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United States Code (Last Updated: May 24, 2014) |
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Title 12. BANKS AND BANKING |
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Chapter 14. FEDERAL CREDIT UNIONS |
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SubChapter I. GENERAL PROVISIONS |
§ 1757. Powers
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A Federal credit union shall have succession in its corporate name during its existence and shall have power— (1) to make contracts; (2) to sue and be sued; (3) to adopt and use a common seal and alter the same at pleasure; (4) to purchase, hold, and dispose of property necessary or incidental to its operations; (5) to make loans, the maturities of which shall not exceed 15 years, except as otherwise provided herein, and extend lines of credit to its members, to other credit unions, and to credit union organizations and to participate with other credit unions, credit union organizations, or financial organizations in making loans to credit union members in accordance with the following: (A) Loans to members shall be made in conformity with criteria established by the board of directors: Provided, That— (i) a residential real estate loan on a one-to-four-family dwelling, including an individual cooperative unit, that is or will be the principal residence of a credit union member, and which is secured by a first lien upon such dwelling, may have a maturity not exceeding thirty years or such other limits as shall be set by the National Credit Union Administration Board (except that a loan on an individual cooperative unit shall be adequately secured as defined by the Board), subject to the rules and regulations of the Board; (ii) a loan to finance the purchase of a mobile home, which shall be secured by a first lien on such mobile home, to be used by the credit union member as his residence, a loan for the repair, alteration, or improvement of a residential dwelling which is the residence of a credit union member, or a second mortgage loan secured by a residential dwelling which is the residence of a credit union member, shall have a maturity not to exceed 15 years or any longer term which the Board may allow; (iii) a loan secured by the insurance or guarantee of, or with advance commitment to purchase the loan by, the Federal Government, a State government, or any agency of either may be made for the maturity and under the terms and conditions specified in the law under which such insurance, guarantee, or commitment is provided; (iv) a loan or aggregate of loans to a director or member of the supervisory or credit committee of the credit union making the loan which exceeds $20,000 plus pledged shares, be approved by the board of directors; (v) loans to other members for which directors or members of the supervisory or credit committee act as guarantor or endorser be approved by the board of directors when such loans standing alone or when added to any outstanding loan or loans of the guarantor or endorser exceeds $20,000; (vi) the rate of interest may not exceed 15 per centum per annum on the unpaid balance inclusive of all finance charges, except that the Board may establish— (I) after consultation with the appropriate committees of the Congress, the Department of Treasury, and the Federal financial institution regulatory agencies, an interest rate ceiling exceeding such 15 per centum per annum rate, for periods not to exceed 18 months, if it determines that money market interest rates have risen over the preceding six-month period and that prevailing interest rate levels threaten the safety and soundness of individual credit unions as evidenced by adverse trends in liquidity, capital, earnings, and growth; and (II) a higher interest rate ceiling for Agent members of the Central Liquidity Facility in carrying out the provisions of subchapter III of this chapter for such periods as the Board may authorize; (vii) the taking, receiving, reserving, or charging of a rate of interest greater than is allowed by this paragraph, when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon. If such greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back from the credit union taking or receiving the same, in an action in the nature of an action of debt, the entire amount of interest paid; but such action must be commenced within two years from the time the usurious collection was made; (viii) a borrower may repay his loan, prior to maturity in whole or in part on any business day without penalty, except that on a first or second mortgage loan a Federal credit union may require that any partial prepayments (I) be made on the date monthly installments are due, and (II) be in the amount of that part of one or more monthly installments which would be applicable to principal; (ix) loans shall be paid or amortized in accordance with rules and regulations prescribed by the Board after taking into account the needs or conditions of the borrowers, the amounts and duration of the loans, the interests of the members and the credit unions, and such other factors as the Board deems relevant; (B) are mortgage related securities (as that term is defined in section 78c(a)(41) of title 15), subject to such regulations as the Board may prescribe, including regulations prescribing minimum size of the issue (at the time of initial distribution) or minimum aggregate sales prices, or both; or (C) are small business related securities (as defined in section 78c(a)(53) of title 15), subject to such regulations as the Board may prescribe, including regulations prescribing the minimum size of the issue (at the time of the initial distribution), the minimum aggregate sales price, or both; (16) subject to such regulations as the Board may prescribe, to provide technical assistance to credit unions in Poland and Hungary; and (17) to exercise such incidental powers as shall be necessary or requisite to enable it to carry on effectively the business for which it is incorporated.
References In Text
Section 77d(5) of title 15, referred to in par. (15)(A), was redesignated section 77d(a)(5) of Title 15, Commerce and Trade, by Pub. L. 112–106, title II, § 201(b)(1), (c)(1),
Codification
In par. (7), “section 9101(3) of title 31” substituted for “section 101 of the Government Corporation Control Act [31 U.S.C. 846]” on authority of Pub. L. 97–258, § 4(b),
Amendments
2010—Par. (8). Pub. L. 111–203, § 362(1), struck out “or the Federal Savings and Loan Insurance Corporation” after “Federal Deposit Insurance Corporation”.
Par. (12). Pub. L. 111–203, § 1073(d), amended par. (12) generally. Prior to amendment, par. (12) read as follows: “in accordance with regulations prescribed by the Board—
“(A) to sell, to persons in the field of membership, negotiable checks (including travelers checks), money orders, and other similar money transfer instruments (including international and domestic electronic fund transfers); and
“(B) to cash checks and money orders and receive international and domestic electronic fund transfers for persons in the field of membership for a fee;”.
2006—Par. (5). Pub. L. 109–351, § 502, substituted “to make loans, the maturities of which shall not exceed 15 years,” for “to make loans, the maturities of which shall not exceed twelve years” in introductory provisions.
Par. (5)(E). Pub. L. 109–351, § 726(3), substituted semicolon for period at end.
Par. (6). Pub. L. 109–351, § 726(4), substituted semicolon for period at end.
Par. (7). Pub. L. 109–351, § 726(4), substituted semicolon for period at end.
Par. (7)(D). Pub. L. 109–351, § 726(5), struck out “the Federal Savings and Loan Insurance Corporation or” before “the Federal Deposit Insurance Corporation”.
Par. (7)(E). Pub. L. 109–351, § 726(6), substituted “the Federal Housing Finance Board,” for “the Federal Home Loan Bank Board,”.
Par. (9). Pub. L. 109–351, § 726(7), made technical amendment to reference in original act which appears in text as reference to subchapter III.
Par. (12). Pub. L. 109–351, § 503, amended par. (12) generally. Prior to amendment, par. (12) read as follows: “in accordance with rules and regulations prescribed by the Board, to sell to members negotiable checks (including travelers checks), money orders, and other similar money transfer instruments, and to cash checks and money orders for members, for a fee;”.
Par. (13). Pub. L. 109–351, § 726(8), struck out “and” after semicolon at end.
1996—Par. (5)(A)(iv), (v). Pub. L. 104–208 substituted “$20,000” for “$10,000”.
1994—Par. (15)(C). Pub. L. 103–325 added subpar. (C).
1989—Pars. (16), (17). Pub. L. 101–179 added par. (16) and redesignated former par. (16) as (17).
1987—Par. (5)(A)(ii). Pub. L. 100–86, § 702, substituted “15 years or any longer term which the Board may allow” for “fifteen years unless such loan is insured or guaranteed as provided in subparagraph (iii)”.
Par. (6). Pub. L. 100–86, § 703, inserted “, representing equity,” after “payments”.
1984—Par. (5)(A)(ii). Pub. L. 98–479 inserted “a loan for the repair, alteration, or improvement of a residential dwelling which is the residence of a credit union member,”.
Pars. (15), (16). Pub. L. 98–440, § 105(b), added par. (15) and redesignated former par. (15) as (16).
1983—Par. (5)(A)(i). Pub. L. 97–457, § 25, substituted “Administration” for “Association” after “National Credit Union”.
Par. (7)(K). Pub. L. 97–457, § 26, redesignated cl. (L) as (K) and substituted a period for “; and” at end.
1982—Par. (5)(A)(i). Pub. L. 97–320, §§ 507–509, substituted “on” for “which is made to finance the acquisition of” after “real estate loan” and “that is or will be” for “for” after “cooperative unit,”, struck out “the sales price of which is not more than 150 per centum of the median sales price of residential real property situated in the geographical area (as determined by the board of directors) in which the property is located,” after “credit union member”, and inserted “or such other limits as shall be set by the National Credit Union Association Board” after “not exceeding thirty years”.
Par. (5)(A)(ii). Pub. L. 97–320, § 510, substituted “or a second mortgage loan secured by a residential dwelling” for “or for the repair, alteration, or improvement of a residential dwelling”.
Par. (5)(A)(iii). Pub. L. 97–320, § 511, inserted “, or with advance commitment to purchase the loan by,” and substituted “insurance, guarantee, or commitment” for “insurance or guarantee”.
Par. (5)(A)(iv), (v). Pub. L. 97–320, § 512, substituted “$10,000” for “$5,000”.
Par. (5)(A)(viii). Pub. L. 97–320, § 513, inserted condition relating to partial prepayments of first or second mortgage loans.
Par. (5)(A)(x). Pub. L. 97–320, § 506, added cl. (x).
Par. (7)(E). Pub. L. 97–320, § 516, inserted provisions relating to instruments issued or guaranteed by any other agency of the United States, and that a Federal Credit Union may issue and sell securities which are guaranteed pursuant to section 1721(g) of this title.
Par. (7)(L). Pub. L. 97–320, § 514, added cl. (L).
Par. (8). Pub. L. 97–320, § 517, inserted “or in banks or institutions the accounts of which are insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation,” after “in which the Federal Credit Union does business,”.
Par. (12). Pub. L. 97–320, § 518, substituted “, money orders, and other similar money transfer instruments” for “and money orders”, and struck out “which does not exceed the direct and indirect costs incident to providing such service” after “for a fee”.
1980—Par. (5)(A)(i). Pub. L. 96–221, § 309(a)(1), inserted provisions relating to an individual cooperative unit.
Par. (5)(A)(vi). Pub. L. 96–221, § 310, substituted provisions setting forth maximum interest rate of 15 per centum per annum, subject to specified exceptions, for provisions setting forth a maximum interest rate of 1 per centum per month.
Par. (6). Pub. L. 96–221, §§ 305(b), 307, revised existing provisions respecting credit unions serving predominately low-income members including provisions added by Pub. L. 96–161, and repealed the amendment made by Pub. L. 96–161. See Repeals and Effective Date of 1980 Amendment notes below.
1979—Par. (6). Pub. L. 96–161 inserted “, and to issue, deal in, and accept share drafts as orders of withdrawal against shares, subject to such terms, rates, and conditions as may be prescribed by the Board” after “within limitations prescribed by the Board”.
Pub. L. 96–153 substituted “Federal, Indian tribal, State” for “Federal, State”.
1978—Par. (5). Pub. L. 95–630, § 502(b), substituted “Board” for “Administrator” wherever appearing.
Par. (6). Pub. L. 95–630, §§ 502(b), 1803(a), inserted “from the Central Liquidity Facility,” after “in the manner so prescribed,” and substituted “Board” for “Administrator” in two places.
Par. (7). Pub. L. 95–630, §§ 502(b), 1803(b), substituted “Board” for “Administrator” wherever appearing and added cl. (J).
Par. (8). Pub. L. 95–630, § 502(b), substituted “Board” for “Administrator”.
Par. (9). Pub. L. 95–630, §§ 502(b), 1803(c), substituted “Board” for “Administrator” and inserted “, except as authorized by the Board in carrying out the provisions of subchapter III of this chapter,” after “amount not exceeding”.
Pars. (12) to (14). Pub. L. 95–630, § 502(b), substituted “Board” for “Administrator” wherever appearing.
1977—Par. (5). Pub. L. 95–22, § 302(a), among other changes, inserted provisions permitting Federal credit unions to establish lines of credit for their members, to raise the maximum loan maturity for most loans to twelve years, and to make loans secured by a first lien and made for the purchase of a one-to-four-family dwelling for the principal residence of a credit union member.
Par. (6). Pub. L. 95–22, §§ 302(b), 303(a), redesignated par. (7) as (6) and substituted reference to payments on shares which may be issued at varying dividend rates and payments on share certificates which may be issued at varying dividend rates and maturities, subject to such terms, rates, and conditions as may be established by the board of directors, within limitations prescribed by the Administrator for reference to payments on shares, share certificates, or share deposits. Former par. (6), relating to the power of Federal credit unions to make loans to its own directors and to its own supervisory credit committee, was struck out.
Par. (7). Pub. L. 95–22, § 303(b), redesignated par. (8) as (7) and added subpar. (I). Former par. (7) redesignated (6).
Pars. (8) to (12). Pub. L. 95–22, § 303(c), redesignated pars. (9) to (13) as (8) to (12), respectively. Former par. (8) redesignated (7).
Par. (13). Pub. L. 95–22, § 303(c), (d), redesignated par. (14) as (13) and inserted reference to purchase, sell, pledge, or discount or otherwise receive or dispose of, in whole or in part, any eligible obligations (as defined by the Administrator) of its members. Former par. (13) redesignated (12).
Par. (14). Pub. L. 95–22, § 303(e), added par. (14).
1974—Par. (5). Pub. L. 93–569 inserted “except that loans made in accordance with section 1703(b) of this title and section 1819 of title 38, may be for the maturities specified therein,” after “ten years”.
Par. (6). Pub. L. 93–383, § 721(a), substituted provisions relating to approval of loans by the board of directors for provisions requiring annual reports to the Administrator with respect to loans and setting forth conditions for the making of loans.
Par. (7). Pub. L. 93–495 inserted provisions relating to receipt of payments of shares, etc., from officers, employees, or agents of nonmember units of Federal, State, or local governments and political subdivisions enumerated in section 1787 of this title.
Par. (8)(E). Pub. L. 93–383, § 805(c)(5), inserted reference to mortgages, obligations, or other securities sold by the Federal Home Loan Mortgage Corporation pursuant to section 1454 or 1455 of this title.
Par. (9). Pub. L. 93–383, § 721(b), inserted provisions relating to Federal credit unions or credit unions authorized by the Department of Defense.
1972—Par. (8)(E). Pub. L. 92–318 authorized investments in obligations or other instruments or securities of the Student Loan Marketing Association.
1970—Pars. (5), (6), (8), (10), (13), (14), Pub. L. 91–206 substituted “Administrator” for “Director” wherever appearing.
Par. (7). Pub. L. 91–468, § 10(1), permitted a Federal credit union to not only receive from members but also from other federally insured credit unions, payments on shares as well as share certificates or share deposits and, in the case of credit unions serving predominantly low-income members, to receive payments on shares, share certificates or share deposits from nonmembers.
Par. (8). Pub. L. 91–468, § 10(2), authorized a Federal credit union to invest in shares, share certificates or share deposits of federally insured credit unions.
1968—Par. (5). Pub. L. 90–375, § 1(1), substituted provisions authorizing Federal credit unions to make unsecured loans with maturities not exceeding five years, and secured loans with maturities not exceeding ten years for provisions authorizing federal credit unions to make loans with maturities not exceeding five years.
Par. (8). Pub. L. 90–448 authorized investments in obligations, participations, or other instruments of or issued by, or guaranteed as to principal and interest by, the Government National Mortgage Association.
Pub. L. 90–375, § 1(2), added cl. (G).
Pars. (14), (15). Pub. L. 90–375, § 1(3), added par. (14) and redesignated former par. (14) as (15).
1967—Par. (5). Pub. L. 90–44, § 2(1), substituted “may be made except as authorized under paragraph (6) of this section” for “shall exceed the amount of his holdings in the Federal Credit Union as represented by shares thereof plus the total unencumbered and unpledged shareholdings in the Federal Credit Union of any member pledged as security for the obligation of such director or committee member”.
Pars. (6), (7). Pub. L. 90–44, § 2(3), added par. (6) and redesignated former pars. (6) and (7) as (7) and (8), respectively.
Pars. (8) to (14). Pub. L. 90–44, §§ 2(2), (3), redesignated former par. (7) as (8), authorized in cl. (D) investment of funds in shares or accounts of mutual savings banks, the accounts of which are insured by the Federal Deposit Insurance Corporation, and redesignated former pars. (8) to (13) as (9) to (14), respectively.
1966—Par. (7). Pub. L. 89–429 expanded list of possible areas of investment of funds by Federal credit unions to include obligations, participations, or other instruments of or issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association and participation certificates evidencing beneficial interests in obligations, or in the right to receive interest and principal collections therefrom, which obligations have been subjected by one or more Government agencies to a trust or trusts for which any executive department, agency, or instrumentality of the United States (or the head thereof) has been named to act as trustee.
1964—Par. (7)(E). Pub. L. 88–353 added cl. (E).
1959—Pub. L. 86–354 made numerous capitalization, punctuation and phraseological changes throughout text; increased maturities limits for loans from three to five years, authorized approval of loans by a loan officer and authorized loans in an amount which shall include total unencumbered and unpledged shareholdings in the Federal credit union of any member pledged as security for the obligation of the director or committee member, provided for payment and amortization of loans, redesignated provisions (a) to (d) as (A) to (D) in par. (7), substituted “levy late charges” for “fine members” and inserted “of members” in par. (10), substituted “charges” for “fines” in par. (11), added par. (12); and redesignated former par. (12) as par. (13).
1952—Par. (7)(d). Act
1949—Par. (5). Act
1946—Par. (5). Act
1937—Par. (7)(c), (d). Act
Effective Date Of Amendment
Amendment by section 362(1) of Pub. L. 111–203 effective on the transfer date, see section 351 of Pub. L. 111–203, set out as a note under section 906 of Title 2, The Congress.
Amendment by section 1073(d) of Pub. L. 111–203 effective 1 day after
Amendment by section 305(b) of Pub. L. 96–221 effective at close of
Amendment by Pub. L. 96–161 effective
Pub. L. 96–153, title III, § 323(e),
Amendment by section 502(b) of Pub. L. 95–630 effective on expiration of 120 days after
Amendment by section 1803 of Pub. L. 95–630 effective
Amendment by Pub. L. 93–569 effective
Amendment by Pub. L. 93–495 effective on 30th day beginning after
For effective date of amendment by title VIII of Pub. L. 90–448, see section 808 of Pub. L. 90–448, set out as a note under section 1716b of this title.
Repeals
Amendment by section 103 of Pub. L. 96–161, cited as a credit to this section, was repealed at the close of