2023 Laws of Puerto Rico › TITLE SEVEN - Banking (§§ 1 — 3116) › PART III - Other Financial Institutions (§§ 551 — 1390) › Chapter 86 - Cooperative Savings and Credit Associations Act of 2002 (§§ 1361 — 1371b) › Subchapter II - Authorized Powers and Activities (§§ 1362 — 1362g) › § 1362c - Loans and financial services—Other financial activities

In addition to the financial services and activities authorized in §§ 1362a and 1362b of this title, cooperatives may perform other financial activities that are described below, subject to the limits and conditions that are established by the corporation through regulations or administrative decisions, which shall ensure the equitable and competitive participation of cooperatives in the respective financial services market in question, such as:
(a) Place deposits in other cooperatives, in the Cooperative Bank of Puerto Rico created by §§ 751 et seq. of this title, in commercial and savings banks doing business in Puerto Rico and in other insured financial entities within the jurisdiction of the United States of America pursuant to applicable legislation.
(b) Acquire shares and other securities and deposits of cooperative societies and second- and third-degree cooperative bodies organized pursuant to the laws of Puerto Rico, including insurance cooperatives, the Cooperative Bank and subsidiaries or affiliated entities of the abovementioned entities.
(c) Grant loans, subject to the applicable requirements of § 1369a of this title, to other cooperative bodies organized under the laws of Puerto Rico, to any juridical person, association, society, foundation, institution, company or group of persons [or] special corporations of workers organized under the laws of Puerto Rico, whether or not they are partners of the cooperative.
(d) Short- or long-term borrowing of money from any person, entity or public or private agency, provided that the loan does not exceed twenty-five percent (25%) of the capital stock of the cooperative, after subtracting any accrued loss. These requirements do not apply to the deposit of public funds, which shall be governed by the applicable special regulations. Regardless of the above provisions, and upon justification to such effects, the Corporation may authorize that the total loan can exceed the above limits. In the cases that it is necessary to pledge corporate assets to obtain such loans and the market price of the assets to be offered as security exceed one hundred and twenty percent (120%) of the total amount of the loan, the cooperative must obtain the prior written consent of the Corporation. When assets are pledged without said consent, and the cooperative incurs problems of insolvency that require action under §§ 1334 et seq. of this title, the Corporation shall have the prerogative, at its full discretion, to rescind said transaction.
(e) Extend, accept, endorse, discount, execute and issue promissory notes, bills of exchange, certificates of deposit and other transferable or negotiable commercial instruments.
(f) Sell and purchase money orders, traveler’s checks, receiving securities on deposit, administering loans and performing all types of collections and payments on behalf of others, buying and selling postage stamps, internal revenue stamps, pre-paid telephone cards and other similar goods and services.
(g) Sell and buy bonds, securities, and other evidence of indebtedness of the Government of the Commonwealth of Puerto Rico, the Government of the United States of America, and the states of the United States, as well as of their agencies, corporations, instrumentalities, authorities and political subdivisions, that are not overdrawn. When investing in such instruments under equal conditions with regard to yield, priority shall be given to those of the Government of the Commonwealth of Puerto Rico, and its agencies. Likewise, when dealing with bonds, stock or evidence of indebtedness from other states of the United States, the stock to be acquired must be rated among the two (2) highest categories by an internationally recognized financial rating firm.
(h) Establish or affiliate to one or more institutions, associations, corporations or networks of financial entities or institutions related to the rendering of financial services and any other needs in common of the cooperatives, including networks or associations for the electronic transfer of funds, systems of payment, and clearing houses, among others whose operations could be limited to the Commonwealth of Puerto Rico or to be extended to or originated in any foreign location.
(i) Operate a trust department with the authorization of the Corporation.
(j) Acquire and hold common stock and obligations issued by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, the Student Loans Marketing Association, or by the Federal Land Bank, the Federal Intermediate Credit Bank and the Cooperatives Bank, organized and authorized to do business in the Commonwealth of Puerto Rico, pursuant to the acts of the United States Congress.
(k) Barter, encumber, acquire or assign in lease the real estate assets needed to execute the goals and purposes for which the cooperative is organized, subject to the limitations of the applicable laws and regulations.
(l) Act, subject to the applicable regulations, as depositaries of public funds of any nature, for which the agencies shall accept as collateral the loans granted to its members that are not in arrears for more than sixty (60) days and whose unpaid balance is kept at least at one hundred and twenty-five percent (125%) of the deposit.
(m) Engage in the sale, soliciting, offering or marketing of insurance products in Puerto Rico, under any of the following structures:
(1) Acting directly, on their own, as agents for cooperative insurers licensed under §§ 101 et seq. of Title 26, known as the Insurance Code, from whom they hold certificates of contribution of funds. For these purposes, the cooperative shall be exempted from the requirements and restrictions provided in § 908 of Title 26 and subsections (1), (4), and (5) of § 916 of Title 26.
(2) Through subsidiaries, affiliates or cooperative enterprises as described in § 1362e of this title, for the sale, soliciting, offering or marketing of insurance products of cooperative insurers authorized pursuant to §§ 101 et seq. of Title 26, known as the Insurance Code of Puerto Rico, that hold certificates of contributions of funds, without it being necessary to qualify as a financing holding company.
(3) The insurance activities of cooperatives authorized in this subsection shall be subject to the special regulations that the Commissioner of Insurance and the Corporation shall adopt jointly, whose regulations shall ensure an equitable and competitive share of the cooperatives in their function of the sale of insurance by the depositary entities, and shall comply with the objective of certain entities supporting others.
(n) Perform such financial activities or services that are necessary or convenient to strengthen their competitive position as a financial intermediary that operates in an environment of regulatory liberality.
(o) Act as sole incorporator of subsidiary or affiliate entities pursuant to any statutory provisions that permit the organization of juridical entities under the laws of Puerto Rico.
(p) Execute all the acts and operations that are needed to perform the activities for which the cooperative is organized and incorporated, subject to the limitations established in this chapter and the regulations adopted by virtue thereof, as well as in §§ 1334 et seq. of this title, and its regulations.
(q) Perform any other activities that the Corporation determines administratively or through regulations, that are incidental to the operations of the cooperative or that are pertinent to the type of other financial institutions or cooperative entities.
History —Oct. 28, 2002, No. 255, § 2.04; Aug. 15, 2008, No. 283, § 1.