(a) General rule.--A credit union shall have the following general powers: (1) To continue as a corporation for the time specified in its articles of incorporation subject to 15 Pa.C.S. § 501 (relating to reserved power of General Assembly).(2) To maintain and defend judicial proceedings in its corporate name.(3) To adopt and use a corporate seal, and alter the same at pleasure.(4) To grant allowances or pensions to officers, directors and employees for faithful and long-continued services and, after the death of the officer, director or employee either while in the service of the corporation or after retirement, pensions or allowances may be granted or continued to their dependents. The allowances to dependents shall be reasonable in amount and paid only for a limited time and, unless part of an employee benefit plan or employment contract in effect at the time of retirement or death of the officer, director or employee, shall not exceed in total the amount of the compensation paid to the officer, director or employee during the 12 months preceding retirement or death.(5) To have and exercise all of the powers and means necessary to effect the purpose or purposes for which the credit union is organized.(b) Special powers.--A credit union shall have the following special powers: (1) To receive the savings of its members as payments, representing equity on shares, share draft accounts and share certificates.(2) To make loans to members and to participate in loans to credit union members, including members of any Federal credit union or credit union chartered under the laws of any state, jointly with such other credit unions, credit union organizations or State or Federally chartered and regulated depository institutions, if the institution which originates such a loan shall be legally required to retain an interest of at least 10% of the outstanding balance of the loan. No loan may be made to any member if, upon the making of that loan, the member would be indebted to the credit union upon loans made to him in an aggregate amount which would exceed 10% of the credit union's unimpaired capital.(3) To make loans to any cooperative society or societies, or other organization or organizations, which have membership in the credit union.(4) To make purchase money mortgage loans to members secured by mortgages which are first liens on improved real property situated within the United States, the improvement being an established dwelling house for not more than four families which is owned by the member of the credit union making the mortgage and occupied or to be occupied, in whole or in part, by such member. Purchase money mortgages shall not exceed 90% of the fair market value of the property, except as provided in paragraph (4.1).(4.1) The department may grant prior approval of a purchase money mortgage loan policy submitted to the department by the credit union which complies with paragraph (4) and additionally provides for private mortgage insurance for each purchase money mortgage and directs that purchase money mortgages shall be written according to secondary market standards, in which case purchase money mortgage loans shall not exceed 100% of the fair market value of the property.(4.2) Shares of the credit union owned by the mortgagor may be assigned or pledged as additional collateral security for the mortgage loan and, in such event, the mortgage loan granted upon such property may be increased by the withdrawal value of the additional pledged shares to an amount not to exceed a maximum total mortgage loan of 100% of the fair market value of such real property, and the credit union may release this additional collateral whenever the mortgage loan meets all of the requirements of this title and could be made legally at the time of release without the requirement of additional collateral. Purchase money mortgage loans shall be amortized by approximately equal payments sufficient in amount to pay all interest and effect full repayment of principal within a period not in excess of 30 years. Except as otherwise provided in this section, purchase money mortgage loans on any one property shall not exceed 90% of the fair market value of the property or 5% of the unimpaired capital of the credit union, whichever is lesser. The aggregate total of mortgage loans shall not exceed 50% of the unimpaired capital of the credit union. Without regard to the limitations as to the amount and term of a purchase money mortgage loan or the aggregate amount of all mortgage loans set forth in this paragraph, a credit union may grant any mortgage loan which is insured or guaranteed, in whole or in part, by the United States or any instrumentality thereof, or if there is a commitment to so insure or guarantee.(5) To make loans to credit unions organized under the laws of this Commonwealth or under the laws of any state or under the laws of the United States. In the case of central or corporate credit unions, the aggregate amount outstanding on all such loans shall not exceed 25% of the unimpaired capital of the lending credit union.(6) To deposit its funds in insured state banks, bank and trust companies, savings banks, national banking associations, savings associations, Federal saving and loan associations, insured credit unions and insured Federal credit unions and central-type credit union organizations.(7) To invest its funds in the following investments:(i) Securities, obligations or other instruments of or fully guaranteed as to principal and interest by the United States or any agency thereof or in any trust established for investing directly or collectively in the same.(ii) Bonds or other interest-bearing obligations of the Commonwealth or any political subdivision thereof or an authority which has been created as a body corporate and politic under any law of this Commonwealth.(iii) Shares of any savings and loan association or credit union, organized under the laws of this Commonwealth, or of any Federal savings and loan association or Federal credit union, to the extent to which the withdrawal or repurchase value of such shares is insured by any agency of the United States or any other insurer approved by the department.(iv) Bonds and notes of the Pennsylvania Housing Agency created by the act of December 3, 1959 (P.L. 1688, No. 621), known as the Housing Finance Agency Law. (v) Capital stock, obligations or other securities of any service corporation organized under the laws of this Commonwealth or under the laws of any other state and duly qualified to do business in this Commonwealth, if the entire capital stock of such corporation is available for purchase only by credit unions, organized and existing under the laws of this Commonwealth and by Federal credit unions or association of credit unions. A complete description of the service corporation and its activities must be furnished to the department and its approval obtained by the credit union before investing in such corporation. No credit union may make an investment in a service corporation if its then aggregate outstanding investments under this subparagraph would exceed 1% of its assets.(vi) Obligations issued by banks for cooperatives, Federal land banks, Federal intermediate credit banks or any corporation designated in 31 U.S.C. § 9101(2) and (3) (relating to definitions) as a "government corporation."(vii) Obligations, participations or other instruments of or issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association or the Government National Mortgage Association.(viii) Mortgages, obligations or other securities which are or ever have been sold by the Federal Home Loan Mortgage Corporation pursuant to 12 U.S.C. § 1454 (relating to purchase and sale of mortgages; residential mortgages; conventional mortgages; terms and conditions of sale or other disposition; authority to enter into, perform, and carry out transactions) or 1455 (relating to obligations and securities of the corporation).(ix) Obligations or other instruments or securities of the Student Loan Marketing Association.(x) 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.(xi) Bankers' acceptances issued by State banks, bank and trust companies and savings banks, and national banking associations the accounts of which are Federally insured. Before making the investments described in subparagraphs (vi) through (xi), a credit union shall be in compliance with investment standards established by the department.
(8) To borrow money subject to the limitations set forth in this title.(9) To make, amend, alter and repeal bylaws, not inconsistent with law, for the regulation of its affairs and the conduct and management of the credit union. Immediately upon the adoption of the bylaws, or any additions thereto, or any alteration, amendment or repeal thereof, notice of such fact and a copy of such bylaws or such alteration, amendment or repeal shall forthwith be sent to the department. The department shall, within 60 days after receipt thereof, have the power to disapprove, for any reasonable cause stated in writing, any such bylaw or any such alteration, amendment or repeal thereof, but the bylaw, alteration, amendment or repeal shall be effective until the department disapproves it and gives notice thereof to the credit union.(10) To hold, purchase, mortgage, alter, improve and sell fixed assets, meaning such real property, and furniture and fixtures to be used therein, as the purposes of the credit union require and which the credit union occupies or intends to occupy for the transaction of its business or partly so occupies and partly leases to others, except that, without the prior written approval of the department, the cost, at the time of acquisition, of such real property and furniture and fixtures therein shall not exceed 5% of shares and undivided earnings.(11) To purchase group insurance at reasonable rates on the lives of its members in an amount not to exceed the respective shares balances of such members.(12) To act as an issuing agent of the United States Treasury for the sale, issuance and redemption of United States Savings Bonds to its members.(13) To invest its funds in shares and become members of any insured central-type credit union organized under the laws of the United States or under the laws of this Commonwealth in which such investments are specifically authorized by the board of directors of the State credit union making the investment.(14) To receive payments on shares and deposits from other credit unions and Federal credit unions. As used in this paragraph, the term "deposit" means a type of time or demand account in which the credit union incurs a debt to the depositor.(15) To receive payments on shares which may be issued at varying dividend rates, share certificates which may be issued at varying dividend rates and maturities and share draft accounts from members or nonmember units of Federal, state or local governments, including any officer, employee or agent of the United States, any state or any political subdivision thereof, or any territory or possession of the United States having official custody of public funds and lawfully investing such funds in a credit union.(16) To sell Federal funds to a bank or institution whose accounts are federally insured, provided that the interest or other consideration received from the financial institution is at the market rate for Federal funds transaction and that the transaction has a maturity of one or more business days or the credit union is able to require repayment at any time.(17) With the prior written approval of the department, to sell all or a part of its assets and to assign its liabilities and capital to another credit union, Federal credit union or out-of-State credit union. Further, a credit union with prior written approval of the department shall have the power to purchase all or part of the assets and to assume the liabilities and capital of a credit union, Federal credit union or out-of-State credit union.(c) Deleted by 2002, Dec. 9, P.L. 1572, No. 207, § 4, effective in 60 days.(d) Special powers of community development credit unions.--A community development credit union may do all of the following:(1) Accept payments on shares from any agency, instrumentality, public corporation or other entity of the United States or any state and nonmembers pursuant to the Federal Credit Union Act (48 Stat. 1216, 12 U.S.C. § 1751 et seq.) and other applicable Federal law and requirements of the National Credit Union Administration.(2) Participate in the Community Development Revolving Loan Program under the administration of the National Credit Union Administration.(3) Engage in any other programs or activities permitted by Federal or State law applicable to a community development credit union with the prior written approval of the department upon filing of an application and submittal of a fee.(e) Federal parity.--Notwithstanding any other provisions of this title or any other law, in addition to any other powers as authorized by this title or other law, a credit union shall have the power:(1) To engage in any activity permissible for a Federal credit union as authorized by the Federal Credit Union Act (48 Stat. 1216, 12 U.S.C. § 1751 et seq.) and the rules and regulations of the National Credit Union Administration, subject to reasonable conditions, limitations and restrictions as may be imposed by the department, including, but not limited to, conditions, limitations and restrictions based upon safety and soundness.(2) To engage in the activity of creating, amending or expanding its field of membership as authorized by section 109 of the Federal Credit Union Act (48 Stat. 1219, 12 U.S.C. § 1759 ), subject to reasonable conditions, limitations and restrictions as may be imposed by the department, including, but not limited to, conditions, limitations and restrictions based upon safety and soundness.(3) To control, hold an interest in or participate in a credit union service organization that engages in any activity permissible for a Federal credit union to conduct through a credit union service organization, provided that any activity permissible for a credit union service organization shall be subject to reasonable conditions, limitations and restrictions as may be imposed by the department, including, but not limited to, conditions, limitations and restrictions based upon safety and soundness.(f) Notice to department.--Unless prior approval is granted by the department, a credit union shall provide at least 30 days' prior written notice to the department before it engages in an activity or acquires an interest permissible under subsection (e). During the review period provided by this subsection, the department may:(1) request further information concerning any proposed activity or interest;(2) impose any conditions, limitations or restrictions upon such interests or activities to the extent authorized by subsection (e); or(3) prohibit the credit union from engaging in any activity or acquiring any interest if to do so would have a significant adverse impact upon the safety and soundness of the credit union.(g) Approval to be presumed.--Except as otherwise agreed to by a credit union, the department shall be deemed to have granted approval for a credit union to engage in an activity or acquire an interest if within 30 days of receipt of written notice from a credit union the department does not act.Amended by P.L. 754 2014 No. 62, § 2, eff. 8/17/2014.1990, Dec. 19, P.L. 834, No. 198, § 302, effective in two months. Amended 1994, Dec. 12, P.L. 1067, No. 146, §2, effective in 60 days; 2002, Dec. 9, P.L. 1572, No. 207, § 4, effective in 60 days.