2002 Minnesota Statutes

     52.04 Powers. 

    Subdivision 1.    Generally.  A credit union has the 
 following powers: 

    (1) to offer its members and other credit unions various 
 classes of shares, share certificates, deposits, or deposit 
 certificates; 

    (2) to receive the savings of its members either as payment 
 on shares or as deposits, including the right to conduct 
 Christmas clubs, vacation clubs, and other thrift organizations 
 within its membership.  Trust funds received by a real estate 
 broker or the broker's salespersons in trust may be deposited in 
 a credit union; 

    (3) to make loans to members for provident or productive 
 purposes as provided in section 52.16; 

    (4) to make loans to a cooperative society or other 
 organization having membership in the credit union; 

    (5) to deposit in state and national banks and trust 
 companies authorized to receive deposits; 

    (6) to invest in any investment legal for savings banks or 
 for trust funds in the state and, notwithstanding clause (3), to 
 invest in and make loans of unsecured days funds (federal funds 
 or similar unsecured loans) to financial institutions insured by 
 an agency of the federal government and a member of the Federal 
 Reserve System or required to maintain reserves at the Federal 
 Reserve; 

    (7) to borrow money as hereinafter indicated; 

    (8) to adopt and use a common seal and alter the same at 
 pleasure; 

    (9) to make payments on shares of and deposit with any 
 other credit union chartered by this or any other state or 
 operating under the provisions of the Federal Credit Union Act, 
 in amounts not exceeding in the aggregate 25 percent of its 
 unimpaired assets.  However, payments on shares of and deposit 
 with credit unions chartered by other states are restricted to 
 credit unions insured by the National Credit Union 
 Administration.  The restrictions imposed by this clause do not 
 apply to share accounts and deposit accounts of the Minnesota 
 corporate credit union in United States central credit union or 
 to share accounts and deposit accounts of credit unions in the 
 Minnesota corporate credit union; 

    (10) to contract with any licensed insurance company or 
 society to insure the lives of members to the extent of their 
 share accounts, in whole or in part, and to pay all or a portion 
 of the premium therefor; 

    (11) to indemnify each director, officer, or committee 
 member, or former director, officer, or committee member against 
 all expenses, including attorney's fees but excluding amounts 
 paid pursuant to a judgment or settlement agreement, reasonably 
 incurred in connection with or arising out of any action, suit, 
 or proceeding to which that person is a party by reason of being 
 or having been a director, officer, or committee member of the 
 credit union, except with respect to matters as to which that 
 person is finally adjudged in the action, suit, or proceeding to 
 be liable for negligence or misconduct in the performance of 
 duties.  The indemnification is not exclusive of any other 
 rights to which that person may be entitled under any bylaw, 
 agreement, vote of members, or otherwise; 

    (12) upon written authorization from a member, retained at 
 the credit union, to make payments to third parties by 
 withdrawals from the member's share or deposit accounts or 
 through proceeds of loans made to such member, or by permitting 
 the credit union to make those payments from the member's funds 
 prior to deposit; to permit draft withdrawals from member 
 accounts, but a credit union proposing to permit draft 
 withdrawals shall notify the commissioner of commerce, in the 
 form prescribed, of its intent not less than 90 days prior to 
 authorizing draft withdrawals.  The board of directors of a 
 credit union may restrict one class of shares to the extent that 
 it may not be redeemed, withdrawn, or transferred except upon 
 termination of membership in the credit union; 

    (13) to inform its members as to the availability of 
 various group purchasing plans which are related to the 
 promotion of thrift or the borrowing of money for provident and 
 productive purposes by means of informational materials placed 
 in the credit union's office, through its publications, or by 
 direct mailings to members by the credit union; 

    (14) to facilitate its members' voluntary purchase of types 
 of insurance incidental to promotion of thrift or the borrowing 
 of money for provident and productive purposes including, but 
 not limited to the following types of group or individual 
 insurance:  Fire, theft, automobile, life and temporary 
 disability; to be the policy holder of a group insurance plan or 
 a subgroup under a master policy plan and to disseminate 
 information to its members concerning the insurance provided 
 thereunder; to remit premiums to an insurer or the holder of a 
 master policy on behalf of a credit union member, if the credit 
 union obtains written authorization from the member for 
 remittance by share or deposit withdrawals or through proceeds 
 of loans made by the members, or by permitting the credit union 
 to make the payments from the member's funds prior to deposit; 
 and to accept from the insurer reimbursement for expenses 
 incurred or in the case of credit life, accident and health, and 
 involuntary unemployment insurance within the meaning of chapter 
 62B commissions for the handling of the insurance.  The amount 
 reimbursed or the commissions received may constitute the 
 general income of the credit union.  The directors, officers, 
 committee members and employees of a credit union shall not 
 profit on any insurance sale facilitated through the credit 
 unions; 

    (15) to contract with another credit union to furnish 
 services which either could otherwise perform.  Contracted 
 services under this clause are subject to regulation and 
 examination by the commissioner of commerce like other services; 

    (16) in furtherance of the twofold purpose of promoting 
 thrift among its members and creating a source of credit for 
 them at legitimate rates of interest for provident purposes, and 
 not in limitation of the specific powers hereinbefore conferred, 
 to have all the powers enumerated, authorized, and permitted by 
 this chapter, and such other rights, privileges and powers 
 incidental to, or necessary for, the accomplishment of the 
 objectives and purposes of the credit union; 

    (17) to rent safe deposit boxes to its members if the 
 credit union obtains adequate insurance or bonding coverage for 
 losses which might result from the rental of safe deposit boxes; 

    (18) notwithstanding the provisions of section 52.05, to 
 accept deposits of public funds in an amount secured by 
 insurance or other means pursuant to chapter 118A or section 
 9.031 or other applicable law and to receive deposits of trust 
 funds provided that either the provider or the beneficial owner 
 of the funds is a member of the credit union accepting the 
 deposit; 

    (19) to accept and maintain treasury tax and loan accounts 
 of the United States and to pledge collateral to secure the 
 treasury tax or loan accounts, in accordance with the 
 regulations of the Department of Treasury of the United States; 

    (20) to accept deposits pursuant to section 149A.97, 
 subdivision 5, notwithstanding the provisions of section 52.05, 
 if the deposits represent funding of prepaid funeral plans of 
 members; 

    (21) to sell, in whole or in part, real estate secured 
 loans provided that:  

    (a) the loan is secured by a first lien; 

    (b) the board of directors approves the sale; 

    (c) if the sale is partial, the agreement to sell a partial 
 interest shall, at a minimum:  

    (i) identify the loan or loans covered by the agreement; 

    (ii) provide for the collection, processing, remittance of 
 payments of principal and interest, taxes and insurance premiums 
 and other charges or escrows, if any; 

    (iii) define the responsibilities of each party in the 
 event the loan becomes subject to collection, loss or 
 foreclosure; 

    (iv) provide that in the event of loss, each owner shall 
 share in the loss in proportion to its interest in the loan or 
 loans; 

    (v) provide for the distribution of payments of principal 
 to each owner proportionate to its interest in the loan or 
 loans; 

    (vi) provide for loan status reports; 

    (vii) state the terms and conditions under which the 
 agreement may be terminated or modified; and 

    (d) the sale is without recourse or repurchase unless the 
 agreement:  

    (i) requires repurchase of a loan because of any breach of 
 warranty or misrepresentation; 

    (ii) allows the seller to repurchase at its discretion; or 

    (iii) allows substitution of one loan for another; 

    (22) in addition to the sale of loans secured by a first 
 lien on real estate, to sell, pledge, discount, or otherwise 
 dispose of, in whole or in part, to any source, a loan or group 
 of loans, other than a self-replenishing line of credit; 
 provided, that within a calendar year beginning January 1 the 
 total dollar value of loans sold, other than loans secured by 
 real estate or insured by a state or federal agency, shall not 
 exceed 25 percent of the dollar amount of all loans and 
 participating interests in loans held by the credit union at the 
 beginning of the calendar year, unless otherwise authorized in 
 writing by the commissioner; 

    (23) to designate the par value of the shares of the credit 
 union by board resolution; 

    (24) to exercise by resolution the powers set forth in 
 United States Code, title 12, section 1757.  Before exercising 
 each power, the board must submit a plan to the commissioner of 
 commerce detailing implementation of the power to be used; 

    (25) to offer self-directed individual retirement accounts 
 and Keogh accounts and act as custodian and trustee of these 
 accounts if: 

    (1) all contributions of funds are initially made to a 
 deposit, share or share certificate account in the credit union; 

    (2) any subsequent transfer of funds to other assets is 
 solely at the direction of the member and the credit union 
 exercises no investment discretion and provides no investment 
 advice with respect to plan assets; and 

    (3) the member is clearly notified of the fact that 
 National Credit Union Share Insurance Fund coverage is limited 
 to funds held in deposit, share or share certificate accounts of 
 National Credit Union Share Insurance Fund-insured credit 
 unions; 

    (26) to impose reasonable charges for the services it 
 provides to its members; 

    (27) to impose financing charges and reasonable late 
 charges in the event of default on loans, and recover reasonable 
 costs and expenses, including, but not limited to, actual 
 collection costs and attorneys' fees incurred both before and 
 after judgment, incurred in the collection of sums due, if 
 provided for in the note or agreement signed by the borrower; 
 and 

    (28) to acquire, lease, hold, assign, pledge, sell, or 
 otherwise dispose of interests in a loan or groups of loans 
 other than a self-replenishing line of credit. 

    Subd. 2. Repealed, 1985 c 137 s 3 

    Subd. 2a.    Credit sales or service contracts.  A 
 person may enter into a credit sale or service contract for sale 
 to a state or federal credit union doing business in this state, 
 and a credit union may purchase and enforce the contract under 
 the terms and conditions set forth in section 47.59, 
 subdivisions 4 to 14. 

    Subd. 3.    Parity.  Notwithstanding any other provision 
 of law, and in addition to all powers and activities, express, 
 implied, or incidental, that a credit union has under the laws 
 of this state, a credit union may exercise the powers and 
 activities of, or take any action permitted for, a federal 
 credit union, upon approval of the commissioner.  The 
 commissioner must approve or deny a request under this 
 subdivision within 60 days after submission of the request by a 
 credit union.  The commissioner may not authorize state credit 
 unions subject to this chapter to engage in credit union 
 activity prohibited by the laws of this state. 

    HIST: (7774-4) 1925 c 206 s 4; 1937 c 213 s 1; 1943 c 247 s 1; 
 1949 c 88 s 3; 1961 c 331 s 2; 1963 c 384 s 1; 1967 c 301 s 1; 
 1971 c 154 s 3; 1973 c 740 s 1; 1975 c 394 s 1; 1976 c 308 s 1; 
 1977 c 71 s 1; 1977 c 84 s 1; 1977 c 315 s 1; 1978 c 747 s 3; 
 1979 c 50 s 7; 1979 c 149 s 1; 1981 c 99 s 1; 1981 c 316 s 1; 
 1983 c 43 s 1; 1983 c 289 s 114 subd 1; 1984 c 512 s 2; 1984 c 
 655 art 1 s 92; 1985 c 137 s 1; 1986 c 353 s 3; 1986 c 444; 1987 
 c 105 s 2; 1991 c 42 s 2; 1993 c 257 s 30,31; 1993 c 343 s 3; 
 1995 c 202 art 3 s 10; 1997 c 157 s 36,37; 1997 c 215 s 2; 2000 
 c 427 s 8; 2001 c 7 s 90; 2002 c 339 s 3,4