N.Y. Banking Law § 454: General powers

§ 454. General powers. In addition to the powers conferred by the

provisions of this chapter, a credit union shall, subject to the

restrictions and limitations contained in this article, in its bylaws,

and in any regulations promulgated by the superintendent, or in any

regulations of the superintendent of financial services as may be

specifically authorized under this section, have the following powers:

1. To issue and receive payments on, shares, share drafts, and share

certificates, subject to such terms, rates, and conditions as are

established by its board of directors, from its members and from other

credit unions, both state and federally chartered.

A member may designate any person or persons to own shares or share

certificates with him or her in joint tenancy with the right of

survivorship, but no joint tenant shall be permitted to vote, obtain

loans, or hold office, unless he or she is within the field of

membership and is a qualified member.

2. To act as trustee under a retirement plan established pursuant to

the provisions of the act of congress entitled "Self-employed

Individuals Tax Retirement Act of 1962," and provisions of law contained

therein, as amended; provided that the provisions of such retirement

plan require the funds of such trust to be invested exclusively in share

accounts of insured state and federally chartered credit unions. In the

event that any such retirement plan, which, in the judgment of the

credit union, constituted a qualified plan under the provisions of said

self-employed individuals tax retirement act of nineteen hundred

sixty-two, and provisions of law contained therein, as amended, and the

regulations promulgated thereunder at the time the trust was established

and accepted by the credit union, is subsequently determined not to be

such a qualified plan or subsequently ceases to be such a qualified

plan, in whole or in part, the credit union may, nevertheless, continue

to act as trustee of any shares theretofore made under such plan and to

dispose of the same in accordance with the directions of the

shareholders and the beneficiaries thereof. No credit union, in respect

to shares purchased under this subdivision, shall be required to

segregate such shares from other shares of such credit union; provided,

however, that the credit union shall keep appropriate records showing in

proper detail all transactions engaged in under the authority of this

subdivision.

3. To act as trustee of an individual retirement account established

pursuant to the provisions of the act of congress entitled "Employee

Retirement Income Security Act of 1974," and provisions of law contained

therein, as amended; provided that the provisions of the written

governing instrument creating the trust require the funds of such trust

to be invested exclusively in share accounts of insured state and

federally chartered credit unions. In the event that any such individual

retirement account, which, in the judgment of the credit union,

constituted a qualified individual retirement account under the

provisions of said employee retirement income security act of 1974, and

provisions of law contained therein, as amended, and the regulations

promulgated thereunder at the time the trust was established and

accepted by the credit union, is subsequently determined not to be such

a qualified individual retirement account or subsequently ceases to be

such a qualified individual retirement account, in whole or in part, the

credit union may, nevertheless, continue to act as trustee of any shares

theretofore purchased under such individual retirement account and to

dispose of the same in accordance with the directions of the shareholder

and the beneficiaries thereof. No credit union, in respect to shares

purchased under this subdivision, shall be required to segregate such

shares from other shares of such credit union; provided, however, that

the credit union shall keep appropriate records showing in proper detail

all transactions engaged in under the authority of this subdivision.

4. To charge an entrance fee to any person who has applied for and

been elected to membership.

5. To charge a reasonable fee for the transfer of its shares.

6. (a) To lend money to its members at the rate or rates agreed to by

the credit union and the borrower upon such terms and conditions as are

established by its board of directors and subject to such regulations

and restrictions as the superintendent of financial services finds

necessary and proper.

(b) The knowingly taking, receiving, reserving, or charging a greater

rate of interest than permitted by law shall be held and adjudged a

forfeiture of the entire interest which the note or other evidence of

debt carries with it, or which has been agreed to be paid thereon. If

such greater rate of interest has been paid, the person paying the same

or his legal representatives may recover twice the entire amount of the

interest thus paid from the credit union.

(c) (i) No credit union may make any member business loan that would

result in a total amount of such loans outstanding at that credit union

at any one time equal to more than the lesser of 1.75 times the actual

net worth of the credit union, or 1.75 times the minimum net worth

required under 12 U.S.C. 1790d(c)(1)(A) for a credit union to be well

capitalized.

(ii) Subparagraph (i) of this paragraph does not apply in the case of:

(A) a credit union chartered for the purpose of making, or that has a

history of primarily making, member business loans to its members, as

determined by the superintendent; or (B) a credit union that serves

predominantly low-income members, as defined by the superintendent, or

which is a community development financial institution as defined in 12

U.S.C. 4702; or (C) a credit union excepted from the requirements of

such subparagraph (i) by the superintendent where such credit union is

seeking an exception from any federal limits on member business loans to

the same extent as permitted to federally-insured state credit unions

pursuant to the Federal Credit Union Act and regulations related

thereto, provided that such credit union demonstrates to the

satisfaction of the superintendent that such exception would be

consistent with the declaration of policy as set forth in section ten of

this chapter.

(iii) For purposes of this paragraph the term "member business loan"

and the term "net worth" shall have the same meaning as such terms are

defined in 12 U.S.C. 1757a.

7. (a) To issue credit cards, debit cards, and similar devices to

allow members to make purchases and to access their loans, lines of

credit, shares and deposits;

(b) To collect, receive and disburse funds in connection with the

issuance of negotiable checks, money orders, travelers checks and other

payment instruments to members, and to charge a fee for such services;

(c) To rent safe deposit boxes to members; and

(d) To provide any related financial services to members which are not

expressly authorized pursuant to this article, including but not limited

to electronic funds transfers and correspondent services; provided,

however, that any credit union which seeks to offer any such related

financial services which it has not offered prior to June twentieth, two

thousand three shall, not less than sixty days prior to offering such

services, notify the superintendent in writing of its intention to offer

such services. If the superintendent does not object in writing to the

offering of such services within sixty days after the receipt of the

notice, the credit union may offer such services to its members.

8. To deposit any moneys received by it, and not lent to members, in

one or more state or federally chartered banking organizations or

branches of foreign banking corporations which are insured by the

Federal Deposit Insurance Corporation, by the National Credit Union

Share Insurance Fund, or by another agency of the United States

government.

9. To borrow money subject to such regulations and restrictions as the

superintendent of financial services finds necessary and proper from any

source in an aggregate amount not exceeding fifty percent of assets

without the written approval of the superintendent.

10. To impose financing charges and late charges in the event of late

payment or default on loans and recover reasonable costs and expenses,

including collection costs and reasonable attorneys' fees incurred both

before and after judgment.

11. To suspend or expel members, as provided in section four hundred

sixty-four of this article.

12. To impress and enforce a lien upon the shares, share accounts,

share certificates, deposits, dividends, and accumulation of interest on

the shares, accounts, certificates, and deposits of any member to the

extent of any sums owed the credit union by said member and any loans

made to him or her directly or indirectly or on which he or she is

surety, guarantor, or endorser.

13. To cancel the shares of any member who withdraws or is expelled

and apply the withdrawal value thereof to the liquidation of such

member's indebtedness to the corporation.

14. Subject to the limitations contained in subdivision seven of

section four hundred fifty-six of this article, to hold shares in and

make loans to other credit unions, whether state or federally chartered.

15. To conduct its business at automated teller machines,

point-of-sale terminals, shared service centers, and similar facilities

subject to regulations which may be promulgated by the superintendent of

financial services. Such facilities shall not be deemed to be stations

and shall not be subject to any of the provisions of this chapter

applicable to stations.

16. To issue shares to and accept deposits from a member in the name

of a minor. Such shares and deposits shall be held for the minor's

exclusive right and benefit and free from control or lien of all other

persons, except creditors. The withdrawal value of such shares or

deposits shall be paid to the person in whose name such shares or

deposits are held. A receipt or acquittance of a minor shall be valid

and sufficient release and discharge to such credit union for all

payments made on account of such shares or deposits.

17. To issue shares to and accept deposits from a member, which are

held in the name of a member in trust for a beneficiary or in the name

of a non-member in trust for a beneficiary who is a member. No

beneficiary, unless a member in his or her own right, shall be permitted

to vote, obtain loans, or hold office or be required to pay an entrance

or membership fee. Payment of part or all of such a trust account to the

party in whose name the account is held shall, to the extent of such

payment, discharge the liability of the credit union to that party and

to the beneficiary, and the credit union shall be under no obligation to

see to the application of such payment. In the event of the death of the

party who owns a trust account, if the credit union has been given no

other written notice of the existence or terms of any trust and has not

received a court order as to disposition of the account, the account's

funds and any dividends or interest thereon shall be paid to the

beneficiary.

18. (a) To invest its funds in: (i) Those securities authorized as

permissible investments for savings banks by subdivisions one, two,

three, four, twelve, paragraph (a) of subdivision twelve-a, and

subdivisions fifteen, seventeen, twenty-seven and twenty-eight-a of

section two hundred thirty-five of this chapter and such other

investments as the superintendent deems permissible.

(ii) Advances of federal funds as authorized for savings banks by

subdivision twelve-b of section two hundred thirty-five of this chapter.

(iii) Common trust units of a credit union investment pool organized

for the purchase of:

(A) obligations of the United States of America, or securities fully

guaranteed as to principal and interest thereby;

(B) obligations issued by banks for cooperatives, federal land banks,

federal intermediate credit banks, federal home loan banks, the Federal

Home Loan Bank Board, or any corporation designated in section 846 of

Title 31 of the United States Code as a wholly owned government

corporation, or in obligations, participations, or other instruments of

or issued by, or fully guaranteed as to principal and interest by, the

Federal National Mortgage Association or the Government National

Mortgage Association, or in mortgages, obligations, or other securities

which are or ever have been sold by the Federal Home Loan Mortgage

Corporation pursuant to section 1454 or 1455 of Title 12 of the United

States Code, or in obligations or other instruments or securities of the

Student Loan Marketing Association;

(C) participation certificates evidencing beneficial interests in

obligations, or in the right to receive interest and principal

collections therefrom, which obligations have been subjected by one or

more government agencies to a trust or trusts for which any executive

department, agency, or instrumentality of the United States (or the head

thereof) has been named to act as trustee; provided that such investment

pool has been approved by the superintendent; or

(D) securities, obligations or other instruments of, or issued by, any

agency of the United States.

(iv) Where the assets of a credit union are in excess of three million

dollars, such credit union is further authorized to invest its funds in

the securities enumerated in subdivisions thirteen and fourteen of

section two hundred thirty-five of this chapter, subject in each case to

those limitations applicable to such investment in the case of savings

banks.

(b) All such securities, except those purchased in a common trust unit

pursuant to subparagraph (iii) of paragraph (a) of this subdivision,

must be registered in the name of the credit union; provided that where

any such securities are non-registerable, except those purchased in a

common trust investment pool, as hereinbefore provided, they shall be

placed in the custody of a bank, trust company, national bank, or state

or federal corporate credit union in the name of the credit union, and

shall be retained by such bank, trust company, national bank, or state

or federal corporate credit union until such securities are liquidated

at maturity or sold, in either of which events the proceeds of such

securities shall be deposited in the name of the credit union in any

institution specified in subdivision eight of this section.

(c) Notwithstanding the provisions of this subdivision, a credit union

may invest the lesser of ten percent of its capital or net worth, but at

least ten thousand dollars, in the shares of investment companies;

provided that the portfolio of such investment company consists solely

of securities in which credit unions are permitted to invest directly.

The term "investment companies" means open-end and close-end investment

companies and unit investment trusts as these terms are used in an Act

of Congress entitled "Investment Company Act of 1940."

19. Subject to regulations and restrictions of the superintendent of

financial services, a credit union may invest its funds in and make

loans to credit union organizations; provided that such loans or

investments shall be approved by the board of directors. No such loan or

investment shall be made by a credit union pursuant to this subdivision

if the amount of such loan or investment exceeds three per centum of the

total sum due to the members on shares and deposits. For the purpose of

this subdivision, a credit union organization is any organization

established primarily to serve the needs of its member state and federal

credit unions, and whose business relates to the daily operations of the

credit unions it serves.

20. To purchase, sell, service, pledge or discount, or otherwise

receive or dispose of, eligible obligations to the same extent as

authorized pursuant to Title 12 U.S.C. section 1757(13) and any

regulations promulgated thereunder, as such laws or regulations may be

amended from time to time.

21. To purchase, hold, lease and convey a plot whereon there is or may

be erected a building suitable for the transaction of its business, from

portions of which not required for its own use a revenue may be derived,

and a plot whereon parking accommodations are or are to be provided,

with or without charge, primarily for its members or employees or both;

provided that the net aggregate of all investments of any credit union

in such plots and building shall be limited to six per centum of the

capital and retained earnings of such credit union, except with the

approval of the superintendent.

22. To enter into contracts.

23. To sue and to be sued in all courts and to participate in actions

and proceedings, whether judicial, arbitrative, or otherwise, in like

cases as natural persons.

24. To have a corporate seal, and to alter such seal at pleasure, and

to use it by causing it or a facsimile to be affixed or impressed or

reproduced in any other manner.

25. To make donations, irrespective of corporate benefit, for the

public welfare or for community fund, hospital, charitable, educational,

scientific, civic, or similar purposes, and, in time of war or other

national emergency, in aid thereof.

26. To elect or appoint officers, employees, and other agents of the

credit union, define their duties, fix the compensation of employees and

other agents, and to indemnify credit union officials, committee

members, and employees.

27. To have perpetual existence.

28. To honor requests for withdrawals of member accounts, whether

shares or deposits, in any manner approved by the credit union's board

of directors, including, without limitation because of enumeration,

requests in person, by telephone, by mail, by negotiable or

non-negotiable order, by electronic communication, or otherwise. The

board of directors may, at any time, require members to give, in

writing, not more than sixty days' notice of intention to withdraw the

whole or any part of the amounts paid in by them, except that this

requirement shall not apply to amounts in a share draft or checking

account. In the event that any credit union shall require that notice be

given before such amounts may be withdrawn, it shall, before or upon the

day such requirement is made effective, notify the superintendent by

telephone, other electronic means or in writing that such requirement

has been made.

29. To, either on an individual or participation basis, establish or

maintain an accounting service center, the functions, facilities, and

operations of which are limited to providing data processing services.

As used in this subdivision, the term "data processing services" means

the maintenance of bookkeeping, accounting, or other records related to

the purposes and functions of a credit union, primarily by mechanical or

electronic methods, and the furnishing of reports and information

derived from such records. Participation in the accounting service

center may be by means of a partnership or other non-corporate

arrangement between or among the participating entities or by

participation in an accounting service center corporation organized for

the sole purpose of providing data processing services. A credit union's

individual or proportionate ownership of the accounting service center

shall not exceed two percent of its members' shareholdings.

30. To acquire and lease personal property, and to hold, assign,

pledge, sell or otherwise dispose of such personal property, to the same

extent as authorized under subdivision twelve of section ninety-six of

this chapter, subject to such limitations and conditions as the

superintendent of financial services may from time to time prescribe by

general regulation.

31. To hold membership in other credit unions organized under this

article or under federal law or any other credit union act, and in

associations and organizations controlled by or fostering the interests

of credit unions, including a central liquidity facility organized under

state or federal law.

32. To execute and deliver for its members such guarantees as may be

incidental or usual in the transfer of investment securities.

33. Notwithstanding any other provision of this article to the

contrary, to participate in the minority - and women-owned business

development and lending program, as established in section 16-c of

section 1 of chapter 174 of the laws of 1968, constituting the urban

development corporation act, to the extent that such program allows

participation by credit unions.

33-a. To accept moneys deposited by the commissioner of taxation and

finance or the comptroller as linked deposits and make linked loans

pursuant to article fifteen of the state finance law and to pledge

assets or furnish other security satisfactory in form and amount to the

depositor, for repayment of such moneys.

34. To have and exercise all other powers that are necessary or

appropriate to enable it to carry out its purpose.

35. To participate in loans to credit union members jointly with other

credit unions, credit union organizations, or other banking

organizations pursuant to written policies established by the board of

directors; provided that a credit union which originates a loan for

which participation arrangements are made shall retain an interest in at

least ten percent of the face amount of the loan. The member of the

originating credit union benefiting from the proceeds of the loan need

not be within the field of membership of the other credit unions

participating in the loan.

36. To invest its funds in a collateralized mortgage obligation/real

estate mortgage investment conduit. A credit union may invest in a fixed

or variable rate collateralized mortgage obligation/real estate mortgage

investment conduit, subject to the same extent and under the same

conditions as federal credit unions are authorized to so invest,

pursuant to the Federal Credit Union Act (12 U.S.C 1757(15)(B)) and any

regulations related thereto, as amended.

37. To engage in a "savings promotion" in accordance with section

nine-v of this chapter and subject to any regulations promulgated by the

superintendent. The superintendent shall consult with the state gaming

commission before proposing any such regulations or any amendments

thereto. Such regulations shall ensure that:

a. no participant in a savings promotion is charged any fee that would

constitute, directly or indirectly, consideration for participation in

such savings promotion; and

b. no participant in a savings promotion foregoes, directly or

indirectly, any interest that would constitute consideration for

participation in such savings promotion.