Senate Bill No. 645

Public Act No. 99-19

An Act Expanding the Powers of Connecticut Credit Unions.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Subsection (a) of section 36a-441 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) A Connecticut credit union may, subject to the restrictions and limitations of sections 36a-435 to 36a-474, inclusive, and its bylaws:

(1) Issue shares to its members and receive payments on shares, reduce the amount of its members' shares and cancel shares as provided in sections 36a-435 to 36a-474, inclusive, including (A) club shares to be withdrawn within fifteen months and on which no dividends need be paid and (B) membership shares, if the bylaws so provide, on which no dividends need be paid;

(2) Make unsecured and secured loans in the manner provided in section 36a-456;

(3) Contract for loan protection insurance on the lives of its borrowing members and for life savings insurance on its members' shares;

(4) Deposit its funds in financial institutions whose accounts are insured by or under a program operated by an agency or instrumentality of the United States, provided not more than ten per cent of its assets may be deposited in financial institutions whose principal offices are located in any other state;

(5) Invest its funds in bonds legal as investments for Connecticut banks under the provisions of section 36a-275 subject to the limitations contained in section 36a-452;

(6) Sell or issue to its members without charge negotiable checks or drafts drawn by or on it and payable by it or through any bank accepting commercial deposits, provided the Connecticut credit union shall give the commissioner prior written notification of its intention to issue and sell such negotiable checks or drafts;

(7) Borrow money to an amount not exceeding fifty per cent of the paid-in and unimpaired capital and surplus of the Connecticut credit union. A Connecticut credit union shall notify the commissioner in writing of its intention to borrow amounts in excess of an aggregate of thirty-five per cent of its paid-in and unimpaired capital and surplus;

(8) Make loans not exceeding twenty per cent of the lending Connecticut credit union's paid-in and unimpaired capital and surplus to any other Connecticut credit union and any federal credit union;

(9) Expel members, as provided in sections 36a-435 to 36a-474, inclusive;

(10) Acquire, improve, hold, alter, maintain, repair, encumber and convey such real property as may be necessary for the transaction of its business including the safekeeping and protection of its assets. No Connecticut credit union may expend in the purchase or construction of any building for the purpose, in whole or in part, of accommodating its business, a greater amount than, in the opinion of the commissioner, should be used for such purpose, and such expenditure shall be subject to the approval of the commissioner;

(11) Make home or property improvement loans as provided in section 36a-456;

(12) Make higher education loans as provided in sections 36a-435 to 36a-474, inclusive;

(13) Make loans secured by mortgage on real property, including home equity loans, as provided in sections 36a-265 and 36a-442;

(14) Make contributions or gifts for charitable, educational or public welfare purposes, except that the total amount of such contributions or gifts made by any Connecticut credit union in any one fiscal year shall not exceed the greater of: (A) One hundred dollars, (B) one and one-half per cent of its undivided earnings, or (C) one-tenth of one per cent of its gross income in the immediately preceding fiscal year;

(15) Sell any or all of its outstanding loans to any other lending institution and to purchase one or more outstanding loans from any other Connecticut credit union or federal credit union or purchase from any other lending institution residential mortgage loans or consumer loans made to the credit union's members on a recourse or without recourse basis for such consideration as shall be agreed upon. A loan servicing agreement or arrangement contemplated by such a transaction shall be subject to the prior approval of the commissioner;

(16) Sell a participating interest in any or all of its outstanding loans to and purchase a participating interest in any or all of the outstanding loans of any bank, Connecticut credit union, federal credit union or credit union service organization, as defined in section 36a-475, pursuant to an appropriate written loan participation and servicing agreement to be signed by [both Connecticut credit unions] all parties involved in such transaction, provided such agreement shall be subject to the prior approval of the commissioner;

(17) Act as agent for the sale, issue and redemption of the obligations of the United States and pledge assets to the United States or to the proper federal reserve bank for its obligations as such agent;

(18) Subject to the prior approval of the commissioner, install safe deposit boxes within suitably constructed vaults in its business building or buildings and rent the boxes to its members provided the Connecticut credit union has assets of at least five hundred thousand dollars and at least one full-time employee; [and]

(19) Act as agent for the sale to its members of money orders and travelers checks issued by the central credit union; and

(20) Transact a general credit union business and exercise by its governing board or duly authorized officers or agents, subject to applicable law, all such incidental powers as are necessary thereto. The express powers authorized for a Connecticut credit union under this subsection do not preclude the existence of additional powers deemed to be incidental to the transaction of a general credit union business pursuant to this subsection.

Approved May 12, 1999

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