Texas 2009 - 81st Regular

Texas Senate Bill SB1647 Compare Versions

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1	1	By: Averitt S.B. No. 1647
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the administration, operation, and regulation of credit
7	7	unions.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 15.303, Finance Code, is amended to read
10	10	as follows:
11	11	Sec. 15.303. DEPUTY COMMISSIONER. (a) The [Subject to the
12	12	commission's approval, the] commissioner may appoint a deputy
13	13	commissioner[, who must have the qualifications required of the
14	14	commissioner].
15	15	[(b)] The deputy commissioner serves at the will of the
16	16	commissioner and, at the commissioner's direction, may exercise the
17	17	powers and prerogatives of the commissioner.
18	18	(b) [(c)] The deputy commissioner is an employee of the
19	19	department [commission] and is subject to the commissioner's
20	20	[commission's] orders and directions.
21	21	(c) [(d)] During the commissioner's absence or inability to
22	22	act, the deputy commissioner shall perform the commissioner's
23	23	duties.
24	24	(d) The commissioner may appoint assistant deputy
25	25	commissioners, whose powers shall be limited to the powers, duties,
26	26	or functions set forth in the appointment.
27	27	SECTION 2. Section 15.305, Finance Code, is amended to read
28	28	as follows:
29	29	Sec. 15.305. GENERAL COUNSEL. A person who is required to
30	30	register as a lobbyist under Chapter 305, Government Code, because
31	31	of the person's activities for compensation on behalf of a
32	32	profession related to the operation of the commission, may not
33	33	serve as general counsel to the commission or the department.
34	34	SECTION 3. Section 15.308, Finance Code, is amended to read
35	35	as follows:
36	36	Sec. 15.308. COMPENSATION OF EMPLOYEES. (a) The
37	37	commission shall set the compensation of the commissioner [and
38	38	deputy commissioner]. The compensation shall be paid according to
39	39	the General Appropriations Act.
40	40	(b) Except for the commissioner [and deputy commissioner],
41	41	Chapter 654, Government Code, applies to any department position.
42	42	SECTION 4. Subsection (c), Section 15.402, Finance Code, is
43	43	amended to read as follows:
44	44	(c) The commission by rule shall establish reasonable and
45	45	necessary fees to recover the costs of maintaining and operating
46	46	the department and enforcing [for the administration of] this
47	47	chapter and Subtitle D, Title 3.
48	48	SECTION 5. Section 15.408, Finance Code, is amended to read
49	49	as follows:
50	50	Sec. 15.408. COLLECTION OF MONEY. The commissioner shall
51	51	collect all fees, charges, and revenues required to be paid by a
52	52	credit union under Section 15.402(c). All money paid to the
53	53	department under this chapter and Subtitle D, Title 3, is subject to
54	54	Subchapter F, Chapter 404, Government Code. A credit union is not
55	55	entitled to a refund of any unused portion of the fee, charge, or
56	56	revenue.
57	57	SECTION 6. Subsection (a), Section 15.410, Finance Code, is
58	58	amended to read as follows:
59	59	(a) The commission shall adopt, and the commissioner shall
60	60	enforce, reasonable rules requiring a credit union, except a
61	61	corporate central credit union, to provide share and deposit
62	62	insurance protection for credit union members and depositors.
63	63	SECTION 7. Subchapter E, Chapter 15, Finance Code, is
64	64	amended by adding Section 15.4111 to read as follows:
65	65	Sec. 15.4111. REGULATORY COORDINATION. (a) To ensure
66	66	effective coordination among and between the department and other
67	67	state and federal agencies, the commissioner may enter into
68	68	cooperative, coordinating, or information-sharing agreements with
69	69	those agencies.
70	70	(b) To further the rapid restoration of credit union
71	71	services after an emergency, the commissioner may enter into
72	72	cooperative, coordinating, or information-sharing agreements with
73	73	credit unions or credit union trade associations or other
74	74	organizations affiliated with or representing one or more credit
75	75	unions.
76	76	(c) Disclosure of information by or to the department under
77	77	this section does not constitute a waiver of or otherwise affect or
78	78	diminish any legal privilege to which the information is otherwise
79	79	subject, even if the disclosure is not governed by a
80	80	confidentiality agreement. Notwithstanding other applicable law,
81	81	a party to an agreement described by this section shall execute,
82	82	honor, and comply with requirements to maintain confidentiality and
83	83	oppose disclosure of information obtained from the department, and
84	84	shall treat as confidential any information obtained from the
85	85	department that is entitled to confidential treatment under
86	86	applicable state or federal law.
87	87	SECTION 8. Section 121.002, Finance Code, is amended by
88	88	amending Subdivision (2) and adding Subdivision (10-a) to read as
89	89	follows:
90	90	(2) "Credit union," unless the context relates to a
91	91	federal credit union, means a voluntary, cooperative, nonprofit
92	92	financial institution authorized to do business in this state under
93	93	this subtitle for purposes of:
94	94	(A) encouraging thrift among its members;
95	95	(B) creating a source of credit at fair and
96	96	reasonable interest rates;
97	97	(C) developing and providing to its members
98	98	alternative methods of financing their purchases at reasonable
99	99	costs;
100	100	(D) providing an opportunity for its members to
101	101	use, protect, or [and] control their money or property to improve or
102	102	maintain their economic or [and] social condition; and
103	103	(E) conducting any other business, engaging in
104	104	any other activity, or providing any other service that may benefit
105	105	its members.
106	106	(10-a) "Share-insuring organization" means a
107	107	cooperative share insurance fund, guaranty corporation, or credit
108	108	union that provides aid and financial assistance to credit unions
109	109	that are in the process of liquidation or are incurring financial
110	110	difficulty to protect or guarantee against loss the share and
111	111	deposit accounts in the credit union up to a specified level for
112	112	each account.
113	113	SECTION 9. Chapter 121, Finance Code, is amended by adding
114	114	Section 121.007 to read as follows:
115	115	Sec. 121.007. COST OF SUPERVISION AND REGULATION.
116	116	(a) Each credit union shall promptly pay the fees, charges, and
117	117	revenues established by the commission under Section 15.402 to
118	118	recover:
119	119	(1) the cost of examination;
120	120	(2) the credit union's equitable or proportionate
121	121	share of the costs of maintenance and operation of the department;
122	122	and
123	123	(3) the costs of enforcement of this subtitle and
124	124	Chapter 15.
125	125	(b) The commission shall adjust those fees, charges, and
126	126	revenues so that the amount collected during the fiscal year equals
127	127	the total amount appropriated, including amounts appropriated for
128	128	both direct and indirect costs for that fiscal year.
129	129	SECTION 10. Subchapter A, Chapter 122, Finance Code, is
130	130	amended by adding Section 122.0011 to read as follows:
131	131	Sec. 122.0011. EXPENSE FUND. (a) Before a credit union
132	132	organized under this subtitle may be authorized to do business, the
133	133	credit union shall create a fund from which operating expenses may
134	134	be paid until earnings, together with net worth allocations and
135	135	dividends that may be declared and credited, are sufficient to
136	136	cover operating expenses.
137	137	(b) Except as provided by this section, the amounts
138	138	contributed to the expense fund are not a liability of the credit
139	139	union.
140	140	(c) The credit union may pay dividends to contributors to
141	141	the expense fund on amounts contributed to the same extent the
142	142	credit union pays dividends to a member. Any amount contributed to
143	143	the expense fund is considered a deposit of the credit union, which
144	144	the credit union's board may reduce pro rata as operating expenses
145	145	are paid from the fund.
146	146	(d) With the prior written consent of the commissioner,
147	147	contributions to the expense fund may be repaid to the
148	148	contributors, in accordance with this subsection, from the net
149	149	earnings of the credit union after the credit union has attained a
150	150	net worth ratio greater than six percent. At the close of each
151	151	dividend period, the board may pay or credit the accounts of the
152	152	contributors an amount that is not more than one percent of the net
153	153	earnings of the credit union during that period until the
154	154	contributors have been repaid in full.
155	155	(e) If the credit union is liquidated before the
156	156	contributions to the expense fund have been fully repaid, any
157	157	portion of the contributions not needed for the payment of the
158	158	expenses of liquidation and for the payment of depositors in full
159	159	shall be paid to the contributors in proportion to their
160	160	contributions until they have been repaid in full.
161	161	(f) The commission may adopt reasonable rules necessary to
162	162	administer this section and to accomplish the purposes of this
163	163	subchapter.
164	164	SECTION 11. Subsection (b), Section 122.007, Finance Code,
165	165	is amended to read as follows:
166	166	(b) The commissioner's order may be appealed to the
167	167	commission not later than the 30th [60th] day after the date of the
168	168	order.
169	169	SECTION 12. Subsections (a) and (c), Section 122.013,
170	170	Finance Code, are amended to read as follows:
171	171	(a) A foreign credit union may do business in this state if
172	172	it is organized in a state or country that allows any [a] credit
173	173	union organized under this subtitle to do business in that state or
174	174	country.
175	175	(c) The commissioner may suspend or revoke a foreign credit
176	176	union's authority to do business in this state if the commissioner
177	177	finds that the foreign credit union:
178	178	(1) has failed to conduct its business in this state in
179	179	a manner consistent with the laws of this state [violated a rule
180	180	adopted under this subtitle];
181	181	(2) is in an unsafe or unsound condition;
182	182	(3) refuses to comply with an order of the
183	183	commissioner [is engaged in a pattern of unsafe or unsound
184	184	practices]; [or]
185	185	(4) refuses to comply with a request by the
186	186	commissioner to review the books and records of the credit union; or
187	187	(5) has not met or does not meet a [commission]
188	188	requirement imposed by commission rules.
189	189	SECTION 13. Subchapter A, Chapter 122, Finance Code, is
190	190	amended by adding Section 122.0131 to read as follows:
191	191	Sec. 122.0131. TEMPORARY FOREIGN CREDIT UNION OFFICE. If a
192	192	state contiguous to this state experiences an emergency, on a
193	193	request by that state's credit union regulatory agency, the
194	194	commissioner may authorize one or more credit unions located in
195	195	that state to open temporary offices in this state to more promptly
196	196	restore credit union services to their members. The commissioner
197	197	shall issue an order permitting the temporary office and specifying
198	198	the period of time the office may remain open. On a finding that the
199	199	conditions requiring the temporary office continue to exist, the
200	200	commissioner may extend the period the office may remain open. A
201	201	credit union may convert a temporary office to a permanent location
202	202	if it qualifies to do business in this state as a foreign credit
203	203	union under Section 122.013 and commission rules.
204	204	SECTION 14. Section 122.051, Finance Code, is amended by
205	205	amending Subsections (a) and (d) and adding Subsection (d-1) to
206	206	read as follows:
207	207	(a) A person may be a member of a credit union only if the
208	208	person is an incorporator or other person who:
209	209	(1) shares a definable community of interest, in
210	210	accordance with the credit union's articles of incorporation or
211	211	bylaws, including a community of interest based on occupation,
212	212	association, or residence;
213	213	(2) has done one or both of the following:
214	214	(A) paid an entrance fee or membership fee, or
215	215	both, as required by the bylaws; or
216	216	(B) met [(3) has complied with] the minimum
217	217	share or deposit account[, including membership share,]
218	218	requirements or complied with other qualifying [account]
219	219	requirements that [established by] the board may establish; and
220	220	(3) [(4)] has complied with any other requirement of
221	221	the articles of incorporation and bylaws.
222	222	(d) [In this subsection, "good cause" includes the act of
223	223	physically or verbally abusing a credit union member or employee.]
224	224	A person's membership in a credit union may be terminated, [or]
225	225	suspended, or restricted [for good cause or for not maintaining
226	226	membership requirements,] under the conditions and in accordance
227	227	with the procedures provided in the bylaws for having done any of
228	228	the following:
229	229	(1) violated the membership agreement or any policy
230	230	adopted by the board;
231	231	(2) been physically or verbally abusive to credit
232	232	union members or staff;
233	233	(3) caused a financial loss to the credit union;
234	234	(4) been involved in suspicious or unusual account
235	235	activity; or
236	236	(5) committed any other act or engaged in any activity
237	237	proscribed by rules adopted by the commission.
238	238	(d-1) [A credit union may also discontinue providing any or
239	239	all services to a member for good cause without terminating or
240	240	suspending the person's membership.] Termination or suspension of
241	241	a person's membership in the credit union or discontinuing services
242	242	does not relieve the person from any outstanding obligations owed
243	243	to the credit union.
244	244	SECTION 15. Section 122.053, Finance Code, is amended by
245	245	amending Subsections (d), (e), and (f) and adding Subsections (g),
246	246	(h), and (i) to read as follows:
247	247	(d) The bylaws shall prescribe the directors' terms and the
248	248	board's duties. A term may not exceed three years. If the terms are
249	249	longer than one year, the terms shall be staggered so that an
250	250	approximately equal number expire each year. A director may serve
251	251	more than one term.
252	252	(e) The board or its executive committee shall meet at least
253	253	once each month. The board may permit the executive committee to
254	254	act on its behalf in all except one meeting per calendar quarter.
255	255	The board shall have no fewer than four regularly scheduled
256	256	meetings each year.
257	257	(f) To [If and to] the extent provided in the bylaws, a
258	258	director may participate in and act at any meeting of the board by
259	259	means of electronic communications equipment through which all
260	260	persons participating in the meeting may simultaneously hear each
261	261	other and [can] communicate during the meeting [with each other].
262	262	Participation in a meeting in the manner authorized by this
263	263	subsection constitutes attendance at a meeting. However, each
264	264	director must physically attend at least one meeting each calendar
265	265	year.
266	266	(g) A director of a credit union who is present at a meeting
267	267	of its board of directors at which action on any matter is taken is
268	268	presumed to have assented to the action taken unless the minutes of
269	269	the meeting specifically indicate otherwise.
270	270	(h) The directors, officers, and employees shall hold in
271	271	confidence all matters presented to the board for deliberation and
272	272	determination, except if disclosure of a matter is permitted by
273	273	applicable law.
274	274	(i) The board shall adopt a code of ethics for all
275	275	directors, officers, and honorary or advisory directors. The code
276	276	of ethics must include standards that are reasonably necessary to
277	277	promote:
278	278	(1) honest and ethical conduct, including the ethical
279	279	handling of actual and apparent conflicts of interest between
280	280	personal and professional relationships; and
281	281	(2) compliance with applicable laws.
282	282	SECTION 16. Subchapter B, Chapter 122, Finance Code, is
283	283	amended by adding Section 122.0531 to read as follows:
284	284	Sec. 122.0531. ACTION BY BOARD OF DIRECTORS WITHOUT
285	285	MEETING. (a) Unless the articles of incorporation or bylaws
286	286	provide otherwise, action required or permitted to be taken under
287	287	this subtitle at a board meeting may be taken without a meeting if
288	288	the action is consented to by all members of the board. The action
289	289	must be evidenced by one or more written consents describing the
290	290	action taken, signed by each director, and included in the minutes
291	291	or filed with the corporate records reflecting the action taken.
292	292	(b) Action taken under this section is effective when the
293	293	last director signs the consent, unless the consent specifies a
294	294	different effective date.
295	295	(c) A written consent signed under this section has the
296	296	effect of a meeting vote and may be described as such in any
297	297	document.
298	298	SECTION 17. Subsections (a) and (c), Section 122.056,
299	299	Finance Code, are amended to read as follows:
300	300	(a) The board may appoint [not more than three] individuals
301	301	to serve at the board's pleasure as honorary or advisory directors
302	302	to advise and consult with the board and otherwise aid the board in
303	303	carrying out the board's duties and responsibilities.
304	304	(c) An honorary or advisory director may participate in any
305	305	board deliberation. An honorary or advisory director must hold in
306	306	confidence all matters presented to the board.
307	307	SECTION 18. Section 122.061, Finance Code, is amended by
308	308	amending Subsection (a) and adding Subsection (c) to read as
309	309	follows:
310	310	(a) While serving as a director, honorary director,
311	311	advisory director, committee member, officer, or employee of a
312	312	credit union, a person may not:
313	313	(1) participate, directly or indirectly, in the
314	314	deliberation on or determination of a question affecting the
315	315	person's pecuniary interest or the pecuniary interest of a member
316	316	of the person's immediate family or of a partnership, association,
317	317	or corporation, other than the credit union, in which the person is
318	318	directly or indirectly interested; or
319	319	(2) become employed by, engage in, or own an interest
320	320	in a business or professional activity that the person could
321	321	reasonably expect to:
322	322	(A) require or induce the person to disclose
323	323	confidential information acquired because of the person's office or
324	324	employment in the credit union; or
325	325	(B) impair the person's independence or judgment
326	326	in the performance of the person's duties or responsibilities to
327	327	the credit union.
328	328	(c) In this section, "member of a person's immediate family"
329	329	means a person's parents, spouse, children, or siblings.
330	330	SECTION 19. Subchapter B, Chapter 122, Finance Code, is
331	331	amended by adding Sections 122.065 and 122.066 to read as follows:
332	332	Sec. 122.065. FIDUCIARY RELATIONSHIP. Directors and
333	333	officers are considered to have a fiduciary relationship with the
334	334	credit union, as an entity, and must discharge the duties of their
335	335	respective positions:
336	336	(1) in good faith;
337	337	(2) with the care an ordinarily prudent person in a
338	338	like position would exercise under similar circumstances; and
339	339	(3) in a manner the director or officer believes to be
340	340	in the best interests of the credit union.
341	341	Sec. 122.066. RELIANCE BY DIRECTORS OR OFFICERS.
342	342	(a) Unless the director or officer has knowledge that makes
343	343	reliance unwarranted, a director or officer, in discharging the
344	344	director's or officer's duties to the credit union, may rely on
345	345	information, opinions, reports, or statements, including financial
346	346	statements and other financial data, prepared or presented by:
347	347	(1) an officer or employee of the credit union whom the
348	348	director or officer believes in good faith to be reliable and
349	349	competent in the matters presented;
350	350	(2) legal counsel, a certified public accountant, or
351	351	another person regarding a matter the director or officer believes
352	352	in good faith is within the person's professional or expert
353	353	competence; or
354	354	(3) in the case of reliance by a director, a committee
355	355	of the board of directors of which the director is not a member if
356	356	the director believes in good faith that the committee merits
357	357	confidence.
358	358	(b) Information, opinions, reports, or statements on which
359	359	a director or officer may rely under this section may be written or
360	360	oral or formal or informal.
361	361	SECTION 20. Subchapter D, Chapter 122, Finance Code, is
362	362	amended by adding Section 122.1511 to read as follows:
363	363	Sec. 122.1511. AUTHORITY TO PURCHASE ASSETS. (a) A credit
364	364	union, with the prior written approval of the commissioner, may
365	365	purchase all or substantially all of the assets of another entity.
366	366	(b) Except as otherwise expressly provided by another
367	367	statute, the purchase of all or part of the assets of the selling
368	368	entity does not make the purchasing credit union responsible for
369	369	any liability or obligation of the selling entity not expressly
370	370	assumed by the purchasing credit union.
371	371	SECTION 21. Subchapter E, Chapter 122, Finance Code, is
372	372	amended by adding Section 122.204 to read as follows:
373	373	Sec. 122.204. CONVERSION OF MUTUAL SAVINGS INSTITUTION TO
374	374	STATE CREDIT UNION. (a) A mutual savings institution may convert
375	375	to a state credit union by complying with the laws of the original
376	376	chartered authority and on the approval of the commissioner.
377	377	(b) Application for approval of the conversion to a state
378	378	credit union must be submitted to the department in the form
379	379	prescribed by the commissioner.
380	380	(c) The commissioner may cause an examination to be made of
381	381	any converting mutual savings institution. The converting mutual
382	382	savings institution shall pay all fees and charges prescribed by
383	383	the commission.
384	384	SECTION 22. Subsection (a), Section 122.257, Finance Code,
385	385	is amended to read as follows:
386	386	(a) If the commissioner finds that a credit union or any
387	387	director, officer, employee, agent, or other person participating
388	388	in the conduct of the affairs of the credit union has engaged, is
389	389	engaging, or is about to engage in an act, practice, or transaction
390	390	meeting any of the criteria [makes a finding] listed in Section
391	391	122.255, the commissioner may issue [and determines that] an order
392	392	directing the credit union or any director, officer, employee,
393	393	agent, or other person participating in the conduct of the affairs
394	394	of the credit union to cease and desist from engaging [is necessary
395	395	and] in the act, practice, or transaction or from doing any act in
396	396	furtherance [best interest] of the act, practice, or transaction
397	397	[credit union involved and its depositors, creditors, and members,
398	398	the commissioner may serve on the credit union, its board, and each
399	399	offending person an order to cease and desist from a violation or
400	400	practice specified in the order] and to take appropriate
401	401	affirmative action within a reasonable period, as prescribed by
402	402	[that] the commissioner, [considers necessary] to correct the
403	403	conditions [a condition] resulting from the act, [a violation or
404	404	unsafe or unsound] practice, or transaction [found].
405	405	SECTION 23. Section 123.003, Finance Code, is amended to
406	406	read as follows:
407	407	Sec. 123.003. ENLARGEMENT OF POWERS. (a) Notwithstanding
408	408	any other law, and subject to Subsection (b), a [A] credit union
409	409	may engage in any activity [in which it could engage], exercise any
410	410	power [it could exercise], or make any loan or investment
411	411	permissible for [it could make, if it were operating as] a [federal]
412	412	credit union organized under federal law or the law of another
413	413	state.
414	414	(a-1) A credit union that intends to engage in an activity,
415	415	exercise a power, or make a loan or investment authorized under
416	416	Subsection (a) shall submit written notice to the commissioner
417	417	describing the activity, power, loan, or investment and the
418	418	specific federal or state authority on which the credit union is
419	419	relying. The credit union may proceed as described in the notice on
420	420	or after the 30th day following submission of the notice, unless the
421	421	commissioner extends the period in accordance with this subsection,
422	422	or prohibits the activity, power, loan, or investment.
423	423	(a-2) The commissioner may prohibit the credit union from
424	424	engaging in an activity, exercising a power, or making a loan or
425	425	investment as described in the notice under Subsection (a-1) only
426	426	if the commissioner finds that:
427	427	(1) specific authority does not exist; or
428	428	(2) the engagement, exercise, or making would
429	429	adversely affect the safety and soundness of the credit union.
430	430	(a-3) The commissioner may extend the 30-day period if the
431	431	commissioner determines that the credit union's notice under
432	432	Subsection (a-1) raises issues requiring additional information or
433	433	additional time for analysis. If the 30-day period is extended, the
434	434	credit union may not proceed without the commissioner's prior
435	435	written approval. The commissioner must issue either an approval
436	436	or prohibition letter not later than the 60th day after the date the
437	437	notice is submitted.
438	438	(b) The commission may adopt rules relating to the exercise
439	439	of [Notwithstanding any other law, and in addition to the powers and
440	440	authorities conferred under Subsection (a), a credit union has the]
441	441	powers or authorities granted under this section [of a foreign
442	442	credit union operating a branch in this state if the commissioner
443	443	finds that exercise of those powers or authorities is convenient
444	444	for and affords an advantage to the credit union's members and
445	445	maintains the fairness of competition and parity between the credit
446	446	union and any foreign credit union. A credit union does not have
447	447	the field of membership powers or authorities of a foreign credit
448	448	union operating a branch in this state].
449	449	SECTION 24. Section 123.104, Finance Code, is amended to
450	450	read as follows:
451	451	Sec. 123.104. MEMBERSHIP IN OTHER ORGANIZATION; OPERATION
452	452	AS CORPORATE CENTRAL CREDIT UNION. A credit union may:
453	453	(1) be a member of:
454	454	(A) another credit union organized under this
455	455	subtitle or other law; and
456	456	(B) another organization approved by the board;
457	457	or
458	458	(2) operate, with the commissioner's approval, as a
459	459	corporate central credit union.
460	460	SECTION 25. Subchapter B, Chapter 123, Finance Code, is
461	461	amended by adding Section 123.1041 to read as follows:
462	462	Sec. 123.1041. CORPORATE CENTRAL CREDIT UNION. (a) Any
463	463	number of credit unions may apply to organize a corporate central
464	464	credit union to engage exclusively in corporate financial and
465	465	operational activities that are part of or incidental to the credit
466	466	union business.
467	467	(b) Membership in the corporate central credit union
468	468	consists of and is limited to:
469	469	(1) credit unions incorporated under this subtitle,
470	470	the Federal Credit Union Act (12 U.S.C. Section 1751 et seq.), or
471	471	any other law applicable to credit unions; and
472	472	(2) organizations owned by credit unions.
473	473	(c) A corporate central credit union has the powers and
474	474	privileges of any other credit union incorporated under this
475	475	subtitle and, subject to rules adopted by the commission, may have
476	476	the power to:
477	477	(1) provide access for its members on a mutual basis to
478	478	financial systems and the services and products of financial
479	479	institutions;
480	480	(2) provide its members with research and consulting
481	481	services concerning financial matters, institutions, and products;
482	482	(3) provide financial system support services and
483	483	facilities;
484	484	(4) establish and execute financial programs to assist
485	485	its members in meeting the members' needs;
486	486	(5) provide safekeeping or trustee services to or on
487	487	behalf of its members; and
488	488	(6) issue uninsured share investments or classes of
489	489	share investments in amounts in excess of $250,000 with terms and
490	490	conditions that may vary from other shares authorized by this
491	491	subtitle as approved by the department.
492	492	SECTION 26. Subsection (c), Section 123.208, Finance Code,
493	493	is amended to read as follows:
494	494	(c) The commissioner may restrict or prohibit the payment of
495	495	a dividend:
496	496	(1) if the commissioner issues a cease and desist
497	497	order under Section 122.257; or
498	498	(2) as necessary to protect the member's interests and
499	499	preserve the solvency of the credit union as authorized by
500	500	commission rule.
501	501	SECTION 27. Subchapter A, Chapter 124, Finance Code, is
502	502	amended by adding Section 124.006 to read as follows:
503	503	Sec. 124.006. ADVANCES PAID BY CREDIT UNION. (a) A credit
504	504	union may pay taxes, assessments, insurance premiums, and similar
505	505	charges for the protection of the credit union's interest in
506	506	property that secures a loan of the credit union.
507	507	(b) A payment under Subsection (a) is an advance, and the
508	508	credit union may:
509	509	(1) carry the payment on the credit union's books as an
510	510	asset of the credit union for which the credit union may charge
511	511	interest; or
512	512	(2) add the payment to the unpaid balance of the loan
513	513	to which it applies as of the first day of the month in which the
514	514	payment is made.
515	515	(c) With the exception of a loan secured by an encumbrance
516	516	against the equity in a homestead property, a payment under
517	517	Subsection (a) is a lien against the property that secures the loan
518	518	for which it is made. For an extension of credit as defined and
519	519	authorized by Section 50(a)(6), Article XVI, Texas Constitution,
520	520	additional terms and conditions apply as provided by that section
521	521	for the payment to become a lien against the property.
522	522	SECTION 28. Section 124.051, Finance Code, is amended to
523	523	read as follows:
524	524	Sec. 124.051. OPEN-END CREDIT PLAN. (a) A credit union
525	525	may enter into a written agreement with a member under which:
526	526	(1) the member is allowed to borrow money from time to
527	527	time; and
528	528	(2) interest may from time to time be computed on the
529	529	unpaid balance.
530	530	(b) If, at any time, application of the contract interest
531	531	rate to the outstanding unpaid balance results in a charge of less
532	532	than $1, the lawful interest charge shall be $1.
533	533	SECTION 29. Section 124.151, Finance Code, is amended to
534	534	read as follows:
535	535	Sec. 124.151. PREPAYMENT PRIVILEGE. (a) A loan may be
536	536	prepaid in whole or in part, without penalty, during regular
537	537	working hours on any day on which the credit union is open for
538	538	business, except as provided by Subsection (b) or Section 124.152.
539	539	(b) A prepayment penalty may be charged on a business loan.
540	540	(c) In this section, "business loan" means a loan other than
541	541	a loan made primarily for personal, family, or household purposes.
542	542	SECTION 30. Subsection (a), Section 124.351, Finance Code,
543	543	is amended to read as follows:
544	544	(a) A credit union may invest money not used in loans to
545	545	members in:
546	546	(1) capital shares, obligations, participation
547	547	certificates, or common or preferred stock of an agency,
548	548	association, or company, subject to Section 124.352(a);
549	549	(2) loans to a national or state credit union
550	550	association or corporation of which the credit union is a member;
551	551	(3) obligations, bonds, notes, or other evidences of
552	552	indebtedness of a state or political subdivision of a state;
553	553	(4) certificates of deposit or other accounts issued
554	554	by a state or national bank, savings and loan association, savings
555	555	association, or mutual savings bank;
556	556	(5) securities, obligations, participations, or other
557	557	instruments of or issued by the United States, or in a trust
558	558	established for investing directly or collectively in those
559	559	investments;
560	560	(6) loans to, shares of, or deposits in another credit
561	561	union, a corporate central credit union, a corporate credit union,
562	562	a central liquidity facility established under state or federal
563	563	law, a trust, or an organization established for lending directly
564	564	or collectively to credit unions;
565	565	(7) securities, obligations, participations, or other
566	566	instruments fully or partially guaranteed as to principal,
567	567	interest, or both by the United States, or in a trust established
568	568	for investing directly or collectively in those investments;
569	569	(8) participation loans with another credit union,
570	570	corporation, credit organization, or financial organization;
571	571	(9) notes receivable, loans to members, or other
572	572	assets of a credit union operating under this subtitle or the
573	573	Federal Credit Union Act (12 U.S.C. Section 1751 et seq.); and
574	574	(10) other investments authorized by rules adopted by
575	575	the commission that satisfy Subsection (b).
576	576	SECTION 31. Subchapter H, Chapter 124, Finance Code, is
577	577	amended by adding Section 124.353 to read as follows:
578	578	Sec. 124.353. PASSIVE INVESTMENT IN MINERAL INTERESTS.
579	579	(a) A credit union may hold a nonworking mineral or royalty
580	580	interest if:
581	581	(1) the credit union acquires the interest incidental
582	582	to a lawful investment or to avoid or minimize a loss on a loan or
583	583	investment previously made in good faith;
584	584	(2) the interest is not subject to expenses of
585	585	exploration, development, production, operation, maintenance, or
586	586	abandonment, or any other expense associated with extracting and
587	587	marketing the minerals subject to the rights or interest;
588	588	(3) the interest is reasonably valued on the books of
589	589	the credit union for not more than a nominal amount, and the
590	590	aggregate amount of earnings from those interests is separately
591	591	disclosed in the financial statements of the credit union;
592	592	(4) the credit union does not make any new investments
593	593	relating to the rights or interests without the approval of the
594	594	commissioner; and
595	595	(5) the commissioner determines that the possession of
596	596	the rights or interests is not inconsistent with the safety and
597	597	soundness of the credit union.
598	598	(b) The commissioner may order a credit union that holds a
599	599	nonworking mineral or royalty interest to divest the interest at
600	600	any time if the commissioner determines that continued ownership of
601	601	the interest is detrimental to the credit union.
602	602	(c) Subject to compliance with this section, nonworking
603	603	mineral or royalty interests are not considered to be real property
604	604	for purposes of this subtitle.
605	605	SECTION 32. Section 125.402, Finance Code, is amended to
606	606	read as follows:
607	607	Sec. 125.402. DISCLOSURE OF RECORDS OF MEMBER;
608	608	CONFIDENTIALITY. (a) The directors, officers, committee members,
609	609	and employees and any honorary or advisory directors of a credit
610	610	union shall hold in confidence all information regarding
611	611	transactions of the credit union, including information concerning
612	612	transactions with the credit union's members and the members'
613	613	personal affairs, except to the extent necessary in connection with
614	614	making, extending, or collecting a loan or extension of credit, or
615	615	as otherwise authorized by commission rules adopted under
616	616	Subsection (d) or other applicable law.
617	617	(b) A credit union is not required to disclose or produce to
618	618	a third party or permit a third party to examine a record pertaining
619	619	to the affairs of a credit union member unless:
620	620	(1) the request is made in connection with an
621	621	examination or audit by a government agency authorized by law to
622	622	examine credit unions;
623	623	(2) the member consents to the disclosure or
624	624	production of the record; or
625	625	(3) the request is made by the department or is made in
626	626	response to:
627	627	(A) a subpoena or other court order; or
628	628	(B) an administrative subpoena or summons issued
629	629	by a state or federal agency as authorized by law.
630	630	(c) [(b)] The commission may authorize the disclosure of
631	631	information relating to a credit union member under circumstances
632	632	and conditions that the commission determines are appropriate or
633	633	required in the daily operation of the credit union's business.
634	634	(d) [(c)] The commission may adopt reasonable rules
635	635	relating to the:
636	636	(1) permissible disclosure of nonpublic personal
637	637	information about [confidentiality of] the accounts of credit union
638	638	members; and
639	639	(2) duties of the credit union to maintain [that]
640	640	confidentiality.
641	641	SECTION 33. Subsection (c), Section 126.002, Finance Code,
642	642	is amended to read as follows:
643	643	(c) The commissioner may disclose the information described
644	644	by Subsection (a) to a law enforcement agency, a share-insuring
645	645	organization, or another department, agency, or instrumentality of
646	646	this state, another state, or the United States if the commissioner
647	647	determines that disclosure is necessary or proper to enforce the
648	648	laws of this state applicable to credit unions.
649	649	SECTION 34. Subsection (a), Section 126.051, Finance Code,
650	650	is amended to read as follows:
651	651	(a) The department, through examiners it appoints and in
652	652	accordance with commission rules, shall [periodically] examine the
653	653	condition and affairs [books and records] of each credit union, and
654	654	may examine the condition and affairs of any subsidiary wholly
655	655	owned or controlled by a credit union, at least once during each
656	656	24-month period. The department may examine a credit union or its
657	657	subsidiaries more frequently if the commissioner considers it
658	658	necessary or advisable to safeguard the interest of depositors,
659	659	creditors, and members or to efficiently enforce applicable law.
660	660	SECTION 35. This Act takes effect September 1, 2009.