Current through Register Vol. 35, No. 18, September 24, 2024
In addition to investment in service corporations under
Section 8 of this Sub-part [now
12.20.48.8
NMAC], an association may invest in the capital stock or other securities of a
service corporation organized under the laws of this state if:
A. the corporation's entire capital stock is
held by one or more savings and loan associations with a home office in this
state;
B. the activities of such
corporation, performed directly or through one or more wholly owned
subsidiaries or joint ventures, consist solely of one or more of the activities
specified in paragraphs 8.4.1 through 8.4.13 of this Sub-part [now Paragraphs
(1) through (13) of Subsection D of Section 12.20.48.8 NMAC] and such other
activities reasonably related to the activities of an association as the
supervisor may approve;
C. In the
case of a corporation in which fewer than five savings and loan associations
hold capital stock or one association holds more than 40 percent of such stock,
the following requirements are met:
(1) the
corporation, including any subsidiary, does not have outstanding at any time
consolidated debt (to holders of its capital stock and to others) exceeding the
following limitations:
(a) unsecured debt -
two times the total of its consolidated net worth plus unsecured debt to
holders of at least 25 percent of its capital stock;
(b) secured and unsecured debt - ten times
the total of its consolidated net worth plus unsecured debt to such
stockholders; or if the corporation, including any subsidiary thereof, is
engaged solely in activities specified in paragraph 8.4.1.1 of this regulation
[now Subparagraph (a) of Paragraph (1) of Subsection D of Section 12.20.48.8
NMAC], 20 times such total;
(c)
secured debt will be deemed unsecured for purposes of Subsection 9.3.1 [now
Paragraph (1) of Subsection C of 12.20.48.9 NMAC] to the extent that it exceeds
the market value of any security therefor at the time the loan is made. The
term secured debt as used in Subsection 9.3.1 [now Paragraph (1) of Subsection
C of 12.20.48.9 NMAC] shall include the entire amount of any obligation of the
service corporation resulting from sale of consumer loans with
recourse;
(d) the debt of each
subsidiary of the corporation shall also conform to the debt limitations in the
subsection;
(2)
supervisor approval is obtained before any activity of the service corporation
is performed through one or more joint ventures if a director, officer or
controlling person of any stockholder of the service corporation has direct or
indirect beneficial interest in the joint venture;
(3) supervisor approval is obtained for any
investment:
(a) by an association in such a
service corporation or in a corporation which will become such a service
corporation as a result of such investment; and
(b) by such service corporation directly or
indirectly through one or more of its wholly-owned subsidiaries or joint
ventures if the purpose of such investment is to acquire a going business for
an amount exceeding the fair market value of the tangible net assets of that
business from a director or officer of an association which owns any of the
capital stock of the service corporation or from an entity in which a director
or officer of the association has a direct or indirect beneficial interest or
is a director, officer, controlling person, partner or trustee.
