S T A T E   O F   N E W   Y O R K
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                                  9408

                          I N  A S S E M B L Y

                             April 25, 2014
                               ___________

Introduced by M. of A. ROBINSON -- read once and referred to the Commit-
  tee on Banks

AN  ACT  to  amend  the  banking  law, in relation to qualifications for
  membership and general powers of credit unions

  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
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,

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

                                                           LBD14866-01-4

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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
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

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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. SUBJECT TO APPROVAL OF  THE
SUPERINTENDENT,  THE  MEMBERSHIP  OF    A  CREDIT UNION SHALL CONSIST OF
PERSONS WITHIN THE CREDIT UNION'S FIELD OF MEMBERSHIP WHO HAVE BEEN DULY
ADMITTED MEMBERS.
  SUBJECT TO THE APPROVAL OF THE SUPERINTENDENT, A CREDIT UNION'S  FIELD
OF MEMBERSHIP MAY 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
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.  FOR  PURPOSES  OF  THIS SECTION A
"WELL-DEFINED IDENTIFIABLE NEIGHBORHOOD, COMMUNITY  OR  RURAL  DISTRICT"
MEANS  ONE  OR  MORE  ADJACENT PRECINCTS, DISTRICTS, CITIES, COUNTIES OR
OTHER BOUNDARIES DEFINED BY THE STATE OR A UNIT OF GOVERNMENT  OR  BY  A
STATE OR GOVERNMENT AGENCY; 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.
  2.  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.
  3. SUBJECT TO APPROVAL OF  THE  SUPERINTENDENT,  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)).

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  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, twelve, [paragraph] PARA-
GRAPHS (a) AND (B) of subdivision twelve-a,  and  subdivisions  fifteen,
seventeen,  twenty-seven and twenty-eight-a of section two hundred thir-
ty-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. This act shall take effect on the ninetieth day  after  it  shall
have become a law.