BILL ANALYSIS

H.B. 560

By: Davis, John

Investments & Financial Services

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Currently in Texas, a credit union may appoint three nonvoting honorary or advisory directors to assist the credit union's board of directors in fulfilling their duties. Interested parties assert that honorary and advisory directors, in addition to providing unique or specialized expertise, give a credit union the opportunity to develop new directors with experience in credit union issues, provide the credit union access to experienced directors who may no longer be able to serve as active members of the board of directors, and give the board of the credit union access to engaged advisors who are familiar with the credit union's specific issues.

H.B. 560 seeks to enable credit unions to realize greater benefit from honorary or advisory directors by increasing the number of such directors that a credit union may appoint.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 560 amends the Finance Code to increase from three to six the maximum number of individuals the board of directors of a credit union may appoint 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.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2013.