New Mexico Administrative Code › Title 2 - PUBLIC FINANCE › Chapter 60 - INVESTMENT AND DEPOSIT OF PUBLIC FUNDS › Part 30 - COLLATERAL POLICY FOR NEW MEXICO SAVINGS AND LOAN ASSOCIATIONS › Section 2.60.30.8 - COLLATERAL POLICY FOR NEW MEXICO SAVINGS AND LOAN ASSOCIATIONS

Current through Register Vol. 35, No. 13, July 16, 2024
A. In the exercise
				of its authority under Sections
				7-27-5.2 [repealed], and
				including but not limited to, Sections
				6-10-10,
				6-10-16,
				6-10-17,
				6-10-18,
				6-10-20,
				6-10-24.1,
				6-10-29
				and
				6-10-35
				NMSA 1978, the state investment council (the "council") desires to minimize the
				level of risk to deposits of severance tax permanent fund monies made pursuant
				to its authority. As a first step towards achieving this goal, the council
				hereby directs the state investment officer to conduct a risk-assessment of
				savings and loans holding deposits of severance tax permanent fund monies. The
				risk assessment will include a determination of each savings and loan's net
				worth to average asset ratio, its average net income before taxes/total average
				assets and its after-tax losses. If a savings and loan's net worth to average
				asset ratio is 3 percent or greater, its four quarter average net income either
				before or after taxes/four quarter average assets is .30 percent or greater,
				and it has not had two or more consecutive quarters of after tax losses, the
				savings and loan should be to maintain collateral at the statutory minimum
				level set forth in Section
				7-27-5.2 [repealed] NMSA
				1978 or Section
				6-10-17
				NMSA 1978, as applicable. If a savings and loan does not meet these 3
				qualifications for a minimum level of collateral under Sections
				7-27-5.2 [repealed] or
				Section
				6-10-17,
				the investment officer is hereby directed to cease making any additional
				deposits of severance tax permanent fund monies into the savings and loan and
				to withdraw deposits as provided herein, unless the savings and loan provides
				increased levels of collateral in accordance with the schedule set forth
				below.
B. The investment officer
				shall request increased collateral from any savings and loan which holds a
				deposit of severance tax permanent funds within the council's authority and
				does not meet the qualifications set out above for a minimum level of
				collateral under Section
				7-27-5.2 [repealed] or
				6-10-17,
				in accordance with the following schedule:
(1)
				If a savings and loan's net worth to average asset ratio (defined as line
				number 800/line 810 section C FHLB quarterly report) is:
(a) 2 percent to 3 percent..... a savings and
				loan shall be required to maintain collateral of deposit in the form of
				securities with an aggregate market value equal to 75 percent of the amount of
				the deposit, or mortgages with an aggregate market value equal to 90 percent of
				the amount of deposit;
(b) less
				than 2 percent..... a savings and loan shall be required to maintain collateral
				in the form of securities with an aggregate market value equal to 100 percent
				of the amount of deposit, or mortgages with an aggregate market value equal to
				110 percent of the amount of the deposit.