|Chapter 453 of the Acts of 2008
To the Chief Executive Officer Addressed:
The Division of Banks (the "Division") is issuing this letter, in response to requests, to clarify the impact of Chapter 454 of the Acts of 2008, An Act Relative to Credit Union Mortgages ("Chapter 454" or the "Act") on the ability of state-chartered credit unions to offer various types of loans and engage in other activities. The Act, which became effective April 5, 2009, significantly expands the statutory lending authorities for credit unions. The Act places enhanced responsibility on the Board of Directors of each credit union to have all proper policies in place for lending and other activities under the new statute. The Act also has an impact on the necessity of certain provisions of Division's regulation 209 CMR 50.00: Parity with Federal Credit Unions (the "Parity Regulations"), and powers which can be granted thereunder.
The Act was based on a bill filed by the Massachusetts Credit Union League, Inc. (the "League"), which provided extensive testimony and support throughout the Legislative process. In addition, during the Legislative process and thereafter, the Division discussed Chapter 454 at length with the League. There were also direct discussions at meetings and outreach seminars with state-chartered credit unions.
The purpose of this letter is to set forth the Division's position on how the Act affects various lending and other authorities in chapter 171 of the General Laws as well as specified provisions of the Parity Regulations.
This letter provides a brief summary of major provisions set forth in the Act; the broadened authorities and responsibilities of the credit unions; what the new requirements are for the Boards of Directors; and what the impact will be on the various related sections of General Laws and the Parity Regulations.
The Division notes that this Industry Letter is not a comprehensive list of all authorities included in the Act, which includes additional provisions not addressed herein. The Act should be consulted directly in reviewing this Letter. A copy of Chapter 454 is attached.
All references to credit unions herein are to state-chartered credit unions.