NMSA 58-12-7. Corporation; powers and duties of the board

58-12-7. Corporation; powers and duties of the board. A. To the extent authorized by the commissioner or any supervisory agency, the board may review the financial condition of any member as it relates to share insurance and, after the review, submit a report of the review to the commissioner and the supervisory agency accompanied with the recommendations of the board. B. Upon request of the board, the commissioner or the supervisory agency may furnish to the board such factual information in his or its possession as the commissioner or the supervisory agency may deem to be of assistance to the corporation in determining the financial condition of any member. C. If the board determines that a special examination and audit, including a current appraisal of the assets, of any member would be in the interests of its shareholders or in the interest of the sound and effective operation of the corporation, the board, by a vote of at least two-thirds of its directors, may request the commissioner or any supervisory agency to provide for a special examination, audit and appraisal. If the commissioner or any supervisory agency determines the examination, audit and appraisal advisable, he or it shall provide for an examination, together with a current appraisal of the member's assets by a qualified person, and the board may furnish to the commissioner or any supervisory agency such evidence of current values of any or all of such member's assets that it considers material to the appraisal. D. After receiving the reports of the examination and appraisal, the commissioner or any supervisory agency shall furnish to the board, and to the member, copies of the reports. The board shall have authority to make recommendations to any member designed to correct practices or policies of the member in conducting its business, including loan or dividend policies, which the board considers unsafe or unsound, or having a tendency to impair the financial condition of the member. If such member fails to follow such recommendations, the board shall give notice to the commissioner and any supervisory agency. E. If it appears to the board that such practices or policies have impaired or are likely to impair the solvency of the member, or are unreasonably increasing the insurance risk of the corporation with respect to the member, they shall include a statement to this effect, together with a report of the facts and circumstances, in the notice to the commissioner and the supervisory agency. If the commissioner or the supervisory agency determines from the report, notice and from other available information that the member is in unsafe or unsound condition to transact the business for which it was created, then, the commissioner or the supervisory agency may so certify to the corporation. Nothing contained in this section shall be construed to abridge any power conferred upon the commissioner or supervisory agency by any law. F. Whenever it appears to the commissioner or the supervisory agency that it is inadvisable or inexpedient for any member to continue to transact the business for which it is organized without receiving assistance, he or it may, in his or its discretion, notify the board and thereupon the board may take any action it considers necessary to reduce the risk or avert a threatened loss to the corporation, and, notwithstanding any other provision of law, may require a merger or consolidation of such member with other financial institutions or may facilitate the sale of assets of such member to, and the assumption of its liabilities by, one or more members or other financial institutions. The board may with the approval of the commissioner or any supervisory agency do any of the following: (1) purchase from such member any equitable or other interest in, its assets at book value, or at some other value mutually agreed upon by such member and the board, notwithstanding that either of such values may exceed the market value of the assets so purchased, and upon such terms and conditions as the board may determine; (2) make loans to such member, and upon such terms and conditions, as the board may determine; (3) pay to the member, in accordance with an agreement entered into between the member and the corporation, an amount not in excess of the difference between the book value of some or all of its assets and the fair value as determined by the agreement, in consideration for which such member shall agree to write down the assets to the fair value and to pay over to the corporation so much of any net proceeds realized from the sale or other disposition of the assets as are in excess of the fair value, the payment to be made in such amounts, at such times and upon such terms and conditions as the board may determine. Any amount paid by the corporation to such member and the agreement of the member to repay the excess shall constitute liabilities of the member only to the extent of any such excess from time to time actually realized; or (4) deposit a sum of money into the reserve accounts of the member in accordance with an agreement entered into between the member and the corporation, such member being hereby authorized and empowered, notwithstanding any other provision of law, to repay the amount to the corporation at such time or times and in such manner as the agreement may prescribe, provided that, any such payment made by the corporation to the member, and any agreement of the member to repay the same shall constitute liabilities of the member only to the extent provided by the agreement. The member, by vote of at least two-thirds of its directors, may take any action necessary or advisable to enable it to carry out any or all provisions of this section. G. At any time after ten years from the date financial assistance has been granted to a member under any provision of this section, any unpaid balance may be compromised or settled for cash payment or other consideration as the board and the member, with the approval of the commissioner and supervisory agency, may agree upon. Upon such compromise or settlement the member shall be released and discharged from any further obligation to repay the unpaid balance of such financial assistance except to the extent provided by such agreement. H. If a member authorized by a vote of at least two-thirds of the member's directors chooses to be liquidated, the corporation shall be fully authorized to proceed with the liquidation, merger or consolidation of the member. I. Whenever it appears to the commissioner or the supervisory agency that any member is in unsound or unsafe condition to transact the business for which it is organized, the commissioner or the supervisory agency may so certify to the board and, upon receipt of the certificate, the board shall, by notice in writing to the commissioner, supervisory agency and to the member, take possession and control of the property and the business of the member and operate the business of the member, subject to such rules and regulations as the commissioner or supervisory agency may prescribe until the member resumes business or until its affairs are finally liquidated. While operating such business, the corporation may pay to the member out of the share insurance fund such sums as the board considers necessary for the protection of the member's shareholders and depositors, and may order these sums to be repaid when no longer required for that purpose, or may purchase assets from the member to effect the purposes of the Credit Union Share Insurance Corporation Act on such terms and conditions and at such valuations as the board may determine. J. At any time after the board has taken over the control, possession and operation of any member, they may with the approval of the commissioner or supervisory agency turn back the control, possession and operation to the member. The member may resume business free from any control by the corporation, subject to such conditions as the commissioner or supervisory agency may approve. The board shall not turn back the control, possession and operation of any member until there has been repaid into the share insurance fund all sums paid out from the fund to the member or its shareholders or depositors or until security for repayment is received which is satisfactory to the board. K. The board may, and at the request of the commissioner or supervisory agency shall, at any time after they have taken over the control, possession and operation of any member, discontinue the business of the member and proceed to liquidate its affairs. The corporation shall in such event pay to the shareholders and depositors of such member the full amount of their shares or deposits permitted by law at the date of the discontinuance of the business of the member with interest from the last dividend date to the date of discontinuance at such rate, not exceeding three percent, as the board shall determine. The payments shall be made as soon as possible after the date of discontinuance. For such purpose the board shall use in addition to the assets of the member such sums as may be required from the share insurance fund. In case of liquidation the corporation shall be subject to such rules and regulations as may be prescribed by the commissioner or the supervisory agency. Rules and regulations prescribed by the commissioner shall apply only to the liquidation of New Mexico- chartered credit unions. In the event of the liquidation of a member chartered in a state other than New Mexico, the corporation shall be subject only to such rules and regulations prescribed by the applicable supervisory agency. The corporation shall take steps to collect all debts due and claims belonging to such members and may sell or compound all bad or doubtful debts, and may sell all or any part of the real or personal property or other assets of the member on such terms and conditions and at such valuation as the board shall determine, and the corporation may itself be the purchaser at any or all such sales. To execute and perform the powers and duties conferred upon the corporation, it may, in the name of any such member, prosecute and defend all suits and other legal proceedings and may, in the name of the member, execute, acknowledge and deliver all deeds, assignments, leases and other instruments necessary and proper to effectuate any sale of real or personal property or other assets. Any deed or other instrument executed pursuant to the authority hereby given shall be valid and effectual for all purposes to the same extent as though executed by the officers of the member by authority of its board of directors. The compensation of employees, counsel and other assistants employed by the board to liquidate the affairs of any member under this section, and all expenses incurred in connection with the liquidation of any such member shall be fixed by the directors of the corporation. The officers of the corporation and any other persons employed by its directors to liquidate the affairs of any member under this section shall give bond to the directors of the corporation for the faithful performance of their duties in relation to such liquidation in such amount and with such surety or sureties as the commissioner or supervisory agency may approve. The persons appointed for the purpose of liquidating the affairs of any such member shall be subject to all the penalties to which agents appointed by the commissioner or supervisory agency for the purpose of liquidating the affairs of a member are now or may hereafter be subject. All accounts for which no claimant can be found after six years following the discontinuance of the business of any such member shall be disposed of in accordance with the Uniform Disposition of Unclaimed Property Act [Uniform Unclaimed Property Act (1995), 7-8A-1 NMSA 1978]. L. With the approval of the commissioner or supervisory agency, and subject to such rules and regulations as he or it may prescribe, the board may appoint conservators or agents to assist it in the operation, management and liquidation of assets purchased or otherwise acquired from members by the corporation. The original location of the assets purchased or otherwise acquired shall determine whether such rules and regulations may be prescribed by the commissioner or supervisory agency. Certificates of appointment of such conservators and agents shall be filed with the commissioner or supervisory agency. Notwithstanding any other provisions of law, all members are hereby authorized to act as such conservators and agents and to exercise the powers and perform the duties contemplated by this section. M. The corporation may exercise all the powers, rights and franchises of any member, the control, possession and operation of which has been taken over by the corporation. Notwithstanding any other provisions of law: (1) with the approval of the commissioner or supervisory agency, any member may advance or loan upon, or purchase, the whole or any part of the assets of any other member which is in possession of the corporation or which has been the subject of a notice from the commissioner or supervisory agency to the corporation as provided herein, at such valuations and upon such terms and conditions as such member or members, by authorization of their boards of directors, may agree upon. The member making such an advance, loan or purchase, for the purpose of effecting the same, may assume and agree to pay the whole or any part of the share, deposit and other liabilities of such other member, subject to such terms and conditions and subject to such adjustments as may be approved by the commissioner or supervisory agency; and (2) with the approval of the commissioner or the supervisory agency, any member may advance or loan upon, or purchase the whole or any part of the assets acquired or held by the corporation, and may participate in such an advance, loan or purchase with one or more other members, at such valuation and upon such terms and conditions as the corporation, and such member or members with authorization of their boards of directors, may agree upon. With like approval, the corporation may do any and all things and may take any and all action which the board considers necessary or advisable to give effect to this paragraph; provided, that the approval of the commissioner or supervisory agency shall not be required in the case of the purchase hereunder by a member from the corporation of any mortgage for a sum equal to the unpaid balance thereof. History: 1953 Comp., § 48-19A-7, enacted by Laws 1973, ch. 114, § 7; 1979, ch. 95, § 7.