NY Banking L § 454 (2021)
2021 New York Laws BNK - Banking Article 11 - Credit Unions 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.