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 banking board 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,  thatthe 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 banking board 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  banking board 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 banking board.  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.    (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  banking  board,  a  credit  union  may  invest  its  funds in and make loans to credit unionorganizations; 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 orelectronic 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  banking  board 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.    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.