12 U.S.C. § 1757 — Powers

A Federal credit union^* continues under its corporate name during its existence. It may:
(1) make contracts;
(2) sue and be sued;
(3) adopt and use a common seal and change it whenever it wishes;
(4) buy, hold, and dispose of property needed or related to its operations;
(5) make loans, generally with terms no longer than 15 years, and extend credit^* lines to members, other credit unions, and credit-union organizations. It may also join other credit unions, credit-union organizations, or financial organizations in making member loans, subject to these rules:
(A) Member loans must follow board^*-of-directors criteria. However:
(i) A first-lien loan on a one-to-four-family home, including an individual cooperative unit, that is or will be the member’s main home may run up to 30 years or another Board-set limit, under Board rules. A cooperative-unit loan must be adequately secured as the Board defines.
(ii) A first-lien mobile-home loan for the member’s residence, a loan to repair, change, or improve the member’s home, and a second mortgage on the member’s home may run up to 15 years or a longer period the Board allows.
(iii) A loan insured or guaranteed by, or subject to an advance commitment to purchase by, the Federal Government, a State^* government, or an agency of either may have the term and conditions allowed by the law providing that insurance, guarantee, or commitment.
(iv) The board of directors must approve a loan or combined loans over $20,000 plus pledged shares to a director^* or supervisory- or credit-committee member of the lending credit union.
(v) The board must approve another member’s loan when a director or supervisory- or credit-committee member guarantees or endorses it and the loan alone or together with that guarantor’s or endorser’s outstanding loans exceeds $20,000.
(vi) Interest may not exceed 15 percent per year on the unpaid balance, including all finance charges. After consulting the specified congressional committees, Treasury Department, and federal financial regulators, the Board may set a higher ceiling for no more than 18 months if money-market rates rose during the prior six months and current rates threaten individual credit unions’ safety and soundness, shown by harmful liquidity, capital, earnings, or growth trends. The Board may also set a higher ceiling for Central Liquidity Facility Agent members for periods it authorizes.
(vii) Knowingly charging more interest than allowed forfeits all interest on the debt. If the extra interest was paid, the payer or legal representative may recover all interest paid from the credit union in a debt-like action, but must bring the action within two years after the usurious collection.
(viii) A borrower may repay all or part of a loan early on any business day without penalty. For a first or second mortgage, a Federal credit union may require partial prepayments on the monthly-installment date and in an amount equal to the principal part of one or more installments.
(ix) Loans must be paid or amortized under Board rules. The Board must consider borrowers’ needs or conditions, loan amounts and terms, member and credit-union interests, and other relevant factors.
(x) The credit committee or a loan officer must approve loans. A member may not receive a loan if it would make the member’s total Federal credit-union loan debt more than 10 percent of the credit union’s unimpaired capital and surplus.
(B) The credit union may establish a self-replenishing credit line up to a stated maximum, with terms that may differ among borrowers.
(C) The board of directors must approve loans to other credit unions.
(D) The board must approve loans to credit-union organizations, and those loans may not exceed 1 percent of the credit union’s paid-in and unimpaired capital and surplus. A “credit union organization” means an organization the Board determines is mainly established to serve member credit unions and whose business relates to those credit unions’ daily operations. This section does not otherwise define that term.
(E) Participation loans with other credit unions, credit-union organizations, or financial organizations must follow written board policies. A credit union originating such a loan must keep at least 10 percent of the loan’s face amount.
(6) receive equity-representing payments from members, other credit unions, specified officers, employees, or agents of listed nonmember government units, the Central Liquidity Facility, and—if serving mostly low-income members as the Board defines—from nonmembers, on shares, share certificates, and authorized share-draft accounts. The board may set terms, rates, and conditions within Board limits. Shares and certificates may have different dividend rates, and certificates may have different maturities.
(7) invest funds:
(A) in loans only to members;
(B) in United States obligations or securities fully guaranteed by the United States;
(C) under Board rules, in loans to other credit unions, up to 25 percent of paid-in and unimpaired capital and surplus;
(D) in shares or accounts of savings-and-loan associations or mutual savings banks insured by the Federal Deposit Insurance Corporation;
(E) in obligations issued by banks for cooperatives, Federal land banks, Federal intermediate credit banks, Federal home loan banks, the Federal Housing Finance Board, or wholly owned Government corporations; in obligations, participations, or other instruments of, issued by, or fully guaranteed as to principal and interest by the Federal National Mortgage Association or the Government National Mortgage Association; in mortgages, obligations, or other securities sold by the Federal Home Loan Mortgage Corporation under section 1454 or 1455 of this title; in obligations or other instruments or securities of the Student Loan Marketing Association; and in obligations, participations, securities, or other instruments of, issued by, or fully guaranteed as to principal and interest by any other agency of the United States. A Federal credit union may also issue and sell securities guaranteed under section 1721(g) of this title;
(F) in participation certificates showing beneficial interests in obligations, or rights to interest and principal collections, placed in trusts by Government agencies with a United States department, agency, instrumentality, or head as trustee;
(G) in shares or deposits of a central credit union when the investing board specifically authorizes them;
(H) in shares, certificates, or deposits of federally insured credit unions;
(I) with Board approval, in shares, stocks, or obligations of an organization providing routine credit-union services, up to 1 percent of paid-in and unimpaired capital and surplus. This does not authorize direct or indirect control of another financial institution or investment in an insurance company, trade association, liquidity facility, or similar organization, unless this chapter expressly allows it;
(J) in the National Credit Union Central Liquidity Facility’s capital stock; and
(K) in obligations issued by a State or its political subdivision, including its agencies, corporations, or instrumentalities. The credit union may not invest more than 10 percent of unimpaired capital and surplus in one issuer’s obligations, excluding that issuer’s general obligations.
(8) deposit money in national banks; State banks, trust companies, and mutual savings banks operating under the law of the State where the credit union does business; and FDIC-insured banks or institutions. A Federal credit union, or a Defense Department-authorized credit union with suboffices on United States military installations in foreign countries or United States trust territories, may keep demand deposits in banks in those countries or territories if Board rules allow and the banks correspond with banks described here.
(9) borrow from any source under Board rules, generally up to 50 percent of paid-in and unimpaired capital and surplus, except as the Board authorizes for subchapter III. A Federal credit union may discount or sell eligible obligations to a Federal intermediate credit bank up to its paid-in and unimpaired capital.
(10) charge late fees under its bylaws when members do not promptly meet their obligations;
(11) impose and enforce a lien on a member’s shares and dividends up to the member’s loan, dues, and charges owed;
(12) under Board regulations, sell negotiable checks, including travelers checks, money orders, and similar money-transfer instruments, including international and domestic electronic fund transfers and remittance transfers as defined in section 1693o–1 of title 15, to people in its membership field, and cash checks and money orders for those people for a fee;
(13) under Board rules, buy, sell, pledge, discount, receive, or otherwise dispose of members’ eligible obligations, wholly or partly. It may buy notes made by members of a liquidating credit union at prices agreed by the two boards. It may not make such purchases if the unpaid balances of notes bought under this paragraph would then exceed 5 percent of its unimpaired capital and surplus.
(14) sell all or part of its assets to another credit union, buy all or part of another credit union’s assets, and assume the selling credit union’s and its members’ liabilities, subject to Board regulations;
(15) invest in securities that:
(A) are offered and sold under section 77d(5) of title 15;
(B) are mortgage-related securities as defined in section 78c(a)(41) of title 15, subject to Board rules, including minimum issue size or minimum total sales prices; or
(C) are small-business-related securities as defined in section 78c(a)(53) of title 15, subject to Board rules, including minimum initial issue size or minimum total sales price;
(16) under Board rules, provide technical assistance to credit unions in Poland and Hungary; and
(17) exercise incidental powers necessary or required to conduct effectively the business for which it was incorporated.