Relates to the qualifications for membership and general powers of credit unions

BILL NUMBER:S1808

Title of bill

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

Purpose or general idea of bill

This bill would provide a chapter amendment to chapter 502 of the laws of 2014, to clarify provisions enacted by such chapter, relating to qualifications for membership and general investment powers of state chartered credit unions.

Summary of specific provisions

This bill would specifically:

1. Amend section 451-a of the banking law to focus membership qualifications of state chartered credit unions with respect to geography and organizations, and to provide that in considering an application for expanded membership, the superintendent must consider the state chartered credit union's record and history of serving underserved areas, as well as low and moderate-income individuals within the communities it currently services, if any, and its commitments to serve underserved areas, as well as low and moderate-income individuals in the communities to be served, and this amendment would further authorize the superintendent to impose such other and further limitations, as he determines to be appropriate in his discretion; and

2. Amend section 454 of the banking law to limit the expansion of the types of approved investments for state chartered credit unions, and to reduce the percentage of commercial real estate held as an investment by such credit unions from fifteen to six percent of their capital and retained earnings.

Justification

Chapter 502 of the laws of 2014 (S.7112 by Senator Griffo) amended section 451 of the banking law to expand the qualification for membership in a state chartered credit union, as determined by the newly created section 451-a.

This newly created section 451-a expanded the qualifications for memberships for state chartered credit unions and provided that the Superintendent of the Department of Financial Services would be the entity responsible for the resolution of determination of such fields of membership, with such fields including groups based on employment, association and/or community affiliation.

Additionally, amendments were further made by chapter 502 in section 454 of the banking law, which authorized state chartered credit unions to invest in bank certificate of deposits, and such other investments as the Superintendent deems permissible, and to increase the per centum of capital in which such state chartered credit unions can invest with respect to real property and improvements thereon. As a result, chapter 502 sought to promote parity between state chartered

credit unions and federally chartered credit unions in the areas of branching and investing.

This bill, which is a three-way agreed chapter amendment to chapter 502, would clarify provisions enacted by such chapter, as set forth above, relating to qualifications for membership and general investment powers of state chartered credit unions.

Prior legislative history

This is a new bill.

Fiscal implications

None noted.

Effective date

This act would take effect on the same date as chapter 502 of the laws of 2014 takes effect (March 20, 2015).