By the Division of Banks

Effective August 20, 1999

209 CMR 50.00 Parity With Federal Credit Unions

50.01 Purpose and Scope
50.02 Applicability and Relationship to Other State Law
50.03 Advisory Opinions
50.04 Definitions
50.05 Credit Union Eligibility to Conduct Activities
50.06 Application Process to Conduct Certain Activities
50.07 Expedited Review Process to Conduct Certain Activities
50.08 Notice Process to Conduct Certain Activities
50.09 Activities Requiring No Application or Notice
50.10 Unauthorized Activities

50.01:Purpose and Scope

The purpose of 209 CMR 50.00 et seq. is to authorize and establish procedures and requirements, pursuant to M.G.L. c. 171, §6A, applicable to credit unions seeking to exercise powers granted to federal credit unions under federal law, to the extent that such powers are not otherwise prohibited under Massachusetts law.

50.02:Applicability and Relationship to Other State Law

  1. 209 CMR 50.00 et seq. shall apply only to credit unions as defined by 209 CMR 50.04.

  2. Any power authorized and exercised pursuant to 209 CMR 50.00 et seq. shall be independent from, and in addition to, any other powers granted to credit unions under applicable General Laws, or regulations promulgated thereunder. The express powers granted to credit unions under the General Laws are not limited or otherwise restricted by 209 CMR 50.00 et seq.

  3. Any lending power authorized and exercised pursuant to 209 CMR 50.00 et seq. shall be subject to the limitations on total obligations to one borrower found in M.G.L. c. 171, §58, unless otherwise specified herein.

50.03:Advisory Opinions

The Commissioner may issue from time to time advisory rulings, pursuant to M.G.L. c. 30A, §8, interpreting any provision of the regulations issued hereunder. Each regulation or officially published interpretation or guideline issued by the NCUA which interprets a provision of Federal law, as defined by 209 CMR 50.04, similar in substance to a provision of 209 CMR 50.00 et seq., shall, until rescinded by the NCUA, be deemed by the Commissioner to be an advisory ruling issued under M.G.L. c. 30A, §8; provided, however, that the Commissioner, at any time, may reject such a regulation or officially published interpretation or guideline issued by the NCUA.

50.04:Definitions

As used in 209 CMR 50.00 et seq., the following words shall, unless the context otherwise requires, have the following meanings:

Adequately capitalized. A credit union shall be deemed adequately capitalized if the credit union meets the definition of an adequately capitalized institution as defined under the prompt corrective action provisions of the Federal Credit Union Act, 12 U.S.C. §1790d, and any implementing regulations subsequently promulgated by the NCUA.

Credit union. A credit union chartered pursuant to M.G. L. c. 171 and subject to examination and supervision by the Commissioner under M.G. L. c. 167.

Commissioner. The commissioner of banks, including the Division of Banks.

CUSO. A credit union service organization authorized under 209 CMR 50.06(3)(c).

Federal law. The Federal Credit Union Act, 12 U.S.C. §1781 et seq., and its implementing regulations; any other federal statute or regulation authorizing a federal credit union to engage in activities; and, any officially published interpretation or guideline issued thereunder, by the NCUA. An "officially published guideline" must be formally published and circulated by the NCUA or a commercial publisher and be generally available to the public. This phrase shall not include a private, unpublished staff attorney letter issued to a federal credit union.

NCUA The National Credit Union Administration.

Well capitalized. A credit union shall be deemed to be well capitalized if the credit union meets the definition of a well capitalized institution as defined under the prompt corrective action provisions of the Federal Credit Union Act, 12 U.S.C. §1790d, and any implementing regulations subsequently promulgated by the NCUA.

Significantly undercapitalized. A credit union shall be deemed to be significantly undercapitalized if it: (a) has a net worth ratio of less than 4 percent; or (b) if-(1) it has a net worth ratio of less than 5 percent; (2) it fails to submit an acceptable net worth restoration plan within the time allowed; or materially fails to implement a net worth restoration plan; or (3) it is not otherwise in compliance with 12 U.S.C. §1790d.

50.05: Credit Union Eligibility to Conduct Activities

  1. Financial and Managerial requirements. Any credit union engaging in an activity pursuant to 209 CMR 50.00 et seq. must possess the necessary financial and managerial resources to ensure such activity will not adversely affect the institution's safety and soundness.

  2. Policy and procedure requirements. Any credit union engaging in an activity pursuant to 209 CMR 50.00 et seq. must have in place adequate policies and procedures governing the performance of such activity by the credit union and its employees, to minimize any credit, market, liquidity, operational, legal and reputational risks to the credit union.

  3. Satisfactory CRA rating requirement. Any credit union applying to engage in an activity pursuant to 209 CMR 50.00 et seq. must have received at least a satisfactory CRA rating at the most recent examination conducted by the Commissioner pursuant to M. G. L. c.167, §14.

  4. Review. Any activity undertaken by a credit union pursuant to 209 CMR 50.00 et seq. shall remain subject to periodic review by the Commissioner. The Commissioner may modify, curtail, rescind or otherwise limit a credit union's authority to conduct any activity pursuant to 209 CMR 50.00 et seq. through a formal or informal remedial action if a credit union ceases to meet any applicable requirements, based upon a report of examination conducted by the Commissioner or the NCUA, or based on other reliable information.

50.06: Application Process to Conduct Certain Activities

  1. General.

    (a) A credit union that is adequately capitalized, and has not been notified that it is significantly undercapitalized, may engage in any activity listed under 209 CMR 50.06(3) by submitting an application to, and receiving approval from the Commissioner before commencing the activity; provided, however, that such a credit union may also apply and receive approval from the Commissioner on a discretionary basis pursuant to 209 CMR 50.06, to engage in activities listed under 209 CMR 50.07(3), 209 CMR 50.08(3), and 209 CMR 50.09(2)(a).

    (b) A credit union that is well capitalized, and has not been notified that it is significantly undercapitalized may apply and receive approval from the Commissioner before commencing the activity; provided, however, that such credit union may also apply and receive an expedited approval from the Commissioner to engage in an activity pursuant to 209 CMR 50.07(1).

  2. Application. The application must include a complete description of the credit union's proposed activity, the credit union's investment in such activity, a detailed business plan containing financial projections and assumptions, the written policies required by 209 CMR 50.05(2), as well as a representation and undertaking that the activity will be conducted in accordance with Massachusetts and Federal law. The application must also provide any other information the Commissioner may require.

  3. Activities subject to application and approval. A credit union may engage in the following activities pursuant to 209 CMR 50.06(1):

    1. Temporary Branch Offices . A credit union may establish and operate a temporary branch office, to be open for less than a year, or on an intermittent basis at a designated site, subject to the investment limitations to purchase, hold and lease real estate suitable for the transaction of business, found at M.G.L. c. 171, §75.

    2. Shared Branch Offices.

      1. Authority . A credit union may establish and operate a branch office on a shared basis with one or more credit unions or federal credit unions subject to the approval of the commissioner under M.G.L. c. 171, §8.

      2. Credit Union Service Organizations. Shared branch offices may be established through a CUSO or by written agreement among two or more credit unions. Such CUSO shall comply with 209 CMR 50.06(3)(c).

      3. Mandatory safeguards. Any such CUSO or agreement shall establish adequate safeguards relative to credit union liability for employee breaches of member confidentiality; loss against fraud or dishonesty; and any other risks associated with the operation of a shared branch office.

      4. Maximum investment. Shared branch offices shall be subject to the investment limitations to purchase, hold and lease real estate suitable for the transaction of business, found at M.G.L. c. 171, §75. In the event of a conflict between the investment limitations of M.G.L. c. 171, §75 and the maximum investment limitations of 209 CMR 50.06(3)(c)(1)(a)-(b) governing CUSOs, the former provision shall control.

    3. Investments in Credit Union Service Organizations. A credit union may, individually or with other credit unions or federal credit unions, invest in one or more CUSOs. Investments in or loans to CUSOs are permissible only if the CUSO primarily serves credit unions, its membership, or the membership of credit unions contracting with the CUSO and shall otherwise conform to the customer base requirements of 12 CFR §712.3(b). Such investment or lending shall be subject to the following conditions and limitations:

      1. Maximum Investment.
        1. Equity investments. A credit union may invest in the shares, stocks or obligations of any other organization, providing services which are associated with the routine operations of credit unions, up to one percent of its total paid in and unimpaired capital and surplus, as of its last calendar year-end financial report, with the approval of the Commissioner.

        2. Lending. A credit union's total loans to all CUSOs shall not exceed, in the aggregate, one percent of its total paid in and unimpaired capital and surplus, as of its last calendar year-end financial report. The lending authority under 209 CMR 50.06(3)(c)(1)(b) is independent from the investment authority authorized under 209 CMR 50.06(3)(c)(1)(a).

        3. Investment Limitations. The investment authorized by 209 CMR 50.06(3)(c)(1) shall not include the power to acquire control directly or indirectly, of another financial institution or to invest in shares, stocks or obligations of an insurance company, trade association, liquidity facility or any similar organization corporation, or association, except as otherwise expressly authorized by 12 U.S.C. § 1781 et seq. or M.G.L. c. 171.

      2. Permissible Activities. A credit union may invest in, or lend to a CUSO that engages in any activity and service specified under 12 CFR § 712.5, provided such activity is not prohibited by 209 CMR 50.06(3)(c)(3). Permissible activities include:

        a. "Checking and currency services" under 12 CFR § 712.5(a);
        b."Clerical, professional and management services" under12 CFR § 712.5(b);
        c."Consumer mortgage loan origination" " under12 CFR § 712.5(c);
        d."Electronic transaction services" under12 CFR § 712.5(d);
        e." Financial counseling services" under12 CFR § 712.5(e);
        f."Leasing" under12 CFR § 712.5(h);
        g."Loan support services" under12 CFR § 712.5(i);
        h."Record retention, security and disaster recovery services" under12 CFR § 712.5(j);
        i."Shared credit union branch (service center) operations" under12 CFR § 712.5(l) subject to 209 CMR 50.06(3)(c); and,
        j."Student loan origination" under12 CFR § 712.5(m).

      3. Prohibited Activities. Notwithstanding 12 CFR § 712.5, a credit union may not invest in or lend to a CUSO that engages in the following activities or services, unless such activity or service is otherwise expressly authorized under M.G.L. c. 171:

        a."Fixed asset services" under 12 CFR § 712.5(f)(1)-(2);
        b."Insurance brokerage or agency" under 12 CFR § 712.5(g)(1)-(3) excluding third party arrangements with independent vendors;
        c."Securities brokerage services" under as described in 12 CFR § 712.5(k), excluding third party arrangements with independent vendors;
        d."Travel agency services" under 12 CFR § 712.5(n);
        e."Trust services" under 12 CFR § 712.5(o); and,
        f."Real estate brokerage" as prohibited by 12 CFR § 712.6(b).

      4. Corporate Requirements.

        a. Corporate Structure. A credit union may invest in or lend to a CUSO structured as a business corporation, limited liability company or limited partnership, provided such entity is established under Massachusetts law.

        b. Separate Corporate Identity. A CUSO shall maintain a separate and distinct corporate identity from the investing credit union. A credit union or CUSO that complies with the provisions of 12 CFR § 712.3; 12 CFR § 712.4 and12 CFR § 712.8, shall be deemed to be in compliance with 209 CMR 50.06(3)(c)(4)(b).

    4. Community Development Investments

      1. Investments in Community Development Credit Unions. A credit union may, individually or with other credit unions or federal credit unions, make deposits in, invest in, or lend to, a state or federally chartered credit union designated as a community development or low-income credit union located in the Commonwealth. A credit union's total deposits, investments and loans to all community development credit unions shall not exceed, in the aggregate, five percent of its total paid in and unimpaired capital and surplus, as of its last calendar year-end financial report.

      2. Community Development Loan Pools . A credit union may, with other state or federally-chartered credit unions or banks, invest in, or lend to, a residential mortgage loan pool designed to promote affordable housing for low to moderate income persons residing in the Commonwealth for the purpose of meeting its obligations under the Massachusetts Community Reinvestment Act, M.G.L.c.167, §14. Such investments and loans shall not exceed, in the aggregate, five percent of the credit union's total paid in and unimpaired capital and surplus, as of its last calendar year-end financial report.

    5. 12 Year Consumer Loans

      1. General. A credit union may make a personal loan to a member for a term of up to 12 years for any personal loan authorized by M.G.L. c. 171, §59 or M.G.L. c. 171, §64. Except as provided by 209 CMR 50.06(3)(e)(2), any such personal loan shall be subject to the limitations, terms and conditions relative to collateral, loan to value, and variation in the rate of interest set forth in M.G.L. c. 171, §59(1)-(3) or M.G.L. c. 171, §64.

      2. Loan Policies. Any such loan shall be (a) made in accordance with a detailed written loan policy approved by the credit union's directors; (b) evidenced by a note of the borrower; and, (c) secured by a perfected pledge or security interest in the collateral, if made on a secured basis.

      3. Limitations. A credit union may make a personal loan authorized by 209 CMR 50.06(3)(e) up to any amount, provided such loan or advance would not cause the member to be indebted to the credit union in an aggregate amount exceeding 10 percent of the credit union's total unimpaired shares and surplus.

      4. Aggregate Outstanding Loan Balance Limitations. Credit unions making personal loans under 209 CMR 50.06(3)(e) shall be subject to the aggregate outstanding loan balance limitations of M.G.L. c. 171, §59. A credit union shall aggregate all personal loans made under M.G.L. c. 171, §59 with loans made under 209 CMR 50.06(3)(e) in calculating its maximum outstanding loan limitations under 209 CMR 50.06(3)(e)(4).

    6. 100 % Automobile Financing .
      1. General. Notwithstanding M.G.L. c. 171, §59(3) and 209 CMR 50.06(3)(e), a credit union may make an automobile loan to a member in an amount up to 100 percent of the value of the collateral for a term not to exceed 12 years or the useful life of the automobile, whichever is less.

      2. Loan Policies. Any such loan shall be (a) made in accordance with a detailed written loan policy approved by the credit union's directors; (b) evidenced by a note of the borrower; and, (c) secured by a perfected pledge or security interest in the collateral.

      3. Limitations. No loan under 209 CMR 50.06(3)(f) shall cause the member to be indebted to the credit union in an aggregate amount exceeding 10 percent of the credit union's total unimpaired shares and surplus.

      4. Aggregate Outstanding Loan Balance Limitations. Credit unions making automobile loans under 209 CMR 50.06(3)(f) shall be subject to the aggregate outstanding loan balance limitations applicable to loans made under M.G.L. c. 171, §59(3). A credit union shall aggregate all loans made under M.G.L. c. 171, §59(3) with loans made under 209 CMR 50.06(3)(f) in calculating its maximum outstanding loan limitations under 209 CMR 50.06(3)(f)(4).

    7. Lines of Credit and Credit Cards.
      1. General. A credit union may grant an unsecured line of credit, including issuing a credit card, to a member subject to a detailed written loan policy required under 209 CMR 50.06(3)(g)(3) which has been approved and reviewed annually by the credit union's directors.

      2. Limitations. No loan or line of credit under 209 CMR 50.06(3)(g)(1) may be made to any member if such loan or advance would cause the member to be indebted to the credit union in an aggregate amount exceeding 10 percent of the credit union's total unimpaired shares and surplus.

      3. Loan Policies. Any such loan shall be (a) made in accordance with a detailed written loan policy approved by the credit union's directors; and (b) evidenced by a note of the borrower. The credit union's loan policy and its contract documents shall establish the amortization and maturity requirements of such lines of credit.

      4. Aggregate Outstanding Loan Balance Limitations. Credit unions making credit card loans under 209 CMR 50.06(3)(g)(1) shall be subject to the aggregate outstanding loan balance limitations of M.G.L. c. 171, §59A. A credit union shall aggregate all credit card loans made under M.G.L. c. 171, §59A with loans made under 209 CMR 50.06(3)(g)(1) in calculating its maximum outstanding loan limitations under 209 CMR 50.06(3)(g)(4).

    8. Leasing Activities.
      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 NCUA Interpretive Ruling and Policy Statement 83-3, FCU Leasing of Personal Property to Members, (November 16, 1983). 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.

    9. 20 Year Loans.

      1. Home Improvement Loans. Notwithstanding the loan maturity requirements of M.G.L. c. 171, §60, a credit union may make a loan to finance the repair, alteration or improvement of improved real estate that is occupied by a member, for a term of up to 20 years. Such home improvement loans may be up to any amount, provided such loan would not cause the member to be indebted to the credit union in an aggregate amount exceeding 10 percent of the credit union's total unimpaired shares and surplus.

      2. Manufactured Home Loans. Notwithstanding the loan maturity requirements of M.G.L. c. 171, §61, a credit union may make a loan to a member to finance a manufactured home, as defined by said section 61, for a term of up to 20 years or the useful life of the manufactured home, whichever is less. Such manufactured home loan may be up to any amount, provided such loan or advance would not cause the member to be indebted to the credit union in an aggregate amount exceeding 10 percent of the credit union's total unimpaired shares and surplus.

      3. Boat, Camper or Trailer Loans. Notwithstanding the loan maturity requirements of M.G.L. c. 171, §62, a credit union may make a loan to a member to finance a boat, camper or trailer, for a term of up to 20 years or the useful life of the collateral, whichever is less. Such boat, camper or trailer loan may be up to any amount, provided such loan or advance would not cause the member to be indebted to the credit union in an aggregate amount exceeding 10 percent of the credit union's total unimpaired shares and surplus.

      4. Loan Policies. Any such loan made under 209 CMR 50.06(3)(i)(1)-(3) shall be (a) made in accordance with a detailed written loan policy approved by the credit union's directors; (b) evidenced by a note of the borrower; and, (c) secured by a perfected pledge or security interest in the collateral.

      5. Aggregate Outstanding Loan Balance Limitations. Credit unions making home improvement, manufactured home and boat, camper and trailer loans under 209 CMR 50.06(3)(i)(1)-(3) shall be subject to the aggregate outstanding loan balance limitations of M.G.L. c. 171, §60-62, respectively. A credit union shall aggregate all loans made under M.G.L. c. 171, §60-62 with loans made under 209 CMR 50.06(3)(i)(1)-(3) in calculating its maximum outstanding loan limitations under 209 CMR 50.06(3)(i)(4).

    10. 40-Year Residential Mortgage Loans.
      1. General. Notwithstanding the maximum loan term requirements of M.G.L. c. 171, §65, a credit union may make owner occupied first lien mortgage loans to members on one to four family residential property for a term of up to forty years on any class or type of real estate loan authorized by M.G.L. c. 171, §65. Such long term residential real estate loans shall be subject to the conditions and limitations contained in 209 CMR 50.06(3)(j)(2).

      2. Conditions and limitations . All long term residential mortgages made under 209 CMR 50.06(3)(j)(1) shall be subject to the following minimum requirements:

      1. Loan Policies. All such mortgage loans shall be made in accordance with detailed written loan policies, approved and annually reviewed by the credit union's board of directors. A credit union's long term residential mortgage lending activities shall be consistent with its formal asset liability management strategy.

      2. Secondary Mortgage Market Standards. All such mortgage loans shall be underwritten to conform with secondary mortgage market standards in accordance with the requirements of Regulatory Bulletin Manual, 4.2-103, entitled Residential Mortgage Loan Underwriting (1998 ed.), and any amendments thereto.

      3. Aggregate Outstanding Loan Balance Limitations. Credit unions making long term residential mortgage loans under209 CMR 50.06(3)(j)(1) shall be subject to the aggregate outstanding loan balance limitations of M.G.L. c. 171, §65 governing real estate mortgage loans. A credit union shall aggregate all residential mortgage loans made under M.G.L. c. 171, §65 with real estate mortgage loans made under 209 CMR 50.06(3)(j)(1) in calculating its maximum outstanding loan limitations under 209 CMR 50.06(3)(j)(1)(c).

    11. 95% Loan to Value Residential Mortgage Loans. A credit union may make owner occupied first lien mortgage loans, not exceeding 95% of the value of the real estate, to members on one to four family residential property subject to the terms and limitations of M.G.L. c. 171, § 65 paragraph 5 or pursuant to 209 CMR 50.06(3)(j).

    12. Purchase and Sale of Loan Portfolios.
      1. General. A credit union may purchase, sell or pledge any consumer or mortgage loan made under M.G.L. c. 171 or 209 CMR 50.00 et seq., (hereinafter "eligible obligation") subject to the requirements of 209 CMR 50.06(3)(l)(2).

      2. Requirements. All loan purchases, sales or pledges under 209 CMR 50.06(3)(l)(1) shall conform to the procedural and substantive requirements of 12 CFR § 701.23(b) governing the purchase of eligible obligations; 12 CFR § 701.23(c) governing the sale of eligible obligations; and 12 CFR §701.23(d) governing the pledge of eligible obligations.

    13. Consumer Loan Participations. A credit union may, by written agreement, make or invest in consumer loan participations with other credit unions, federal credit unions or federally-insured banks having their main office in the Commonwealth, subject to the terms and conditions applicable to federal credit unions found in 12 CFR § 701.22(b) through 12 CFR § 701.22(d). For the purposes of 209 CMR 50.06(3)(m), a consumer loan shall include any loan made under M.G.L.c. 171, §§ 59-59A and 209 CMR 50.06(3)(e) through 209 CMR 50.06(3)(g). A credit union may invest in the aggregate up to 10% of its assets in consumer loan participation interests.

    14. Group Purchasing Activities. A credit union may make insurance, mutual fund, annuities and financial planning services available to its members by entering into group purchasing plans involving outside vendors and perform administrative functions on behalf of the vendors subject to the requirements of 12 CFR §721.2 and applicable Massachusetts law.

50.07: Expedited Review Process to conduct Certain Activities

  1. General. A credit union that is well capitalized and has not been notified that it is significantly undercapitalized may engage in the activities listed in 209 CMR 50.07(3) by submitting an application to the Commissioner and receiving approval thereof. Such an application shall be deemed approved by the Commissioner 30 days after the filing is received by the Commissioner, unless the Commissioner notifies the credit union prior to that date that the filing is not eligible for expedited review.

  2. Application. The application must include a complete description of the credit union's proposed activity, the credit union's investment in such activity, a detailed business plan containing financial projections and assumptions, the written policies required by 209 CMR 50.05(2), as well as a representation and undertaking that the activity will be conducted in accordance with Massachusetts and Federal law. Any credit union granted an approval to conduct an activity pursuant to 209 CMR 50.07(1) is deemed to have agreed to conduct the activity in a manner consistent with applicable guidelines. The Commissioner may also impose additional conditions in connection with any approval granted under 209 CMR 50.07(1).

  3. Activities eligible for expedited review. A credit union may exercise the following powers pursuant to 209 CMR 50.07(1):

    1. Temporary Branch Offices . A credit union which received, as a result of its most recent examination by the Commissioner a "High Satisfactory" or an "Outstanding" CRA performance rating, may establish and operate a temporary branch office, to be open for less than a year, or on an intermittent basis at a designated site, subject to the investment limitations to purchase, hold and lease real estate suitable for the transaction of business, found at M.G.L. c. 171, §75.

    2. Shared Branch Offices.

      1. Authority. A credit union may establish and operate a branch office on a shared basis with one or more credit unions or federal credit unions subject to the approval of the commissioner under M.G.L. c. 171, §8, provided all of the credit unions seeking to establish and operate such shared office received a "High Satisfactory" or an "Outstanding" CRA performance rating as a result of their most recent examinations by the Commissioner.

      2. Credit Union Service Organizations. Shared branch offices may be established through a CUSO or by written agreement among two or more credit unions. Such CUSO shall comply with 209 CMR 50.06(3)c).

      3. Mandatory Safeguards. Any such CUSO or agreement shall establish adequate safeguards relative to credit union liability for employee breaches of member confidentiality; loss against fraud or dishonesty; and any other risks associated with the operation of a shared branch office.

      4. Maximum Investment. Shared branch offices shall be subject to the investment limitations to purchase, hold and lease real estate suitable for the transaction of business, found at M.G.L. c. 171, §75. In the event of a conflict between the investment limitations of M.G.L. c. 171, §75 and the maximum investment limitations of 209 CMR 50.06(3)(c) governing CUSOs, the former provision shall control.

50.08: Notice Process to Conduct Certain Activities

  1. General. A credit union that is well capitalized and has not been notified that it is in troubled condition may engage in any activity listed under 209 CMR 50.08(3), by providing the Commissioner written notice within 10 days after commencing the new activity.

  2. Notice. The written notice must include a complete description of the activity conducted, the credit union's investment in such activity, and a representation and undertaking that the activity will be conducted in accordance with Massachusetts and Federal law. Any credit union filing notice pursuant to 209 CMR 50.08(1) is deemed to have agreed to conduct the activity in a manner consistent with applicable guidelines.

  3. Activities subject to notice. A credit union may engage in the following activities pursuant to 209 CMR 50.08(1):

    1. 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.

    2. 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.

50.09: Activities Requiring No Application or Notice

  1. A credit union that is well capitalized and has not been notified that it is significantly undercapitalized may engage in the activities listed in 209 CMR 50.09(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 50.09(1):

    1. Deposits in Federally Insured Banks and Credit Unions

      1. Types of Deposits.
        1. 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.

        2. 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.

        3. Certificates of deposit authorized by 209 CMR 50.09(1)(a)(1)(a)-(b) may exceed two years in maturity provided such investment is consistent with a credit union's formal asset liability management strategy.

      2. Investment Policies. The investments authorized by 209 CMR 50.09(2)(1)(a)-(c) shall conform to written investment policies which meet the requirements of Regulatory Bulletin Manual, 2.2-101, entitled Investment Policy Minimum Requirements (1998 ed.), and any amendments thereto.

      3. Cash on Hand Requirements. Deposits or certificates of deposit authorized by 209 CMR 50.09(1)(a)(1)(a)-(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.

    2. Federal Funds. A credit union may participate in federal funds with federally insured banks whose main offices are located within the Commonwealth, provided such institutions are "well capitalized" under applicable federal deposit insurance laws and regulations.

    3. Non-Member Deposits.

      1. Corporate Credit Unions. A credit union may accept deposits from the Central Credit Union Fund, Inc., or a corporate credit union, as defined by M .G. L. c. 171, §1, for liquidity purposes. Said deposits shall not exceed federal or excess share insurance limits and shall comply with the maximum deposit limitations of M.G. L. c. 171, §30.

      2. Credit Unions. A credit union may accept deposits for any purpose from another credit union or a federally chartered credit union having its main office in the Commonwealth. Said deposits shall not exceed federal or excess share insurance limits and shall comply with the maximum deposit limitations of M.G. L. c. 171, §30.

50:10 Unauthorized Activities

  1. A credit union shall not be permitted under 209 CMR 50.00 et seq., to engage in any insurance sales activities that would require the credit union to be licensed as an insurance agent or broker under M.G. L. c. 175.

  2. The prohibition against insurance sales activities under 209 CMR 50.10(1) shall not prohibit a credit union from engaging in indirect insurance sales activities through a CUSO pursuant to 209 CMR 50.06(3)(c) or through group purchasing activities authorized by 209 CMR 50.06(3)(n).

  3. The prohibition against insurance sales activities under 209 CMR 50.10(1) shall expire automatically upon the granting of insurance sales powers for credit unions under either state or federal law. In such event, the provisions of G.L. c. 167F, § 2A and 209 CMR 49.00 et seq. and 211 CMR 142.00 et seq. shall govern the insurance sales activities of credit unions.

REGULATORY AUTHORITY: M.G.L. c. 171, §6A.