New Mexico Administrative Code
Title 2 - PUBLIC FINANCE
Chapter 60 - INVESTMENT AND DEPOSIT OF PUBLIC FUNDS
Part 15 - COLLATERAL POLICY FOR NEW MEXICO SAVINGS AND LOAN ASSOCIATIONS GOVERNING CERTIFICATES OF DEPOSIT CREATED AFTER MAY 25, 1988
Section 2.60.15.8 - COLLATERALIZATION REQUIREMENTS

Universal Citation: 2 NM Admin Code 2.60.15.8

Current through Register Vol. 35, No. 18, September 24, 2024

A. The investment officer is directed to require collateral to be maintained for institutions within each classification at levels in accordance with the following schedule for all new deposits and all reinvestments of existing deposits. These rules will become effective five (5) days after filing with the records and rules commission.

(1) CLASS A. A savings and loan in this class shall be required to maintain collateral at the statutory minimum level set forth in Section 6-10-17 NMSA 1978 or Section 7-27-5.2 NMSA 1978 [repealed], as applicable. Collateral in the form of securities shall have an aggregate market value equal to 50 percent of the amount of deposit. Collateral in the form of mortgages shall have an aggregate outstanding principal balance equivalent to 120 percent of the amount of the initial deposit, and shall be maintained at a minimum of an aggregate outstanding principal balance equivalent to 100 percent of the amount of the deposit.

(2) CLASS B. A savings and loan in this class shall be required to maintain collateral in the form of securities with an aggregate market value equal to 75 percent of the amount of deposit or collateral in the form of mortgages with an aggregate outstanding principal balance equivalent to 120 percent of the amount of the initial deposit.

(3) CLASS C. A savings and loan in this class shall be required to maintain collateral in the form of securities with an aggregate market value equal to 100 & of the amount of the deposit, or collateral in the form of mortgages maintained at a minimum aggregate outstanding principal balance equivalent to 120 percent of the amount of the deposit.

(4) CLASS D. A savings and loan in this class shall be required to maintain collateral in the form of securities with an aggregate market value equal to 100 percent of the amount of the deposit, or collateral in the form of mortgages with an aggregate outstanding principal balance equivalent to 120 percent of the amount of the deposit. The investment officer may, at his discretion, require the pledging of additional mortgage collateral of up to 200 percent of the outstanding principal balance, or additional securities with an aggregate market value equal to 120 percent of the amount of the deposit to prevent the loss of public funds.

B. FSLIC insurance will not be counted as collateral unless the savings and loan is willing to certify quarterly in writing what the insurance amount is after prorating for other state accounts, including agency accounts.

C. If a savings and loan association is unable to meet the collateral level required by its financial classification, the state investment officer may make withdrawals of deposits to an amount which can be collateralized at an appropriate level, as above specified. The increased collateral levels shall be required until the ratios of the savings and loan, as determined by the risk assessment, return to a level which allows reclassification to a less restrictive level. The collateral levels shall be governed by the policy in effect at the time of deposit or renewal of deposit.

D. Any qualifying savings and loan that fails to maintain the pledge of qualifying collateral or other security for deposits, or fails to substitute or provide additional qualifying collateral or security when requested by the council or state investment officer, is subject to a penalty by the director of the financial institutions division of up to one hundred dollars ($100) a day for each two hundred and fifty thousand dollars ($250,000) deposited for each day the violation continues. The state investment officer may also take any other action deemed necessary to secure state funds.

E. In making the decision to accept or reject collateral, the state investment office or the treasurer's office reserves the right to reject, either at the time of submission or at any time thereafter, any collateral that does not meet all statutory criteria and any collateral not of sufficient quality to protect the state's interests.

F. Depository institutions are to provide to the state investment office a complete audit of all mortgage collateral by an outside certified public accountant using generally accepted auditing standards to ensure that all requirements of the depository and custodial agreements, state law, these regulations and any other pertinent regulations have been met. The audit will be done annually or more frequently as requested by the state investment officer. Specific guidelines for the required audit of all mortgage collateral will be developed by the state investment office.

Disclaimer: These regulations may not be the most recent version. New Mexico may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.