Opinion 18-44(A)

March 29, 2018

Digest:         A judge need not recuse him/herself from matters involving a credit union in which the judge is a member and account holder.

Rules:          22 NYCRR 100.2; 100.2(A); 100.2(c); 100.3(E)(1); 100.3(E)(1)(d)(ii); 100.4(C)(3)(a)(ii); Opinions 10-96; 04-50; 95-104; 92-126; People v Moreno, 70 NY2d 403 (1987).

Opinion:

         A judge asks if he/she may preside in matters involving a not-for-profit credit union in which the judge is a member and account holder. The judge also asks if the answer differs based on the nature of his/her relationship with the credit union (for example, as account holder or borrower).

         A judge must always avoid even the appearance of impropriety (see 22 NYCRR 100.2) and must always act in a manner that promotes public confidence in the judiciary’s integrity and impartiality (see 22 NYCRR 100.2[A]). Further, a judge must not lend the prestige of judicial office to advance private interests (see 22 NYCRR 100.2[C]). A judge must also disqualify him/herself in a proceeding in which the judge’s impartiality “might reasonably be questioned” (22 NYCRR 100.3[E][1]).

         Significantly, nothing in the inquiry suggests that the inquiring judge is an officer, director, trustee, or non-legal advisor of the credit union (see 22 NYCRR 100.3[E][1][d][ii] [requiring disqualification if the judge “is an officer, director or trustee of a party”]; cf. 22 NYCRR 100.4[C][3][a][ii] [full-time judge may not serve as officer, director, trustee, or non-legal advisor “if it is likely that the organization ... will be engaged regularly in adversary proceedings in any court”]).

         A judge ordinarily need not recuse him/herself in matters involving a local bank that holds a mortgage on the judge’s home after a re-financing, provided the judge can be fair and impartial (see Opinion 92-126). Indeed, if a judge “has a mortgage loan on his or her personal residence, and an automobile loan, both of which are held by banks, and credit cards issued by financial institutions,” he/she “need not disqualify him/herself or disclose in [cases] where those banks or financial institutions appear as parties” (Opinion 04-50). As we explained (id. [citations omitted]):

given the ubiquity and routine nature of home mortgage and automobile loans, and the fact that such transactions are rarely predicated on a special or personal relationship between the borrower and the institutional lender, neither recusal nor disclosure is required in foreclosure or other proceedings where the institutional lender appears as a party. The same holds true for the issuers of credit cards. That is, the mere fact of the relationship alone in these instances does not give rise to an inference that the judge’s impartiality might reasonably be questioned.

         We have reached a different conclusion only rarely, for example, when the mortgage-holder is an individual, rather than a financial institution (see Opinion 95-104), or “while the judge is negotiating a mortgage loan with a bank that also may be the undisclosed seller of the property the judge is buying” (Opinion 10-96 [noting that the obligation ends once the mortgage negotiations and property purchase are concluded]). In both instances, there was, at least temporarily, a relationship between the judge and the lender that could reasonably be perceived as special, personal, or otherwise non-routine.

         We recognize credit unions differ from traditional banks as they are not-for-profit, “member-owned and cooperative institutions” (The National Credit Union Administration, “What Is a Credit Union?” at https://www.mycreditunion.gov <visited 6/15/2018>). However, like banks, they “accept deposits, make loans and provide a wide array of other financial services” (id.). Indeed, we believe that for an ordinary member and account-holder who is not involved in the credit union’s governance, a credit union is the functional equivalent of a bank.

         Accordingly, absent any connections between the judge and the credit union beyond a routine, arms-length relationship expected between a financial institution and an ordinary borrower or account-holder, we conclude the judge need not recuse from a credit union’s cases as long as he/she can be fair and impartial. This determination is within the judge’s sole discretion (People v Moreno, 70 NY2d 403, 405 [1987]).