NMSA 58-9-10. Impairment of capital; unsafe conditions; receivership
AI-assisted research summary: The director can require a trust company to fix a capital deficit, investigate unsafe or unlawful conduct, and seek court relief, including receivership or injunctions.
58-9-10. Impairment of capital; unsafe conditions; receivership. A. If it appears to the director that the capital of a trust company is either reduced or impaired below the minimum capital requirements set forth in Section 58-9-6 NMSA 1978, except for nonprofit corporations, the director shall order the company to make good any deficit within sixty days of the date of the order and may restrict and regulate the operation of the trust business until the capital is restored. B. If the deficiency in capital has not been made good within the prescribed time, the director may apply to the district court in the county in which the principal office of the company is located to have a receiver appointed for the liquidation or rehabilitation of the company. The expense of the receivership shall be paid out of the assets of the trust company. C. The director may investigate, upon complaint or otherwise, if it appears that a trust company is conducting business in an unsafe, unsound, financially irresponsible or injurious manner or in violation of the Trust Company Act, or the rules promulgated pursuant to that act, the Uniform Probate Code [Chapter 45 NMSA 1978], the Uniform Prudent Investor Act [45-7-601 to 45-7-612 NMSA 1978] or the Uniform Trust Code [Chapter 46A NMSA 1978], or when it appears that any person is engaging in trust business without being certified pursuant to the Trust Company Act. D. If it appears upon sufficient ground or evidence satisfactory to the director that a trust company has engaged in or is about to engage in any act or practice in violation of the Trust Company Act, or any rule or order pursuant to that act, or the Uniform Probate Code, the Uniform Prudent Investor Act or the Uniform Trust Code, to the extent that the security of the assets and trust accounts or the protection of persons utilizing the trust services have been or may be jeopardized, the director may summarily order the trust company to cease and desist from that act or practice, or the director may apply to the district court of the first judicial district of Santa Fe county to enjoin the trust company in engaging in the act or practice and to enforce compliance with the Trust Company Act, the Uniform Probate Code, the Uniform Prudent Investor Act or the Uniform Trust Code, or for any other appropriate equitable relief. Upon a proper showing, if a temporary restraining order, a preliminary injunction or a permanent injunction is granted, a receiver may be appointed for the defendant or defendant's assets, and the certification of the trust company may be canceled and such additional or other equitable remedies may be provided as the court deems appropriate. The director shall not be required to post a bond. E. If an investigation pursuant to Subsection C of this section reveals that a trust company is conducting business in an unsafe, unsound or injurious manner, or in violation of the Trust Company Act or rules promulgated pursuant to that act, the Uniform Probate Code, the Uniform Prudent Investor Act or the Uniform Trust Code, or that any person is engaging in trust business without being certified pursuant to the Trust Company Act, the trust company or person investigated shall pay to the director an investigation fee at the rate of one hundred fifty dollars ($150) per day or fraction of a day for each authorized representative engaged in the investigation. History: 1953 Comp., § 48-24-10, enacted by Laws 1973, ch. 191, § 10; 1991, ch. 250, § 6; 2013, ch. 88, § 4; 2013, ch. 97, § 4; 2018, ch. 64, § 9.