2019 New Mexico Statutes
Chapter 58 - Financial Institutions and Regulations
Article 11 - Credit Unions
Section 58-11-56 - Investments.

A. Funds not required to satisfy member demands for extensions of credit may be invested in:

(1) securities, obligations or other instruments of or issued by or fully guaranteed as to principal and interest by the United States or any agency of the United States or in any trust investing solely, directly or indirectly, in the same;

(2) securities, obligations or other instruments of this state or any political subdivision of this state;

(3) deposits or other accounts of state or federally chartered financial institutions, the accounts of which are insured by an agency of the United States;

(4) loans or extensions of credit to or shares or deposits of other credit unions, central credit unions or corporate credit unions, the accounts of which are insured by the national credit union administration's share insurance fund;

(5) deposits in, loans to or shares of any federal reserve bank or of any central liquidity facility established under federal law;

(6) shares, stocks, loans or extensions of credit to or other obligations of any organization, corporation or association providing services that are associated with the general purposes of the credit union or that engage in activities incidental to the operations of a credit union. Those investments in the aggregate shall not exceed five percent of the credit union's capital;

(7) shares of a cooperative society organized under the laws of this state or of the laws of the United States in a total amount not exceeding ten percent of the capital of the credit union, subject to prior approval by the director;

(8) fixed assets, not to exceed six percent of the credit union's capital and deposits, unless with the written approval of the director. For the purpose of this subsection, "fixed assets" means structures, land, computer hardware and software and heating and cooling equipment that are affixed to the premises;

(9) common trusts or mutual funds whose investment portfolios consist of mortgages, securities and obligations and bonds of the federal national mortgage association, federal home loan mortgage corporation, government national mortgage association and other government-sponsored enterprises;

(10) other investments, or in amounts in excess of the thresholds listed in this section, as approved by the director in written application; and

(11) activities that the director determines are a part of or incidental to the operations of a credit union notwithstanding any provision to the contrary in the Credit Union Act.

B. Credit unions with minimum undivided earnings of one million dollars ($1,000,000) and with capital in excess of seven and one-half percent after required reserves may also invest funds not required to satisfy member demands for extensions of credit. The aggregate of a credit union's investments as provided in this subsection shall not exceed ten percent of the credit union's undivided earnings. Such investments may only be in or through:

(1) common trusts or mutual funds whose investment portfolios consist of the bonds or other obligations of insured financial institutions organized pursuant to the laws of another state or the United States, or corporations organized in any state, the District of Columbia, the commonwealth of Puerto Rico or the territories organized by congress; provided that the investment portfolios are representative of a recognized broadly traded bond index, as defined in the credit union's board-approved investment policy, and provided that the portfolios shall be limited to such bonds and other obligations having maturities of less than fifteen years with an average weighted life not to exceed seven years and being rated among the three highest ratings established by one or more national rating services; and

(2) common trusts or mutual funds whose investment portfolios consist of the stock of corporations organized in any state, the District of Columbia, the commonwealth of Puerto Rico or the territories organized by congress, provided that the investment portfolios of such common trusts or mutual funds are representative of a recognized broadly traded stock index as defined in the credit union's board-approved investment policy.

History: Laws 1987, ch. 311, § 56; 1991, ch. 51, § 17; 1997, ch. 195, § 35; 2003, ch. 28, § 12.

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, redesignated the first paragraph of the section as Subsection A and redesignated former A through H as present Paragraphs A(1) through A(8); added Paragraphs A(9) and A(10); redesignated Subsection I as Paragraph A(11) and deleted "investments or" from the beginning; and added Subsection B.

The 1997 amendment, effective July 1, 1997, substituted "member demands for extensions of credit" for "member loan demands in the introductory paragraph, inserted "or extensions of credit" in Subsections D and F, inserted "administration's" preceding "share insurance" in Subsection D, added Subsection I, and made minor stylistic changes in Subsections G and H.

The 1991 amendment, effective July 1, 1991, deleted former Subsection H pertaining to stocks and bonds of other states and territories and redesignated former Subsection I as Subsection H.