S4567B-2011 Actions

• May 23, 2012: REPORTED AND COMMITTED TO FINANCE
• May 16, 2012: PRINT NUMBER 4567C
• May 16, 2012: AMEND AND RECOMMIT TO BANKS
• Apr 27, 2012: PRINT NUMBER 4567B
• Apr 27, 2012: AMEND (T) AND RECOMMIT TO BANKS
• Feb 21, 2012: PRINT NUMBER 4567A
• Feb 21, 2012: AMEND (T) AND RECOMMIT TO BANKS
• Jan 4, 2012: REFERRED TO BANKS
• Apr 12, 2011: REFERRED TO BANKS

S4567B-2011 Votes

S4567B-2011 Memo

BILL NUMBER:S4567B

TITLE OF BILL:

An act to amend the banking law, in relation to credit union memberships
and general powers

PURPOSE OR GENERAL IDEA OF BILL:

This bill would expand the qualifications for membership into credit
unions and to create parity with federal credit unions in the areas of
investing, taxation and branching.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1. Amends subdivision 2 of section 451 to provide that the qual-
ification for memberships shall be determined by a new section 451-a and
shall not apply to a corporate credit unions.

Section 2. Adds a new section 451-a to the banking law to provide that
the qualification for memberships shall be determined by the board of
directors of the credit union.

Section 3 and 4. Amends subparagraph (i) of paragraph (a) of subdivision
18 of section 454 of the banking law and adds a new paragraph (d) to
authorize credit unions to invest in projects of State corporations that
work with housing projects, slum clearance corporations, small business
investment corporations and urban development corporations.

Section 5. Amends subdivisions 21 of section 454 of the banking law to
create parity with savings bank as it relates to owning real property
and improvements thereon for the purpose of conducting business.

Section 6. Amends section 454 of the banking law by adding a new subdi-
vision to create parity with federal credit unions as it relates to
exercising incidental powers.

Section 7. Amends section 479 of the banking law to ensure parity
between state and federal credit unions as it relates to unrelated busi-
ness income tax.

Section 8. Provides that this act shall take effect immediately.

JUSTIFICATION:

State chartered credit unions remain an important component of the
financial services industry. A healthy dual chartering system and the
ability for credit unions to reach as many New Yorkers in need of their
products and services are essential elements toward their continued
success.  These revisions to the State Credit Union Act ensure credit
unions are able to meet the financial services needs of low and working

class New Yorkers by enabling them to reach into these communities and
off them membership and services through a viable business model. The
revisions also endure state chartered credit unions remain a viable
alternative to federal credit unions fostering a healthy dual chartering
system by maintaining parity with federal law and regulation.

PRIOR LEGISLATIVE HISTORY:

2011 - Referred to Assembly Banks Committee

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

To be determined.

EFFECTIVE DATE:
Immediate.

S4567B-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 4567--B
 2011-2012 Regular Sessions
 I N  SENATE
 April 12, 2011
 
 Introduced  by  Sens.  GRIFFO, AVELLA -- read twice and ordered printed,
 and when printed to be committed to the Committee on Banks  --  recom
 mitted  to  the  Committee  on Banks in accordance with Senate Rule 6,
 sec. 8 -- committee discharged, bill  amended,  ordered  reprinted  as
 amended  and  recommitted  to  said committee -- committee discharged,
 bill amended, ordered reprinted as amended  and  recommitted  to  said
 committee
 

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
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD10800-07-2
 
       S. 4567--B                          2
 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,
 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
 
       S. 4567--B                          3
 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.]  QUALIFICATIONS  FOR  MEMBERSHIP  SHALL  BE  PURSUANT TO
 SECTION FOUR HUNDRED FIFTY-ONE-A OF THIS ARTICLE AND 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  GEOGRAPHIC
 AREA, IDENTIFIABLE NEIGHBORHOOD, COMMUNITY OR RURAL DISTRICT; OR
 (4)  WITHIN  A COMBINATION OF THESE THREE CATEGORIES DESCRIBED IN THIS
 SUBDIVISION; OR
 (B)  BUSINESSES,  ASSOCIATIONS  OR  ORGANIZATIONS  LOCATED  WITHIN   A
 GEOGRAPHIC AREA; 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. 4567--B                          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 18 of section 454 of the banking law is  amended  by
 adding a new paragraph (d) to read as follows:

 (D)  ALL  INVESTMENT ACTIVITIES AND INVESTMENTS AUTHORIZED FOR FEDERAL
 CREDIT UNIONS UNDER 12 CFR PART 703.13 AND 703.14.
 

S 5. 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] FORTY per centum of
 the capital and retained earnings of such credit union, except with  the
 approval of the superintendent.
 

S  6.

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  7. 

Section  479 of the banking law, as added by chapter 608 of the
 laws of 1996, is amended to read as follows:

 

S 479. Credit union not liable for taxation.  Any credit union subject
 to the provisions of this article shall be  deemed  an  institution  for
 savings  within  the  meaning of the law which exempts such institutions
 from taxation. No law which taxes  corporations  in  any  form,  or  the
 shares  thereof  or  the accumulations therein, OR THEIR PROPERTY, THEIR
 FRANCHISES, CAPITAL, RESERVES, SURPLUSES,  AND  OTHER  FUNDS,  OR  THEIR
 INCOME,  shall  apply  to corporations doing business in accordance with
 the provisions of this article, unless  such  corporations  are  specif
 ically  named  in  said  law, EXCEPT THAT ANY REAL AND TANGIBLE PERSONAL
 PROPERTY OF SUCH CORPORATION SHALL BE SUBJECT TO TAXATION  TO  THE  SAME
 EXTENT AS OTHER SIMILAR PROPERTY IS TAXED.
 

S 8. This act shall take effect immediately.

*By contributing or voting you agree to the Terms of Participation and Privacy Policy and verify you are over 13.

Discuss!