Powers

  1. Law
  2. Georgia Code
  3. Banking and Finance
  4. Financial Institutions
  5. Credit Unions
  6. Operation and Regulation
  7. Powers

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A credit union shall have, in addition to the powers common to all corporations under the laws of this state, the power to:

  1. Receive funds from its members or other financial institutions in the form of shares and deposits on accounts or as evidenced by certificates of deposit issued by the credit union but shall not have the power to offer third-party payment services except as authorized under Code Section 7-1-670;
  2. Receive savings deposits from nonmembers, provided that such deposits are:
    1. Insured by or through a federal public body or are expressly authorized by state or federal law;
    2. Made in such a manner as expressly authorized by the bylaws;
    3. Not deposited in a share draft account; and
    4. Not bearing a greater rate of interest than the rate of interest paid to members for the same class of deposit;
  3. Make loans to members subject to approval by its credit committee or authorized employees pursuant to Code Section 7-1-658;
  4. On the authority of its board of directors or by employees authorized by the board of directors, invest:
    1. In obligations of the United States, including bonds and securities upon which payment of principal and interest is fully guaranteed by the United States; obligations issued by banks for cooperatives, federal land banks, federal intermediate credit banks, federal home loan banks, the Federal Home Loan Bank Board, or any corporation designated in Section 846 of Title 31 of the United States Code as a wholly owned government corporation; or in obligations, participations, or other instruments of or issued by or fully guaranteed as to principal and interest by the Federal National Mortgage Association or the Government National Mortgage Association;
    2. In general and direct obligations of the State of Georgia, its counties, districts, and municipalities which have been validated as provided by law, if no more than 25 percent of the shares and deposits of a credit union shall be invested in the obligations of any one such obligor;
    3. In loans to other credit unions, provided the loans do not exceed 10 percent of the shares, deposits, and surplus of the investing credit union;
    4. By depositing its funds in banks, savings and loan associations, and credit unions; by purchasing certificates of deposit and savings certificates which such financial institutions are authorized to issue; by selling or purchasing federal or correspondent (daily) funds through such financial institutions; and by selling or purchasing whole loans or loan participations. The authorizations in this subparagraph shall be subject to limitations prescribed in regulations issued by the department; and
    5. In any other types of investments authorized by the department, including commercial paper, provided that such investments shall not, in the aggregate, exceed 10 percent of the shares, deposits, and surplus of the investing credit union or 15 percent of its equity capital, as defined by the department, in authorized investments issued by any single obligor;
  5. Borrow from any source, provided that the total of such borrowings shall at no time exceed 50 percent of paid-in shares, deposits, and surplus. The department may, notwithstanding the other provisions of this Code section, temporarily waive the requirements of this paragraph to permit an individual credit union to borrow for emergency purposes;
  6. Undertake, with the approval of the department, other activities which are not inconsistent with this chapter or regulations adopted pursuant thereto; provided, however, that no such approval shall be granted unless the commissioner determines the activities do not present undue safety and soundness risks to the credit union involved;
  7. Organize and engage in business without having any stated amount of capital subscribed or paid in other than that derived from the subscribers' qualifying shares, commence business with only such capital authorized and paid in as may be provided in its bylaws, and provide for the payment and withdrawal thereof as and in the manner provided by its bylaws;
  8. Purchase, hold, and convey real estate for the following purposes only:
    1. Such real estate as the credit union occupies or intends to occupy primarily for the transaction of its business, subject to the prior approval of the department except to the extent authorized by regulation;
    2. Such real estate as shall be conveyed to it in satisfaction of debt previously contracted in the course of its business; and
    3. Such real estate as it shall purchase at sales under judgments, decrees, or mortgage foreclosures pursuant to mortgages or security deeds held by it;
  9. Hold real estate acquired in the cases provided for by subparagraphs (B) and (C) of paragraph (8) of this Code section and real estate which has ceased to be used primarily as credit union premises, subject to a determination by a majority vote of its directors at least once each year as to the advisability of retaining any such property and provided that no such property is held for more than five years without the prior written approval of the department;
  10. Hold property other than real estate, which is acquired in satisfaction of debts previously contracted and which a credit union is not otherwise authorized to own, for no longer than six months unless such time period is extended by the department;
  11. Dispose of property held pursuant to paragraphs (9) and (10) of this subsection through financing by the credit union without the advance of additional funds irrespective of the purchasers' membership in the credit union and of ordinarily applicable collateral margin requirements;
  12. Provide, in its articles of incorporation approved by a majority of its membership present and voting, for the elimination or limitation of personal liability of a director to the credit union or its members in their capacity as shareholders of the credit union to the same extent as a bank or trust company operating under the provisions of this chapter; and
  13. Subject to any rules and regulations enacted by the department and in compliance with federal law and applicable provisions regarding insurable interests in Chapter 24 of Title 33, purchase, hold, or fund insurance on the life of any of its directors, officers, or employees, or any other person whose death might cause financial loss to the credit union, or, pursuant to any contract lawfully obligating the credit union as guarantor or surety, on the life of the principal obligor.

(Ga. L. 1925, p. 165, § 8; Code 1933, § 25-105; Ga. L. 1956, p. 742, § 1; Ga. L. 1968, p. 465, § 3; Code 1933, § 41A-3101, enacted by Ga. L. 1974, p. 705, § 1; Ga. L. 1979, p. 417, § 1; Ga. L. 1981, p. 1244, § 4; Ga. L. 1987, p. 1586, §§ 12-14; Ga. L. 1989, p. 1211, § 12; Ga. L. 1990, p. 300, § 1; Ga. L. 1999, p. 674, § 26; Ga. L. 2005, p. 826, § 17/SB 82; Ga. L. 2015, p. 5, § 7/HB 90; Ga. L. 2016, p. 390, § 3-2/HB 811; Ga. L. 2017, p. 193, § 17/HB 143; Ga. L. 2018, p. 214, § 13/HB 780; Ga. L. 2019, p. 828, § 20/HB 185.)

The 2018 amendment, effective May 3, 2018, deleted "and" at the end of paragraph (11); in paragraph (12), substituted "in its articles of incorporation approved by a majority" for "through an amendment to its bylaws approved by two-thirds" near the beginning, inserted "credit union or its" in the middle, and added "; and" at the end; and added paragraph (13). See Editor's notes for applicability.

The 2019 amendment, effective July 1, 2019, in subparagraph (4)(D), in the middle, deleted "and" preceding "by selling or purchasing", deleted ", whole loans, or loan participations" following "(daily) funds", and inserted "and by selling or purchasing whole loans or loan participations. The authorizations in this subparagraph shall be" near the end.

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 1987, "subparagraphs (B) and (C) of paragraph (8)" was substituted for "subparagraph (8)(B) and (C)" in the first sentence of paragraph (9).

Pursuant to Code Section 28-9-5, in 1988, in paragraph (7), a correction was made in the word "business" the second time it appears.

Editor's notes.

- Ga. L. 2018, p. 214, § 26(b)/HB 780, not codified by the General Assembly, provides that: "It is not the intent of the General Assembly to affect the law applicable to litigation pending as of March 9, 2018."

JUDICIAL DECISIONS

Credit union may accept security deed as loan collateral.

- Credit union has authority to accept title to real estate in the form of a security deed as collateral for loans which the credit union makes. Cole v. Georgia Cent. Credit Union, 243 Ga. 60, 252 S.E.2d 485 (1979).

OPINIONS OF THE ATTORNEY GENERAL

Credit union cannot legally function as dues collection agent for labor union.

- Legislature did not intend to grant credit unions any powers that were not necessary for or incidental to performing traditional credit union functions. Collection of dues on behalf of a labor union is not necessary for or incidental to performing traditional credit union functions; therefore, a credit union cannot legally function as a dues collection agent for a labor union. 1976 Op. Att'y Gen. No. 76-119.

Loan to nonmember may constitute investment in authorized obligation.

- Former Code 1933, § 41A-3101 (see now O.C.G.A. § 7-1-650) implied that a credit union may invest in authorized obligations irrespective of whether the obligation constitutes a loan to a nonmember. 1976 Op. Att'y Gen. No. 76-12.

Guaranteed portion of small business administration loans are legal investments.

- Guaranteed portion of small business administration loans are obligations upon which payment of principal and interest is fully guaranteed by the United States and are therefore legal investments under former Code 1933, § 41A-3101. 1976 Op. Att'y Gen. No. 76-12.

Former Code 1933, § 41A-3101 (see now O.C.G.A. § 7-1-650) prevented a credit union from investing in United States government guaranteed participation in small business administration loans. 1976 Op. Att'y Gen. No. 76-12.

RESEARCH REFERENCES

Am. Jur. 2d.

- 10 Am. Jur. 2d, Banks and Financial Institutions, §§ 5 et seq., 189.

C.J.S.

- 12 C.J.S., Building and Loan Associations, Savings and Loan Associations, and Credit Unions, § 88 et seq.

ALR.

- Power of savings bank or similar institution to provide checking facilities or negotiable orders of withdrawal (NOW) to customers, 64 A.L.R.3d 1314.


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