Texas 2013 - 83rd Regular

Texas House Bill HB1602 Compare Versions

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1	1	83R8757 ATP-D
2	2	By: Villarreal H.B. No. 1602
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the administration, operation, supervision, and
8	8	regulation of credit unions.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 15.403, Finance Code, is amended to read
11	11	as follows:
12	12	Sec. 15.403. SUPERVISION AND REGULATION OF CREDIT UNIONS.
13	13	(a) The commissioner shall supervise and regulate a credit union
14	14	doing business in this state, other than a federal credit union, in
15	15	accordance with this chapter and Subtitle D, Title 3, including
16	16	rules adopted under this chapter and Subtitle D, Title 3.
17	17	(b) To the extent necessary to the department's authority to
18	18	supervise and regulate credit unions under this chapter and
19	19	Subtitle D, Title 3, the commissioner may require each credit union
20	20	to conduct business in compliance with federal laws that apply to
21	21	credit unions.
22	22	SECTION 2. Section 15.409(d), Finance Code, is amended to
23	23	read as follows:
24	24	(d) The department shall periodically notify the person
25	25	filing the complaint and each person who is the subject of the
26	26	complaint [parties] of the status of the complaint until final
27	27	disposition.
28	28	SECTION 3. Subchapter E, Chapter 15, Finance Code, is
29	29	amended by adding Section 15.4111 to read as follows:
30	30	Sec. 15.4111. REGULATORY COORDINATION. To ensure effective
31	31	coordination among and between the department and other state and
32	32	federal agencies, the commissioner and those agencies may enter
33	33	into cooperative, coordinating, or information-sharing agreements
34	34	that are necessary or proper to enforce the state or federal laws
35	35	applicable to credit unions.
36	36	SECTION 4. Section 122.008(c), Finance Code, is amended to
37	37	read as follows:
38	38	(c) Acceptance of a certificate of incorporation by the
39	39	credit union is conclusive evidence that the credit union is
40	40	authorized to do business under this subtitle.
41	41	SECTION 5. Section 122.012, Finance Code, is amended by
42	42	amending Subsection (b) and adding Subsection (d) to read as
43	43	follows:
44	44	(b) A credit union shall provide [After notifying] the
45	45	commissioner with written notice not later than the 30th day before
46	46	the date that the credit union establishes [in writing, a credit
47	47	union may establish and maintain, at locations other than its
48	48	principal place of business,] additional offices or service
49	49	facilities. A new office or service facility must be [that are]
50	50	reasonably necessary to provide services to the credit union's
51	51	members. The credit union shall additionally notify the
52	52	commissioner in writing not later than the 10th business day after
53	53	[of] the date that the new office or service facility begins
54	54	operating. For purposes of this subsection, an unmanned teller
55	55	machine is not considered a service facility.
56	56	(d) In accordance with rules adopted by the commission and
57	57	after notifying the commissioner in writing, a credit union may
58	58	close any office or service facility, provided that the credit
59	59	union designates and maintains an office as its principal place of
60	60	business in this state.
61	61	SECTION 6. Sections 122.013(a) and (c), Finance Code, are
62	62	amended to read as follows:
63	63	(a) A foreign credit union may do business in this state if
64	64	it is organized in a state or country that allows any [a] credit
65	65	union organized under this subtitle to do business in that state or
66	66	country.
67	67	(c) The commissioner may suspend or revoke a foreign credit
68	68	union's authority to do business in this state if the commissioner
69	69	finds that the foreign credit union:
70	70	(1) has failed to conduct its business in this state in
71	71	a manner consistent with the laws of this state [violated a rule
72	72	adopted under this subtitle];
73	73	(2) is in an unsafe or unsound condition;
74	74	(3) refuses to comply with an order of the
75	75	commissioner [is engaged in a pattern of unsafe or unsound
76	76	practices]; [or]
77	77	(4) refuses to comply with a request by the
78	78	commissioner to review the books and records of the credit union; or
79	79	(5) has not met or does not meet a [commission]
80	80	requirement imposed by commission rules.
81	81	SECTION 7. Subchapter A, Chapter 122, Finance Code, is
82	82	amended by adding Section 122.0131 to read as follows:
83	83	Sec. 122.0131. TEMPORARY FOREIGN CREDIT UNION OFFICE. If a
84	84	state contiguous to this state experiences an emergency, on a
85	85	request by that state's credit union regulatory agency, the
86	86	commissioner may authorize one or more credit unions located in
87	87	that state to open temporary offices in this state to more promptly
88	88	restore credit union services to their members. The commissioner
89	89	shall issue an order permitting the temporary office and specifying
90	90	the period the office may remain open. On a finding that the
91	91	conditions requiring the temporary office continue to exist, the
92	92	commissioner may extend the period the office may remain open. A
93	93	credit union may convert a temporary office authorized under this
94	94	section to a permanent location and operate as a foreign credit
95	95	union if it qualifies to do business in this state as a foreign
96	96	credit union under Section 122.013 and commission rules.
97	97	SECTION 8. Section 122.053(f), Finance Code, is amended to
98	98	read as follows:
99	99	(f) A director may not vote by proxy. A [If and to the extent
100	100	provided in the bylaws, a] director may participate in and act at
101	101	any meeting of the board by means of electronic communications
102	102	equipment through which all persons participating in the meeting
103	103	can communicate with each other. Participation in a meeting in the
104	104	manner authorized by this subsection constitutes attendance at a
105	105	meeting.
106	106	SECTION 9. Sections 122.056(a) and (c), Finance Code, are
107	107	amended to read as follows:
108	108	(a) The board may appoint not more than six [three]
109	109	individuals to serve at the board's pleasure as honorary or
110	110	advisory directors to advise and consult with the board and
111	111	otherwise aid the board in carrying out the board's duties and
112	112	responsibilities.
113	113	(c) An honorary or advisory director may participate in any
114	114	board deliberation. Except as otherwise provided by Section
115	115	125.402(d), an honorary or advisory director shall hold in
116	116	confidence all information the director receives about a credit
117	117	union during the director's service.
118	118	SECTION 10. Section 122.060(a), Finance Code, is amended to
119	119	read as follows:
120	120	(a) A credit union shall submit to the commissioner, in a
121	121	form approved by the department, [The board chairman and the
122	122	secretary:
123	123	[(1) shall execute] a certificate of election that
124	124	provides [states] the name and address of each officer, director,
125	125	and committee member elected or appointed. The certificate must be
126	126	filed within the time prescribed by the commissioner[; and
127	127	[(2) not later than the 30th day after the date of the
128	128	annual organizational meeting of election or appointment of any
129	129	interim officer, director, or committee member, shall file a copy
130	130	of the certificate of election with the department].
131	131	SECTION 11. Section 122.061, Finance Code, is amended by
132	132	amending Subsection (a) and adding Subsection (c) to read as
133	133	follows:
134	134	(a) While serving as a director, honorary director,
135	135	advisory director, committee member, officer, or employee of a
136	136	credit union, a person may not:
137	137	(1) participate, directly or indirectly, in the
138	138	deliberation on or determination of a question affecting the
139	139	person's pecuniary interest or the pecuniary interest of a member
140	140	of the person's immediate family or of a partnership, association,
141	141	or corporation, other than the credit union, in which the person is
142	142	directly or indirectly interested; or
143	143	(2) become employed by, engage in, or own an interest
144	144	in a business or professional activity that the person could
145	145	reasonably expect to:
146	146	(A) require or induce the person to disclose
147	147	confidential information acquired because of the person's office or
148	148	employment in the credit union; or
149	149	(B) impair the person's independence or judgment
150	150	in the performance of the person's duties or responsibilities to
151	151	the credit union.
152	152	(c) In this section, "member of a person's immediate family"
153	153	means a person's spouse or another person living in the person's
154	154	household.
155	155	SECTION 12. Section 122.064, Finance Code, is amended to
156	156	read as follows:
157	157	Sec. 122.064. INDEMNIFICATION. A credit union may elect to
158	158	indemnify a director, officer, employee, or agent of the credit
159	159	union [or another person] and to purchase insurance as if the credit
160	160	union were an "enterprise" as defined by Section 8.001, Business
161	161	Organizations Code, under and subject to the credit union's bylaws
162	162	and written policy. A credit union may not provide any
163	163	indemnification or insurance that would not be permissible under
164	164	Chapter 8, Business Organizations Code, but may elect to impose the
165	165	credit union's own limitations on indemnification[:
166	166	[(1) by adopting the indemnification and insurance
167	167	procedures of Section 2.22A, Texas Non-Profit Corporation Act
168	168	(Article 1396-2.22A, Vernon's Texas Civil Statutes); or
169	169	[(2) in another manner determined by the board].
170	170	SECTION 13. Sections 122.101(a) and (b), Finance Code, are
171	171	amended to read as follows:
172	172	(a) A credit union shall prepare [submit to the department
173	173	on] a quarterly [basis a] call report, in a manner approved [on a
174	174	form supplied] by the department, that states the credit union's
175	175	financial condition. The commissioner may require a credit union to
176	176	file additional financial reports.
177	177	(b) The credit union must submit the call report on or
178	178	before the due date prescribed [stated on the form supplied] by the
179	179	department. If a credit union does not submit a report by the due
180	180	date, the commissioner shall charge a late fee in an amount set by
181	181	the commission for each day the report remains unfiled. The
182	182	commissioner for good cause shown may waive all or part of the late
183	183	fee.
184	184	SECTION 14. Section 122.201, Finance Code, is amended to
185	185	read as follows:
186	186	Sec. 122.201. CONVERSION OF STATE CREDIT UNION TO FEDERAL
187	187	CREDIT UNION. (a) A credit union organized under the laws of this
188	188	state may convert to a credit union under the laws of the United
189	189	States:
190	190	(1) on an affirmative vote by a majority of the members
191	191	voting at a meeting called for that purpose; and
192	192	(2) by complying with any rule adopted by the
193	193	commission to facilitate the conversion.
194	194	(b) On the issuance of a charter by the National Credit
195	195	Union Administration, the credit union:
196	196	(1) ceases to be a credit union incorporated under
197	197	this subtitle; and
198	198	(2) is no longer subject to the supervision and
199	199	regulation of the commissioner and department.
200	200	(c) The converted credit union shall file with the
201	201	commissioner a copy of the charter issued to the credit union by the
202	202	National Credit Union Administration. Failure to file the required
203	203	copy of the charter does not affect the validity of the conversion.
204	204	SECTION 15. Section 123.106, Finance Code, is amended to
205	205	read as follows:
206	206	Sec. 123.106. CHANGE OF LOCATION. (a) A credit union
207	207	changing the location of [may change] its principal place of
208	208	business or any additional office or service facility shall notify
209	209	[a subsidiary place of business to another location by notifying]
210	210	the commissioner in writing of the new location [address] and the
211	211	scheduled or effective date of the change.
212	212	(b) The credit union must submit notice to the commissioner
213	213	not later than the 30th day before the scheduled or effective date
214	214	of the change. The commissioner may waive or reduce the timing of
215	215	the notice requirement under this subsection.
216	216	SECTION 16. Section 124.002, Finance Code, is amended to
217	217	read as follows:
218	218	Sec. 124.002. LIMITATIONS ON INTEREST RATES. The interest
219	219	rate on a loan to a member may not exceed:
220	220	(1) 1-1/2 percent per month on the unpaid balance;
221	221	[or]
222	222	(2) 28 percent a year to the extent that federal credit
223	223	unions are permitted to charge that rate; or
224	224	(3) a higher rate authorized by law, including a rate
225	225	authorized by Chapter 303.
226	226	SECTION 17. Section 125.402, Finance Code, is amended by
227	227	amending Subsection (c) and adding Subsection (d) to read as
228	228	follows:
229	229	(c) The commission may adopt reasonable rules relating to
230	230	the:
231	231	(1) permissible disclosure of nonpublic personal
232	232	information about [confidentiality of] the accounts of credit union
233	233	members; and
234	234	(2) duties of the credit union to maintain [that]
235	235	confidentiality of member accounts.
236	236	(d) The directors, officers, committee members, and
237	237	employees and any honorary or advisory directors of a credit union
238	238	shall hold in confidence all information regarding transactions of
239	239	the credit union, including information concerning transactions
240	240	with the credit union's members and the members' personal affairs,
241	241	except to the extent necessary in connection with making,
242	242	extending, or collecting a loan or extension of credit, or as
243	243	otherwise authorized by this section, commission rules adopted
244	244	under Subsection (c), or other applicable law.
245	245	SECTION 18. Sections 126.002(c) and (e), Finance Code, are
246	246	amended to read as follows:
247	247	(c) The commissioner may disclose the information described
248	248	by Subsection (a) to a law enforcement agency, a share insuring
249	249	organization, or another department, agency, or instrumentality of
250	250	this state, another state, or the United States if the commissioner
251	251	determines that disclosure is necessary or proper to enforce the
252	252	laws of this state applicable to credit unions.
253	253	(e) Confidential information that is provided by the
254	254	department to a credit union, organization, or service provider of
255	255	a credit union, whether in the form of a report of examination or
256	256	otherwise, is the confidential property of the department. The
257	257	recipient or an officer, director, employee, or agent of the
258	258	recipient may not make the information public and may not disclose
259	259	the information to a person not officially connected to the
260	260	recipient as an officer, director, employee, attorney, auditor, or
261	261	independent auditor, except as authorized by rules adopted under
262	262	this subtitle. A credit union may disclose a report of examination
263	263	or relevant portions of the report to another credit union
264	264	proposing to merge or consolidate with the credit union or to a
265	265	fidelity bond carrier if the recipient executes a written agreement
266	266	not to disclose information in the report.
267	267	SECTION 19. Section 126.101, Finance Code, is amended by
268	268	adding Subsection (c) to read as follows:
269	269	(c) The board may:
270	270	(1) agree in writing to a conservatorship order; and
271	271	(2) waive its right to appeal the order under Section
272	272	126.105.
273	273	SECTION 20. Sections 126.102(b) and (c), Finance Code, are
274	274	amended to read as follows:
275	275	(b) Service may be by mail if an officer or director is not
276	276	available for service on the date personal service of the order is
277	277	attempted [of issuance].
278	278	(c) Service by [certified or registered] mail[:
279	279	[(1)] must be by certified or registered mail, must be
280	280	addressed to the credit union at the address shown for its principal
281	281	office by department records and to the home address of the chairman
282	282	of the board,[;] and
283	283	[(2)] is complete on deposit of the order in a
284	284	postpaid, properly addressed wrapper, in a post office or official
285	285	depository under the care and custody of the United States Postal
286	286	Service.
287	287	SECTION 21. Sections 126.105(a) and (b), Finance Code, are
288	288	amended to read as follows:
289	289	(a) Unless the board waives its right to appeal under
290	290	Section 126.101(c), the [The] board may file a written appeal of the
291	291	conservatorship order with the commissioner not later than the 10th
292	292	business day after the date the order is served as provided by
293	293	Section 126.102. The appeal must include a certified copy of the
294	294	board resolution and must state whether the board requests a
295	295	hearing.
296	296	(b) If the board requests [files an appeal to request] a
297	297	hearing [before the commission], the commissioner shall promptly
298	298	request from the State Office of Administrative Hearings a hearing
299	299	date that is not earlier than the 11th day nor later than the 30th
300	300	day after the date on which the commissioner receives the appeal [is
301	301	received].
302	302	SECTION 22. Section 126.106, Finance Code, is amended to
303	303	read as follows:
304	304	Sec. 126.106. FAILURE TO APPEAL [FILE REPLY] OR APPEAR
305	305	[REQUEST HEARING]. [(a)] If the board does not appeal [file a
306	306	reply to] the conservatorship order or fails to [as required by
307	307	Section 126.104 or fails to request and] appear at the hearing
308	308	provided for by Section 126.105, the credit union is presumed to
309	309	have consented to the commissioner's disposition action, and the
310	310	commissioner may dispose of the conservatorship matter as the
311	311	commissioner considers appropriate.
312	312	[(b) The credit union is presumed to have consented to the
313	313	commissioner's disposition action and may not contest it.]
314	314	SECTION 23. Section 126.201, Finance Code, is amended to
315	315	read as follows:
316	316	Sec. 126.201. LIQUIDATION ORDER; APPOINTMENT OF
317	317	LIQUIDATING AGENT. (a) After the commissioner has issued a
318	318	conservatorship order and provided an opportunity for hearing, the
319	319	commissioner by liquidation order may appoint a liquidating agent
320	320	and direct that the credit union be liquidated if:
321	321	(1) the board requests issuance of a liquidation order
322	322	and liquidation of the credit union;
323	323	(2) the credit union otherwise consents to the
324	324	liquidation; or
325	325	(3) the commissioner:
326	326	(A) finds that the closing of the credit union
327	327	and the liquidation of the credit union's assets are in the public
328	328	interest and the best interest of the credit union's members,
329	329	depositors, and creditors; and
330	330	(B) determines that the credit union is not in a
331	331	condition to continue business and cannot be rehabilitated as
332	332	provided by this chapter.
333	333	(b) If the board consents to the liquidation order and
334	334	waives the necessity of a conservatorship order, the commissioner
335	335	may issue a liquidation order without first issuing a
336	336	conservatorship order.
337	337	SECTION 24. Section 126.455, Finance Code, is amended to
338	338	read as follows:
339	339	Sec. 126.455. VOTE ON VOLUNTARY LIQUIDATION. At a special
340	340	meeting called to consider the proposed liquidation, a majority of
341	341	the credit union members voting, but not less than a quorum, may
342	342	vote to dissolve and liquidate the credit union. Those members
343	343	casting votes by mail or at the meeting constitute a quorum for the
344	344	transaction of business at the special meeting, notwithstanding a
345	345	bylaw provision to the contrary.
346	346	SECTION 25. Section 126.104, Finance Code, is repealed.
347	347	SECTION 26. This Act takes effect September 1, 2013.