New York Banking Law

Article 11-A,  Credit Union Insurance Fund

Section 481. Creation of fund.
        482. Management of fund.
        483. Execution and filing of agreement.
        484. Provisions of agreement.
        485. Powers and duties of trustee or trustees.
        486. Powers of superintendent to obtain payment from fund.
        487. Payment of liquidating dividends on uninsured shares.
        488. Exemption of fund from taxation.
        489. Liability for payment of contributions.
        490. Powers of credit unions with respect to agreement.

  Sec. 481. Creation of fund. Any fifty or more credit unions organized
under the provisions of this chapter whose share liabilities aggregate
not less than fifty per centum of the total share liabilities of all
credit unions so organized may enter into an agreement, subject to the
approval of the superintendent, to create a fund and from time to time
make contributions thereto in accordance with the terms of such
agreement, for the purpose of insuring the shares of such credit unions
as shall become parties to such agreement; provided, however, that the
shares so insured of any one holder in any one credit union shall not
exceed two thousand dollars. Such an agreement once entered into may be
continued, notwithstanding the fact that any number of associations may
cease to be parties thereto.

  Sec. 482. Management of fund. The fund shall be collected, held,
administered and disbursed by a corporate trustee or a board of trustees
composed of individuals who are directors or members of a supervisory
committee of credit unions. The appointment of a corporate trustee or a
board of trustees, as the case may be, shall be subject to the approval
of the superintendent. In the event there be a board of individual
trustees, a majority of them at any time in office, shall constitute a
quorum and the vote of a majority present at any meeting, provided a
quorum is present, shall be determinative.

  Sec. 483. Execution and filing of agreement. The agreement when
approved by the superintendent and executed by the credit unions
desiring to become parties thereto shall be filed in the office of the
superintendent and shall thereupon become effective. The agreement may
be executed in any number of counterparts.

  Sec. 484. Provisions of agreement. The agreement shall provide for the
following: (a) The designation of a corporate trustee or a board of
trustees to administer the fund and procedure for the resignation or
removal of any such trustee or trustees and for the selection of a
substitute trustee or trustees;
  (b) The amount of the initial contribution to the fund, which shall be
made by all parties to the agreement ratably in proportion to their
respective share and deposit liabilities, and which shall be not less
than one-fourth of one per centum of the total share and deposit
liabilities, of each such party;
  (c) The manner of making subsequent calls for contributions, which
shall be made ratably upon all parties to the agreement in proportion to
their respective share and deposit liabilities, except that the
superintendent, where he deems it necessary and advisable, may exempt
any such party or parties from any such call in whole or in part;
  (d) Procedure for amendment of such agreement and its termination and
liquidation of the fund;
  (e) The powers to be vested in the corporate trustee or board of
trustees, as the case may be, and the manner in which such powers shall
be exercised;
  (f) The distribution of any earnings realized from the fund which
distribution shall be made only with the written consent of the
superintendent;
  (g) The method of determining from time to time the amount of the
share and deposit liabilities of the respective parties to the
agreement;
  (h) The requirements to be complied with by a party to the agreement
desiring to withdraw therefrom prior to its termination, provided the
contributions to the fund theretofore made by such withdrawing party
shall not be returned but shall remain the property of the fund.

  Sec. 485. Powers and duties of trustee or trustees. It shall be the
duty of the corporate trustee or the board of trustees, as the case may
be, to collect the initial contribution to the fund, to call for, and to
collect by legal proceedings if necessary, such subsequent contributions
as become payable under the terms of the agreement, and to administer
the fund so created in accordance with the terms of the agreement. Such
part of the fund as is not required to be kept on hand or in bank for
the purpose of meeting and satisfying demands made by the superintendent
pursuant to the next succeeding section, may be invested in obligations
of the United States and of the state of New York, and of any county or
municipality of the state of New York.

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  Sec. 486. Powers of superintendent to obtain payment from fund. In any
case where the superintendent has taken possession of any party to the
agreement and has been engaged in the liquidation thereof for one year,
he may demand of the trustee or trustees payment to him from the fund of
such sum as shall be necessary to enable him to pay a dividend on
account of insured shares which taken together with any dividends
previously paid on account thereof will equal fifty per centum of the
established insured claim of shareholders. At the end of two years from
the date upon which the superintendent took possession of any such party
to the agreement he may demand of the trustee or trustees payment to him
from the fund of such additional sum as shall be necessary to enable him
to pay a dividend on account of insured shares which taken together with
dividends previously paid on account thereof shall equal seventy-five
per centum of such established insured claims of shareholders. At the
end of three years from the date upon which the superintendent took
possession of any party to the agreement he may demand of the trustee or
trustees payment to him from the fund of such additional sum as shall be
necessary to enable him to pay the unpaid balance of such established
insured claims of shareholders. Any payments demanded by the
superintendent shall be paid to him from the fund by the trustee or
trustees within thirty days of the date of such demand. Any sum realized
by the superintendent from the liquidation of any party to the agreement
after shareholders have been paid in full, shall be paid by him to the
trustee or trustees of the fund to the extent of the aggregate of the
sums paid by the trustee or trustees to the superintendent under the
provisions of this section.

  Sec. 487. Payment of liquidating dividends on uninsured shares. In the
event of liquidation by the superintendent of any credit union which is
a party to the agreement, he shall pay on account of its uninsured share
liabilities and deposit liabilities, dividends in the same manner and
amount as he would pay on account thereof if none of the share
liabilities of such credit union were insured.

  S 488. Exemption of fund from taxation. The fund provided for by this
article and the income thereof shall be exempt from all taxation now or
hereafter imposed by the state of New York or by any county,
municipality or local authority or subdivision.

  S 489. Liability for payment of contributions. Any credit union which
is a party to the agreement provided for by this article shall be liable
for the payment of any contribution called for by the trustee or
trustees pursuant to such agreement in the same manner as it would be
liable for the payment of a debt otherwise contracted.

  S 490. Powers of credit unions with respect to agreement. Any credit
union organized under the provisions of this chapter shall have the
power to become a party to the agreement provided for by this article,
and to take all actions authorized or required by the terms of such
agreement and to pay all contributions provided for therein. Any such
contributions paid into the fund by any party to such agreement may be
carried on its books by such party as an asset to the extent authorized
by the superintendent.