Depositing Public Funds in Local Banks – New Mexico (Proposed)

Sponsored by Representative Brian Egolf, this bill (HB 66) passed the New Mexico House of Representatives on a unanimous vote of 65-0, but did not make it to the Senate in time for consideration in the 2010 session. Rep. Egolf has vowed to reintroduce it next year.

The bill would give New Mexico-based banks and credit unions that otherwise meet the state’s banking requirements a 10 percent preference in bidding to be the state’s fiscal agent, the institution that manages its day-to-day banking business.

The bill also requires the New Mexico Treasurer and the State Investment Council to develop an investment policy for funds held in CDs (certificates of deposit) that would increase community bank lending to local residents and businesses.

It further mandates that the state treasurer shall produce a study on the feasibility of moving more of the state’s general fund accounts to local banks and credit unions.