A. 8145--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
A. 8145--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
A. 8145--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.
A. 8145--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:
A. 8145--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.