Relates to the qualifications for membership and general powers of credit unions.
Ayes (24): Skelos, DeFrancisco, Bonacic, Carlucci, Farley, Flanagan, Hannon, Golden, LaValle, Little, Marcellino, Nozzolio, Seward, Valesky, Young, Stewart-Cousins, Breslin, Dilan, Espaillat, Gianaris, Hassell-Thompson, Krueger, Montgomery, Perkins
Excused (1): Parker
Ayes (61): Addabbo, Amedore, Avella, Bonacic, Boyle, Breslin, Carlucci, Comrie, Croci, DeFrancisco, Diaz, Dilan, Espaillat, Farley, Felder, Flanagan, Funke, Gallivan, Gianaris, Golden, Griffo, Hamilton, Hannon, Hassell-Thomps, Hoylman, Kennedy, Klein, Krueger, Lanza, Larkin, Latimer, LaValle, Libous, Little, Marcellino, Marchione, Martins, Montgomery, Murphy, Nozzolio, O'Mara, Ortt, Panepinto, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Sampson, Savino, Serino, Serrano, Seward, Skelos, Squadron, Stavisky, Stewart-Cousin, Valesky, Venditto, Young
Excused (2): Parker, Sanders
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.
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.
This act would take effect on the same date as chapter 502 of the laws of 2014 takes effect (March 20, 2015).
STATE OF NEW YORK ________________________________________________________________________ 1808 2015-2016 Regular Sessions IN SENATE January 14, 2015 ___________Introduced by Sen. GRIFFO -- read twice and ordered printed, and when printed to be committed to the Committee on Rules AN ACT to amend the banking law, in relation to qualifications for membership and general powers of credit unions THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 451-a of the banking law, as added by chapter 502 of the laws of 2014, is amended to read as follows: S 451-a. Qualifications for membership. 1. Subject to approval of the superintendent, the membership of a credit union shall consist of persons within the credit union's field of membership who have been duly admitted members. Subject to the approval of the superintendent, a credit union's field of membership may 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 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. For purposes of this section a "well- defined identifiable neighborhood, community or rural district" [means]MAY CONSIST OF one or more adjacent precincts, districts, cities [,]OR counties [or other boundaries defined by the state or a unit of govern- ment or by a state or government agency]; or (4) within a combination of these three categories described in this subdivision; or (b) [Businesses, associations or organizations]ORGANIZATIONS located within a well-defined [geographic area]IDENTIFIABLE NEIGHBORHOOD,EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD07570-01-5 S. 1808 2
COMMUNITY OR RURAL DISTRICT, AS DETERMINED IN ACCORDANCE WITH SUBPARA- GRAPH THREE OF PARAGRAPH (A) OF THIS SUBDIVISION and which, in the judg- ment of the superintendent, 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. 2. 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. 3. Subject to approval of the superintendent, 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)). 4. IN CONSIDERING AN APPLICATION PURSUANT TO SUBDIVISION ONE OF THIS SECTION, THE SUPERINTENDENT SHALL CONSIDER THE 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 MODER- ATE-INCOME INDIVIDUALS IN THE COMMUNITIES TO BE SERVED. FURTHERMORE, IN CONSIDERING SUCH APPLICATION, THE SUPERINTENDENT MAY IMPOSE SUCH LIMITA- TION, SUCH AS GEOGRAPHICAL LIMITATIONS, AS THE SUPERINTENDENT DETERMINES TO BE APPROPRIATE IN HIS OR HER SOLE DISCRETION. S 2. Subparagraph (i) of paragraph (a) of subdivision 18 of section 454 of the banking law, as amended by chapter 502 of the laws of 2014, is amended to read as follows: (i) Those securities authorized as permissible investments for savings banks by subdivisions one, two, three, four, twelve,
[paragraphs]PARA- GRAPH (a) [and (b)]of subdivision twelve-a, and subdivisions fifteen, seventeen, twenty-seven and twenty-eight-a of section two hundred thir- ty-five of this chapter and such other investments as the superintendent deems permissible. S 3. Subdivision 21 of section 454 of the banking law, as amended by chapter 502 of the laws of 2014, 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 [fifteen]SIX per centumS. 1808 3
of the capital and retained earnings of such credit union, except with the approval of the superintendent. S 4. This act shall take effect on the same date as chapter 502 of the laws of 2014 takes effect.