CHAPTER 121. GENERAL PROVISIONS - Texas Statutes

FINANCE CODE

TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES

SUBTITLE D. CREDIT UNIONS

CHAPTER 121. GENERAL PROVISIONS

Sec. 121.001. SHORT TITLE. This subtitle may be cited as the

Texas Credit Union Act.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 121.0011. POLICY. The purposes of this subtitle are to

safeguard the public interest, to promote public confidence in

credit unions doing business in this state, to provide for the

protection of the interests, shares, and deposits of credit

unions, to delegate to the department rulemaking and

discretionary authority that may be necessary to assure that

credit unions operating under this subtitle may be sufficiently

flexible and readily responsive to changes in economic conditions

and practices, to maintain sound credit union growth and

financial integrity, fiscal responsibility, and independent

judgment in the management of the business affairs of credit

unions, to permit credit unions to effectively provide a full

array of financial and financially related services, to provide

effective supervision and regulation of credit unions and their

fields of membership, and to clarify and modernize the law

governing the credit unions doing business in this state. This

subtitle is the public policy of this state and necessary to the

public welfare.

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.15, eff. Sept. 1,

1999; Acts 1999, 76th Leg., ch. 87, Sec. 2, eff. Sept. 1, 1999.

Sec. 121.002. DEFINITIONS. In this subtitle:

(1) "Board" means the board of directors of a credit union.

(2) "Credit union," unless the context relates to a federal

credit union, means a voluntary, cooperative, nonprofit financial

institution authorized to do business in this state under this

subtitle for purposes of:

(A) encouraging thrift among its members;

(B) creating a source of credit at fair and reasonable interest

rates;

(C) developing and providing to its members alternative methods

of financing their purchases at reasonable costs;

(D) providing an opportunity for its members to use and control

their money to improve their economic and social condition; and

(E) conducting any other business, engaging in any other

activity, or providing any other service that may benefit its

members.

(3) "Commission" means the Credit Union Commission.

(4) "Commissioner" means the credit union commissioner.

(5) "Department" means the credit union department.

(6) "Deputy commissioner" means the deputy credit union

commissioner.

(7) "Foreign credit union" means a credit union that is not

organized under the laws of this state or the United States.

(8) "Law enforcement agency" means the Department of Public

Safety of the State of Texas, the Federal Bureau of

Investigation, or any local police or sheriff department.

(9) "Membership share" means a designated share account of a

credit union consisting of the balance held by the credit union

and established by a credit union member in accordance with the

standards specified by the credit union.

(10) "Organization" means a corporation, partnership,

association, limited liability company, or other legal entity.

(11) "Unsafe or unsound condition," with respect to a credit

union, includes:

(A) being insolvent;

(B) having incurred or being likely to incur a loss that will

deplete all or substantially all of the credit union's net worth;

or

(C) being in imminent danger of losing the credit union's share

and deposit insurance or guarantee.

(12) "Unsafe or unsound practice" means an action or inaction in

the operation of a credit union that is contrary to generally

accepted standards of prudent operation, the likely consequences

of which, if continued, would be abnormal and material risk of

loss or danger to a credit union, the credit union's members, or

an organization insuring or guaranteeing the credit union's

shares and deposits.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 157, Sec. 5, eff. Sept. 1,

1999; Acts 2003, 78th Leg., ch. 533, Sec. 6, eff. Sept. 1, 2003.

Sec. 121.003. CREDIT UNIONS SUBJECT TO SUBTITLE. A credit union

organized and existing under the laws of this state is governed

by and authorized to do business under this subtitle.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 121.004. LIBERAL CONSTRUCTION. This subtitle shall be

liberally construed to effect its purposes.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 121.005. HEARINGS. (a) A hearing held under this subtitle

is governed by Chapter 2001, Government Code.

(b) The commission may adopt rules of procedure for a hearing

held under this subtitle.

(c) This section does not apply to a meeting under Section

122.005.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.14(a), eff. Sept.

1, 1999.

Sec. 121.006. PROCEDURE AND RULES APPLICABLE TO CERTAIN

PROCEEDINGS. (a) If the commissioner proposes to revoke a

credit union's certificate of incorporation, the credit union is

entitled to a hearing conducted by the State Office of

Administrative Hearings.

(b) A proceeding for a disciplinary action is governed by

Chapter 2001, Government Code. Rules of practice adopted by the

commission under Section 2001.004, Government Code, applicable to

a proceeding for a disciplinary action may not conflict with

rules adopted by the State Office of Administrative Hearings.

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.14(b), eff. Sept.

1, 1999. Amended by Acts 2003, 78th Leg., ch. 533, Sec. 7, eff.

Sept. 1, 2003.