December 9, 1997
Mary Beth M. Wong, Esq.
Ashford & Wriston
P.O. Box 131
Honolulu, HI 96810
Dear Ms. Wong:
You have asked several questions about the effect of the 1997
Hawaii Reciprocal Beneficiaries Act (RBA) on federal credit unions
(FCUs). Briefly summarized, you have asked whether reciprocal
beneficiaries may or must be included in the definition of immediate
family members and whether FCUs must, as a result of amendments
to state law concerning the establishment of tenancies by the
entirety, offer such accounts to their members.
As explained in more detail below, our answers are as follows.
An FCU may, but is not required to, include reciprocal beneficiaries,
as defined in the RBA, in the definition of immediate family member.
Our view is that the state law concerning the establishment of
tenancies by the entirety does not require that an FCU offer accounts
as tenancies by the entirety and the RBA amendments did not change
the provision.
The RBA allows two persons who are legally prohibited from marrying
one another under state law to register their reciprocal beneficiary
relationship by filing a notarized declaration with the state
director of health. The RBA affords reciprocal beneficiaries
certain rights that previously were reserved to spouses, for example,
standing to sue for wrongful death and other tort claims, rights
to an elective share upon death, authority to make health care
decisions, rights to workers' compensation benefits, rights to
receive payments of wages on the death of an employee, and rights
to family leave under state law.
An FCU may include immediate family members of its common bond
group in its field of membership and may create its own definition
of "immediate family member," although the definition
must be sufficiently limited to give the term a rational, discernible
meaning. We have stated that there must be an ongoing "familial"
relationship between a primary member and those who qualify for
membership as an immediate family member. In the context of unmarried
couples, we have stated that we would look to factors indicating
the intended permanence of a familial relationship, such as: regular
cohabitation; joint ownership of property with right of survivorship;
joint credit obligations; and custodial rights over minors or
other dependents. Merely sharing a household or a purely business
relationship would not be sufficient.
You ask whether an FCU may include reciprocal beneficiaries, as
defined in the RBA, in the definition of immediate family member
even though a reciprocal beneficiary may not meet the factors
cited above. You note that the RBA does not require reciprocal
beneficiaries to have a common residence, joint ownership of property,
or joint credit obligations. The RBA, in the findings section
of the law, indicates that it is intended to reach "individuals
who have significant personal, emotional, and economic relationships
with another individual" and we note that the rights afforded
reciprocal beneficiaries indicate a strong familial relationship.
Therefore, we conclude that an FCU may include reciprocal beneficiaries
in the definition of immediate family member.
You also ask whether an FCU may limit who may be included in the
definition of immediate family member, overriding, for example,
any state law purporting to require that reciprocal beneficiaries
be given the same rights as spouses. We assume the state law
you have in mind is the RBA and we note that, while it extends
particular rights and benefits to reciprocal beneficiaries, it
does not require that reciprocal beneficiaries be given the same
rights as spouses. If you are asking whether an FCU in Hawaii
must include reciprocal beneficiaries in the definition of immediate
family member, the answer is no.
Section 10 of the RBA modifies an existing provision of the Hawaii
Revised Statutes, Section 509-2, by adding "reciprocal beneficiary"
or "reciprocal beneficiaries" wherever "spouse"
or "spouses" appear. Section 509-2 provides that joint
tenancies, tenancies by the entirety, and tenancies in common,
whether between or among spouses, reciprocal beneficiaries, or
other persons, may be created without the necessity of conveying
through a third party. You state that Section 10 "may be
construed" to provide that any property may be held by spouses
or reciprocal beneficiaries as tenants by the entirety. You ask
whether an FCU could override such a law in deciding whether to
offer accounts that may be held by tenants by the entirety. We
conclude that Section 10 merely adds reciprocal beneficiaries
to an existing state law that, itself, does not require a financial
institution, or any entity, to offer any particular type of account.
Therefore, there is no need to consider whether an FCU could
override it.
Sincerely,
Sheila A. Albin
Associate General Counsel
GC/LH:bhs
SSIC 6010
97-0852