§ 454 — General powers

§ 454. General powers. In addition to the powers conferred by the\nprovisions of this chapter, a credit union shall, subject to the\nrestrictions and limitations contained in this article, in its bylaws,\nand in any regulations promulgated by the superintendent, or in any\nregulations of the superintendent of financial services as may be\nspecifically authorized under this section, have the following powers:\n 1. To issue and receive payments on, shares, share drafts, and share\ncertificates, subject to such terms, rates, and conditions as are\nestablished by its board of directors, from its members and from other\ncredit unions, both state and federally chartered.\n A member may designate any person or persons to own shares or share\ncertificates with him or her in joint tenancy with the right of\nsurvivorship, but no joint tenant shall be permitted to vote, obtain\nloans, or hold office, unless he or she is within the field of\nmembership and is a qualified member.\n 2. To act as trustee under a retirement plan established pursuant to\nthe provisions of the act of congress entitled "Self-employed\nIndividuals Tax Retirement Act of 1962," and provisions of law contained\ntherein, as amended; provided that the provisions of such retirement\nplan require the funds of such trust to be invested exclusively in share\naccounts of insured state and federally chartered credit unions. In the\nevent that any such retirement plan, which, in the judgment of the\ncredit union, constituted a qualified plan under the provisions of said\nself-employed individuals tax retirement act of nineteen hundred\nsixty-two, and provisions of law contained therein, as amended, and the\nregulations promulgated thereunder at the time the trust was established\nand accepted by the credit union, is subsequently determined not to be\nsuch a qualified plan or subsequently ceases to be such a qualified\nplan, in whole or in part, the credit union may, nevertheless, continue\nto act as trustee of any shares theretofore made under such plan and to\ndispose of the same in accordance with the directions of the\nshareholders and the beneficiaries thereof. No credit union, in respect\nto shares purchased under this subdivision, shall be required to\nsegregate such shares from other shares of such credit union; provided,\nhowever, that the credit union shall keep appropriate records showing in\nproper detail all transactions engaged in under the authority of this\nsubdivision.\n 3. To act as trustee of an individual retirement account established\npursuant to the provisions of the act of congress entitled "Employee\nRetirement Income Security Act of 1974," and provisions of law contained\ntherein, as amended; provided that the provisions of the written\ngoverning instrument creating the trust require the funds of such trust\nto be invested exclusively in share accounts of insured state and\nfederally chartered credit unions. In the event that any such individual\nretirement account, which, in the judgment of the credit union,\nconstituted a qualified individual retirement account under the\nprovisions of said employee retirement income security act of 1974, and\nprovisions of law contained therein, as amended, and the regulations\npromulgated thereunder at the time the trust was established and\naccepted by the credit union, is subsequently determined not to be such\na qualified individual retirement account or subsequently ceases to be\nsuch a qualified individual retirement account, in whole or in part, the\ncredit union may, nevertheless, continue to act as trustee of any shares\ntheretofore purchased under such individual retirement account and to\ndispose of the same in accordance with the directions of the shareholder\nand the beneficiaries thereof. No credit union, in respect to shares\npurchased under this subdivision, shall be required to segregate such\nshares from other shares of such credit union; provided, however, that\nthe credit union shall keep appropriate records showing in proper detail\nall transactions engaged in under the authority of this subdivision.\n 4. To charge an entrance fee to any person who has applied for and\nbeen elected to membership.\n 5. To charge a reasonable fee for the transfer of its shares.\n 6. (a) To lend money to its members at the rate or rates agreed to by\nthe credit union and the borrower upon such terms and conditions as are\nestablished by its board of directors and subject to such regulations\nand restrictions as the superintendent of financial services finds\nnecessary and proper.\n (b) The knowingly taking, receiving, reserving, or charging a greater\nrate of interest than permitted by law shall be held and adjudged a\nforfeiture of the entire interest which the note or other evidence of\ndebt carries with it, or which has been agreed to be paid thereon. If\nsuch greater rate of interest has been paid, the person paying the same\nor his legal representatives may recover twice the entire amount of the\ninterest thus paid from the credit union.\n (c) (i) No credit union may make any member business loan that would\nresult in a total amount of such loans outstanding at that credit union\nat any one time equal to more than the lesser of 1.75 times the actual\nnet worth of the credit union, or 1.75 times the minimum net worth\nrequired under 12 U.S.C. 1790d(c)(1)(A) for a credit union to be well\ncapitalized.\n (ii) Subparagraph (i) of this paragraph does not apply in the case of:\n(A) a credit union chartered for the purpose of making, or that has a\nhistory of primarily making, member business loans to its members, as\ndetermined by the superintendent; or (B) a credit union that serves\npredominantly low-income members, as defined by the superintendent, or\nwhich is a community development financial institution as defined in 12\nU.S.C. 4702; or (C) a credit union excepted from the requirements of\nsuch subparagraph (i) by the superintendent where such credit union is\nseeking an exception from any federal limits on member business loans to\nthe same extent as permitted to federally-insured state credit unions\npursuant to the Federal Credit Union Act and regulations related\nthereto, provided that such credit union demonstrates to the\nsatisfaction of the superintendent that such exception would be\nconsistent with the declaration of policy as set forth in section ten of\nthis chapter.\n (iii) For purposes of this paragraph the term "member business loan"\nand the term "net worth" shall have the same meaning as such terms are\ndefined in 12 U.S.C. 1757a.\n 7. (a) To issue credit cards, debit cards, and similar devices to\nallow members to make purchases and to access their loans, lines of\ncredit, shares and deposits;\n (b) To collect, receive and disburse funds in connection with the\nissuance of negotiable checks, money orders, travelers checks and other\npayment instruments to members, and to charge a fee for such services;\n (c) To rent safe deposit boxes to members; and\n (d) To provide any related financial services to members which are not\nexpressly authorized pursuant to this article, including but not limited\nto electronic funds transfers and correspondent services; provided,\nhowever, that any credit union which seeks to offer any such related\nfinancial services which it has not offered prior to June twentieth, two\nthousand three shall, not less than sixty days prior to offering such\nservices, notify the superintendent in writing of its intention to offer\nsuch services. If the superintendent does not object in writing to the\noffering of such services within sixty days after the receipt of the\nnotice, the credit union may offer such services to its members.\n 8. To deposit any moneys received by it, and not lent to members, in\none or more state or federally chartered banking organizations or\nbranches of foreign banking corporations which are insured by the\nFederal Deposit Insurance Corporation, by the National Credit Union\nShare Insurance Fund, or by another agency of the United States\ngovernment.\n 9. To borrow money subject to such regulations and restrictions as the\nsuperintendent of financial services finds necessary and proper from any\nsource in an aggregate amount not exceeding fifty percent of assets\nwithout the written approval of the superintendent.\n 10. To impose financing charges and late charges in the event of late\npayment or default on loans and recover reasonable costs and expenses,\nincluding collection costs and reasonable attorneys' fees incurred both\nbefore and after judgment.\n 11. To suspend or expel members, as provided in section four hundred\nsixty-four of this article.\n 12. To impress and enforce a lien upon the shares, share accounts,\nshare certificates, deposits, dividends, and accumulation of interest on\nthe shares, accounts, certificates, and deposits of any member to the\nextent of any sums owed the credit union by said member and any loans\nmade to him or her directly or indirectly or on which he or she is\nsurety, guarantor, or endorser.\n 13. To cancel the shares of any member who withdraws or is expelled\nand apply the withdrawal value thereof to the liquidation of such\nmember's indebtedness to the corporation.\n 14. Subject to the limitations contained in subdivision seven of\nsection four hundred fifty-six of this article, to hold shares in and\nmake loans to other credit unions, whether state or federally chartered.\n 15. To conduct its business at automated teller machines,\npoint-of-sale terminals, shared service centers, and similar facilities\nsubject to regulations which may be promulgated by the superintendent of\nfinancial services. Such facilities shall not be deemed to be stations\nand shall not be subject to any of the provisions of this chapter\napplicable to stations.\n 16. To issue shares to and accept deposits from a member in the name\nof a minor. Such shares and deposits shall be held for the minor's\nexclusive right and benefit and free from control or lien of all other\npersons, except creditors. The withdrawal value of such shares or\ndeposits shall be paid to the person in whose name such shares or\ndeposits are held. A receipt or acquittance of a minor shall be valid\nand sufficient release and discharge to such credit union for all\npayments made on account of such shares or deposits.\n 17. To issue shares to and accept deposits from a member, which are\nheld in the name of a member in trust for a beneficiary or in the name\nof a non-member in trust for a beneficiary who is a member. No\nbeneficiary, unless a member in his or her own right, shall be permitted\nto vote, obtain loans, or hold office or be required to pay an entrance\nor membership fee. Payment of part or all of such a trust account to the\nparty in whose name the account is held shall, to the extent of such\npayment, discharge the liability of the credit union to that party and\nto the beneficiary, and the credit union shall be under no obligation to\nsee to the application of such payment. In the event of the death of the\nparty who owns a trust account, if the credit union has been given no\nother written notice of the existence or terms of any trust and has not\nreceived a court order as to disposition of the account, the account's\nfunds and any dividends or interest thereon shall be paid to the\nbeneficiary.\n 18. (a) To invest its funds in: (i) Those securities authorized as\npermissible investments for savings banks by subdivisions one, two,\nthree, four, twelve, paragraph (a) of subdivision twelve-a, and\nsubdivisions fifteen, seventeen, twenty-seven and twenty-eight-a of\nsection two hundred thirty-five of this chapter and such other\ninvestments as the superintendent deems permissible.\n (ii) Advances of federal funds as authorized for savings banks by\nsubdivision twelve-b of section two hundred thirty-five of this chapter.\n (iii) Common trust units of a credit union investment pool organized\nfor the purchase of:\n (A) obligations of the United States of America, or securities fully\nguaranteed as to principal and interest thereby;\n (B) obligations issued by banks for cooperatives, federal land banks,\nfederal intermediate credit banks, federal home loan banks, the Federal\nHome Loan Bank Board, or any corporation designated in section 846 of\nTitle 31 of the United States Code as a wholly owned government\ncorporation, or in obligations, participations, or other instruments of\nor issued by, or fully guaranteed as to principal and interest by, the\nFederal National Mortgage Association or the Government National\nMortgage Association, or in mortgages, obligations, or other securities\nwhich are or ever have been sold by the Federal Home Loan Mortgage\nCorporation pursuant to section 1454 or 1455 of Title 12 of the United\nStates Code, or in obligations or other instruments or securities of the\nStudent Loan Marketing Association;\n (C) participation certificates evidencing beneficial interests in\nobligations, or in the right to receive interest and principal\ncollections therefrom, which obligations have been subjected by one or\nmore government agencies to a trust or trusts for which any executive\ndepartment, agency, or instrumentality of the United States (or the head\nthereof) has been named to act as trustee; provided that such investment\npool has been approved by the superintendent; or\n (D) securities, obligations or other instruments of, or issued by, any\nagency of the United States.\n (iv) Where the assets of a credit union are in excess of three million\ndollars, such credit union is further authorized to invest its funds in\nthe securities enumerated in subdivisions thirteen and fourteen of\nsection two hundred thirty-five of this chapter, subject in each case to\nthose limitations applicable to such investment in the case of savings\nbanks.\n (b) All such securities, except those purchased in a common trust unit\npursuant to subparagraph (iii) of paragraph (a) of this subdivision,\nmust be registered in the name of the credit union; provided that where\nany such securities are non-registerable, except those purchased in a\ncommon trust investment pool, as hereinbefore provided, they shall be\nplaced in the custody of a bank, trust company, national bank, or state\nor federal corporate credit union in the name of the credit union, and\nshall be retained by such bank, trust company, national bank, or state\nor federal corporate credit union until such securities are liquidated\nat maturity or sold, in either of which events the proceeds of such\nsecurities shall be deposited in the name of the credit union in any\ninstitution specified in subdivision eight of this section.\n (c) Notwithstanding the provisions of this subdivision, a credit union\nmay invest the lesser of ten percent of its capital or net worth, but at\nleast ten thousand dollars, in the shares of investment companies;\nprovided that the portfolio of such investment company consists solely\nof securities in which credit unions are permitted to invest directly.\nThe term "investment companies" means open-end and close-end investment\ncompanies and unit investment trusts as these terms are used in an Act\nof Congress entitled "Investment Company Act of 1940."\n 19. Subject to regulations and restrictions of the superintendent of\nfinancial services, a credit union may invest its funds in and make\nloans to credit union organizations; provided that such loans or\ninvestments shall be approved by the board of directors. No such loan or\ninvestment shall be made by a credit union pursuant to this subdivision\nif the amount of such loan or investment exceeds three per centum of the\ntotal sum due to the members on shares and deposits. For the purpose of\nthis subdivision, a credit union organization is any organization\nestablished primarily to serve the needs of its member state and federal\ncredit unions, and whose business relates to the daily operations of the\ncredit unions it serves.\n 20. To purchase, sell, service, pledge or discount, or otherwise\nreceive or dispose of, eligible obligations to the same extent as\nauthorized pursuant to Title 12 U.S.C. section 1757(13) and any\nregulations promulgated thereunder, as such laws or regulations may be\namended from time to time.\n 21. To purchase, hold, lease and convey a plot whereon there is or may\nbe erected a building suitable for the transaction of its business, from\nportions of which not required for its own use a revenue may be derived,\nand a plot whereon parking accommodations are or are to be provided,\nwith or without charge, primarily for its members or employees or both;\nprovided that the net aggregate of all investments of any credit union\nin such plots and building shall be limited to six per centum of the\ncapital and retained earnings of such credit union, except with the\napproval of the superintendent.\n 22. To enter into contracts.\n 23. To sue and to be sued in all courts and to participate in actions\nand proceedings, whether judicial, arbitrative, or otherwise, in like\ncases as natural persons.\n 24. To have a corporate seal, and to alter such seal at pleasure, and\nto use it by causing it or a facsimile to be affixed or impressed or\nreproduced in any other manner.\n 25. To make donations, irrespective of corporate benefit, for the\npublic welfare or for community fund, hospital, charitable, educational,\nscientific, civic, or similar purposes, and, in time of war or other\nnational emergency, in aid thereof.\n 26. To elect or appoint officers, employees, and other agents of the\ncredit union, define their duties, fix the compensation of employees and\nother agents, and to indemnify credit union officials, committee\nmembers, and employees.\n 27. To have perpetual existence.\n 28. To honor requests for withdrawals of member accounts, whether\nshares or deposits, in any manner approved by the credit union's board\nof directors, including, without limitation because of enumeration,\nrequests in person, by telephone, by mail, by negotiable or\nnon-negotiable order, by electronic communication, or otherwise. The\nboard of directors may, at any time, require members to give, in\nwriting, not more than sixty days' notice of intention to withdraw the\nwhole or any part of the amounts paid in by them, except that this\nrequirement shall not apply to amounts in a share draft or checking\naccount. In the event that any credit union shall require that notice be\ngiven before such amounts may be withdrawn, it shall, before or upon the\nday such requirement is made effective, notify the superintendent by\ntelephone, other electronic means or in writing that such requirement\nhas been made.\n 29. To, either on an individual or participation basis, establish or\nmaintain an accounting service center, the functions, facilities, and\noperations of which are limited to providing data processing services.\nAs used in this subdivision, the term "data processing services" means\nthe maintenance of bookkeeping, accounting, or other records related to\nthe purposes and functions of a credit union, primarily by mechanical or\nelectronic methods, and the furnishing of reports and information\nderived from such records. Participation in the accounting service\ncenter may be by means of a partnership or other non-corporate\narrangement between or among the participating entities or by\nparticipation in an accounting service center corporation organized for\nthe sole purpose of providing data processing services. A credit union's\nindividual or proportionate ownership of the accounting service center\nshall not exceed two percent of its members' shareholdings.\n 30. To acquire and lease personal property, and to hold, assign,\npledge, sell or otherwise dispose of such personal property, to the same\nextent as authorized under subdivision twelve of section ninety-six of\nthis chapter, subject to such limitations and conditions as the\nsuperintendent of financial services may from time to time prescribe by\ngeneral regulation.\n 31. To hold membership in other credit unions organized under this\narticle or under federal law or any other credit union act, and in\nassociations and organizations controlled by or fostering the interests\nof credit unions, including a central liquidity facility organized under\nstate or federal law.\n 32. To execute and deliver for its members such guarantees as may be\nincidental or usual in the transfer of investment securities.\n 33. Notwithstanding any other provision of this article to the\ncontrary, to participate in the minority - and women-owned business\ndevelopment and lending program, as established in section 16-c of\nsection 1 of chapter 174 of the laws of 1968, constituting the urban\ndevelopment corporation act, to the extent that such program allows\nparticipation by credit unions.\n 33-a. To accept moneys deposited by the commissioner of taxation and\nfinance or the comptroller as linked deposits and make linked loans\npursuant to article fifteen of the state finance law and to pledge\nassets or furnish other security satisfactory in form and amount to the\ndepositor, for repayment of such moneys.\n 34. To have and exercise all other powers that are necessary or\nappropriate to enable it to carry out its purpose.\n 35. To participate in loans to credit union members jointly with other\ncredit unions, credit union organizations, or other banking\norganizations pursuant to written policies established by the board of\ndirectors; provided that a credit union which originates a loan for\nwhich participation arrangements are made shall retain an interest in at\nleast ten percent of the face amount of the loan. The member of the\noriginating credit union benefiting from the proceeds of the loan need\nnot be within the field of membership of the other credit unions\nparticipating in the loan.\n 36. To invest its funds in a collateralized mortgage obligation/real\nestate mortgage investment conduit. A credit union may invest in a fixed\nor variable rate collateralized mortgage obligation/real estate mortgage\ninvestment conduit, subject to the same extent and under the same\nconditions as federal credit unions are authorized to so invest,\npursuant to the Federal Credit Union Act (12 U.S.C 1757(15)(B)) and any\nregulations related thereto, as amended.\n 37. To engage in a "savings promotion" in accordance with section\nnine-v of this chapter and subject to any regulations promulgated by the\nsuperintendent. The superintendent shall consult with the state gaming\ncommission before proposing any such regulations or any amendments\nthereto. Such regulations shall ensure that:\n a. no participant in a savings promotion is charged any fee that would\nconstitute, directly or indirectly, consideration for participation in\nsuch savings promotion; and\n b. no participant in a savings promotion foregoes, directly or\nindirectly, any interest that would constitute consideration for\nparticipation in such savings promotion.\n