Permissibility Of State-Chartered Credit Union To Purchase Loans From Another State-Chartered Or Federally-Chartered Credit Union - Q4 1998

By the Division of Banks

Administrative Bulletin 85-5, issued on November 28, 1985, explains the Division's interpretation of Mass. Gen. Laws chapter 171, section 74 (formerly M.G.L. c. 171 § 21C) regarding the sale and purchase of loans by a state-chartered credit union. In Admin. Bull. 85-5, the Division took the position that said section 74 implicitly authorizes state-chartered credit unions to purchase loans from other state-chartered credit unions, notwithstanding the lack of any express authority elsewhere in chapter 171. This position is based on the Division's view of section 74 as an enabling statute. Upon further review of that section, it is the position of the Division that a state-chartered credit union may purchase the loan portfolio of a federally-chartered credit union if such portfolio contains only loans which, pursuant to chapter 171, state-chartered credit unions otherwise may make.