§ 456. Limitations upon powers. No credit union shall:

1. Pay any commission or compensation for securing members or for the
sale of its shares; except that such restrictions shall not prohibit a
credit union from issuing or selling shares to other state or federal
credit unions through deposit brokers, subject to any regulations
prescribed by the superintendent, nor pay any compensation to directors
or committee members except that directors and committee members may be
reimbursed for reasonable and proper costs incurred while carrying out
the responsibilities of their positions. Such reimbursement shall be
determined by the board of directors to be appropriate in carrying out
the official business of the credit union and shall be in accordance
with written policies and procedures, including documentation
requirements, established by the board of directors.

2. Make any loan to any member, if, upon the making of that loan, the
member would be indebted to the credit union upon loans made to, or
guaranteed or endorsed by, such member in an aggregate amount which
would exceed ten per centum of the capital and undivided profits of the
credit union.

3. Impose a fine, in case of failure of a member to make payments on
shares, exceeding two per centum per month or fraction of a month on
amounts due.

4. Permit any director, officer, employee, member of the credit
committee or supervisory committee to borrow directly or indirectly or
become surety for any loan or advance made by such credit union where
such loan or advance or aggregate loans or advances exceed twenty
thousand dollars, unless the loan or advance is fully secured in
accordance with criteria established by the board of directors or unless
the loan or advance is approved by a majority of the entire board of
directors. Such approval must be given in writing. Complete minutes of
such meeting shall be kept which shall include the names of all
directors present. The rate of interest or discount charged on any such
loan to a director, officer or member of the credit committee or
supervisory committee shall not be less than the rate of interest or
discount charged for loans of like character in the ordinary course of
business.

5. Issue any shares except as provided in subdivision one of section
four hundred fifty-four of this article, and unless there is printed
upon the certificate or other evidence of such shares the words
"Transferable only to qualified members."

6. Retain physical possession of a passbook or other evidence of
membership of any member except that the supervisory committee may
retain such passbook or other evidence of membership for a period not to
exceed ten days for the purpose of auditing the records of the credit
union.

7. Except in the case of a state or federal corporate credit union,
make any loan or other extension of credit to, or investment in the
shares of, any other credit union other than a state or federal
corporate credit union in an amount the aggregate of which shall exceed
twenty-five per centum of its assets or twenty-five per centum of the
assets of such other credit union; provided, however, that the
superintendent may approve a credit union's request to invest a higher
per centum of its assets in any other credit union; nor shall a credit
union issue or sell one or more shares to another credit union if, by
such issuance or sale, the aggregate of its shares held by other credit
unions will thereby exceed thirty per centum of its own assets;
provided, however, that the superintendent may approve a credit union's
request to issue or sell shares which aggregate a higher per centum of
its assets to other credit unions. Extension of credit to or investment
in the shares of another credit union or the issuance or sale of shares
to another credit union, under this subdivision, shall include credit
unions chartered by the federal government or federally insured credit
unions chartered by a state.

In the case of a corporate credit union, no loan shall be made to a
member credit union in an amount in excess of twenty percent of the
share capital of the corporate credit union.

8. Permit any member to withdraw any shares pledged as security for
any loan on which such member is liable as maker, endorser, guarantor or
surety except upon the prior written approval of a majority of the
credit committee or the loan officer. In any case, the amount of shares
in excess of the liability of such member as maker, endorser, guarantor
or surety, may be withdrawn without the approval of the credit committee
or the loan officer.

9. Make a loan to a member upon the security of a mortgage which is
not a first lien, unless such loan is in compliance with the regulations
of the superintendent of financial services. Such regulations may
include such restrictions as the superintendent of financial services
finds necessary and proper, including without limitation, a restriction
as to the percentage of total assets which may be invested in such
loans, a restriction on the loan-to-appraisal value of property securing
such loan, a restriction on the maximum amount to be loaned to each
member, and a limitation on such loans based upon share capital, as
determined by the superintendent of financial services.