SRC-JBJ S.B. 1055 76(R)BILL ANALYSIS


Senate Research CenterS.B. 1055
By: Carona
Economic Development
6/21/1999
Enrolled


DIGEST 

Currently, a credit union operating in the state may be charted as a
federal or state institution. Depending on their public charter, the credit
union holds specific financial responsibilities and duties. In a state
credit union, several problems arise because the credit union retains
authority to engage in federal credit union activities.  Moreover, these
state credit unions implement certain rules that limit access and
responsibilities of a trust fund or safety deposit box account with
multiple access.  S.B. 1055 will amend a state credit union's ability to
engage in federal credit union activities; create the ability for a trustee
of a trust account and safe deposit box to access the accounts in a state
credit union; include savings banks in the definition of a financial
institution; and add a section on state policy. 

PURPOSE

As enrolled, S.B. 1055 amends certain regulations and operations of a state
credit union. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 15.204(c), Finance Code, to redefine "financial
institution." 

SECTION 2.  Amends Chapter 121, Finance Code, by adding Section 121.0011,
as follows: 

 Sec. 121.0011.  POLICY.  Sets forth the intent and purposes of the
subtitle. 

SECTION 3.  Amends Section 123.003, Finance Code, to delete the Public
Utility Commission's rulemaking authority to authorize a credit union to
engage in certain activities, if the credit union operates as a federal
credit union.  Authorizes a credit union to engage in certain activities,
if the credit union operates as a federal credit union. 

SECTION 4.  Amends Section 125.301, Finance Code, to authorize a credit
union to rely on any information provided by the trustee to determine
whether a trust is revocable or irrevocable.  Deletes a requirement that
each beneficiary or trustee be disclosed to the credit union.   

SECTION 5.Amends Section 125.503, Finance Code, as follows:

Sec. 125.503.  New heading:  ACCESS BY MORE THAN ONE PERSON.  Requires a
credit union, in the absence of a contract to the contrary, to allow each
holder of a safe deposit box, which may be held jointly by two or more
persons or a person other than the lessee designated in the lease
agreement, access to the box and removal of its contents.  Provides that
the credit union is not responsible for damage because a designated person
had access to the box and removed its contents.  Provides that the death of
a holder of a  jointly held safe deposit box does not affect the right of
another holder or other designated person, rather than or other holder of
the box, to have access to and remove contents from the box.   

SECTION 6.Effective date: September 1, 1999.

SECTION 7.Emergency clause.

 SUMMARY OF COMMITTEE CHANGES

SECTION 2.

 Deletes proposed Section 121.0015, Finance Code, regarding purpose of the
legislature. 

Amends Chapter 121, Finance Code, by adding Subsection 121.0011 regarding
policy of the state.