83R8757 ATP-D
By: Villarreal H.B. No. 1602
A BILL TO BE ENTITLED
AN ACT
relating to the administration, operation, supervision, and
regulation of credit unions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 15.403, Finance Code, is amended to read
as follows:
Sec. 15.403. SUPERVISION AND REGULATION OF CREDIT UNIONS.
(a) The commissioner shall supervise and regulate a credit union
doing business in this state, other than a federal credit union, in
accordance with this chapter and Subtitle D, Title 3, including
rules adopted under this chapter and Subtitle D, Title 3.
(b) To the extent necessary to the department's authority to
supervise and regulate credit unions under this chapter and
Subtitle D, Title 3, the commissioner may require each credit union
to conduct business in compliance with federal laws that apply to
credit unions.
SECTION 2. Section 15.409(d), Finance Code, is amended to
read as follows:
(d) The department shall periodically notify the person
filing the complaint and each person who is the subject of the
complaint [parties] of the status of the complaint until final
disposition.
SECTION 3. Subchapter E, Chapter 15, Finance Code, is
amended by adding Section 15.4111 to read as follows:
Sec. 15.4111. REGULATORY COORDINATION. To ensure effective
coordination among and between the department and other state and
federal agencies, the commissioner and those agencies may enter
into cooperative, coordinating, or information-sharing agreements
that are necessary or proper to enforce the state or federal laws
applicable to credit unions.
SECTION 4. Section 122.008(c), Finance Code, is amended to
read as follows:
(c) Acceptance of a certificate of incorporation by the
credit union is conclusive evidence that the credit union is
authorized to do business under this subtitle.
SECTION 5. Section 122.012, Finance Code, is amended by
amending Subsection (b) and adding Subsection (d) to read as
follows:
(b) A credit union shall provide [After notifying] the
commissioner with written notice not later than the 30th day before
the date that the credit union establishes [in writing, a credit
union may establish and maintain, at locations other than its
principal place of business,] additional offices or service
facilities. A new office or service facility must be [that are]
reasonably necessary to provide services to the credit union's
members. The credit union shall additionally notify the
commissioner in writing not later than the 10th business day after
[of] the date that the new office or service facility begins
operating. For purposes of this subsection, an unmanned teller
machine is not considered a service facility.
(d) In accordance with rules adopted by the commission and
after notifying the commissioner in writing, a credit union may
close any office or service facility, provided that the credit
union designates and maintains an office as its principal place of
business in this state.
SECTION 6. Sections 122.013(a) and (c), Finance Code, are
amended to read as follows:
(a) A foreign credit union may do business in this state if
it is organized in a state or country that allows any [a] credit
union organized under this subtitle to do business in that state or
country.
(c) The commissioner may suspend or revoke a foreign credit
union's authority to do business in this state if the commissioner
finds that the foreign credit union:
(1) has failed to conduct its business in this state in
a manner consistent with the laws of this state [violated a rule
adopted under this subtitle];
(2) is in an unsafe or unsound condition;
(3) refuses to comply with an order of the
commissioner [is engaged in a pattern of unsafe or unsound
practices]; [or]
(4) refuses to comply with a request by the
commissioner to review the books and records of the credit union; or
(5) has not met or does not meet a [commission]
requirement imposed by commission rules.
SECTION 7. Subchapter A, Chapter 122, Finance Code, is
amended by adding Section 122.0131 to read as follows:
Sec. 122.0131. TEMPORARY FOREIGN CREDIT UNION OFFICE. If a
state contiguous to this state experiences an emergency, on a
request by that state's credit union regulatory agency, the
commissioner may authorize one or more credit unions located in
that state to open temporary offices in this state to more promptly
restore credit union services to their members. The commissioner
shall issue an order permitting the temporary office and specifying
the period the office may remain open. On a finding that the
conditions requiring the temporary office continue to exist, the
commissioner may extend the period the office may remain open. A
credit union may convert a temporary office authorized under this
section to a permanent location and operate as a foreign credit
union if it qualifies to do business in this state as a foreign
credit union under Section 122.013 and commission rules.
SECTION 8. Section 122.053(f), Finance Code, is amended to
read as follows:
(f) A director may not vote by proxy. A [If and to the extent
provided in the bylaws, a] director may participate in and act at
any meeting of the board by means of electronic communications
equipment through which all persons participating in the meeting
can communicate with each other. Participation in a meeting in the
manner authorized by this subsection constitutes attendance at a
meeting.
SECTION 9. Sections 122.056(a) and (c), Finance Code, are
amended to read as follows:
(a) The board may appoint not more than six [three]
individuals to serve at the board's pleasure as honorary or
advisory directors to advise and consult with the board and
otherwise aid the board in carrying out the board's duties and
responsibilities.
(c) An honorary or advisory director may participate in any
board deliberation. Except as otherwise provided by Section
125.402(d), an honorary or advisory director shall hold in
confidence all information the director receives about a credit
union during the director's service.
SECTION 10. Section 122.060(a), Finance Code, is amended to
read as follows:
(a) A credit union shall submit to the commissioner, in a
form approved by the department, [The board chairman and the
secretary:
[(1) shall execute] a certificate of election that
provides [states] the name and address of each officer, director,
and committee member elected or appointed. The certificate must be
filed within the time prescribed by the commissioner[; and
[(2) not later than the 30th day after the date of the
annual organizational meeting of election or appointment of any
interim officer, director, or committee member, shall file a copy
of the certificate of election with the department].
SECTION 11. Section 122.061, Finance Code, is amended by
amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) While serving as a director, honorary director,
advisory director, committee member, officer, or employee of a
credit union, a person may not:
(1) participate, directly or indirectly, in the
deliberation on or determination of a question affecting the
person's pecuniary interest or the pecuniary interest of a member
of the person's immediate family or of a partnership, association,
or corporation, other than the credit union, in which the person is
directly or indirectly interested; or
(2) become employed by, engage in, or own an interest
in a business or professional activity that the person could
reasonably expect to:
(A) require or induce the person to disclose
confidential information acquired because of the person's office or
employment in the credit union; or
(B) impair the person's independence or judgment
in the performance of the person's duties or responsibilities to
the credit union.
(c) In this section, "member of a person's immediate family"
means a person's spouse or another person living in the person's
household.
SECTION 12. Section 122.064, Finance Code, is amended to
read as follows:
Sec. 122.064. INDEMNIFICATION. A credit union may elect to
indemnify a director, officer, employee, or agent of the credit
union [or another person] and to purchase insurance as if the credit
union were an "enterprise" as defined by Section 8.001, Business
Organizations Code, under and subject to the credit union's bylaws
and written policy. A credit union may not provide any
indemnification or insurance that would not be permissible under
Chapter 8, Business Organizations Code, but may elect to impose the
credit union's own limitations on indemnification[:
[(1) by adopting the indemnification and insurance
procedures of Section 2.22A, Texas Non-Profit Corporation Act
(Article 1396-2.22A, Vernon's Texas Civil Statutes); or
[(2) in another manner determined by the board].
SECTION 13. Sections 122.101(a) and (b), Finance Code, are
amended to read as follows:
(a) A credit union shall prepare [submit to the department
on] a quarterly [basis a] call report, in a manner approved [on a
form supplied] by the department, that states the credit union's
financial condition. The commissioner may require a credit union to
file additional financial reports.
(b) The credit union must submit the call report on or
before the due date prescribed [stated on the form supplied] by the
department. If a credit union does not submit a report by the due
date, the commissioner shall charge a late fee in an amount set by
the commission for each day the report remains unfiled. The
commissioner for good cause shown may waive all or part of the late
fee.
SECTION 14. Section 122.201, Finance Code, is amended to
read as follows:
Sec. 122.201. CONVERSION OF STATE CREDIT UNION TO FEDERAL
CREDIT UNION. (a) A credit union organized under the laws of this
state may convert to a credit union under the laws of the United
States:
(1) on an affirmative vote by a majority of the members
voting at a meeting called for that purpose; and
(2) by complying with any rule adopted by the
commission to facilitate the conversion.
(b) On the issuance of a charter by the National Credit
Union Administration, the credit union:
(1) ceases to be a credit union incorporated under
this subtitle; and
(2) is no longer subject to the supervision and
regulation of the commissioner and department.
(c) The converted credit union shall file with the
commissioner a copy of the charter issued to the credit union by the
National Credit Union Administration. Failure to file the required
copy of the charter does not affect the validity of the conversion.
SECTION 15. Section 123.106, Finance Code, is amended to
read as follows:
Sec. 123.106. CHANGE OF LOCATION. (a) A credit union
changing the location of [may change] its principal place of
business or any additional office or service facility shall notify
[a subsidiary place of business to another location by notifying]
the commissioner in writing of the new location [address] and the
scheduled or effective date of the change.
(b) The credit union must submit notice to the commissioner
not later than the 30th day before the scheduled or effective date
of the change. The commissioner may waive or reduce the timing of
the notice requirement under this subsection.
SECTION 16. Section 124.002, Finance Code, is amended to
read as follows:
Sec. 124.002. LIMITATIONS ON INTEREST RATES. The interest
rate on a loan to a member may not exceed:
(1) 1-1/2 percent per month on the unpaid balance;
[or]
(2) 28 percent a year to the extent that federal credit
unions are permitted to charge that rate; or
(3) a higher rate authorized by law, including a rate
authorized by Chapter 303.
SECTION 17. Section 125.402, Finance Code, is amended by
amending Subsection (c) and adding Subsection (d) to read as
follows:
(c) The commission may adopt reasonable rules relating to
the:
(1) permissible disclosure of nonpublic personal
information about [confidentiality of] the accounts of credit union
members; and
(2) duties of the credit union to maintain [that]
confidentiality of member accounts.
(d) The directors, officers, committee members, and
employees and any honorary or advisory directors of a credit union
shall hold in confidence all information regarding transactions of
the credit union, including information concerning transactions
with the credit union's members and the members' personal affairs,
except to the extent necessary in connection with making,
extending, or collecting a loan or extension of credit, or as
otherwise authorized by this section, commission rules adopted
under Subsection (c), or other applicable law.
SECTION 18. Sections 126.002(c) and (e), Finance Code, are
amended to read as follows:
(c) The commissioner may disclose the information described
by Subsection (a) to a law enforcement agency, a share insuring
organization, or another department, agency, or instrumentality of
this state, another state, or the United States if the commissioner
determines that disclosure is necessary or proper to enforce the
laws of this state applicable to credit unions.
(e) Confidential information that is provided by the
department to a credit union, organization, or service provider of
a credit union, whether in the form of a report of examination or
otherwise, is the confidential property of the department. The
recipient or an officer, director, employee, or agent of the
recipient may not make the information public and may not disclose
the information to a person not officially connected to the
recipient as an officer, director, employee, attorney, auditor, or
independent auditor, except as authorized by rules adopted under
this subtitle. A credit union may disclose a report of examination
or relevant portions of the report to another credit union
proposing to merge or consolidate with the credit union or to a
fidelity bond carrier if the recipient executes a written agreement
not to disclose information in the report.
SECTION 19. Section 126.101, Finance Code, is amended by
adding Subsection (c) to read as follows:
(c) The board may:
(1) agree in writing to a conservatorship order; and
(2) waive its right to appeal the order under Section
126.105.
SECTION 20. Sections 126.102(b) and (c), Finance Code, are
amended to read as follows:
(b) Service may be by mail if an officer or director is not
available for service on the date personal service of the order is
attempted [of issuance].
(c) Service by [certified or registered] mail[:
[(1)] must be by certified or registered mail, must be
addressed to the credit union at the address shown for its principal
office by department records and to the home address of the chairman
of the board,[;] and
[(2)] is complete on deposit of the order in a
postpaid, properly addressed wrapper, in a post office or official
depository under the care and custody of the United States Postal
Service.
SECTION 21. Sections 126.105(a) and (b), Finance Code, are
amended to read as follows:
(a) Unless the board waives its right to appeal under
Section 126.101(c), the [The] board may file a written appeal of the
conservatorship order with the commissioner not later than the 10th
business day after the date the order is served as provided by
Section 126.102. The appeal must include a certified copy of the
board resolution and must state whether the board requests a
hearing.
(b) If the board requests [files an appeal to request] a
hearing [before the commission], the commissioner shall promptly
request from the State Office of Administrative Hearings a hearing
date that is not earlier than the 11th day nor later than the 30th
day after the date on which the commissioner receives the appeal [is
received].
SECTION 22. Section 126.106, Finance Code, is amended to
read as follows:
Sec. 126.106. FAILURE TO APPEAL [FILE REPLY] OR APPEAR
[REQUEST HEARING]. [(a)] If the board does not appeal [file a
reply to] the conservatorship order or fails to [as required by
Section 126.104 or fails to request and] appear at the hearing
provided for by Section 126.105, the credit union is presumed to
have consented to the commissioner's disposition action, and the
commissioner may dispose of the conservatorship matter as the
commissioner considers appropriate.
[(b) The credit union is presumed to have consented to the
commissioner's disposition action and may not contest it.]
SECTION 23. Section 126.201, Finance Code, is amended to
read as follows:
Sec. 126.201. LIQUIDATION ORDER; APPOINTMENT OF
LIQUIDATING AGENT. (a) After the commissioner has issued a
conservatorship order and provided an opportunity for hearing, the
commissioner by liquidation order may appoint a liquidating agent
and direct that the credit union be liquidated if:
(1) the board requests issuance of a liquidation order
and liquidation of the credit union;
(2) the credit union otherwise consents to the
liquidation; or
(3) the commissioner:
(A) finds that the closing of the credit union
and the liquidation of the credit union's assets are in the public
interest and the best interest of the credit union's members,
depositors, and creditors; and
(B) determines that the credit union is not in a
condition to continue business and cannot be rehabilitated as
provided by this chapter.
(b) If the board consents to the liquidation order and
waives the necessity of a conservatorship order, the commissioner
may issue a liquidation order without first issuing a
conservatorship order.
SECTION 24. Section 126.455, Finance Code, is amended to
read as follows:
Sec. 126.455. VOTE ON VOLUNTARY LIQUIDATION. At a special
meeting called to consider the proposed liquidation, a majority of
the credit union members voting, but not less than a quorum, may
vote to dissolve and liquidate the credit union. Those members
casting votes by mail or at the meeting constitute a quorum for the
transaction of business at the special meeting, notwithstanding a
bylaw provision to the contrary.
SECTION 25. Section 126.104, Finance Code, is repealed.
SECTION 26. This Act takes effect September 1, 2013.