Banking Interpretations

Banking Law 451

September 30, 2004

To: Examiner Frances Wellman

From: Harry C. Goberdhan - Legal Division

Subject: Sponsor - organization becoming member

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According to your Memorandum dated August 31, 2004, [        ] is a sponsor of the [           ], and wants to become a member of [     ]in order to be able to use [      ] services - make deposits, withdrawals and/or open a checking account.

Banking Law §451(e) permits "any incorporated or unincorporated organization composed principally of persons eligible to membership" to become a member of a credit union; provided, however, that such membership is "not expressly prohibited by the bylaws of the credit union." 

In this case, [     ] is an organization composed principally of persons eligible to membership in [    ]; also, the Bylaws of [   ] do not prohibit such membership.  The Banking Laws were also reviewed in order to determine whether there are any prohibitions on a "sponsor" becoming a member: no Banking Laws were found that prohibit such membership.

In light of the above, [      ] can become a member of [    ], and the Department would take no action against such membership.

Noted: 
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SAK