State-chartered credit unions in New York State achieved a kind of parity with their federally-chartered peers when the state financial regulator removed the requirement that top officials of these institutions must take an oath of office.
The New York State Department of Financial Services said on Wednesday it will no longer require the officers, directors and committee members of New York’s 16 state-chartered credit unions to take an oath of office under the authority granted to the DFS Superintendent under New York Banking Law.
DFS indicated that four state-chartered credit unions – CFCU Community Credit Union ($1 billion assets, based in Ithaca); Hudson River Community Credit Union ($221 million, Corinth); Municipal Credit Union ($2.5 billion, New York) and Directors Choice Credit Union ($8.3 million, Albany) – had applied for and received approval from DFS for relief from the oath-taking law. The DFS is now applying this decision to all 16 state-chartered credit unions.
“DFS is steadfast in supporting and promoting state-chartered banks and credit unions, and this action puts them on an equal footing with federal credit unions” DFS Superintendent Maria T. Vullo said in a statement. “Although the requirement related to taking oaths will no longer apply, officers, directors and committee members of New York State-chartered credit unions are reminded that their obligations and duties to consumers under New York Banking Law continue.”
The DFS public affairs office emphasized that this “does not in any way change the fiduciary responsibilities of officers.”
From the perspective of the New York Credit Union Association, this development is significant for two reasons, according to RJ Tamburri, communications director at NYCUA.
“First of all, it demonstrates Superintendent Vullo’s commitment to maintaining a viable state charter by eliminating an administrative burden on state-chartered credit unions that federal credit unions do not have to deal with,” he said. “In other words, it creates parity.”
Secondly, Tamburri noted, it also marks the first time that the DFS has granted such a request under the state’s so-called “wild card law.”
“[That] law provides state-chartered credit unions, banks and thrifts with the opportunity to exercise the same banking powers that are available to federally chartered institutions,” he elaborated.
Tamburri said NYCUA “worked closely” with the state-chartered credit unions on this request, and submitted its own letter in support of their request.
The new law “does not change the responsibilities of any credit union professional or volunteer," he said. "It simply removes an unnecessary burden previously imposed on state-chartered credit unions.”
