the defendant or defendant's assets, and the certification of the trust company may be canceled and such additional or other equitable remedies may be provided as the court deems appropriate. The director shall not be required to post a bond.
E. If an investigation pursuant to Subsection C of this section reveals that a trust company is conducting business in an unsafe, unsound or injurious manner, or in violation of the Trust Company Act or rules promulgated pursuant to that act, the Uniform Probate Code, the Uniform Prudent Investor Act or the Uniform Trust Code, or that any person is engaging in trust business without being certified pursuant to the Trust Company Act, the trust company or person investigated shall pay to the director an investigation fee at the rate of one hundred fifty dollars ($150) per day or fraction of a day for each authorized representative engaged in the investigation.
History:
1953 Comp., § 48-24-10, enacted by Laws 1973, ch. 191, § 10; 1991, ch. 250, § 6; 2013, ch. 88, § 4; 2013, ch. 97, § 4; 2018, ch. 64, § 9.
ANNOTATIONS
The 2018 amendment,
effective July 1, 2018, provided additional power and authority to the director of the financial institutions division to protect the security of assets and trust accounts and to protect persons utilizing trust services, clarified existing powers of the director, and provided for investigation fees to be assessed against any trust company that is found to be conducting business in violation of relevant rules or New Mexico law; added new subsection designations "A." and "B."; in Subsection A, after "reduced or impaired below", deleted "five hundred thousand dollars ($500,000)" and added "the minimum capital requirements set forth in Section 58-9-6 NMSA 1978", after "nonprofit corporations", deleted "or the affairs of the company are in an unsound condition", and after "make good any deficit", deleted "or to remedy the unsafe conditions of its affairs"; in Subsection B, after "has not been made good", deleted "and the unsafe condition remedied"; and added Subsections C through E.
The 2013 amendment,
effective July 1, 2017, increased the minimum required paid-up capital; and in the first sentence, after "impaired below", deleted "one hundred fifty thousand dollars ($150,000)" and added "five hundred thousand dollars ($500,000)".
The 1991 amendment,
effective June 14, 1991, substituted "director of the financial institutions division" for "commissioner" near the beginning and "director" for "commissioner" in two places; inserted "except for nonprofit corporations" in the first sentence; and made minor stylistic changes throughout the section.
Am. Jur. 2d, A.L.R. and C.J.S. references. —
10 Am. Jur. 2d Banks § 763.
Power of receiver or liquidating officer of insolvent bank or trust company to borrow, and pledge assets, and power of court to authorize him to do so, 82 A.L.R. 1228, 91 A.L.R. 1119.
9 C.J.S. Banks and Banking § 629.