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Can you summarize 3 NYCRR Legal Interpretations, Legal Interpretation 5?
Legal Interpretations > Credit Unions
Short Summary
This legal document pertains to credit unions and their ability to invest in securities. It states that securities held by credit unions should be placed in the custody of a bank or trust company in the name of the credit union, as required by Subdivision 14 of section 453 of the Banking Law. The document addresses an inquiry from a credit union regarding holding securities in bearer form through a broker. The department replied that such an arrangement would not comply with the law as the securities would be held in the name of the broker, not the credit union. Additionally, the involvement of a broker adds risk to the liquidity and clarity of title to the investment securities. The document is dated November 26, 1973, and is found in the New York Codes, Rules and Regulations under the Banking section. Another legal document pertains to revolving credit loans under section 470 of the Banking Law. It addresses an inquiry from a credit union regarding its power to approve lines of credit for its members and enter revolving credit agreements. The document concludes that a credit union is foreclosed from issuing a ’line of credit’ due to the requirement in section 470 that each loan application must be made in writing and state the purpose and security offered. However, the inconvenience caused by the credit union’s credit committee passing on every loan has been partially eliminated by a 1969 law allowing credit unions with shares exceeding $50,000 to appoint loan officers. The document is dated July 22, 1969.
Whom does it apply to?
Credit unions
What does it govern?
Credit unions' ability to invest in securities, revolving credit loans
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
New York