2023 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.