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A BILL TO BE ENTITLED
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AN ACT
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relating to the administration, operation, supervision, and |
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regulation of credit unions. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 15.403, Finance Code, is amended to read |
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as follows: |
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Sec. 15.403. SUPERVISION AND REGULATION OF CREDIT UNIONS. |
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(a) The commissioner shall supervise and regulate a credit union |
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doing business in this state, other than a federal credit union, in |
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accordance with this chapter and Subtitle D, Title 3, including |
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rules adopted under this chapter and Subtitle D, Title 3. |
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(b) To the extent necessary to the department's authority to |
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supervise and regulate credit unions under this chapter and |
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Subtitle D, Title 3, the commissioner may require each credit union |
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to conduct business in compliance with federal laws that apply to |
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credit unions. |
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SECTION 2. Section 15.409(d), Finance Code, is amended to |
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read as follows: |
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(d) The department shall periodically notify the person |
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filing the complaint and each person who is the subject of the |
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complaint [parties] of the status of the complaint until final |
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disposition. |
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SECTION 3. 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. To ensure effective |
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coordination among and between the department and other state and |
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federal agencies, the commissioner and those agencies may enter |
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into cooperative, coordinating, or information-sharing agreements |
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that are necessary or proper to enforce the state or federal laws |
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applicable to credit unions. |
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SECTION 4. Section 122.008(c), Finance Code, is amended to |
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read as follows: |
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(c) Acceptance of a certificate of incorporation by the |
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credit union is conclusive evidence that the credit union is |
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authorized to do business under this subtitle. |
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SECTION 5. Section 122.012, Finance Code, is amended by |
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amending Subsection (b) and adding Subsection (d) to read as |
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follows: |
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(b) A credit union shall provide [After notifying] the |
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commissioner with written notice not later than the 30th day before |
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the date that the credit union establishes [in writing, a credit
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union may establish and maintain, at locations other than its
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principal place of business,] additional offices or service |
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facilities. A new office or service facility must be [that are] |
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reasonably necessary to provide services to the credit union's |
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members. The credit union shall additionally notify the |
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commissioner in writing not later than the 10th business day after |
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[of] the date that the new office or service facility begins |
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operating. For purposes of this subsection, an unmanned teller |
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machine is not considered a service facility. |
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(d) In accordance with rules adopted by the commission and |
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after notifying the commissioner in writing, a credit union may |
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close any office or service facility, provided that the credit |
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union designates and maintains an office as its principal place of |
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business in this state. |
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SECTION 6. 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 |
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union organized under this subtitle to do business in that state or |
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country. |
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(c) The commissioner may suspend or revoke a foreign credit |
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union's authority to do business in this state if the commissioner |
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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 |
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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] |
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requirement imposed by commission rules. |
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SECTION 7. 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 |
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request by that state's credit union regulatory agency, the |
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commissioner may authorize one or more credit unions located in |
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that state to open temporary offices in this state to more promptly |
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restore credit union services to their members. The commissioner |
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shall issue an order permitting the temporary office and specifying |
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the period 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 authorized under this |
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section to a permanent location and operate as a foreign credit |
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union if it qualifies to do business in this state as a foreign |
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credit union under Section 122.013 and commission rules. |
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SECTION 8. Section 122.053(f), Finance Code, is amended to |
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read as follows: |
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(f) A director may not vote by proxy. A [If and to the extent
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provided in the bylaws, a] director may participate in and act at |
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any meeting of the board by means of electronic communications |
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equipment through which all persons participating in the meeting |
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can communicate with each other. Participation in a meeting in the |
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manner authorized by this subsection constitutes attendance at a |
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meeting. |
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SECTION 9. Sections 122.056(a) and (c), Finance Code, are |
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amended to read as follows: |
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(a) The board may appoint not more than six [three] |
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individuals to serve at the board's pleasure as honorary or |
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advisory directors to advise and consult with the board and |
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otherwise aid the board in carrying out the board's duties and |
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responsibilities. |
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(c) An honorary or advisory director may participate in any |
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board deliberation. Except as otherwise provided by Section |
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125.402(d), an honorary or advisory director shall hold in |
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confidence all information the director receives about a credit |
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union during the director's service. |
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SECTION 10. Section 122.060(a), Finance Code, is amended to |
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read as follows: |
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(a) A credit union shall submit to the commissioner, in a |
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form approved by the department, [The board chairman and the
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secretary:
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[(1) shall execute] a certificate of election that |
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provides [states] the name and address of each officer, director, |
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and committee member elected or appointed. The certificate must be |
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filed within the time prescribed by the commissioner[; and
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[(2)
not later than the 30th day after the date of the
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annual organizational meeting of election or appointment of any
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interim officer, director, or committee member, shall file a copy
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of the certificate of election with the department]. |
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SECTION 11. Section 122.061, Finance Code, is amended by |
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amending Subsection (a) and adding Subsection (c) to read as |
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follows: |
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(a) While serving as a director, honorary director, |
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advisory director, committee member, officer, or employee of a |
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credit union, a person may not: |
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(1) participate, directly or indirectly, in the |
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deliberation on or determination of a question affecting the |
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person's pecuniary interest or the pecuniary interest of a member |
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of the person's immediate family or of a partnership, association, |
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or corporation, other than the credit union, in which the person is |
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directly or indirectly interested; or |
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(2) become employed by, engage in, or own an interest |
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in a business or professional activity that the person could |
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reasonably expect to: |
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(A) require or induce the person to disclose |
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confidential information acquired because of the person's office or |
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employment in the credit union; or |
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(B) impair the person's independence or judgment |
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in the performance of the person's duties or responsibilities to |
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the credit union. |
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(c) In this section, "member of a person's immediate family" |
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means a person's spouse or another person living in the person's |
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household. |
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SECTION 12. Section 122.064, Finance Code, is amended to |
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read as follows: |
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Sec. 122.064. INDEMNIFICATION. A credit union may elect to |
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indemnify a director, officer, employee, or agent of the credit |
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union [or another person] and to purchase insurance as if the credit |
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union were an "enterprise" as defined by Section 8.001, Business |
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Organizations Code, under and subject to the credit union's bylaws |
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and written policy. A credit union may not provide any |
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indemnification or insurance that would not be permissible under |
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Chapter 8, Business Organizations Code, but may elect to impose the |
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credit union's own limitations on indemnification[:
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[(1)
by adopting the indemnification and insurance
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procedures of Section 2.22A, Texas Non-Profit Corporation Act
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(Article 1396-2.22A, Vernon's Texas Civil Statutes); or
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[(2) in another manner determined by the board]. |
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SECTION 13. Sections 122.101(a) and (b), Finance Code, are |
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amended to read as follows: |
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(a) A credit union shall prepare [submit to the department
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on] a quarterly [basis a] call report, in a manner approved [on a
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form supplied] by the department, that states the credit union's |
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financial condition. The commissioner may require a credit union to |
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file additional financial reports. |
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(b) The credit union must submit the call report on or |
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before the due date prescribed [stated on the form supplied] by the |
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department. If a credit union does not submit a report by the due |
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date, the commissioner shall charge a late fee in an amount set by |
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the commission for each day the report remains unfiled. The |
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commissioner for good cause shown may waive all or part of the late |
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fee. |
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SECTION 14. Section 122.201, Finance Code, is amended to |
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read as follows: |
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Sec. 122.201. CONVERSION OF STATE CREDIT UNION TO FEDERAL |
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CREDIT UNION. (a) A credit union organized under the laws of this |
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state may convert to a credit union under the laws of the United |
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States: |
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(1) on an affirmative vote by a majority of the members |
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voting at a meeting called for that purpose; and |
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(2) by complying with any rule adopted by the |
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commission to facilitate the conversion. |
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(b) On the issuance of a charter by the National Credit |
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Union Administration, the credit union: |
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(1) ceases to be a credit union incorporated under |
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this subtitle; and |
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(2) is no longer subject to the supervision and |
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regulation of the commissioner and department. |
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(c) The converted credit union shall file with the |
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commissioner a copy of the charter issued to the credit union by the |
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National Credit Union Administration. Failure to file the required |
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copy of the charter does not affect the validity of the conversion. |
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SECTION 15. Section 123.106, Finance Code, is amended to |
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read as follows: |
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Sec. 123.106. CHANGE OF LOCATION. (a) A credit union |
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changing the location of [may change] its principal place of |
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business or any additional office or service facility shall notify |
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[a subsidiary place of business to another location by notifying] |
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the commissioner in writing of the new location [address] and the |
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scheduled or effective date of the change. |
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(b) The credit union must submit notice to the commissioner |
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not later than the 30th day before the scheduled or effective date |
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of the change. The commissioner may waive or reduce the timing of |
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the notice requirement under this subsection. |
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SECTION 16. Section 124.002, Finance Code, is amended to |
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read as follows: |
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Sec. 124.002. LIMITATIONS ON INTEREST RATES. The interest |
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rate on a loan to a member may not exceed: |
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(1) 1-1/2 percent per month on the unpaid balance; |
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[or] |
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(2) 28 percent a year to the extent that federal credit |
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unions are permitted to charge that rate; or |
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(3) a higher rate authorized by law, including a rate |
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authorized by Chapter 303. |
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SECTION 17. Section 125.402, Finance Code, is amended by |
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amending Subsection (c) and adding Subsection (d) to read as |
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follows: |
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(c) The commission may adopt reasonable rules relating to |
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the: |
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(1) permissible disclosure of nonpublic personal |
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information about [confidentiality of] the accounts of credit union |
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members; and |
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(2) duties of the credit union to maintain [that] |
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confidentiality of member accounts. |
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(d) The directors, officers, committee members, and |
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employees and any honorary or advisory directors of a credit union |
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shall hold in confidence all information regarding transactions of |
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the credit union, including information concerning transactions |
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with the credit union's members and the members' personal affairs, |
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except to the extent necessary in connection with making, |
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extending, or collecting a loan or extension of credit, or as |
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otherwise authorized by this section, commission rules adopted |
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under Subsection (c), or other applicable law. |
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SECTION 18. Sections 126.002(c) and (e), Finance Code, are |
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amended to read as follows: |
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(c) The commissioner may disclose the information described |
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by Subsection (a) to a law enforcement agency, a share insuring |
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organization, or another department, agency, or instrumentality of |
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this state, another state, or the United States if the commissioner |
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determines that disclosure is necessary or proper to enforce the |
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laws of this state applicable to credit unions. |
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(e) Confidential information that is provided by the |
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department to a credit union, organization, or service provider of |
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a credit union, whether in the form of a report of examination or |
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otherwise, is the confidential property of the department. The |
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recipient or an officer, director, employee, or agent of the |
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recipient may not make the information public and may not disclose |
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the information to a person not officially connected to the |
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recipient as an officer, director, employee, attorney, auditor, or |
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independent auditor, except as authorized by rules adopted under |
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this subtitle. A credit union may disclose a report of examination |
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or relevant portions of the report to another credit union |
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proposing to merge or consolidate with the credit union or to a |
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fidelity bond carrier if the recipient executes a written agreement |
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not to disclose information in the report. |
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SECTION 19. Section 126.101, Finance Code, is amended by |
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adding Subsection (c) to read as follows: |
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(c) The board may: |
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(1) agree in writing to a conservatorship order; and |
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(2) waive its right to appeal the order under Section |
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126.105. |
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SECTION 20. Sections 126.102(b) and (c), Finance Code, are |
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amended to read as follows: |
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(b) Service may be by mail if an officer or director is not |
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available for service on the date personal service of the order is |
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attempted [of issuance]. |
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(c) Service by [certified or registered] mail[:
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[(1)] must be by certified or registered mail, must be |
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addressed to the credit union at the address shown for its principal |
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office by department records and to the home address of the chairman |
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of the board,[;] and |
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[(2)] is complete on deposit of the order in a |
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postpaid, properly addressed wrapper, in a post office or official |
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depository under the care and custody of the United States Postal |
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Service. |
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SECTION 21. Sections 126.105(a) and (b), Finance Code, are |
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amended to read as follows: |
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(a) Unless the board waives its right to appeal under |
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Section 126.101(c), the [The] board may file a written appeal of the |
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conservatorship order with the commissioner not later than the 10th |
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business day after the date the order is served as provided by |
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Section 126.102. The appeal must include a certified copy of the |
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board resolution and must state whether the board requests a |
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hearing. |
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(b) If the board requests [files an appeal to request] a |
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hearing [before the commission], the commissioner shall promptly |
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request from the State Office of Administrative Hearings a hearing |
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date that is not earlier than the 11th day nor later than the 30th |
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day after the date on which the commissioner receives the appeal [is
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received]. |
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SECTION 22. Section 126.106, Finance Code, is amended to |
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read as follows: |
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Sec. 126.106. FAILURE TO APPEAL [FILE REPLY] OR APPEAR |
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[REQUEST HEARING]. [(a)] If the board does not appeal [file a
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reply to] the conservatorship order or fails to [as required by
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Section 126.104 or fails to request and] appear at the hearing |
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provided for by Section 126.105, the credit union is presumed to |
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have consented to the commissioner's disposition action, and the |
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commissioner may dispose of the conservatorship matter as the |
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commissioner considers appropriate. |
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[(b)
The credit union is presumed to have consented to the
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commissioner's disposition action and may not contest it.] |
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SECTION 23. Section 126.201, Finance Code, is amended to |
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read as follows: |
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Sec. 126.201. LIQUIDATION ORDER; APPOINTMENT OF |
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LIQUIDATING AGENT. (a) After the commissioner has issued a |
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conservatorship order and provided an opportunity for hearing, the |
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commissioner by liquidation order may appoint a liquidating agent |
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and direct that the credit union be liquidated if: |
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(1) the board requests issuance of a liquidation order |
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and liquidation of the credit union; |
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(2) the credit union otherwise consents to the |
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liquidation; or |
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(3) the commissioner: |
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(A) finds that the closing of the credit union |
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and the liquidation of the credit union's assets are in the public |
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interest and the best interest of the credit union's members, |
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depositors, and creditors; and |
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(B) determines that the credit union is not in a |
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condition to continue business and cannot be rehabilitated as |
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provided by this chapter. |
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(b) If the board consents to the liquidation order and |
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waives the necessity of a conservatorship order, the commissioner |
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may issue a liquidation order without first issuing a |
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conservatorship order. |
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SECTION 24. Section 126.455, Finance Code, is amended to |
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read as follows: |
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Sec. 126.455. VOTE ON VOLUNTARY LIQUIDATION. At a special |
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meeting called to consider the proposed liquidation, a majority of |
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the credit union members voting, but not less than a quorum, may |
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vote to dissolve and liquidate the credit union. Those members |
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casting votes by mail or at the meeting constitute a quorum for the |
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transaction of business at the special meeting, notwithstanding a |
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bylaw provision to the contrary. |
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SECTION 25. Section 126.104, Finance Code, is repealed. |
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SECTION 26. This Act takes effect September 1, 2013. |