S02912 Summary:

SAME ASNo same as
Amd SS451, 454 & 461, Bank L
Provides criteria for membership in credit unions and permits the extension of certain services to nonmembers.
Go to top    

S02912 Actions:

Go to top

S02912 Floor Votes:

There are no votes for this bill in this legislative session.
Go to top

S02912 Text:

                STATE OF NEW YORK
                               2013-2014 Regular Sessions
                    IN SENATE
                                    January 25, 2013
        Introduced  by  Sen.  PARKER -- 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:

     1    Section 1. Subdivision 2 of section 451 of the banking law, as amended
     2  by chapter 660 of the laws of 2004, is amended to read as follows:
     3    2. The qualifications for membership.
     4    [(a) Membership shall be limited to:
     5    (1) persons having a common employer;
     6    (2)  persons  and  organizations  who  are  members of the same trade,
     7  industry, profession, club, union, society or other association;
     8    (3) in the case of a credit union incorporated under this  chapter  as
     9  of  the effective date of this subdivision, and with the approval of the
    10  superintendent, which approval  shall  not  be  given  if  it  would  be
    11  destructive  of  competition within a municipality, more than one common
    12  employer; provided, however, that an employer  group  with  under  three

    13  thousand  employees may be added upon receipt of a notice as provided in
    14  subdivision two of section four hundred seventy-eight of this article;
    15    (4) with the approval  of  the  superintendent,  and  subject  to  the
    16  provisions  of  paragraph  (b)  of this subdivision, more than one group
    17  each of which has, within  the  group,  a  common  bond  of  occupation,
    18  including  a  common employer, or association; provided, however, that a
    19  group of less than three thousand members, which  is  within  reasonable
    20  proximity to the credit union's service area or areas, may be added upon
    21  receipt  of  a  notice  as  provided  in subdivision two of section four
    22  hundred seventy-eight of this article; or

    23    (5) persons and organizations within a well-defined  local  community,
    24  neighborhood  or  rural  district  and who in the judgment of the super-

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

        S. 2912                             2

     1  intendent have such a community of interest as will insure proper admin-
     2  istration.
     3    (b)  In  considering  an  application to add a group to a credit union
     4  authorized under subparagraph four of paragraph (a) of this subdivision,
     5  the superintendent shall not approve the addition unless  the  group  is

     6  within reasonable proximity to the credit union's service area or areas.
     7  If  the  group  has more than three thousand members, the superintendent
     8  shall not approve such addition unless he or  she  determines  that  the
     9  group  could  not  feasibly  or reasonably establish a new single common
    10  bond credit union because:
    11    (1) the group  lacks  sufficient  volunteer  and  other  resources  to
    12  support the efficient and effective operation of a credit union;
    13    (2)  the group does not meet the criteria which the superintendent has
    14  determined to be important for the likelihood of success in establishing
    15  and managing a new credit union, including  demographic  characteristics
    16  such  as  geographical location of members, diversity of ages and income

    17  levels, and other factors that may affect the  financial  viability  and
    18  stability of a credit union;
    19    (3)  the  group  would  be unlikely to operate a safe and sound credit
    20  union; or
    21    (4) the group has  been  transferred  from  another  credit  union  in
    22  connection  with  a  merger  or  consolidation recommended by a state or
    23  federal regulator based on safety and soundness concerns or by the board
    24  of the National Credit Union Administration in its capacity as conserva-
    25  tor or liquidating agent.
    26    (c) With the approval of the superintendent, a credit union may extend
    27  membership to persons and organizations in an underserved local communi-
    28  ty, neighborhood or rural district, where such area is determined by the

    29  superintendent to be an "investment area"  as  defined  in  the  federal
    30  Community Development Banking and Financial Institutions Act of 1994 (12
    31  U.S.C.  4703(16))  and any other requirements imposed by the superinten-
    32  dent, including a requirement that the credit union establish and  main-
    33  tain an office or facility in such area.
    34    (d) To the extent not expressly prohibited by the bylaws of the credit
    35  union:
    36    (1)  in each instance where a person is a member or is directly eligi-
    37  ble for membership, members of his or her immediate family or  household
    38  shall be eligible for membership. For the purposes of this subparagraph,
    39  "immediate  family"  means a person's spouse, and their lineal ancestors

    40  and descendants, including persons so  related  by  adoption,  siblings,
    41  stepparents,  stepchildren,  and  stepsiblings;  and  "household"  means
    42  persons living in the same residence and maintaining a  single  economic
    43  unit;
    44    (2)  any employee of the credit union shall be eligible to membership;
    45  and
    46    (3) any member who leaves the field of  membership  and  who  has  not
    47  withdrawn or been expelled may retain membership.
    48    (e) To the extent not expressly prohibited by the bylaws of the credit
    49  union,  any incorporated or unincorporated organization composed princi-
    50  pally of persons eligible to membership in  the  credit  union  and  the
    51  organization's  employees  shall be eligible to membership in the credit

    52  union.
    53    (f) Any person who is eligible for membership by reason  of  the  fact
    54  that he or she is an employee either of a common employer or of a credit
    55  union shall not become ineligible, after the termination of such employ-
    56  ment, as long as he or she receives a pension or annuity from, or under,

        S. 2912                             3

     1  a plan or other arrangement established by such common employer or cred-
     2  it union.
     3    (g)  The provisions of this subdivision shall not apply to a corporate
     4  credit union.] The membership of a credit union shall be  determined  by
     5  the board of directors of such credit union and shall consist of persons
     6  who have been duly admitted members.

     7    § 2. Subparagraph (i) of paragraph (c) of subdivision 6 of section 454
     8  of  the  banking  law,  as  added by chapter 660 of the laws of 2004, is
     9  amended to read as follows:
    10    (i) [No credit union may make any  member  business  loan  that  would
    11  result  in a total amount of such loans outstanding at that credit union
    12  at any one time equal to more than the lesser of 1.75 times  the  actual
    13  net  worth  of  the  credit  union,  or 1.75 times the minimum net worth
    14  required under 12 U.S.C. 1790d(c)(1)(A) for a credit union  to  be  well
    15  capitalized.]  (A) No credit union shall make any member a business loan
    16  that would result in the net member business loan  balance  to  any  one
    17  member exceeding the greater of

    18    (1) twenty-five percent of the credit union's net worth, or
    19    (2) two hundred fifty thousand dollars.
    20    (B) The aggregate limit on a credit union's net business loan balances
    21  shall be the greater of:
    22    (1) twenty-five percent of the credit union's total assets, or
    23    (2) the limit established for federal credit unions.
    24    §  3.  Subparagraph  (i) of paragraph (a) of subdivision 18 of section
    25  454 of the banking law, as amended by chapter 679 of the laws  of  2003,
    26  is amended to read as follows:
    27    (i) Those securities authorized as permissible investments for savings
    28  banks  by  subdivisions one, two, three, four, twelve, [paragraph] para-
    29  graphs (a) and (b) of subdivision twelve-a, [and] subparagraph  five  of

    30  paragraph  (a)  of  subdivision  nine,  subdivisions fifteen, seventeen,
    31  paragraph (a) of subdivision twenty,  subparagraphs  one  and  one-a  of
    32  paragraph  (a)  of  subdivision  twenty-one, subdivisions twenty-four-d,
    33  twenty-seven [and], twenty-eight, twenty-eight-a, twenty-nine and thirty
    34  of section two hundred thirty-five of this chapter.
    35    § 4. Subdivision 2 of section 461 of the  banking  law,  as  added  by
    36  chapter 608 of the laws of 1996, is amended to read as follows:
    37    2.  Subject  to  such regulations as the superintendent may adopt, any
    38  credit union, may open and maintain within or without the state, in  any
    39  locality  in  which  [a  substantial  portion  of]  its actual potential
    40  membership is employed,  attending  school  or  residing,  one  or  more

    41  stations  for the conduct of its business [provided that before any such
    42  station or stations shall be opened or maintained or removed  to  a  new
    43  location:
    44    (a)  Its board of directors shall submit to the superintendent a writ-
    45  ten application setting forth the  reasons  therefor  and  the  proposed
    46  location of such station or stations.
    47    (b) The superintendent shall have given his written approval thereto].
    48    §  5.  Subdivision  1 of section 454 of the banking law, as amended by
    49  chapter 679 of the laws of 2003, is amended to read as follows:
    50    1. To issue and receive payments on, shares, share drafts,  and  share
    51  certificates, subject to such terms, rates, and conditions as are estab-
    52  lished by its board of directors, from:

    53    (a) its members;
    54    (b)  nonmembers  who  or  which  may be natural persons, corporations,
    55  limited liability companies, partnerships or other legal entities;

        S. 2912                             4
     1    (c) an officer, employee or agent of  those  nonmember  units  of  the
     2  federal,  state, Indian tribal or local governments and political subdi-
     3  visions; and
     4    (d) from other credit unions, both state and federally chartered.
     5    A  member  may  designate any person or persons to own shares or share
     6  certificates with him or her in joint tenancy with the right  of  survi-
     7  vorship,  but  no joint tenant shall be permitted to vote, obtain loans,
     8  or hold office, unless he or she is within the field of  membership  and
     9  is a qualified member.

    10    § 6. This act shall take effect immediately.
Go to top