Proposals To Boost NMFA Oversight Discussed

SANTA FE – Proposals to reshape the troubled New Mexico Finance Authority are piling up, as legislators and others look for ways to restore public confidence in the quasi-independent lending agency.

Sen. Tim Keller, D-Albuquerque, said Monday that he intends to introduce legislation during the 2013 session that would increase the background requirements for NMFA board members – by mandating that at least some of them have finance or banking experience – and reduce the number of board seats appointed by the Governor’s Office.

Other ideas recently floated include strengthening oversight by requiring the Finance Authority to submit its budget to the Legislature for annual approval and cutting the size of the agency’s staff.

“I think there’s a lot of desire to right the ship with statutory changes,” Keller said.

Keller sponsored a 2010 bill that changed the makeup of the State Investment Council and said the NMFA, which has been staggered by a fraudulent 2011 audit report and its fallout, needs a similar overhaul.

“We operate under government structures that are totally outdated, and the NMFA is no exception,” he told the Journal.

Keller’s legislation would, among other things, make the following changes:

⋄  Require that at least half the NMFA board members have at least 10 years of experience in finance or banking.

⋄  Require that the board chairman be elected by fellow board members, not appointed by the governor.

⋄  Give the Legislature and other top-ranking elected officials the authority to appoint board members.

Currently, the NMFA board is made up of 11 members, nine of which are Governor’s Office appointees. There are no minimum qualifications for board members, though one member must be the financial officer of a state university and all appointees are subject to Senate confirmation.

Gov. Susana Martinez’s office did not comment directly Monday on Keller’s proposal, but has recently said Martinez is open to ideas that are “designed to increase the day-to-day oversight and accountability of the finances at NMFA.”

The Finance Authority, which was created in 1992 and has an annual operating budget of about $128 million, has delayed loans to cities and canceled a $40 million bond sale since the bogus audit report was discovered. Two national credit rating agencies have also placed the NMFA’s bond ratings under review for possible downgrade.