By: Rosson S.B. No. 470
73R3393 LJD-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to multiple-party accounts and trust accounts at a credit
1-3 union.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 6.05(a), Texas Credit Union Act (Article
1-6 2461-6.05, Vernon's Texas Civil Statutes), is amended to read as
1-7 follows:
1-8 (a) A member, including a member of a federal credit union
1-9 doing business in this state, may designate any person or persons,
1-10 including organizations, associations, corporations, or
1-11 partnerships, to own share or deposit accounts with the member
1-12 jointly, with or without the right of survivorship, or in a
1-13 multiple-party account as that term is defined by the Texas Probate
1-14 Code. One or more or all of the parties to an account may make
1-15 payments on share accounts and deposit accounts and make
1-16 withdrawals subject to the terms of the account agreements accepted
1-17 by the credit union. Subject to a policy adopted by the board of
1-18 directors, a member by written notice to the credit union may
1-19 change or cancel a designation, change the form of the account, or
1-20 stop or vary payment under the terms of the account. No party,
1-21 unless also a member, may vote, obtain loans, or hold office in the
1-22 credit union. Payment of part or all of an account to any one or
1-23 more of the parties discharges, to the extent of the payment, the
1-24 liability of the credit union to all.
2-1 SECTION 2. Section 6.07, Texas Credit Union Act (Article
2-2 2461-6.07, Vernon's Texas Civil Statutes), is amended to read as
2-3 follows:
2-4 Sec. 6.07. TRUST ACCOUNTS. (a) A credit union may issue
2-5 shares or receive deposits:
2-6 (1) in a revocable trust, if:
2-7 (A) a settlor is a member; or
2-8 (B) a trustee or beneficiary is a member, and a
2-9 settlor is a family member of the trustee or beneficiary; or
2-10 (2) in an irrevocable trust, if a settlor, trustee, or
2-11 beneficiary is a member.
2-12 (b) On opening a trust account, the names of the
2-13 beneficiaries must be disclosed to the credit union. Unless a
2-14 beneficiary is a member, the beneficiary may not vote, obtain a
2-15 loan, or hold office and is not required to pay an entrance fee.
2-16 Subject to limitations imposed by this Act or a rule adopted under
2-17 this Act, a credit union may make a fully secured loan to a
2-18 nonmember trustee to enable or assist the trustee in performing the
2-19 trustee's fiduciary responsibilities.
2-20 (c) Payment of part or all of the shares and deposits to a
2-21 trustee or other person authorized to request present payment, to
2-22 the extent of the payment, discharges the liability of the credit
2-23 union to any settlor, trustee, and beneficiary. The credit union
2-24 does not have a duty to inquire of a trustee the reason for a
2-25 transaction or the intended use for which funds are withdrawn or
2-26 borrowed.
2-27 (d) On termination of the trust, the credit union shall pay
3-1 funds remaining in a trust account as:
3-2 (1) directed by the trustee;
3-3 (2) prescribed by the trust agreement; or
3-4 (3) provided by applicable law, in the absence of
3-5 direction from the trustee or by the trust agreement.
3-6 (e) The death of a trustee does not affect the ownership or
3-7 disposition of a trust account unless:
3-8 (1) the trust agreement provides otherwise;
3-9 (2) the account is a trust account subject to Chapter
3-10 XI, Texas Probate Code, as amended, and there is not a surviving
3-11 trustee; or
3-12 (3) there is not a surviving trustee and written
3-13 evidence of the terms of the trust does not exist.
3-14 (f) On the death of a trustee for a trust account described
3-15 by Subdivision (1), (2), or (3) of Subsection (e) of this section,
3-16 the credit union may pay out the funds:
3-17 (1) in accordance with the trust agreement; or
3-18 (2) in the absence of written evidence of the terms of
3-19 the trust, to a beneficiary or any other person authorized by law
3-20 to request or receive payment. <A credit union may issue shares or
3-21 hold deposits in the name of a member in trust for a beneficiary,
3-22 including a minor, but no beneficiary, unless the beneficiary is
3-23 also a member, may vote, obtain loans, hold office, or be required
3-24 to pay an entrance fee. Payment of part or all of the shares or
3-25 deposits to a member shall, to the extent of the payment, discharge
3-26 the liability of the credit union to the member and the
3-27 beneficiary, and the credit union shall be under no further
4-1 obligation. If a member to or for whom shares or deposits are
4-2 issued or held in trust dies, and the credit union has no other
4-3 written evidence of the existence or terms of any trust, the credit
4-4 union may pay the shares or deposits and any dividends or interest
4-5 to the beneficiary or to the legal representative of the
4-6 beneficiary. Such a payment discharges the liability of the credit
4-7 union to the extent of the payment. If the credit union has
4-8 written evidence of the terms of the trust, the credit union shall
4-9 administer and distribute the shares or deposits so issued or held
4-10 under the provisions of the trust agreement, a copy of which must
4-11 remain on file with the credit union until termination of the
4-12 trust. If the credit union does not have written evidence of the
4-13 termination or other disposition of the trust, the credit union may
4-14 distribute the shares or deposits so issued or held under the
4-15 provisions of the trust agreement. Such a distribution discharges
4-16 the liability of the credit union to the extent of the
4-17 distribution.>
4-18 SECTION 3. The change in law made by Section 2 of this Act
4-19 applies to a credit union trust account created on or after the
4-20 effective date of this Act. A credit union trust account created
4-21 before the effective date of this Act is governed by the law then
4-22 in effect, and the former law is continued for that purpose.
4-23 SECTION 4. The importance of this legislation and the
4-24 crowded condition of the calendars in both houses create an
4-25 emergency and an imperative public necessity that the
4-26 constitutional rule requiring bills to be read on three several
4-27 days in each house be suspended, and this rule is hereby suspended,
5-1 and that this Act take effect and be in force from and after its
5-2 passage, and it is so enacted.