Gordon, 040234 PAAGO, AGO 127

• Case Date: April 02, 1934
• Court: Pennsylvania

Honorable William D. Gordon AGO 127 Opinion No. 127 Pennsylvania Attorney General Opinions Opinions of the Attorney General April 2, 1934          Corporations—Credit Union—Nature of business—Conduct by foreign or domestic corporation or business trust—Act of May 26, 1933, Sec. 22—Eestriction to corporations supervised by Department of Banking.          1. Section 22 of the Act of May 26, 1933, P. L. 1076, restricts the conduct of the business of a credit union, consisting of the receipt of savings from members as payment on shares, the making of loans to members at legal rates of interest, and the investment of surplus funds in mortgages, real estate, and designated stocks, to corporations organized Stocks the provisions of that statute; neither a business trust, a foreign corporation, nor a domestic corporation organized under any other law of the Commonwealth is authorized to transact such a business.          2. The activities of a credit union being in the nature of a banking business, the Commonwealth may properly restrict the conduct thereof to certain domestic corporations operating under the supervision of the Department of Banking.          Department of Justice,          Harrisburg, Pa., April 2, 1934.          Honorable William D. Gordon,          Secretary of Banking, Harrisburg, Pennsylvania.          Sir: We have your request to be advised whether Section 22 of the Act of May 26, 1933, P. L. 1076 is applicable to a so-called business trust, to a domestic corporation, and to a duly registered foreign corporation, all of which are engaged in the business of making loans to their members.          This act is generally referred to as the Credit "Union Act. Section 1 defines "credit union" as used in the act as "a cooperative society, in the nature of a corporate entity, incorporated for the two-fold purpose of promoting thrift among its members and creating a source of credit for them, at legitimate rates of interest, for provident purposes.''          The act further provides for the incorporation, powers, membership, meetings, elections, loans, reserves, dividends, dissolution, and other matters pertaining to the conduct of the business of a credit union. Section 5 provides that credit unions shall be under the supervision of the Department of Banking.          Section 3 of the act gives a credit union the power to receive the savings of its members as payment on shares.          Section 15 permits a credit union to make loans...