2018 New Mexico Statutes
Chapter 58 - Financial Institutions and Regulations
Article 11 - Credit Unions
Section 58-11-49 - Loan policies.
A. A credit union may extend credit to members for such purposes and upon such conditions as the bylaws may provide.
B. The interest rates on extensions of credit shall be authorized and determined by the board of directors or any person or committee to which it has delegated that authority.
C. A credit union may assess charges to members, in accordance with the bylaws, for failure to meet their obligations to the credit union in a timely manner.
D. Except as provided in Subsection H of this section, every application for an extension of credit and every approved extension of credit shall be made in writing or in such other manner as permitted or required by law in a standard format consistent with the extension of credit policies approved by the board of directors.
E. No loan shall be made to any member in an aggregate amount in excess of ten percent of the credit union's total assets as determined by the director.
F. Security, within the meaning of the Credit Union Act [58-11-1 NMSA 1978], may include, without limitation because of enumeration, the endorsement of a note by a surety or guarantor, assignment of an interest in real or personal property or any other collateral deemed acceptable by the board of directors. The types of security acceptable shall be determined by the written policies established by the board of directors pursuant to Section 58-11-36 NMSA 1978.
G. A member may receive an extension of credit in installments or in one sum and may pay the whole or any part on any day on which the office of the credit union is open for business.
H. Upon written application by a member, the board of directors or any person or committee to which it has delegated authority to extend credit may approve a self-replenishing line of credit, and advances may be granted to the member within the limit of such line of credit. Whenever a line of credit has been approved, no additional credit application is required as long as the aggregate indebtedness does not exceed the approved limit; provided, however, each line of credit shall be reviewed in accordance with the credit union's policy governing extensions of credit.
I. A credit union may participate in extensions of credit to credit union members jointly with other credit unions or other financial organizations pursuant to written policies established by the board of directors.
J. A credit union may:
(1) participate in any guaranteed loan program of the federal government or of this state under the terms and conditions specified by the law under which such a program is provided; and
(2) purchase the conditional sales contracts, notes and similar instruments of its members.
K. A credit union may make an extension of credit to any of its executive officers, board members and members of its supervisory and other committees; provided that:
(1) the extension of credit complies with all lawful requirements under the Credit Union Act with respect to loans to other members, is not on terms more favorable than those extended to other borrowers and is in compliance with loan policies established by the board for other borrowers;
(2) the following provisions have been met:
(a) the extension of credit is approved by the board of directors or any person or committee to which it has delegated authority to extend credit; and
(b) the applicant takes no part in the consideration of his application and does not attend any committee or board meeting while his application is under consideration; and
(3) if the aggregate extension of credit to the applicant, including the extension applied for and excluding share or deposit secured loans, exceeds the limits set for the total asset size of the credit union as provided in this paragraph, the extension of credit shall be submitted to the board of directors for approval. The board shall require, at a minimum, a completed loan application and a detailed current financial statement of the applicant; provided that submission to the board of directors of an application of an executive officer shall only be required for an applicant serving the credit union as chief executive officer, chief operating officer, chief financial officer or chief lending supervisor. The set limits for the total asset size of the credit union are as follows:
| Credit Union Total Assets | Aggregate Credit Exceeding | ||
| less than $5,000,000 | $20,000 | ||
| $5,000,000 - $10,000,000 | $30,000 | ||
| $10,000,001 - $50,000,000 | $40,000 | ||
| $50,000,001 or greater | $50,000. |
L. A credit union may permit executive officers, board members and members of its committees to act as co-makers, guarantors or endorsers of extensions of credit to other members, subject to the requirements of Subsection K of this section.
History: Laws 1987, ch. 311, § 49; 1991, ch. 51, § 14; 1997, ch. 195, § 33; 2003, ch. 28, § 9.
Repeals. — Laws 1997, ch. 195, § 42 repealed Laws 1987, ch. 311, § 68, which had provided for the repeal of this section on July 1, 1997.
The 2003 amendment, effective June 20, 2003, inserted "or in such other manner as permitted or required by law" following "made in writing" near the middle of Subsection D; deleted "A credit union which originates such an extension shall retain an interest of at least ten percent of the face amount of the extension of credit" at the end of Subsection I; and rewrote Paragraph K(3) to such an extent that a detailed comparison is impracticable.
The 1997 amendment, effective July 1, 1997, substituted "extension of credit" for "loan", "extensions of credit" for "loans" and made other related and stylistic changes throughout the section, rewrote Subsections B and D, added "as determined by the director" at the end of Subsection E, substituted "Credit Union Act" for "Credit Union Regulatory Act" near the beginning of the first sentence of Subsection F and near the beginning of Paragraph K(1), substituted "the board of directors or any person or committee to which it has delegated authority to extend credit" for "credit committee, credit manager or loan officer" in the first sentence of Subsection H, in Subsection K, substituted "other committees" for "credit committees" in the introductory language, added "is in compliance with loan policies established by the board for other borrowers" at the end of Paragraph (1), rewrote Subparagraph (2)(a), and added Paragraph (3), and, in Subsection L, deleted "supervisory and credit" preceding "committees".
The 1991 amendment, effective July 1, 1991, in the first sentence of Subsection F substituted "the Credit Union Regulatory Act" for "this Act" and in the second sentence substituted "Section 58-11-36 NMSA 1978" for "Section 36 of the Credit Union Regulatory Act"; in Subsection K inserted "executive" in the introductory paragraph and substituted "or loan application forms signed by the applicant" for "signed by and truly reflecting all assets, liabilities and net worth of the applicant" in Paragraph (2)(a); and in Subsection L inserted "executive".
