The Department of Financial Services in New York announced that New York State-chartered credit unions which are seeking to establish temporary facilities in New York to provide “limited services” (that do not include certain monetary transactions, such as signing up new members), may provide such services on notice to the DFS without requiring a prior application with DFS.
DFS Superintendent Maria T. Vullo said that under terms of the guidance, credit unions must provide the Department with a schedule listing upcoming times and locations of the temporary facilities, as well as the number and title of qualified individuals offering the services at any temporary facility located in the state. Such facilities can include mobile service units, tents, booths, tables, or similar stations.
"Temporary facilities can be useful tools for New York State-chartered credit unions to better [serve] their existing members, attract new members, and extend the provision of financial products and services to underserved communities in New York State in an efficient manner," Vullo said in a statement. "The Department remains committed to assisting the continued expansion of New York State-chartered financial institutions that offer vital resources to local communities and contribute to regional economic growth while providing strong state-based consumer protection through regulatory oversight by DFS."
In response to the new development, R,J. Tamburri communications director at the New York Credit Union Association, told Credit Union Journal that NYCUA appreciates the DFS guidance, “however modest it may be.”
Tamburri further noted that “any action that makes it less burdensome for credit unions to connect with consumers is a positive in our book.”
Also, under the guidance, a credit union must provide DFS with information regarding the security procedures for the protection of confidential information and data. In addition, the credit union is required to obtain any permit or authorization that may be required from any city or local governmental agency for operation or use of the temporary facility and “conspicuously display” the name and signage of the credit union on the temporary facility.
In a blog, Henry Meier, NYCUA general counsel, commended the DFS. “As someone who has tried to advise credit unions on this issue it is a welcome clarification,” he wrote. “Section 461 of New York’s banking law requires state charters to apply for permission anytime they change location or open station within the state. The process is cumbersome and must be accompanied by a board resolution.”
The new guidance, Meier added, means that this requirement does not apply to a state charter that “simply wants to set up a temporary location to sign up new members, receive loan and credit card applications, and advise members and potential members about the products and services offered by the credit union.”