senate Bill S4567C

2011-2012 Legislative Session

Relates to credit union memberships and membership powers

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
May 23, 2012 reported and committed to finance
May 16, 2012 print number 4567c
amend and recommit to banks
Apr 27, 2012 print number 4567b
amend (t) and recommit to banks
Feb 21, 2012 print number 4567a
amend (t) and recommit to banks
Jan 04, 2012 referred to banks
Apr 12, 2011 referred to banks

Votes

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May 23, 2012 - Banks committee Vote

S4567C
13
1
committee
13
Aye
1
Nay
5
Aye with Reservations
0
Absent
0
Excused
0
Abstained
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Bill Amendments

Original
A
B
C (Active)
Original
A
B
C (Active)

Co-Sponsors

S4567 - Bill Details

See Assembly Version of this Bill:
A8145C
Current Committee:
Law Section:
Banking Law
Laws Affected:
Amd §§451 & 454, add §451-a, Bank L

S4567 - Bill Texts

view 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.

view sponsor memo
BILL NUMBER:S4567

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 investments, taxation and branching.

SUMMARY OF PROVISIONS:
Section 1. Expands the definition of a low income credit union and
grants low income credit unions the same tax treatment as branches of
banks in banking development districts.

Section 2. Amends subdivision 2 of section 451 to provide that the
qualifications for memberships shall be determined by a new section
451-a and shall not apply to a corporate credit union.

Section 3. Adds a new section 451-a to the banking law to provide that
the qualifications for memberships shall be determined by the board
of directors of the credit union.

Section 4. Amends subparagraph (i) of paragraph (c) of subdivision 6
of section 454 of the banking law to place limitations on business
loans made to its members.

Sections 5 and 6. Amends subparagraph (i) of paragraph (a) of
subdivision 18 of section 454 of the banking law and adds a new
paragraph (d) 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 7. Amends subdivision 21 of section 454 to create parity with
savings banks as it relates to owning real property and improvements
thereon for the purpose of conducting business.

Section 8. Amends subdivision 2 of section 461 of the banking law to
create parity with federal credit unions by authorizing credit unions
to operate in any locality where its actual potential membership
attends school. Eliminates requirement for a credit union to submit
an application to the superintendent of banks in order to open a
place of business.

Section 9. Amends subdivision one of section 454 of the banking law to
authorize the use of credit unions by nonmembers and governmental
units.

Section 10. Amends section 454 by adding two new subparagraphs to
create parity with federal credit unions as it relates to exercising
incidental powers and adding a new subparagraph granting state
chartered credit unions the authority to accept supplemental capital.


Section 11. Amends section 479 of the banking law to ensure parity
between state and federal credit unions as it relates to unrelated
business income tax.

Section 12. Provides that this act shall take effect immediately.

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 offer 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:
New.

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
Immediate.

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

                                  4567

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             April 12, 2011
                               ___________

Introduced  by  Sen.  GRIFFO -- read twice and ordered printed, and when
  printed to be committed to the Committee on Banks

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.  Subdivisions 3 and 5 of section 450-a of the banking law,
as added by chapter 214 of the laws of 1999,  are  amended  to  read  as
follows:
  3.  Notwithstanding  any other provision of this article, a low income
credit union may issue shares, share drafts and  share  certificates  to
nonmembers  who  or which may be natural persons, corporations, partner-
ships or other legal entities. A BRANCH OF A  LOW  INCOME  CREDIT  UNION
LOCATED IN A LOW INCOME AREA SHALL BE EXEMPT FROM TAXATION UNDER SECTION
FOUR HUNDRED EIGHTY-FIVE-F OF THE REAL PROPERTY TAX LAW.
  5.  As  used in this section, the term "low income credit union" shall
mean a credit union in which a majority of [the members] A  WELL-DEFINED
SEGMENT  OF  MEMBERS TO BE SERVED:  (a) make less than eighty percent of
the average for all wage earners as established by the bureau  of  labor
statistics  of  the  United  States  department  of labor or have annual
household incomes that fall at or below eighty  percent  of  the  median
household  income  for  the  nation  as established by the United States
census bureau; or (b) are residents of  a  public  housing  project  who
qualify  for  such  residency  because  of low income; or (c) qualify to
receive benefits from any program designed to  assist  the  economically
disadvantaged.  The banking board may promulgate regulations appropriate
to the formation and operation of low income credit unions.
  S 2. 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:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10800-01-1

S. 4567                             2

  (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
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:

S. 4567                             3

  (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
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.]  QUALIFICATIONS  FOR  MEMBERSHIP  SHALL  BE  PURSUANT TO
SECTION FOUR HUNDRED FIFTY-ONE-A OF THIS ARTICLE AND SHALL NOT APPLY  TO
A CORPORATE CREDIT UNION.
  S  3. 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 MAY INCLUDE:
  (A) PERSONS WITHIN ONE OR MORE GROUPS OF THE FOLLOWING, OR A  COMBINA-
TION OF SUCH GROUPS:
  (1) OCCUPATION, OR
  (2) ASSOCIATION OR INTEREST, OR
  (3)  PERSONS  WHO  RESIDE,  WORK,  WORSHIP  OR  ATTEND SCHOOL WITHIN A
GEOGRAPHIC AREA, IDENTIFIABLE NEIGHBORHOOD, COMMUNITY OR RURAL DISTRICT;
AND
  (B)  BUSINESSES,  ASSOCIATIONS  OR  ORGANIZATIONS  LOCATED  WITHIN   A
GEOGRAPHIC AREA; AND
  (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; AND
  (D) ANY EMPLOYEE OF THE CREDIT UNION; AND
  (E) ANY MEMBER WHO LEAVES THE FIELD OF  MEMBERSHIP  AND  WHO  HAS  NOT
WITHDRAWN OR BEEN EXPELLED MAY RETAIN MEMBERSHIP; AND
  (F)  ANY  INCORPORATED OR UNINCORPORATED ORGANIZATION COMPOSED PRINCI-
PALLY OF PERSONS ELIGIBLE TO MEMBERSHIP IN THE  CREDIT  UNION  AND  THAT
ORGANIZATION'S EMPLOYEES.

S. 4567                             4

  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.
  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 4. Subparagraph (i) of paragraph (c) of subdivision 6 of section 454
of  the  banking  law,  as  added by chapter 660 of the laws of 2004, is
amended to read as follows:
  (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.]  NO  CREDIT UNION SHALL MAKE ANY MEMBER BUSINESS LOAN THAT
WOULD RESULT IN A TOTAL AMOUNT OF SUCH LOANS OUTSTANDING AT  THE  CREDIT
UNION  AT  ANY  ONE  TIME  EQUAL TO MORE THAN THE GREATER OF TWENTY-FIVE
PERCENT OF THE TOTAL ASSETS OF THE CREDIT UNION,  OR  THE  LIMIT  ESTAB-
LISHED FOR FEDERAL CREDIT UNIONS.
  S  5.  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.
  S  6.  Subdivision 18 of section 454 of the banking law, as amended by
chapter 679 of the laws of 2003, is amended by adding  a  new  paragraph
(d) to read as follows:
  (D)  ALL  INVESTMENT ACTIVITIES AND INVESTMENTS AUTHORIZED FOR FEDERAL
CREDIT UNIONS UNDER 12 CFR PART 703.13 AND 703.14.
  S 7. 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] FORTY per centum of
the capital and retained earnings of such credit union, except with  the
approval of the superintendent.
  S  8.  Subdivision  2  of  section 461 of the banking law, as added by
chapter 608 of the laws of 1996, is amended to read as follows:
  2. Subject to such regulations as the superintendent  may  adopt,  any
credit  union, may open and maintain within or without the state, in any
locality in which  [a  substantial  portion  of]  its  actual  potential

S. 4567                             5

membership  is  employed,  ATTENDING  SCHOOL  or  residing,  one or more
stations for the conduct of its business [provided that before any  such
station  or  stations  shall be opened or maintained or removed to a new
location:
  (a)  Its board of directors shall submit to the superintendent a writ-
ten application setting forth the  reasons  therefor  and  the  proposed
location of such station or stations.
  (b) The superintendent shall have given his written approval thereto].
  S  9.  Subdivision  1 of section 454 of the banking law, as amended by
chapter 679 of the laws of 2003, is amended to read as follows:
  1. To issue and receive payments on, shares, share drafts,  and  share
certificates, subject to such terms, rates, and conditions as are estab-
lished by its board of directors, from:
  (A) its members;
  (B)  AN  OFFICER,  EMPLOYEE  OR  AGENT OF THOSE NONMEMBER UNITS OF THE
FEDERAL, STATE, INDIAN TRIBAL OR LOCAL GOVERNMENTS AND POLITICAL  SUBDI-
VISIONS; and
  (C) 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  survi-
vorship,  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.
  S  10.  Section  454  of  the banking law is amended by adding two new
subdivisions 37 and 38 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.
  38.  TO RECEIVE SUPPLEMENTAL CAPITAL FROM BOTH NATURAL AND NON-NATURAL
PERSON NON-MEMBERS. THE OFFER AND SALE OF SUPPLEMENTAL CAPITAL SHALL  BE
SUBJECT  TO  REGULATIONS  PROMULGATED  BY  THE SUPERINTENDENT THAT SHALL
ADDRESS THE SAFETY AND SOUNDNESS OF THE OFFER OR SALE  OF  SUCH  SUPPLE-
MENTAL  CAPITAL,  INCLUDING THE SUPPLEMENTAL CAPITAL'S MATURITY, TERM OF
SALE, TERMS OF CAPITAL, TOTAL AMOUNT OF SUPPLEMENTAL CAPITAL THAT MAY BE
OUTSTANDING AT ONE TIME, REDEMPTION, ELIGIBILITY OF  THE  INVESTORS.  IN
ADDITION, SUPPLEMENTAL CAPITAL SHALL BE SUBJECT TO ALL OF THE FOLLOWING:
  (I)  THE  SUPPLEMENTAL  CAPITAL  SHALL  BE ESTABLISHED AS AN UNINSURED
SUPPLEMENTAL CAPITAL OR OTHER FORM OF NON-SHARE ACCOUNT.
  (II) THE SUPPLEMENTAL CAPITAL MAY NOT BE INSURED BY THE NATIONAL CRED-
IT UNION SHARE INSURANCE FUND (NCUSIF)  OR  ANY  OTHER  GOVERNMENTAL  OR
PRIVATE ENTITY.
  (III) THE SUPPLEMENTAL CAPITAL HOLDER'S CLAIM AGAINST THE CREDIT UNION
SHALL  BE  SUBORDINATE TO ALL OTHER CLAIMS INCLUDING THOSE OF SHAREHOLD-
ER'S CREDITORS, AND THE NCUSIF, OR AN APPROVED INSURER.
  (IV) THE SUPPLEMENTAL CAPITAL MAY NOT BE PLEDGED OR  PROVIDED  BY  THE
ACCOUNT  HOLDER  AS  A  SECURITY  ON A LOAN OR OTHER OBLIGATION WITH THE
CREDIT UNION OR ANY OTHER PARTY.
  FOR PURPOSES OF THIS SECTION, SUPPLEMENTAL CAPITAL SHALL MEAN FORMS OF
CAPITAL THAT ARE SUBORDINATE TO  SHARES,  OTHER  LIABILITIES  AND  SHARE
INSURANCE.
  S  11.  Section 479 of the banking law, as added by chapter 608 of the
laws of 1996, is amended to read as follows:
  S 479. Credit union not liable for taxation.  Any credit union subject
to the provisions of this article shall be  deemed  an  institution  for
savings  within  the  meaning of the law which exempts such institutions
from taxation. No law which taxes  corporations  in  any  form,  or  the
shares  thereof  or  the accumulations therein, OR THEIR PROPERTY, THEIR

S. 4567                             6

FRANCHISES, CAPITAL, RESERVES, SURPLUSES,  AND  OTHER  FUNDS,  OR  THEIR
INCOME,  shall  apply  to corporations doing business in accordance with
the provisions of this article, unless  such  corporations  are  specif-
ically  named  in  said  law, EXCEPT THAT ANY REAL AND TANGIBLE PERSONAL
PROPERTY OF SUCH CORPORATION SHALL BE SUBJECT TO TAXATION  TO  THE  SAME
EXTENT AS OTHER SIMILAR PROPERTY IS TAXED.
  S 12. This act shall take effect immediately.

Co-Sponsors

S4567A - Bill Details

See Assembly Version of this Bill:
A8145C
Current Committee:
Law Section:
Banking Law
Laws Affected:
Amd §§451 & 454, add §451-a, Bank L

S4567A - Bill Texts

view 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.

view sponsor memo
BILL NUMBER:S4567A

TITLE OF BILL:
An act
to amend the banking law and the insurance 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 investments, taxation and branching.

SUMMARY OF PROVISIONS:
Section 1. Expands the definition of a low income credit union and
grants low income credit unions the same tax treatment as branches of
banks in banking development districts.

Sections 2 and 3 amend subdivision 2 of section 451 and add a new
section 451-a of the banking law to provide that the qualifications
for memberships shall be determined by the board of directors of the
credit union.

Section 4 amends subparagraph (i) of paragraph (c) of subdivision 6 or
section 454 of the banking law to place limitations on business loans
made to its members.

Section 5 and 6 amend 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 7 amends subparagraph 21 of section 454 to create parity with
savings banks as it relates to owning real property and improvements
thereon for the purpose of conducting business.

Section 8 amends subdivision 2 of section 461 of the banking law to
create parity with federal credit unions by authorizing credit unions
to operate in any locality where its actual potential membership
attends school. Eliminates requirement for a credit union
to submit an application to the superintendent of banks in order to
open a place of business.

Section 9 amends subdivision 1 of section 454 of the banking law to
authorize use of credit unions by nonmembers and governmental units.

Section 10 amends section 454 by adding a new subparagraph to create
parity with federal credit unions as it relates to exercising
incidental powers and adding a new paragraph granting state chartered
credit unions the authority to accept supplemental capital.

Section 11 amends section 479 of the banking law to ensure parity
between state and federal credit unions as it relates to unrelated
business income tax.

Section 12 amends section 1101 of the insurance law to ensure parity
between state and federal credit unions as it relates to deriving
revenue from the sale of GAP insurance.

Section 13 provides for an immediate effective date.

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 offer 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- S.4567/A.8145 - Banks Committee

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
Immediate.

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

                                 4567--A

                       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

AN  ACT  to  amend the banking law and the insurance 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.  Subdivisions 3 and 5 of section 450-a of the banking law,
as added by chapter 214 of the laws of 1999, subdivision  5  as  further
amended  by section 104 of part A of chapter 62 of the laws of 2011, are
amended to read as follows:
  3. Notwithstanding any other provision of this article, a  low  income
credit  union  may  issue shares, share drafts and share certificates to
nonmembers who or which may be natural persons,  corporations,  partner-
ships  or  other  legal  entities. A BRANCH OF A LOW INCOME CREDIT UNION
LOCATED IN A LOW INCOME AREA SHALL BE EXEMPT FROM TAXATION UNDER SECTION
FOUR HUNDRED EIGHTY-FIVE-F OF THE REAL PROPERTY TAX LAW.
  5. As used in this section, the term "low income credit  union"  shall
mean  a credit union in which a majority of [the members] A WELL-DEFINED
SEGMENT OF MEMBERS TO BE SERVED:  (a) make less than eighty  percent  of
the  average  for all wage earners as established by the bureau of labor
statistics of the United States  department  of  labor  or  have  annual
household  incomes  that  fall  at or below eighty percent of the median
household income for the nation as  established  by  the  United  States
census  bureau;  or  (b)  are  residents of a public housing project who
qualify for such residency because of low  income;  or  (c)  qualify  to
receive  benefits  from  any program designed to assist the economically
disadvantaged. The superintendent of financial services  may  promulgate

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10800-02-2

S. 4567--A                          2

regulations  appropriate  to  the  formation and operation of low income
credit unions.
  S  2.  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
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

S. 4567--A                          3

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
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.]  QUALIFICATIONS  FOR  MEMBERSHIP  SHALL  BE  PURSUANT  TO
SECTION  FOUR HUNDRED FIFTY-ONE-A OF THIS ARTICLE AND SHALL NOT APPLY TO
A CORPORATE CREDIT UNION.
  S 3. 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 MAY INCLUDE:
  (A)  PERSONS WITHIN ONE OR MORE GROUPS OF THE FOLLOWING, OR A COMBINA-
TION OF SUCH GROUPS:
  (1) OCCUPATION, OR
  (2) ASSOCIATION OR INTEREST, OR
  (3) PERSONS WHO RESIDE,  WORK,  WORSHIP  OR  ATTEND  SCHOOL  WITHIN  A
GEOGRAPHIC AREA, IDENTIFIABLE NEIGHBORHOOD, COMMUNITY OR RURAL DISTRICT;
AND
  (B)   BUSINESSES,  ASSOCIATIONS  OR  ORGANIZATIONS  LOCATED  WITHIN  A
GEOGRAPHIC AREA; AND
  (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; AND
  (D) ANY EMPLOYEE OF THE CREDIT UNION; AND

S. 4567--A                          4

  (E)  ANY  MEMBER  WHO  LEAVES  THE FIELD OF MEMBERSHIP AND WHO HAS NOT
WITHDRAWN OR BEEN EXPELLED MAY RETAIN MEMBERSHIP; AND
  (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.
  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 4. Subparagraph (i) of paragraph (c) of subdivision 6 of section 454
of  the  banking  law,  as  added by chapter 660 of the laws of 2004, is
amended to read as follows:
  (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.]  NO  CREDIT UNION SHALL MAKE ANY MEMBER BUSINESS LOAN THAT
WOULD RESULT IN A TOTAL AMOUNT OF SUCH LOANS OUTSTANDING AT  THE  CREDIT
UNION  AT  ANY  ONE  TIME  EQUAL TO MORE THAN THE GREATER OF TWENTY-FIVE
PERCENT OF THE TOTAL ASSETS OF THE CREDIT UNION,  OR  THE  LIMIT  ESTAB-
LISHED FOR FEDERAL CREDIT UNIONS.
  S  5.  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.
  S  6.   Subdivision 18 of section 454 of the banking law is amended by
adding a new paragraph (d) to read as follows:
  (D) ALL INVESTMENT ACTIVITIES AND INVESTMENTS AUTHORIZED  FOR  FEDERAL
CREDIT UNIONS UNDER 12 CFR PART 703.13 AND 703.14.
  S  7.  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] FORTY per centum of
the  capital and retained earnings of such credit union, except with the
approval of the superintendent.

S. 4567--A                          5

  S 8. Subdivision 2 of section 461 of the  banking  law,  as  added  by
chapter 608 of the laws of 1996, is amended to read as follows:
  2.  Subject  to  such regulations as the superintendent may adopt, any
credit union, may open and maintain within or without the state, in  any
locality  in  which  [a  substantial  portion  of]  its actual potential
membership is employed,  ATTENDING  SCHOOL  or  residing,  one  or  more
stations  for the conduct of its business [provided that before any such
station or stations shall be opened or maintained or removed  to  a  new
location:
  (a)  Its board of directors shall submit to the superintendent a writ-
ten application setting forth the  reasons  therefor  and  the  proposed
location of such station or stations.
  (b) The superintendent shall have given his written approval thereto].
  S  9.  Subdivision  1 of section 454 of the banking law, as amended by
chapter 679 of the laws of 2003, is amended to read as follows:
  1. To issue and receive payments on, shares, share drafts,  and  share
certificates, subject to such terms, rates, and conditions as are estab-
lished by its board of directors, from:
  (A) its members;
  (B)  AN  OFFICER,  EMPLOYEE  OR  AGENT OF THOSE NONMEMBER UNITS OF THE
FEDERAL, STATE, INDIAN TRIBAL OR LOCAL GOVERNMENTS AND POLITICAL  SUBDI-
VISIONS; and
  (C) 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  survi-
vorship,  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.
  S  10.  Section  454  of  the banking law is amended by adding two new
subdivisions 37 and 38 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.
  38.  TO RECEIVE SUPPLEMENTAL CAPITAL FROM BOTH NATURAL AND NON-NATURAL
PERSON NON-MEMBERS. THE OFFER AND SALE OF SUPPLEMENTAL CAPITAL SHALL  BE
SUBJECT  TO  REGULATIONS  PROMULGATED  BY  THE SUPERINTENDENT THAT SHALL
ADDRESS THE SAFETY AND SOUNDNESS OF THE OFFER OR SALE  OF  SUCH  SUPPLE-
MENTAL  CAPITAL,  INCLUDING THE SUPPLEMENTAL CAPITAL'S MATURITY, TERM OF
SALE, TERMS OF CAPITAL, TOTAL AMOUNT OF SUPPLEMENTAL CAPITAL THAT MAY BE
OUTSTANDING AT ONE TIME, REDEMPTION, ELIGIBILITY OF  THE  INVESTORS.  IN
ADDITION, SUPPLEMENTAL CAPITAL SHALL BE SUBJECT TO ALL OF THE FOLLOWING:
  (I)  THE  SUPPLEMENTAL  CAPITAL  SHALL  BE ESTABLISHED AS AN UNINSURED
SUPPLEMENTAL CAPITAL OR OTHER FORM OF NON-SHARE ACCOUNT.
  (II) THE SUPPLEMENTAL CAPITAL MAY NOT BE INSURED BY THE NATIONAL CRED-
IT UNION SHARE INSURANCE FUND (NCUSIF)  OR  ANY  OTHER  GOVERNMENTAL  OR
PRIVATE ENTITY.
  (III) THE SUPPLEMENTAL CAPITAL HOLDER'S CLAIM AGAINST THE CREDIT UNION
SHALL  BE  SUBORDINATE TO ALL OTHER CLAIMS INCLUDING THOSE OF SHAREHOLD-
ER'S CREDITORS, AND THE NCUSIF, OR AN APPROVED INSURER.
  (IV) THE SUPPLEMENTAL CAPITAL MAY NOT BE PLEDGED OR  PROVIDED  BY  THE
ACCOUNT  HOLDER  AS  A  SECURITY  ON A LOAN OR OTHER OBLIGATION WITH THE
CREDIT UNION OR ANY OTHER PARTY.
  FOR PURPOSES OF THIS SECTION, SUPPLEMENTAL CAPITAL SHALL MEAN FORMS OF
CAPITAL THAT ARE SUBORDINATE TO  SHARES,  OTHER  LIABILITIES  AND  SHARE
INSURANCE.
  S  11.  Section 479 of the banking law, as added by chapter 608 of the
laws of 1996, is amended to read as follows:

S. 4567--A                          6

  S 479. Credit union not liable for taxation.  Any credit union subject
to the provisions of this article shall be  deemed  an  institution  for
savings  within  the  meaning of the law which exempts such institutions
from taxation. No law which taxes  corporations  in  any  form,  or  the
shares  thereof  or  the accumulations therein, OR THEIR PROPERTY, THEIR
FRANCHISES, CAPITAL, RESERVES, SURPLUSES,  AND  OTHER  FUNDS,  OR  THEIR
INCOME,  shall  apply  to corporations doing business in accordance with
the provisions of this article, unless  such  corporations  are  specif-
ically  named  in  said  law, EXCEPT THAT ANY REAL AND TANGIBLE PERSONAL
PROPERTY OF SUCH CORPORATION SHALL BE SUBJECT TO TAXATION  TO  THE  SAME
EXTENT AS OTHER SIMILAR PROPERTY IS TAXED.
  S  12.  Subparagraph (iii) of paragraph 3 of subsection (b) of section
1101 of the insurance law, as amended by chapter  140  of  the  laws  of
1995, is amended to read as follows:
  (iii)  in  the event the lessor, creditor or assignee purchases lessor
or creditor gap insurance, the charge to the lessee or  debtor  for  the
waiver  does not exceed the cost of the lessor or creditor gap insurance
coverage; provided, however, that  nothing  contained  herein  shall  be
construed to prohibit the lessor from including the charge for the waiv-
er in the capitalized cost as that term is defined in subdivision eleven
of  section  three  hundred  thirty-one of the personal property law AND
PROVIDED FURTHER THAT THIS SUBPARAGRAPH SHALL  NOT  APPLY  TO  A  CREDIT
UNION LESSOR, CREDITOR OR ASSIGNEE.
  S 13. This act shall take effect immediately.

Co-Sponsors

S4567B - Bill Details

See Assembly Version of this Bill:
A8145C
Current Committee:
Law Section:
Banking Law
Laws Affected:
Amd §§451 & 454, add §451-a, Bank L

S4567B - Bill Texts

view 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.

view sponsor memo
BILL NUMBER:S4567B

TITLE OF BILL:

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

PURPOSE OR GENERAL IDEA OF BILL:

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

SUMMARY OF SPECIFIC PROVISIONS:

Section 1. Amends subdivision 2 of section 451 to provide that the qual-
ification 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 and 4. Amends subparagraph (i) of paragraph (a) of subdivision
18 of section 454 of the banking law and adds a new paragraph (d) 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 5. Amends subdivisions 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 6. Amends section 454 of the banking law by adding a new subdi-
vision to create parity with federal credit unions as it relates to
exercising incidental powers.

Section 7. Amends section 479 of the banking law to ensure parity
between state and federal credit unions as it relates to unrelated busi-
ness income tax.

Section 8. Provides that this act shall take effect immediately.

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 endure 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.

PRIOR LEGISLATIVE HISTORY:

2011 - Referred to Assembly Banks Committee

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

To be determined.

EFFECTIVE DATE:
Immediate.

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

                                 4567--B

                       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

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
group  of  less  than three thousand members, which is within reasonable

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10800-07-2

S. 4567--B                          2

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--B                          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.]  QUALIFICATIONS  FOR  MEMBERSHIP  SHALL  BE  PURSUANT TO
SECTION FOUR HUNDRED FIFTY-ONE-A OF THIS ARTICLE AND 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  GEOGRAPHIC
AREA, IDENTIFIABLE NEIGHBORHOOD, COMMUNITY OR RURAL DISTRICT; OR
  (4)  WITHIN  A COMBINATION OF THESE THREE CATEGORIES DESCRIBED IN THIS
SUBDIVISION; OR
  (B)  BUSINESSES,  ASSOCIATIONS  OR  ORGANIZATIONS  LOCATED  WITHIN   A
GEOGRAPHIC AREA; 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.
  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. 4567--B                          4

  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 18 of section 454 of the banking law is  amended  by
adding a new paragraph (d) to read as follows:
  (D)  ALL  INVESTMENT ACTIVITIES AND INVESTMENTS AUTHORIZED FOR FEDERAL
CREDIT UNIONS UNDER 12 CFR PART 703.13 AND 703.14.
  S 5. 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] FORTY per centum of
the capital and retained earnings of such credit union, except with  the
approval of the superintendent.
  S  6. 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  7.  Section  479 of the banking law, as added by chapter 608 of the
laws of 1996, is amended to read as follows:
  S 479. Credit union not liable for taxation.  Any credit union subject
to the provisions of this article shall be  deemed  an  institution  for
savings  within  the  meaning of the law which exempts such institutions
from taxation. No law which taxes  corporations  in  any  form,  or  the
shares  thereof  or  the accumulations therein, OR THEIR PROPERTY, THEIR
FRANCHISES, CAPITAL, RESERVES, SURPLUSES,  AND  OTHER  FUNDS,  OR  THEIR
INCOME,  shall  apply  to corporations doing business in accordance with
the provisions of this article, unless  such  corporations  are  specif-
ically  named  in  said  law, EXCEPT THAT ANY REAL AND TANGIBLE PERSONAL
PROPERTY OF SUCH CORPORATION SHALL BE SUBJECT TO TAXATION  TO  THE  SAME
EXTENT AS OTHER SIMILAR PROPERTY IS TAXED.
  S 8. This act shall take effect immediately.

Co-Sponsors

S4567C (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A8145C
Current Committee:
Law Section:
Banking Law
Laws Affected:
Amd §§451 & 454, add §451-a, Bank L

S4567C (ACTIVE) - Bill Texts

view 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.

view 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.

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                    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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