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

209 CMR 50.07
Amended by Mass Register Issue 1319, eff. 8/12/2016.

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