209 CMR, § 50.07 - Activities Requiring No Application or Notice
(1) A credit union that is well or adequately
capitalized and has not been notified that it is in troubled condition may
engage in the activities listed in 209 CMR 50.07(2) without filing an
application or providing notice to the Commissioner, provided the activities
continue to be deemed legally permissible by the Commissioner, and the
activities are conducted in accordance with applicable Massachusetts or federal
law.
(2) A credit union may engage
in the following activities pursuant to 209 CMR 50.07(1):
(a)
Additional Consumer Loan
Participation Authority Not Included in M.G.L. c. 171. A credit
union may, by written agreement, make or invest in consumer loan participations
with any credit union service organization or any state or federal government
agency and its subdivisions meeting the requirements of 209 CMR 50.07 subject
to the terms and conditions applicable to federal credit unions found in 12 CFR
§ 701.22. For the purposes of 209 CMR 50.07(2)(a), a consumer loan is
defined as a loan or line of credit, whether secured by collateral or security
of any nature or unsecured, for consumer or other purposes other than a real
estate loan.
(b)
Real
Estate Loan Participations. A credit union may, by written
agreement, make or invest in real estate loan participations with any
federally-chartered or federally-insured credit union, any federally-chartered
or federally-insured bank, any state or federal government agency and any
subdivision thereof, or any credit union service organization meeting the
requirements of 209 CMR 50.07 subject to the terms and conditions applicable to
federal credit unions found in 12 CFR § 701.22.
(c)
Deposits in Federally Insured
Banks and Credit Unions.
1.
Types of Deposits.
a.
A credit union may invest in the deposits, including certificates of deposit,
of federally insured banks located within or without the Commonwealth, provided
such institutions are well capitalized under applicable federal share or
deposit insurance laws and regulations.
b. A credit union may invest in the shares
and deposits, including certificates of deposit, of federally insured credit
unions located within or without the Commonwealth, provided such institutions
are well capitalized under applicable federal share or deposit insurance laws
and regulations.
c. Certificates of
deposit authorized by 209 CMR 50.07(2)(c)1.a. and b. may exceed two years in
maturity provided such investment is consistent with a credit union's formal
asset liability management strategy.
2.
Cash on Hand
Requirements. Deposits or certificates of deposit authorized by
209 CMR 50.07(2)(c)1.a. and b. shall not qualify towards the cash on hand
requirements of M.G.L. c. 171, § 71, unless the deposit or certificate of
deposit meets the maturity and eligible depository requirements of M.G.L. c.
171, § 71.
(d)
Additional Investment Authorities. A credit union may
invest or engage in investment repurchase transactions; securities lending
transactions; borrowing repurchase transactions, including reverse repurchase
transactions; and federal funds from any financial institution insured by the
Federal Deposit Insurance Corporation or the NCUA subject to the terms and
conditions applicable to federal credit unions found in 12 CFR Part 703. Any
investments made under 209 CMR 50.07(2)(d) shall be made in accordance with a
detailed written policy approved and reviewed annually by the credit union's
directors.
(e)
Interest
Bearing Corporate Checking Accounts. To the extent permitted by
federal law, a credit union may pay dividends on organization member share
draft accounts and may permit such organization members to make withdrawals
from such accounts by negotiable or transferable instruments or other orders
for the purpose of making transfers to third parties; provided, however, that
the entire beneficial interest in such account shall be held by an organization
member.
(f)
Treasury
Tax and Loan Depositories. A credit union may establish Treasury
Tax and Loan Remittance Accounts subject to the requirements and limitations of
12 U.S.C. § 1767(a) and 12 CFR § 701.37, its implementing
regulations. Such authority shall not extend to acting as a fiscal agent or
depository for the Commonwealth or its political subdivisions unless expressly
authorized by Massachusetts law.
(g)
Leasing.
1.
Authority. A
credit union may engage in automobile and personal property lease financing
transactions with its members on a net, full payout basis. Such automobile and
personal leasing activities may be conducted on either a direct or indirect
basis and on either an open or closed end basis.
2.
Conditions and
Limitations. All credit union leasing activities shall strictly
conform to the conditions and limitations set forth in 12 CFR Part 714:
Leasing. Those requirements include, but are not limited to,
provisions governing maximum residual value; salvage values over leased
property; and, contingent liability insurance policy endorsements for leasing.
Credit union leasing activities shall remain subject to applicable usury limits
under Massachusetts law.
(h)
Additional
Powers.
1.
General. The authorities provided in 209 CMR
50.07(2)(h)2. are only for those activities listed. A credit union may engage
in other activities if they are permitted and determined by the NCUA to be
incidental powers pursuant 12 CFR § 721 pursuant to regulations,
guidelines or written opinions of the General Counsel of the NCUA only if the
Commissioner affirmatively determines by regulation or in writing that the
activity is reasonably related to an individual power set out in 209 CMR
50.07(2)(h)2.
2.
Permissible Activities.
a.
Certification
Services. A credit union may provide the following certification
services: notary services, signature guarantees, certification of electronic
signatures, and share draft certifications.
b.
Charitable Contributions and
Donations. A credit union may make charitable contributions and
donations, including gifts the credit union provides to assist others through
contributions of staff, equipment, money, or other resources. Examples of
charitable contributions include donations to community groups, nonprofit
organizations, other credit unions or credit union affiliated causes, as well
as donations to create charitable foundations.
c.
Correspondent
Services. A credit union may provide the following correspondent
services to other federally-insured credit unions: loan processing, loan
servicing, member check cashing services, disbursing share withdrawals and loan
proceeds, cashing and selling money orders, and automated teller machine
deposit services.
d.
Electronic Financial Services. A credit union may
provide the following electronic financial services: automated teller machines,
electronic fund transfers, online transaction processing through a web site,
web site hosting services, account aggregation services, and Internet access
services to perform or deliver products or services to members.
e.
Excess Capacity.
i.
Agreements Relative to Excess
Capacity in Personnel. A credit union with excess capacity in its
personnel may enter into an agreement to permit its employees to work elsewhere
subject to the provisions of M.G.L. c. 171, § 19.
ii.
Sale or Lease of Excess
Capacity in Data Processing Equipment or Services. A credit union
may sell or lease the excess capacity in data processing equipment or
services.
iii.
Sale or
Lease of Excess Capacity in Facilities, Equipment or Office Space.
A credit union may sell or lease the excess capacity in facilities, equipment
or office space.
f.
Financial Counseling. A credit union may provide
advice, guidance or services to members to promote thrift or to otherwise
assist members on financial matters and may provide the following financial
counseling services if said services are provided by the credit union for a
fee: income tax preparation service; electronic tax filing for members;
counseling regarding estate and retirement planning; investment counseling; and
debt and budget counseling.
g.
Finder Activities. A credit union may provide the
following finder activities by offering products and services to members
through outside vendors: through the sale of advertising space on the credit
union's web site and account statements and receipts; and selling statistical
or consumer financial information to outside vendors to facilitate the sale of
their products to the members of the credit union.
h.
Marketing
Activities. A credit union may engage in the following marketing
activities: advertising and other promotional activities such as raffles,
membership referral drives, and the purchase or use of advertising.
i.
Member Monetary Instrument
Services. A credit union may provide the following monetary
instrument services to its members: sale and exchange of foreign currency and
U.S. commemorative coins; use of a credit union's accounts in foreign financial
institutions to facilitate members' transfer and negotiation of checks
denominated in foreign currency; and engaging in monetary transfer services for
members, provided, however, that under no circumstances can a credit union
engage in foreign exchange activities for speculative purposes for its own
account.
j.
Stored
Value Products. A credit union may provide the following stored
value products: stored value cards, public transportation tickets, event and
attraction tickets, gift certificates, prepaid phone cards, postage stamps,
electronic benefits transfer script, and similar media.
k.
Health Savings
Accounts. A credit union may offer health savings accounts. The
term health savings account shall include a tax-advantaged savings account a
member may use to pay some medical expenses not covered by health insurance in
accordance with 26 U.S.C. § 223 and any guidelines issued by the
NCUA.
l.
Loan-related
Products. A credit union may provide the following loan-related
products: debt cancellation agreements and debt suspension agreements.
i. The credit union shall adopt policies
relative to debt cancellation or debt suspension agreements to include
provisions addressing, but not limited to, disclosures relative to the
prohibition against tying; total fees; payment methods and termination process;
eligibility requirements; and an affirmative election by the member to purchase
a debt cancellation or debt suspension product, and a written acknowledgment of
the disclosures with receipt by the member.
ii. Any agreement between the credit union
and the vendor, and any agreements with additional or different third parties
in connection with this authority, must include a provision that allows the
Division access to its records regarding debt cancellation or debt suspension
products for examination purposes. Any agreement with the vendor or any
additional or different third parties must include provisions granting the
Division access to the books and records of third party providers for the
purpose of verifying compliance with applicable laws, rules, regulations and
regulatory guidelines.
iii. The
credit union shall also be subject to any directives and regulations the
National Credit Union Administration and the Division may promulgate in the
future on debt cancellation or debt suspension products.
iv. Should the credit union decide to
compensate member service representatives for the sale of debt cancellation or
debt suspension agreements. Said compensation would have to be at a nominal
level. The credit union would be required to establish written policies and
internal controls in connection with said incentive and monitor compliance with
such policies and controls at least annually.
m.
Investments in Land, Building,
Improvements, and Equipment. A credit union may invest in land,
building, improvements and equipment up to $1,000,000 per one parcel of real
estate or purchase of equipment per transaction without providing notice to the
Commissioner.
Notes
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