Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

Office of the Revisor of 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
(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
(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.
History: (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

Official Publication of the State of Minnesota
Revisor of Statutes