Code of Massachusetts Regulations › 209 CMR - DIVISION OF BANKS AND LOAN AGENCIES › Title 209 CMR 50.00 - Parity with Federal Credit Unions › Section 50.07 - Activities Requiring No Application or Notice

Current through Register 1525, July 5, 2024
(1) A credit union that is well or adequately
			 capitalized and has not been notified that it is in troubled condition may
			 engage in the activities listed in 209 CMR 50.07(2) without filing an
			 application or providing notice to the Commissioner, provided the activities
			 continue to be deemed legally permissible by the Commissioner, and the
			 activities are conducted in accordance with applicable Massachusetts or federal
			 law.
(2) A credit union may engage
			 in the following activities pursuant to 209 CMR 50.07(1):
(a)
Additional Consumer Loan
			 Participation Authority Not Included in M.G.L. c. 171
. A credit
			 union may, by written agreement, make or invest in consumer loan participations
			 with any credit union service organization or any state or federal government
			 agency and its subdivisions meeting the requirements of 209 CMR 50.07 subject
			 to the terms and conditions applicable to federal credit unions found in 12 CFR
			 § 701.22. For the purposes of 209 CMR 50.07(2)(a), a consumer loan is
			 defined as a loan or line of credit, whether secured by collateral or security
			 of any nature or unsecured, for consumer or other purposes other than a real
			 estate loan.
(b)
Real
			 Estate Loan Participations
. A credit union may, by written
			 agreement, make or invest in real estate loan participations with any
			 federally-chartered or federally-insured credit union, any federally-chartered
			 or federally-insured bank, any state or federal government agency and any
			 subdivision thereof, or any credit union service organization meeting the
			 requirements of 209 CMR 50.07 subject to the terms and conditions applicable to
			 federal credit unions found in 12 CFR § 701.22.
(c)
Deposits in Federally Insured
			 Banks and Credit Unions
.
1.
Types of Deposits
.
a.
			 A credit union may invest in the deposits, including certificates of deposit,
			 of federally insured banks located within or without the Commonwealth, provided
			 such institutions are well capitalized under applicable federal share or
			 deposit insurance laws and regulations.
b. A credit union may invest in the shares
			 and deposits, including certificates of deposit, of federally insured credit
			 unions located within or without the Commonwealth, provided such institutions
			 are well capitalized under applicable federal share or deposit insurance laws
			 and regulations.
c. Certificates of
			 deposit authorized by 209 CMR 50.07(2)(c)1.a. and b. may exceed two years in
			 maturity provided such investment is consistent with a credit union's formal
			 asset liability management strategy.
2.
Cash on Hand
			 Requirements
. Deposits or certificates of deposit authorized by
			 209 CMR 50.07(2)(c)1.a. and b. shall not qualify towards the cash on hand
			 requirements of M.G.L. c. 171, § 71, unless the deposit or certificate of
			 deposit meets the maturity and eligible depository requirements of M.G.L. c.
			 171, § 71.
(d)
Additional Investment Authorities
. A credit union may
			 invest or engage in investment repurchase transactions; securities lending
			 transactions; borrowing repurchase transactions, including reverse repurchase
			 transactions; and federal funds from any financial institution insured by the
			 Federal Deposit Insurance Corporation or the NCUA subject to the terms and
			 conditions applicable to federal credit unions found in 12 CFR Part 703. Any
			 investments made under 209 CMR 50.07(2)(d) shall be made in accordance with a
			 detailed written policy approved and reviewed annually by the credit union's
			 directors.
(e)
Interest
			 Bearing Corporate Checking Accounts
. To the extent permitted by
			 federal law, a credit union may pay dividends on organization member share
			 draft accounts and may permit such organization members to make withdrawals
			 from such accounts by negotiable or transferable instruments or other orders
			 for the purpose of making transfers to third parties; provided, however, that
			 the entire beneficial interest in such account shall be held by an organization
			 member.
(f)
Treasury
			 Tax and Loan Depositories
. A credit union may establish Treasury
			 Tax and Loan Remittance Accounts subject to the requirements and limitations of
			 12 U.S.C. § 1767(a) and 12 CFR § 701.37, its implementing
			 regulations. Such authority shall not extend to acting as a fiscal agent or
			 depository for the Commonwealth or its political subdivisions unless expressly
			 authorized by Massachusetts law.
(g)
Leasing
.
1.
Authority
. A
			 credit union may engage in automobile and personal property lease financing
			 transactions with its members on a net, full payout basis. Such automobile and
			 personal leasing activities may be conducted on either a direct or indirect
			 basis and on either an open or closed end basis.
2.
Conditions and
			 Limitations
. All credit union leasing activities shall strictly
			 conform to the conditions and limitations set forth in 12 CFR Part 714:
Leasing
. Those requirements include, but are not limited to,
			 provisions governing maximum residual value; salvage values over leased
			 property; and, contingent liability insurance policy endorsements for leasing.
			 Credit union leasing activities shall remain subject to applicable usury limits
			 under Massachusetts law.
(h)
Additional
			 Powers
.
1.
General
. The authorities provided in 209 CMR
			 50.07(2)(h)2. are only for those activities listed. A credit union may engage
			 in other activities if they are permitted and determined by the NCUA to be
			 incidental powers pursuant 12 CFR § 721 pursuant to regulations,
			 guidelines or written opinions of the General Counsel of the NCUA only if the
			 Commissioner affirmatively determines by regulation or in writing that the
			 activity is reasonably related to an individual power set out in 209 CMR
			 50.07(2)(h)2.
2.
Permissible Activities
.
a.
Certification
			 Services
. A credit union may provide the following certification
			 services: notary services, signature guarantees, certification of electronic
			 signatures, and share draft certifications.
b.
Charitable Contributions and
			 Donations
. A credit union may make charitable contributions and
			 donations, including gifts the credit union provides to assist others through
			 contributions of staff, equipment, money, or other resources. Examples of
			 charitable contributions include donations to community groups, nonprofit
			 organizations, other credit unions or credit union affiliated causes, as well
			 as donations to create charitable foundations.
c.
Correspondent
			 Services
. A credit union may provide the following correspondent
			 services to other federally-insured credit unions: loan processing, loan
			 servicing, member check cashing services, disbursing share withdrawals and loan
			 proceeds, cashing and selling money orders, and automated teller machine
			 deposit services.
d.
Electronic Financial Services
. A credit union may
			 provide the following electronic financial services: automated teller machines,
			 electronic fund transfers, online transaction processing through a web site,
			 web site hosting services, account aggregation services, and Internet access
			 services to perform or deliver products or services to members.
e.
Excess Capacity
.
i.
Agreements Relative to Excess
			 Capacity in Personnel
. A credit union with excess capacity in its
			 personnel may enter into an agreement to permit its employees to work elsewhere
			 subject to the provisions of M.G.L. c. 171, § 19.
ii.
Sale or Lease of Excess
			 Capacity in Data Processing Equipment or Services
. A credit union
			 may sell or lease the excess capacity in data processing equipment or
			 services.
iii.
Sale or
			 Lease of Excess Capacity in Facilities, Equipment or Office Space
.
			 A credit union may sell or lease the excess capacity in facilities, equipment
			 or office space.
f.
Financial Counseling
. A credit union may provide
			 advice, guidance or services to members to promote thrift or to otherwise
			 assist members on financial matters and may provide the following financial
			 counseling services if said services are provided by the credit union for a
			 fee: income tax preparation service; electronic tax filing for members;
			 counseling regarding estate and retirement planning; investment counseling; and
			 debt and budget counseling.
g.
Finder Activities
. A credit union may provide the
			 following finder activities by offering products and services to members
			 through outside vendors: through the sale of advertising space on the credit
			 union's web site and account statements and receipts; and selling statistical
			 or consumer financial information to outside vendors to facilitate the sale of
			 their products to the members of the credit union.
h.
Marketing
			 Activities
. A credit union may engage in the following marketing
			 activities: advertising and other promotional activities such as raffles,
			 membership referral drives, and the purchase or use of advertising.
i.
Member Monetary Instrument
			 Services
. A credit union may provide the following monetary
			 instrument services to its members: sale and exchange of foreign currency and
			 U.S. commemorative coins; use of a credit union's accounts in foreign financial
			 institutions to facilitate members' transfer and negotiation of checks
			 denominated in foreign currency; and engaging in monetary transfer services for
			 members, provided, however, that under no circumstances can a credit union
			 engage in foreign exchange activities for speculative purposes for its own
			 account.
j.
Stored
			 Value Products
. A credit union may provide the following stored
			 value products: stored value cards, public transportation tickets, event and
			 attraction tickets, gift certificates, prepaid phone cards, postage stamps,
			 electronic benefits transfer script, and similar media.
k.
Health Savings
			 Accounts
. A credit union may offer health savings accounts. The
			 term health savings account shall include a tax-advantaged savings account a
			 member may use to pay some medical expenses not covered by health insurance in
			 accordance with 26 U.S.C. § 223 and any guidelines issued by the
			 NCUA.
l.
Loan-related
			 Products
. A credit union may provide the following loan-related
			 products: debt cancellation agreements and debt suspension agreements.
i. The credit union shall adopt policies
			 relative to debt cancellation or debt suspension agreements to include
			 provisions addressing, but not limited to, disclosures relative to the
			 prohibition against tying; total fees; payment methods and termination process;
			 eligibility requirements; and an affirmative election by the member to purchase
			 a debt cancellation or debt suspension product, and a written acknowledgment of
			 the disclosures with receipt by the member.
ii. Any agreement between the credit union
			 and the vendor, and any agreements with additional or different third parties
			 in connection with this authority, must include a provision that allows the
			 Division access to its records regarding debt cancellation or debt suspension
			 products for examination purposes. Any agreement with the vendor or any
			 additional or different third parties must include provisions granting the
			 Division access to the books and records of third party providers for the
			 purpose of verifying compliance with applicable laws, rules, regulations and
			 regulatory guidelines.
iii. The
			 credit union shall also be subject to any directives and regulations the
			 National Credit Union Administration and the Division may promulgate in the
			 future on debt cancellation or debt suspension products.
iv. Should the credit union decide to
			 compensate member service representatives for the sale of debt cancellation or
			 debt suspension agreements. Said compensation would have to be at a nominal
			 level. The credit union would be required to establish written policies and
			 internal controls in connection with said incentive and monitor compliance with
			 such policies and controls at least annually.
m.
Investments in Land, Building,
			 Improvements, and Equipment
. A credit union may invest in land,
			 building, improvements and equipment up to $1,000,000 per one parcel of real
			 estate or purchase of equipment per transaction without providing notice to the
			 Commissioner.