Pub. 15 2018 Issue 4

6 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S One possibility is that the drafters assumed that the Clause would be adapted and made workable by court decisions. The federal Bill of Rights, for example, features many concepts, like “freedom of speech,” that had no commonly understood meaning when the U.S. Constitution was ratified. Those con - cepts, however, were subsequently fleshed out by extensive federal caselaw. Unfortunately, New Mexico courts have not provided a sim- ilar service with respect to the Anti-donation Clause. Shortly after statehood, in 1915, the Chief Justice of the New Mexico Supreme Court proclaimed that the Clause should be applied literally and, apparently, with as little thought as possible: “The language of [the Clause] is so clear and explicit that it does not require [interpretation]; all that need be done is to read it and apply the language in its ordinary sense.” The anti-donation clause has been amended to provide exceptions to the general rule for such purpose as providing care and maintenance for the sick, establishing a veteran’s scholarship program for Vietnam veterans; student loan pro- gram; new jobs by providing land; buildings or infrastructure to support new and expanding businesses; affordable housing; and veterans’ scholarships. This process is cumbersome as in each instance where a need arises to pledge the states credit for a private purpose. The Hall article notes that… “The Anti-donation Clause could evolve in a number of ways. At some point, the state Supreme Court will be called upon to rule on the constitutionality of a law that, by tra - ditional measures, clearly violates the Clause, but where enforcement of the violation would be deeply unpopular. How the Court will respond to such a dilemma is un- known. Most likely, it will attempt to resolve the constitu- tional question on the narrowest possible grounds, which is usually good judicial practice. The fundamental difficulty with the Clause, however, is that its very breadth generally precludes narrow answers. If the Court wishes to avoid pol- icy discussions, its only choice may be to keep the rationale for its decision as vague as possible. There is also, of course, the alternative of direct amendment or repeal. A repeal would constitute a definitive resolution of all Anti-donation Clause controversies. But whether New Mexico voters would approve a repeal, and whether a repeal would be a good idea, are separate questions.” A final question that was raised by NMBA President John Gulas was, “Would the creation of a state bank violate the New Mexico anti-donation clause?” Interesting. State Bank Senator Jeff Steinborn (D-Las Cruces) has introduced Senate Memorial 5 which in part requests that the Legislative Finance Committee undertake a feasibility study during the 2019 legislative interim of establishing a state-owned bank in New Mexico. Based on the language of the memorial, the Senator expresses a desire to establish a state bank to: • Provide greater access to banking services for small local business; • Provide venture capital for new businesses in the technology transfer sector; • Increase stewardship of public funds; and • Enhanced agricultural lending. If such a study were to be undertaken, the finance com - mittee would have to consider the costs, risks, and regulatory issues, including capitalization, deposit insurance, and access to interbank funds and transfer systems, as well as various ownership structures, including appropriate mixes and public and private capital. Charter: There are two potential bank-like charters that may be available to a state-owned bank. As a first option, a public bank charter could not be utilized as there is no provision for a public bank charter under New Mexico law. A second option would be utilization of the commercial bank charter which would require the approval of the state bank regulator (FID), a sound business plan, experienced manage- ment and appropriate capitalization. n EXECUTIVE VICE PRESIDENT’S MESSAGE continued from page 5