S T A T E O F N E W Y O R K
________________________________________________________________________
2089
2013-2014 Regular Sessions
I N S E N A T E
January 10, 2013
___________
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. 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-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00150-01-3
S. 2089 2
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
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,
S. 2089 3
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.
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. 2089 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 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.