senate Bill S4567C

Relates to credit union memberships and membership powers

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 12 / Apr / 2011
    • REFERRED TO BANKS
  • 04 / Jan / 2012
    • REFERRED TO BANKS
  • 21 / Feb / 2012
    • AMEND (T) AND RECOMMIT TO BANKS
  • 21 / Feb / 2012
    • PRINT NUMBER 4567A
  • 27 / Apr / 2012
    • AMEND (T) AND RECOMMIT TO BANKS
  • 27 / Apr / 2012
    • PRINT NUMBER 4567B
  • 16 / May / 2012
    • AMEND AND RECOMMIT TO BANKS
  • 16 / May / 2012
    • PRINT NUMBER 4567C
  • 23 / May / 2012
    • REPORTED AND COMMITTED TO FINANCE

Summary

Relates to credit union memberships and membership powers; sets forth the qualifications for membership in a credit union; and amends the powers of credit unions in relation to business loans, investment activities and other powers.

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Bill Details

See Assembly Version of this Bill:
A8145C
Versions:
S4567
S4567A
S4567B
S4567C
Legislative Cycle:
2011-2012
Current Committee:
Senate Finance
Law Section:
Banking Law
Laws Affected:
Amd §§451 & 454, add §451-a, Bank L

Votes

13
1
13
Aye
1
Nay
5
aye with reservations
0
absent
0
excused
0
abstained
show Banks committee vote details

Sponsor Memo

BILL NUMBER:S4567C

TITLE OF BILL:
An act
to amend the banking law,
in relation to credit union memberships
and general powers

PURPOSE:
This bill would expand the qualifications for membership into credit
unions and to create parity with federal credit unions in the areas
of investing and branching.

SUMMARY OF PROVISIONS:
Section 1. Amends subdivision 2 of section 451 to provide that the
qualification for memberships shall be determined by a new section
451-a and shall not apply to a corporate credit unions.

Section 2. Adds a new section 451-a to the banking law to provide that
the qualification for memberships shall be determined by the board of
directors of the credit union.

Section 3. Amends subparagraph (i) of paragraph (a) of subdivision 18
of section 454 of the banking law to authorize credit unions to
invest in projects of State corporations that work with housing
projects, slum clearance corporations, small business investment
corporations and urban development corporations.

Section 4. Amends subdivision 21 of section 454 of the banking law to
create parity with savings bank as it relates to owning real property
and improvements thereon for the purpose of conducting business.

Section 5. Amends section 454 of the banking law by adding a new
subdivision to create parity with federal credit unions as it relates
to exercising incidental powers.

Section 6. Provides that this act shall take effect on the ninetieth
day.

JUSTIFICATION:
State chartered credit unions remain an important component of the
financial services industry. A healthy dual chartering system and the
ability for credit unions to reach as many New Yorkers in need of
their products and services are essential elements toward their
continued success. These revisions to the State Credit Union Act
ensure credit unions are able to meet the financial services needs
of low and working class New Yorkers by enabling them to reach into
these communities and off them membership and services through a
viable business model. The revisions also ensure state chartered
credit unions remain a viable alternative to federal credit unions
fostering a healthy dual chartering system by maintaining parity with
federal law and regulation.

LEGISLATIVE HISTORY:
2011 Banks Committee.


FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4567--C

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             April 12, 2011
                               ___________

Introduced  by  Sens.  GRIFFO, AVELLA -- read twice and ordered printed,
  and when printed to be committed to the Committee on Banks  --  recom-
  mitted  to  the  Committee  on Banks in accordance with Senate Rule 6,
  sec. 8 -- committee discharged, bill  amended,  ordered  reprinted  as
  amended  and  recommitted  to  said committee -- committee discharged,
  bill amended, ordered reprinted as amended  and  recommitted  to  said
  committee  -- committee discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee

AN ACT to amend the banking law, in relation to credit union memberships
  and general powers

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.    Subdivision  2  of  section  451 of the banking law, as
amended by chapter 660 of the laws  of  2004,  is  amended  to  read  as
follows:
  2. The qualifications for membership.
  [(a) Membership shall be limited to:
  (1) persons having a common employer;
  (2)  persons  and  organizations  who  are  members of the same trade,
industry, profession, club, union, society or other association;
  (3) in the case of a credit union incorporated under this  chapter  as
of  the effective date of this subdivision, and with the approval of the
superintendent, which approval  shall  not  be  given  if  it  would  be
destructive  of  competition within a municipality, more than one common
employer; provided, however, that an employer  group  with  under  three
thousand  employees may be added upon receipt of a notice as provided in
subdivision two of section four hundred seventy-eight of this article;
  (4) with the approval  of  the  superintendent,  and  subject  to  the
provisions  of  paragraph  (b)  of this subdivision, more than one group
each of which has, within  the  group,  a  common  bond  of  occupation,
including  a  common employer, or association; provided, however, that a

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10800-08-2

S. 4567--C                          2

group of less than three thousand members, which  is  within  reasonable
proximity to the credit union's service area or areas, may be added upon
receipt  of  a  notice  as  provided  in subdivision two of section four
hundred seventy-eight of this article; or
  (5)  persons  and organizations within a well-defined local community,
neighborhood or rural district and who in the  judgment  of  the  super-
intendent have such a community of interest as will insure proper admin-
istration.
  (b)  In  considering  an  application to add a group to a credit union
authorized under subparagraph four of paragraph (a) of this subdivision,
the superintendent shall not approve the addition unless  the  group  is
within reasonable proximity to the credit union's service area or areas.
If  the  group  has more than three thousand members, the superintendent
shall not approve such addition unless he or  she  determines  that  the
group  could  not  feasibly  or reasonably establish a new single common
bond credit union because:
  (1) the group  lacks  sufficient  volunteer  and  other  resources  to
support the efficient and effective operation of a credit union;
  (2)  the group does not meet the criteria which the superintendent has
determined to be important for the likelihood of success in establishing
and managing a new credit union, including  demographic  characteristics
such  as  geographical location of members, diversity of ages and income
levels, and other factors that may affect the  financial  viability  and
stability of a credit union;
  (3)  the  group  would  be unlikely to operate a safe and sound credit
union; or
  (4) the group has  been  transferred  from  another  credit  union  in
connection  with  a  merger  or  consolidation recommended by a state or
federal regulator based on safety and soundness concerns or by the board
of the National Credit Union Administration in its capacity as conserva-
tor or liquidating agent.
  (c) With the approval of the superintendent, a credit union may extend
membership to persons and organizations in an underserved local communi-
ty, neighborhood or rural district, where such area is determined by the
superintendent to be an "investment area"  as  defined  in  the  federal
Community Development Banking and Financial Institutions Act of 1994 (12
U.S.C.  4703(16))  and any other requirements imposed by the superinten-
dent, including a requirement that the credit union establish and  main-
tain an office or facility in such area.
  (d) To the extent not expressly prohibited by the bylaws of the credit
union:
  (1)  in each instance where a person is a member or is directly eligi-
ble for membership, members of his or her immediate family or  household
shall be eligible for membership. For the purposes of this subparagraph,
"immediate  family"  means a person's spouse, and their lineal ancestors
and descendants, including persons so  related  by  adoption,  siblings,
stepparents,  stepchildren,  and  stepsiblings;  and  "household"  means
persons living in the same residence and maintaining a  single  economic
unit;
  (2)  any employee of the credit union shall be eligible to membership;
and
  (3) any member who leaves the field of  membership  and  who  has  not
withdrawn or been expelled may retain membership.
  (e) To the extent not expressly prohibited by the bylaws of the credit
union,  any incorporated or unincorporated organization composed princi-
pally of persons eligible to membership in  the  credit  union  and  the

S. 4567--C                          3

organization's  employees  shall be eligible to membership in the credit
union.
  (f)  Any  person  who is eligible for membership by reason of the fact
that he or she is an employee either of a common employer or of a credit
union shall not become ineligible, after the termination of such employ-
ment, as long as he or she receives a pension or annuity from, or under,
a plan or other arrangement established by such common employer or cred-
it union.
  (g) The provisions of this subdivision shall not apply to a  corporate
credit  union.]  SUCH QUALIFICATIONS FOR MEMBERSHIP SHALL BE ESTABLISHED
IN ACCORDANCE WITH THE PROVISIONS OF SECTION FOUR HUNDRED FIFTY-ONE-A OF
THIS ARTICLE, EXCEPT THAT SUCH SECTION SHALL NOT APPLY  TO  A  CORPORATE
CREDIT UNION.
  S  2. The banking law is amended by adding a new section 451-a to read
as follows:
  S 451-A. QUALIFICATIONS FOR MEMBERSHIP. 1. THE MEMBERSHIP OF A  CREDIT
UNION SHALL BE DETERMINED BY THE BOARD OF DIRECTORS OF SUCH CREDIT UNION
AND  SHALL CONSIST OF PERSONS WITHIN THE CREDIT UNION'S FIELD OF MEMBER-
SHIP WHO HAVE BEEN DULY ADMITTED MEMBERS.
  2. A CREDIT UNION'S FIELD OF MEMBERSHIP SHALL INCLUDE ONE OR  MORE  OF
THE FOLLOWING CATEGORIES:
  (A) PERSONS:
  (1) WITHIN THE SAME OCCUPATION OR FROM MULTIPLE GROUPS EACH REPRESENT-
ING A DIFFERENT OCCUPATION;
  (2)  WITHIN  THE  SAME ASSOCIATION OR INTEREST OR FROM MULTIPLE GROUPS
EACH REPRESENTING A DIFFERENT ASSOCIATION OR INTEREST;
  (3) WHO RESIDE, WORK, WORSHIP OR ATTEND SCHOOL WITHIN  A  WELL-DEFINED
GEOGRAPHIC  AREA, IDENTIFIABLE NEIGHBORHOOD, COMMUNITY OR RURAL DISTRICT
AND WHO, IN THE JUDGMENT OF THE SUPERINTENDENT, HAVE SUCH A COMMUNITY OF
INTEREST AS WILL ENSURE PROPER ADMINISTRATION; OR
  (4) WITHIN A COMBINATION OF THESE THREE CATEGORIES DESCRIBED  IN  THIS
SUBDIVISION; OR
  (B)   BUSINESSES,  ASSOCIATIONS  OR  ORGANIZATIONS  LOCATED  WITHIN  A
WELL-DEFINED GEOGRAPHIC AREA AND WHICH, IN THE JUDGMENT  OF  THE  SUPER-
INTENDENT,  HAVE  SUCH  A  COMMUNITY  OF  INTEREST AS WILL ENSURE PROPER
ADMINISTRATION; OR
  (C) FAMILY MEMBERS OF SUCH PERSONS DESCRIBED IN PARAGRAPH (A) OF  THIS
SUBDIVISION. FOR THE PURPOSES OF THIS PARAGRAPH, "FAMILY MEMBER" MEANS A
PERSON RELATED BY BLOOD, MARRIAGE OR LIVING IN THE SAME HOUSEHOLD WITH A
PERSON  WITHIN  THE  FIELD  OF MEMBERSHIP AND THEIR LINEAL ANCESTORS AND
DESCENDANTS INCLUDING PERSONS SO RELATED BY ADOPTION, SIBLINGS, STEPPAR-
ENTS, STEPCHILDREN  AND  STEPSIBLINGS;  AND  "HOUSEHOLD"  MEANS  PERSONS
LIVING IN THE SAME RESIDENCE AND MAINTAINING A SINGLE ECONOMIC UNIT; OR
  (D) ANY EMPLOYEE OF THE CREDIT UNION; OR
  (E)  ANY  MEMBER  WHO  LEAVES  THE FIELD OF MEMBERSHIP AND WHO HAS NOT
WITHDRAWN OR BEEN EXPELLED MAY RETAIN MEMBERSHIP; OR
  (F) ANY INCORPORATED OR UNINCORPORATED ORGANIZATION  COMPOSED  PRINCI-
PALLY  OF  PERSONS  ELIGIBLE  TO MEMBERSHIP IN THE CREDIT UNION AND THAT
ORGANIZATION'S EMPLOYEES.
  3. ANY PERSON WHO IS ELIGIBLE FOR MEMBERSHIP BY  REASON  OF  THE  FACT
THAT  HE OR SHE IS AN EMPLOYEE OF A COMMON EMPLOYER OR OF A CREDIT UNION
SHALL NOT BECOME INELIGIBLE, AFTER THE TERMINATION OF  SUCH  EMPLOYMENT,
AS  LONG  AS  HE  OR SHE RECEIVES A PENSION OR ANNUITY FROM, OR UNDER, A
PLAN OR OTHER ARRANGEMENT ESTABLISHED BY SUCH COMMON EMPLOYER OR  CREDIT
UNION.

S. 4567--C                          4

  4.  A  CREDIT UNION MAY EXTEND MEMBERSHIP TO PERSONS AND ORGANIZATIONS
IN AN UNDERSERVED LOCAL COMMUNITY, NEIGHBORHOOD OR RURAL DISTRICT  WHERE
SUCH  AREA  IS CONSIDERED AN "INVESTMENT AREA" AS DEFINED IN THE FEDERAL
COMMUNITY DEVELOPMENT BANKING AND FINANCIAL INSTITUTIONS ACT OF 1994 (12
U.S.C. 4703(16)).
  S  3.   Subparagraph (i) of paragraph (a) of subdivision 18 of section
454 of the banking law, as amended by chapter 679 of the laws  of  2003,
is amended to read as follows:
  (i) Those securities authorized as permissible investments for savings
banks  by  subdivisions one, two, three, four, SIX, SUBPARAGRAPH FIVE OF
PARAGRAPH (A) OF SUBDIVISION NINE, twelve,  [paragraph]  PARAGRAPHS  (a)
AND  (B) of subdivision twelve-a, [and] subdivisions fifteen, seventeen,
PARAGRAPH (A) OF SUBDIVISION TWENTY,  SUBPARAGRAPHS  ONE  AND  ONE-A  OF
PARAGRAPH (A) OF SUBDIVISION TWENTY-ONE, AND SUBDIVISIONS TWENTY-FOUR-D,
twenty-seven [and], TWENTY-EIGHT, twenty-eight-a, TWENTY-NINE AND THIRTY
of  section  two  hundred  thirty-five  of  this  chapter AND SUCH OTHER
INVESTMENTS AS THE SUPERINTENDENT DEEMS PERMISSIBLE.
  S 4. Subdivision 21 of section 454 of the banking law, as  amended  by
chapter 679 of the laws of 2003, is amended to read as follows:
  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] FIFTEEN per  centum
of  the  capital and retained earnings of such credit union, except with
the approval of the superintendent.
  S 5. Section 454 of the banking law is amended by adding a new  subdi-
vision 37 to read as follows:
  37.  TO  EXERCISE  INCIDENTAL  POWERS  APPROVED BY THE NATIONAL CREDIT
UNION ADMINISTRATION AS SET FORTH IN 12 C.F.R. 721.
  S 6. This act shall take effect on the ninetieth day  after  it  shall
have become a law.

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