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A BILL TO BE ENTITLED
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AN ACT
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relating to the administration, operation, and regulation of credit |
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unions. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 15.303, Finance Code, is amended to read |
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as follows: |
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Sec. 15.303. DEPUTY COMMISSIONER. (a) The [Subject to
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the commission's approval, the] commissioner may appoint a deputy |
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commissioner[, who must have the qualifications required of the
|
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commissioner]. |
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[(b)] The deputy commissioner serves at the will of the |
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commissioner and, at the commissioner's direction, may exercise the |
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powers and prerogatives of the commissioner. |
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(b) [(c)] The deputy commissioner is an employee of the |
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department [commission] and is subject to the commissioner's |
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[commission's] orders and directions. |
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(c) [(d)] During the commissioner's absence or inability to |
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act, the deputy commissioner shall perform the commissioner's |
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duties. |
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(d) The commissioner may appoint assistant deputy |
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commissioners, whose powers shall be limited to the powers, duties, |
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or functions set forth in the appointment. |
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SECTION 2. Section 15.305, Finance Code, is amended to read |
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as follows: |
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Sec. 15.305. GENERAL COUNSEL. A person who is required to |
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register as a lobbyist under Chapter 305, Government Code, because |
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of the person's activities for compensation on behalf of a |
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profession related to the operation of the commission, may not |
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serve as general counsel to the commission or the department. |
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SECTION 3. Section 15.308, Finance Code, is amended to read |
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as follows: |
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Sec. 15.308. COMPENSATION OF EMPLOYEES. (a) The |
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commission shall set the compensation of the commissioner [and
|
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deputy commissioner]. The compensation shall be paid according to |
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the General Appropriations Act. |
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(b) Except for the commissioner [and deputy commissioner], |
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Chapter 654, Government Code, applies to any department position. |
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SECTION 4. Section 15.402(c), Finance Code, is amended to |
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read as follows: |
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(c) The commission by rule shall establish reasonable and |
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necessary fees to recover the costs of maintaining and operating |
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the department and enforcing [for the administration of] this |
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chapter and Subtitle D, Title 3. |
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SECTION 5. Section 15.408, Finance Code, is amended to read |
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as follows: |
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Sec. 15.408. COLLECTION OF MONEY. The commissioner shall |
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collect all fees, charges, and revenues required to be paid by a |
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credit union under Section 15.402(c). All money paid to the |
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department under this chapter and Subtitle D, Title 3, is subject to |
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Subchapter F, Chapter 404, Government Code. A credit union is not |
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entitled to a refund of any unused portion of the fee, charge, or |
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revenue. |
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SECTION 6. Section 15.410(a), Finance Code, is amended to |
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read as follows: |
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(a) The commission shall adopt, and the commissioner shall |
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enforce, reasonable rules requiring a credit union, except a |
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corporate central credit union, to provide share and deposit |
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insurance protection for credit union members and depositors. |
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SECTION 7. Subchapter E, Chapter 15, Finance Code, is |
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amended by adding Section 15.4111 to read as follows: |
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Sec. 15.4111. REGULATORY COORDINATION. (a) To ensure |
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effective coordination among and between the department and other |
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state and federal agencies, the commissioner may enter into |
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cooperative, coordinating, or information-sharing agreements with |
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those agencies. |
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(b) To further the rapid restoration of credit union |
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services after an emergency, the commissioner may enter into |
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cooperative, coordinating, or information-sharing agreements with |
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credit unions or credit union trade associations or other |
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organizations affiliated with or representing one or more credit |
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unions. |
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(c) Disclosure of information by or to the department under |
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this section does not constitute a waiver of or otherwise affect or |
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diminish any legal privilege to which the information is otherwise |
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subject, even if the disclosure is not governed by a |
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confidentiality agreement. Notwithstanding other applicable law, |
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a party to an agreement described by this section shall execute, |
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honor, and comply with requirements to maintain confidentiality and |
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oppose disclosure of information obtained from the department, and |
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shall treat as confidential any information obtained from the |
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department that is entitled to confidential treatment under |
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applicable state or federal law. |
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SECTION 8. Section 121.002, Finance Code, is amended by |
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amending Subdivision (2) and adding Subdivision (10-a) to read as |
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follows: |
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(2) "Credit union," unless the context relates to a |
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federal credit union, means a voluntary, cooperative, nonprofit |
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financial institution authorized to do business in this state under |
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this subtitle for purposes of: |
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(A) encouraging thrift among its members; |
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(B) creating a source of credit at fair and |
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reasonable interest rates; |
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(C) developing and providing to its members |
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alternative methods of financing their purchases at reasonable |
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costs; |
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(D) providing an opportunity for its members to |
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use, protect, or [and] control their money or property to improve or |
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maintain their economic or [and] social condition; and |
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(E) conducting any other business, engaging in |
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any other activity, or providing any other service that may benefit |
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its members or otherwise promote its members' economic well-being. |
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(10-a) "Share insuring organization" means a |
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cooperative share insurance fund, guaranty corporation, or credit |
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union that provides aid and financial assistance to credit unions |
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that are in the process of liquidation or are incurring financial |
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difficulty to protect or guarantee against loss the share and |
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deposit accounts in the credit union up to a specified level for |
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each account. |
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SECTION 9. Chapter 121, Finance Code, is amended by adding |
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Section 121.007 to read as follows: |
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Sec. 121.007. COST OF SUPERVISION AND REGULATION. (a) Each |
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credit union shall promptly pay the fees, charges, and revenues |
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established by the commission under Section 15.402 to recover: |
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(1) the cost of examination; |
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(2) the credit union's equitable or proportionate |
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share of the costs of maintenance and operation of the department; |
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and |
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(3) the costs of enforcement of this subtitle and |
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Chapter 15. |
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(b) The commission shall adjust those fees, charges, and |
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revenues so that the amount collected during the fiscal year equals |
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the total amount appropriated, including amounts appropriated for |
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both direct and indirect costs for that fiscal year. |
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SECTION 10. Subchapter A, Chapter 122, Finance Code, is |
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amended by adding Section 122.0011 to read as follows: |
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Sec. 122.0011. EXPENSE FUND. (a) Before a credit union |
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organized under this subtitle may be authorized to do business, the |
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credit union shall create a fund from which operating expenses may |
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be paid until earnings, together with net worth allocations and |
|
dividends that may be declared and credited, are sufficient to |
|
cover operating expenses. |
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(b) Except as provided by this section, the amounts |
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contributed to the expense fund are not a liability of the credit |
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union. |
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(c) The credit union may pay dividends to contributors to |
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the expense fund on amounts contributed to the same extent the |
|
credit union pays dividends to a member. Any amount contributed to |
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the expense fund is considered a deposit of the credit union, which |
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the credit union's board may reduce pro rata as operating expenses |
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are paid from the fund. |
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(d) With the prior written consent of the commissioner, |
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contributions to the expense fund may be repaid to the |
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contributors, in accordance with this subsection, from the net |
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earnings of the credit union after the credit union has attained a |
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net worth ratio greater than six percent. At the close of each |
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dividend period the board may pay or credit the accounts of the |
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contributors an amount that is not more than one percent of the net |
|
earnings of the credit union during that period until the |
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contributors have been repaid in full. |
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(e) If the credit union is liquidated before the |
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contributions to the expense fund have been fully repaid, any |
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portion of the contributions not needed for the payment of the |
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expenses of liquidation and for the payment of depositors in full |
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shall be paid to the contributors in proportion to their |
|
contributions until they have been repaid in full. |
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(f) The commission may adopt reasonable rules necessary to |
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administer this section and to accomplish the purposes of this |
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subchapter. |
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SECTION 11. Section 122.007(b), Finance Code, is amended to |
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read as follows: |
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(b) The commissioner's order may be appealed to the |
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commission not later than the 30th [60th] day after the date of the |
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order. |
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SECTION 12. Subchapter A, Chapter 122, Finance Code, is |
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amended by adding Section 122.0121 to read as follows: |
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Sec. 122.0121. CONDUCTING BUSINESS BY MAIL OR ELECTRONIC |
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COMMUNICATION. With the prior approval of the commissioner, a |
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credit union may conduct all or a portion of its business solely by |
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mail or through electronic communication without having a physical |
|
location for the members to transact business with the credit |
|
union. A credit union conducting business under this section shall |
|
maintain its principal place of business in this state. |
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SECTION 13. Sections 122.013(a) and (c), Finance Code, are |
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amended to read as follows: |
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(a) A foreign credit union may do business in this state if |
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it is organized in a state or country that allows any [a] credit |
|
union organized under this subtitle to do business in that state or |
|
country. |
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(c) The commissioner may suspend or revoke a foreign credit |
|
union's authority to do business in this state if the commissioner |
|
finds that the foreign credit union: |
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(1) has failed to conduct its business in this state in |
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a manner consistent with the laws of this state [violated a rule
|
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adopted under this subtitle]; |
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(2) is in an unsafe or unsound condition; |
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(3) refuses to comply with an order of the |
|
commissioner [is engaged in a pattern of unsafe or unsound
|
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practices]; [or] |
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(4) refuses to comply with a request by the |
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commissioner to review the books and records of the credit union; or |
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(5) has not met or does not meet a [commission] |
|
requirement imposed by commission rules. |
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SECTION 14. Subchapter A, Chapter 122, Finance Code, is |
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amended by adding Section 122.0131 to read as follows: |
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Sec. 122.0131. TEMPORARY FOREIGN CREDIT UNION OFFICE. If a |
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state contiguous to this state experiences an emergency, on a |
|
request by that state's credit union regulatory agency, the |
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commissioner may authorize one or more credit unions located in |
|
that state to open temporary offices in this state to more promptly |
|
restore credit union services to their members. The commissioner |
|
shall issue an order permitting the temporary office and specifying |
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the period of time the office may remain open. On a finding that the |
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conditions requiring the temporary office continue to exist, the |
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commissioner may extend the period the office may remain open. A |
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credit union may convert a temporary office to a permanent location |
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if it qualifies to do business in this state as a foreign credit |
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union under Section 122.013 and commission rules. |
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SECTION 15. Subchapter A, Chapter 122, Finance Code, is |
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amended by adding Section 122.0141 to read as follows: |
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Sec. 122.0141. DEPOSITORY FOR GOVERNMENTAL ENTITIES. |
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Notwithstanding the requirements of Chapter 105 or 116, Local |
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Government Code, and Chapter 45, Education Code, a credit union |
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that has been designated by the commissioner as an underserved-area |
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credit union may act as an agent or depository of and accept for |
|
deposit the money of a political subdivision of this state, |
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including a municipality, county, school district, or other taxing |
|
authority. |
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SECTION 16. Section 122.051, Finance Code, is amended by |
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amending Subsections (a) and (d) and adding Subsection (d-1) to |
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read as follows: |
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(a) A person may be a member of a credit union only if the |
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person is an incorporator or other person who: |
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(1) shares a definable community of interest, in |
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accordance with the credit union's articles of incorporation or |
|
bylaws, including a community of interest based on occupation, |
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association, or residence; |
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(2) has done one or both of the following: |
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(A) paid an entrance fee or membership fee, or |
|
both, as required by the bylaws; or |
|
(B) met [(3) has complied with] the minimum |
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share or deposit account[, including membership share,] |
|
requirements or complied with other qualifying [account] |
|
requirements that [established by] the board may establish; and |
|
(3) [(4)] has complied with any other requirement of |
|
the articles of incorporation and bylaws. |
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(d) [In this subsection, "good cause" includes the act of
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physically or verbally abusing a credit union member or employee.] |
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A person's membership in a credit union may be terminated, [or] |
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suspended, or restricted [for good cause or for not maintaining
|
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membership requirements,] under the conditions and in accordance |
|
with the procedures provided in the bylaws for having done any of |
|
the following: |
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(1) violated the membership agreement or any policy |
|
adopted by the board; |
|
(2) been physically or verbally abusive to credit |
|
union members or staff; |
|
(3) caused a financial loss to the credit union; |
|
(4) been involved in suspicious or unusual account |
|
activity; or |
|
(5) committed any other act or engaged in any activity |
|
proscribed by rules adopted by the commission. |
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(d-1) [A credit union may also discontinue providing any or
|
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all services to a member for good cause without terminating or
|
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suspending the person's membership.] Termination or suspension of |
|
a person's membership in the credit union or discontinuing services |
|
does not relieve the person from any outstanding obligations owed |
|
to the credit union. |
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SECTION 17. Section 122.053, Finance Code, is amended by |
|
amending Subsections (d), (e), and (f) and adding Subsections (g), |
|
(h), and (i) to read as follows: |
|
(d) The bylaws shall prescribe the directors' terms and the |
|
board's duties. A term may not exceed three years. If the terms are |
|
longer than one year, the terms shall be staggered so that an |
|
approximately equal number expire each year. A director may serve |
|
more than one term. |
|
(e) The board or its executive committee shall meet at least |
|
once each month. The board may permit the executive committee to |
|
act on its behalf in all except one meeting per calendar quarter. |
|
The board shall have no fewer than four regularly scheduled |
|
meetings each year. |
|
(f) To [If and to] the extent provided in the bylaws, a |
|
director may participate in and act at any meeting of the board by |
|
means of electronic communications equipment through which all |
|
persons participating in the meeting may simultaneously hear each |
|
other and [can] communicate during the meeting [with each other]. |
|
Participation in a meeting in the manner authorized by this |
|
subsection constitutes attendance at a meeting. However, each |
|
director must physically attend at least one meeting each calendar |
|
year. |
|
(g) A director of a credit union who is present at a meeting |
|
of its board of directors at which action on any matter is taken is |
|
presumed to have assented to the action taken unless the minutes of |
|
the meeting specifically indicate otherwise. |
|
(h) The directors, officers, and employees shall hold in |
|
confidence all matters presented to the board for deliberation and |
|
determination, except if disclosure of a matter is permitted by |
|
applicable law. |
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(i) The board shall adopt a code of ethics for all |
|
directors, officers, and honorary or advisory directors. The code |
|
of ethics must include standards that are reasonably necessary to |
|
promote: |
|
(1) honest and ethical conduct, including the ethical |
|
handling of actual and apparent conflicts of interest between |
|
personal and professional relationships; and |
|
(2) compliance with applicable laws. |
|
SECTION 18. Subchapter B, Chapter 122, Finance Code, is |
|
amended by adding Section 122.0531 to read as follows: |
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Sec. 122.0531. ACTION BY BOARD OF DIRECTORS WITHOUT |
|
MEETING. (a) Unless the articles of incorporation or bylaws |
|
provide otherwise, action required or permitted to be taken under |
|
this subtitle at a board meeting may be taken without a meeting if |
|
the action is consented to by all members of the board. The action |
|
must be evidenced by one or more written consents describing the |
|
action taken, signed by each director, and included in the minutes |
|
or filed with the corporate records reflecting the action taken. |
|
(b) Action taken under this section is effective when the |
|
last director signs the consent, unless the consent specifies a |
|
different effective date. |
|
(c) A written consent signed under this section has the |
|
effect of a meeting vote and may be described as such in any |
|
document. |
|
SECTION 19. Sections 122.056(a) and (c), Finance Code, are |
|
amended to read as follows: |
|
(a) The board may appoint [not more than three] individuals |
|
to serve at the board's pleasure as honorary or advisory directors |
|
to advise and consult with the board and otherwise aid the board in |
|
carrying out the board's duties and responsibilities. |
|
(c) An honorary or advisory director may participate in any |
|
board deliberation. An honorary or advisory director must hold in |
|
confidence all matters presented to the board. |
|
SECTION 20. Section 122.061, Finance Code, is amended by |
|
amending Subsection (a) and adding Subsection (c) to read as |
|
follows: |
|
(a) While serving as a director, honorary director, |
|
advisory director, committee member, officer, or employee of a |
|
credit union, a person may not: |
|
(1) participate, directly or indirectly, in the |
|
deliberation on or determination of a question affecting the |
|
person's pecuniary interest or the pecuniary interest of a member |
|
of the person's immediate family or of a partnership, association, |
|
or corporation, other than the credit union, in which the person is |
|
directly or indirectly interested; or |
|
(2) become employed by, engage in, or own an interest |
|
in a business or professional activity that the person could |
|
reasonably expect to: |
|
(A) require or induce the person to disclose |
|
confidential information acquired because of the person's office or |
|
employment in the credit union; or |
|
(B) impair the person's independence or judgment |
|
in the performance of the person's duties or responsibilities to |
|
the credit union. |
|
(c) In this section, "member of a person's immediate family" |
|
means a person's parents, spouse, children, or siblings. |
|
SECTION 21. Subchapter B, Chapter 122, Finance Code, is |
|
amended by adding Sections 122.065 and 122.066 to read as follows: |
|
Sec. 122.065. FIDUCIARY RELATIONSHIP. Directors and |
|
officers are considered to have a fiduciary relationship with the |
|
credit union, as an entity, and must discharge the duties of their |
|
respective positions: |
|
(1) in good faith; |
|
(2) with the care an ordinarily prudent person in a |
|
like position would exercise under similar circumstances; and |
|
(3) in a manner the director or officer believes to be |
|
in the best interests of the credit union. |
|
Sec. 122.066. RELIANCE BY DIRECTORS OR OFFICERS. (a) |
|
Unless the director or officer has knowledge that makes reliance |
|
unwarranted, a director or officer, in discharging the director's |
|
or officer's duties to the credit union, may rely on information, |
|
opinions, reports, or statements, including financial statements |
|
and other financial data, prepared or presented by: |
|
(1) an officer or employee of the credit union whom the |
|
director or officer believes in good faith to be reliable and |
|
competent in the matters presented; |
|
(2) legal counsel, a certified public accountant, or |
|
another person regarding a matter the director or officer believes |
|
in good faith is within the person's professional or expert |
|
competence; or |
|
(3) in the case of reliance by a director, a committee |
|
of the board of directors of which the director is not a member if |
|
the director believes in good faith that the committee merits |
|
confidence. |
|
(b) Information, opinions, reports, or statements on which |
|
a director or officer may rely under this section may be written or |
|
oral or formal or informal. |
|
SECTION 22. Subchapter D, Chapter 122, Finance Code, is |
|
amended by adding Section 122.1511 to read as follows: |
|
Sec. 122.1511. AUTHORITY TO PURCHASE ASSETS. (a) A credit |
|
union, with the prior written approval of the commissioner, may |
|
purchase all or substantially all of the assets of another entity. |
|
(b) Except as otherwise expressly provided by another |
|
statute, the purchase of all or part of the assets of the selling |
|
entity does not make the purchasing credit union responsible for |
|
any liability or obligation of the selling entity not expressly |
|
assumed by the purchasing credit union. |
|
SECTION 23. Subchapter E, Chapter 122, Finance Code, is |
|
amended by adding Sections 122.204 and 122.205 to read as follows: |
|
Sec. 122.204. CONVERSION OF STATE CREDIT UNION TO A MUTUAL |
|
SAVINGS INSTITUTION. A credit union organized under the laws of |
|
this state may convert to a mutual savings institution under the |
|
laws of this state or federal law by complying with: |
|
(1) the requirements of the jurisdiction under which |
|
the converting credit union is organized; and |
|
(2) any applicable commission rule. |
|
Sec. 122.205. CONVERSION OF MUTUAL SAVINGS INSTITUTION TO |
|
STATE CREDIT UNION. (a) A mutual savings institution may convert |
|
to a state credit union by complying with the laws of the original |
|
chartered authority and on the approval of the commissioner. |
|
(b) Application for approval of the conversion to a state |
|
credit union must be submitted to the department in the form |
|
prescribed by the commissioner. |
|
(c) The commissioner may cause an examination to be made of |
|
any converting mutual savings institution. The converting mutual |
|
savings institution shall pay all fees and charges prescribed by |
|
the commission. |
|
SECTION 24. Section 122.257(a), Finance Code, is amended to |
|
read as follows: |
|
(a) If the commissioner finds that a credit union or any |
|
director, officer, employee, agent, or other person participating |
|
in the conduct of the affairs of the credit union has engaged, is |
|
engaging, or is about to engage in an act, practice, or transaction |
|
meeting any of the criteria [makes a finding] listed in Section |
|
122.255, the commissioner may issue [and determines that] an order |
|
directing the credit union or any director, officer, employee, |
|
agent, or other person participating in the conduct of the affairs |
|
of the credit union to cease and desist from engaging [is necessary
|
|
and] in the act, practice, or transaction or from doing any act in |
|
furtherance [best interest] of the act, practice, or transaction |
|
[credit union involved and its depositors, creditors, and members,
|
|
the commissioner may serve on the credit union, its board, and each
|
|
offending person an order to cease and desist from a violation or
|
|
practice specified in the order] and to take appropriate |
|
affirmative action within a reasonable period, as prescribed by |
|
[that] the commissioner, [considers necessary] to correct the |
|
conditions [a condition] resulting from the act, [a violation or
|
|
unsafe or unsound] practice, or transaction [found]. |
|
SECTION 25. Section 123.003, Finance Code, is amended to |
|
read as follows: |
|
Sec. 123.003. ENLARGEMENT OF POWERS. (a) Notwithstanding |
|
any other law, and subject to Subsection (b), a [A] credit union |
|
may engage in any activity [in which it could engage], exercise any |
|
power [it could exercise], or make any loan or investment |
|
permissible for [it could make, if it were operating as] a [federal] |
|
credit union organized under federal law or the law of another |
|
state. |
|
(a-1) A credit union that intends to engage in an activity, |
|
exercise a power, or make a loan or investment authorized under |
|
Subsection (a) shall submit written notice to the commissioner |
|
describing the activity, power, loan, or investment and the |
|
specific federal or state authority on which the credit union is |
|
relying. The credit union may proceed as described in the notice on |
|
or after the 30th day following submission of the notice, unless the |
|
commissioner extends the period in accordance with this subsection, |
|
or prohibits the activity, power, loan, or investment. |
|
(a-2) The commissioner may prohibit the credit union from |
|
engaging in an activity, exercising a power, or making a loan or |
|
investment as described in the notice under Subsection (a-1) only |
|
if the commissioner finds that: |
|
(1) specific authority does not exist; or |
|
(2) the engagement, exercise, or making would |
|
adversely affect the safety and soundness of the credit union. |
|
(a-3) The commissioner may extend the 30-day period if the |
|
commissioner determines that the credit union's notice under |
|
Subsection (a-1) raises issues requiring additional information or |
|
additional time for analysis. If the 30-day period is extended, the |
|
credit union may not proceed without the commissioner's prior |
|
written approval. The commissioner must issue either an approval |
|
or prohibition letter not later than the 60th day after the date the |
|
notice is submitted. |
|
(b) The commission may adopt rules relating to the exercise |
|
of [Notwithstanding any other law, and in addition to the powers and
|
|
authorities conferred under Subsection (a), a credit union has the] |
|
powers or authorities granted under this section [of a foreign
|
|
credit union operating a branch in this state if the commissioner
|
|
finds that exercise of those powers or authorities is convenient
|
|
for and affords an advantage to the credit union's members and
|
|
maintains the fairness of competition and parity between the credit
|
|
union and any foreign credit union. A credit union does not have
|
|
the field of membership powers or authorities of a foreign credit
|
|
union operating a branch in this state]. |
|
SECTION 26. Section 123.104, Finance Code, is amended to |
|
read as follows: |
|
Sec. 123.104. MEMBERSHIP IN OTHER ORGANIZATION; OPERATION |
|
AS CORPORATE CENTRAL CREDIT UNION. A credit union may: |
|
(1) be a member of: |
|
(A) another credit union organized under this |
|
subtitle or other law; and |
|
(B) another organization approved by the board; |
|
or |
|
(2) operate, with the commissioner's approval, as a |
|
corporate central credit union. |
|
SECTION 27. Subchapter B, Chapter 123, Finance Code, is |
|
amended by adding Section 123.1041 to read as follows: |
|
Sec. 123.1041. CORPORATE CENTRAL CREDIT UNION. (a) Any |
|
number of credit unions may apply to organize a corporate central |
|
credit union to engage exclusively in corporate financial and |
|
operational activities that are part of or incidental to the credit |
|
union business. |
|
(b) Membership in the corporate central credit union |
|
consists of and is limited to: |
|
(1) credit unions incorporated under this subtitle, |
|
the Federal Credit Union Act (12 U.S.C. Section 1751 et seq.), or |
|
any other law applicable to credit unions; and |
|
(2) organizations owned by credit unions. |
|
(c) A corporate central credit union has the powers and |
|
privileges of any other credit union incorporated under this |
|
subtitle and, subject to rules adopted by the commission, may have |
|
the power to: |
|
(1) provide access for its members on a mutual basis to |
|
financial systems and the services and products of financial |
|
institutions; |
|
(2) provide its members with research and consulting |
|
services concerning financial matters, institutions, and products; |
|
(3) provide financial system support services and |
|
facilities; |
|
(4) establish and execute financial programs to assist |
|
its members in meeting the members' needs; |
|
(5) provide safekeeping or trustee services to or on |
|
behalf of its members; and |
|
(6) issue uninsured share investments or classes of |
|
share investments in amounts in excess of $100,000 with terms and |
|
conditions that may vary from other shares authorized by this |
|
subtitle as approved by the department. |
|
SECTION 28. Section 123.208(c), Finance Code, is amended to |
|
read as follows: |
|
(c) The commissioner may restrict or prohibit the payment of |
|
a dividend: |
|
(1) if the commissioner issues a cease and desist |
|
order under Section 122.257; or |
|
(2) as necessary to protect the member's interests and |
|
preserve the solvency of the credit union as authorized by |
|
commission rule. |
|
SECTION 29. Subchapter A, Chapter 124, Finance Code, is |
|
amended by adding Sections 124.006 and 124.007 to read as follows: |
|
Sec. 124.006. LIMITATION ON EQUITY AGREEMENTS AND |
|
PROFIT-SHARING ARRANGEMENTS. A credit union may not grant a loan if |
|
any additional income received by the credit union is tied to the |
|
profit or sale of the business or endeavor for which the loan is |
|
made. This prohibition does not apply to a loan made to an agency, |
|
association, or company that is described by Section 124.352(a). |
|
Sec. 124.007. ADVANCES PAID BY CREDIT UNION. (a) A credit |
|
union may pay taxes, assessments, insurance premiums, and similar |
|
charges for the protection of the credit union's interest in |
|
property that secures a loan of the credit union. |
|
(b) A payment under Subsection (a) is an advance, and the |
|
credit union may: |
|
(1) carry the payment on the credit union's books as an |
|
asset of the credit union for which the credit union may charge |
|
interest; or |
|
(2) add the payment to the unpaid balance of the loan |
|
to which it applies as of the first day of the month in which the |
|
payment is made. |
|
(c) With the exception of a loan secured by an encumbrance |
|
against the equity in a homestead property, a payment under |
|
Subsection (a) is a lien against the property that secures the loan |
|
for which it is made. For an extension of credit as defined and |
|
authorized by Section 50(a)(6), Article XVI, Texas Constitution, |
|
additional terms and conditions apply as provided by that section |
|
for the payment to become a lien against the property. |
|
SECTION 30. Section 124.051, Finance Code, is amended to |
|
read as follows: |
|
Sec. 124.051. OPEN-END CREDIT PLAN. (a) A credit union |
|
may enter into a written agreement with a member under which: |
|
(1) the member is allowed to borrow money from time to |
|
time; and |
|
(2) interest may from time to time be computed on the |
|
unpaid balance. |
|
(b) If, at any time, application of the contract interest |
|
rate to the outstanding unpaid balance results in a charge of less |
|
than $1, the lawful interest charge shall be $1. |
|
SECTION 31. Section 124.151, Finance Code, is amended to |
|
read as follows: |
|
Sec. 124.151. PREPAYMENT PRIVILEGE. (a) A loan may be |
|
prepaid in whole or in part, without penalty, during regular |
|
working hours on any day on which the credit union is open for |
|
business, except as provided by Subsection (b) or Section 124.152. |
|
(b) A prepayment penalty may be charged on a business loan. |
|
(c) In this section, "business loan" means a loan other than |
|
a loan made primarily for personal, family, or household purposes. |
|
SECTION 32. Section 124.351(a), Finance Code, is amended to |
|
read as follows: |
|
(a) A credit union may invest money not used in loans to |
|
members in: |
|
(1) capital shares, obligations, participation |
|
certificates, or common or preferred stock of an agency, |
|
association, or company, subject to Section 124.352(a); |
|
(2) loans to a national or state credit union |
|
association or corporation of which the credit union is a member; |
|
(3) obligations, bonds, notes, or other evidences of |
|
indebtedness of a state or political subdivision of a state; |
|
(4) certificates of deposit or other accounts issued |
|
by a state or national bank, savings and loan association, savings |
|
association, or mutual savings bank; |
|
(5) securities, obligations, participations, or other |
|
instruments of or issued by the United States, or in a trust |
|
established for investing directly or collectively in those |
|
investments; |
|
(6) loans to, shares of, or deposits in another credit |
|
union, a corporate central credit union, a corporate credit union, |
|
a central liquidity facility established under state or federal |
|
law, a trust, or an organization established for lending directly |
|
or collectively to credit unions; |
|
(7) securities, obligations, participations, or other |
|
instruments fully or partially guaranteed as to principal, |
|
interest, or both by the United States, or in a trust established |
|
for investing directly or collectively in those investments; |
|
(8) participation loans with another credit union, |
|
corporation, credit organization, or financial organization; |
|
(9) notes receivable, loans to members, or other |
|
assets of a credit union operating under this subtitle or the |
|
Federal Credit Union Act (12 U.S.C. Section 1751 et seq.); and |
|
(10) other investments authorized by rules adopted by |
|
the commission that satisfy Subsection (b). |
|
SECTION 33. Subchapter H, Chapter 124, Finance Code, is |
|
amended by adding Section 124.353 to read as follows: |
|
Sec. 124.353. PASSIVE INVESTMENT IN MINERAL INTERESTS. (a) |
|
A credit union may hold a nonworking mineral or royalty interest if: |
|
(1) the credit union acquires the interest incidental |
|
to a lawful investment or to avoid or minimize a loss on a loan or |
|
investment previously made in good faith; |
|
(2) the interest is not subject to expenses of |
|
exploration, development, production, operation, maintenance, or |
|
abandonment, or any other expense associated with extracting and |
|
marketing the minerals subject to the rights or interest; |
|
(3) the interest is reasonably valued on the books of |
|
the credit union for not more than a nominal amount, and the |
|
aggregate amount of earnings from those interests is separately |
|
disclosed in the financial statements of the credit union; |
|
(4) the credit union does not make any new investments |
|
relating to the rights or interests without the approval of the |
|
commissioner; and |
|
(5) the commissioner determines that the possession of |
|
the rights or interests is not inconsistent with the safety and |
|
soundness of the credit union. |
|
(b) The commissioner may order a credit union that holds a |
|
nonworking mineral or royalty interest to divest the interest at |
|
any time if the commissioner determines that continued ownership of |
|
the interest is detrimental to the credit union. |
|
(c) Subject to compliance with this section, nonworking |
|
mineral or royalty interests are not considered to be real property |
|
for purposes of this subtitle. |
|
SECTION 34. Section 125.402, Finance Code, is amended to |
|
read as follows: |
|
Sec. 125.402. DISCLOSURE OF RECORDS OF MEMBER; |
|
CONFIDENTIALITY. (a) The directors, officers, committee members, |
|
and employees and any honorary or advisory directors of a credit |
|
union shall hold in confidence all information regarding |
|
transactions of the credit union, including information concerning |
|
transactions with the credit union's members and the members' |
|
personal affairs, except to the extent necessary in connection with |
|
making, extending, or collecting a loan or extension of credit, or |
|
as otherwise authorized by commission rules adopted under |
|
Subsection (d) or other applicable law. |
|
(b) A credit union is not required to disclose or produce to |
|
a third party or permit a third party to examine a record pertaining |
|
to the affairs of a credit union member unless: |
|
(1) the request is made in connection with an |
|
examination or audit by a government agency authorized by law to |
|
examine credit unions; |
|
(2) the member consents to the disclosure or |
|
production of the record; or |
|
(3) the request is made by the department or is made in |
|
response to: |
|
(A) a subpoena or other court order; or |
|
(B) an administrative subpoena or summons issued |
|
by a state or federal agency as authorized by law. |
|
(c) [(b)] The commission may authorize the disclosure of |
|
information relating to a credit union member under circumstances |
|
and conditions that the commission determines are appropriate or |
|
required in the daily operation of the credit union's business. |
|
(d) [(c)] The commission may adopt reasonable rules |
|
relating to the: |
|
(1) permissible disclosure of nonpublic personal |
|
information about [confidentiality of] the accounts of credit union |
|
members; and |
|
(2) duties of the credit union to maintain [that] |
|
confidentiality. |
|
SECTION 35. Section 126.002(c), Finance Code, is amended to |
|
read as follows: |
|
(c) The commissioner may disclose the information described |
|
by Subsection (a) to a law enforcement agency, a share insuring |
|
organization, or another department, agency, or instrumentality of |
|
this state, another state, or the United States if the commissioner |
|
determines that disclosure is necessary or proper to enforce the |
|
laws of this state applicable to credit unions. |
|
SECTION 36. Section 126.051(a), Finance Code, is amended to |
|
read as follows: |
|
(a) The department, through examiners it appoints and in |
|
accordance with commission rules, shall [periodically] examine the |
|
condition and affairs [books and records] of each credit union, and |
|
may examine the condition and affairs of any subsidiary wholly |
|
owned or controlled by a credit union, at least once during each |
|
24-month period. The department may examine a credit union or its |
|
subsidiaries more frequently if the commissioner considers it |
|
necessary or advisable to safeguard the interest of depositors, |
|
creditors, and members or to efficiently enforce applicable law. |
|
SECTION 37. This Act takes effect September 1, 2009. |