HB 125 PUBLIC BANKING ACT

Rep Patricia Roybal Caballero

Actions: HPREF [2] not prntd-HRC

Scheduled: Not Scheduled

 House Bill 125 (HB 125) The Public Banking Act outlines a comprehensive framework for the establishment and operation of the Public Bank of New Mexico, emphasizing transparency, public representation, and a focus on community development. The act reflects a commitment to leveraging the bank's resources for the benefit of the state and local communities. 

 House Bill 125 (HB 125) The Public Banking Act in New Mexico introduces a significant initiative to establish the Public Bank of New Mexico, outlining various aspects of its structure, governance, and operations. 
Establishment and Structure:
•	The act creates the Public Bank of New Mexico as a public body politic and corporate, emphasizing its role as a governmental instrumentality.  
•	The bank is granted the capacity to make contracts, accept deposits, borrow and lend money, and act as a fiscal agent for the state and local governments.
Board of Directors:
•	The board of directors, consisting of eleven members, is responsible for governing the bank.
•	Members are appointed with input from the public, ensuring diverse representation.  
•	The act specifies the qualifications, terms, and limitations for directors, aiming for a balance of expertise in banking, community economic development, and other relevant fields.
Executive Leadership:  
•	The Chief Executive Officer (CEO) and Chief Risk Officer (CRO) play crucial roles.  
•	The CEO is responsible for the overall management of the bank, financial health, and compliance with regulatory requirements.  
•	The CRO assists in strategic planning and risk management.
Investments and Lending:
•	The act outlines the permissible investments and lending activities of the bank, including loans to state-chartered institutions, political subdivisions, and organizations with tax-exempt status.  
•	Emphasis is placed on developing loan programs for public benefit, fostering agriculture, commerce, and industry.
Conflict of Interest: 
•	The act addresses conflicts of interest among directors, officers, and employees, requiring disclosure and abstention from participation in related decisions.  
•	Violation of conflict-of-interest provisions is subject to penalties.
State Banking Fund:  
•	The State Banking Fund is created to receive appropriations, capital, and earnings.  
•	Funds from loan repayments and securities are deposited into the fund, ensuring its sustainability.  
•	Appropriations are made for capitalization and operational expenses.
Deposits and Exceptions:
•	The act makes an exception to certain deposit regulations for the Public Bank of New Mexico, allowing the state treasurer to make a significant initial deposit into the bank.
Appropriations:  
•	Appropriations are allocated to capitalize the bank and support its establishment, including funds for economic development.
Effective Date:  
•	The act is set to take effect on July 1, 2024.