N.Y. Comp. Codes R. & Regs. tit. 3 § 96.5

Current through Register Vol. 46, No. 51, December 18, 2024

Section 96.5 - Loans secured by collateral other than shares of the credit union

(a) A credit union may make loans to a member which are secured by collateral other than that specified in section 96.3 of this Part in an amount not exceeding 25 percent of the net worth of the credit union or $15,000, whichever is greater, provided that the amount exceeding the greater of 15 percent of such net worth or $5,000, as the case may be, is secured by:

(1) the assignment of the cash surrender value of a life insurance policy issued by a life insurance company chartered by this State or any other state;

(2) a deposit or share account in any federally insured banking institution which does not exceed the amount of insurance coverage;

(3) common or preferred stocks listed on either the New York or American Stock Exchange, provided that only 80 percent of the market value of such stocks shall be considered as collateral;

(4) securities in which a credit union may invest pursuant to section 453(14) of the Banking Law, provided that the lower of par or market value shall be considered in evaluating such securities;

(5) a lien on tangible property appraised in good faith by the credit committee of a credit union, provided that only 80 percent of the fair market value of such property shall be considered as collateral.

(b) A credit union may make a loan to a member which is secured by a mortgage on a one- to six-family owner-occupied residence in an amount not exceeding 25 percent of the net worth of the credit union, provided that the fair market value of the residence is determined by a certified independent appraiser appointed by the board of directors or credit committee and shown in a written and signed certificate, provided that, in making any such mortgage which is a first lien, only 90 percent of the fair market value of the residence shall be considered as collateral, and provided further that any such mortgage which is not a first lien shall be made in compliance with the provisions of Part 80 of this Chapter. For the purpose of this subdivision, the term mortgage shall include a lien on an existing ownership interest in certificates of stock or other evidence of an ownership interest in, and a proprietary lease from, a corporation or partnership formed for the purpose of the cooperative ownership of real estate.

(c) A credit union may make loans to a member in an amount not exceeding 25 percent of the net worth of the credit union, provided that the amount exceeding 15 percent of such net worth is a loan which the United States, or any state thereof, or any city, county, town, village or school district of this State, any Federal intermediate credit bank, Federal National Mortgage Association, any Federal land bank, any national mortgage association, any Federal home loan bank, the Small Business Administration or any department, agency or instrumentality of the United States or any state thereof, has agreed to pay the principal or interest thereof, or has guaranteed payment (by guaranty or commitment to purchase or otherwise) of such principal and interest, or is committed to supply, by loan, subsidy or otherwise, funds sufficient to pay such principal and interest, or has otherwise pledged its faith and credit for the payment of such principal and interest.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 96.5