Part 6.
CREDIT UNION DEPARTMENT
Chapter 91.
CHARTERING, OPERATIONS, MERGERS, LIQUIDATIONS
Subchapter A. GENERAL RULES
7 TAC §91.104
The Texas Credit Union Commission proposed an amendment to §91.104
concerning the public notice of certain requests for approval by the commissioner.
The amendment would add paragraph (5) to subsection (a), thereby requiring
notice of a request by a foreign credit union to do business in Texas to be
published in the Texas Register and the department newsletter.
Subsection (d) of §91.211 relating to an application for a certificate
of authority to do business in the State of Texas requires notice of an application
to be published. However, as part of the Commission's review of all administrative
rules in accordance with the Government Code and General Appropriations Act, §91.211
is being repealed and a replacement rule proposed. During this process it
was determined that all publication requirements be set forth in §91.104
for easy reference.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed amended rule.
She has also determined that for each year of the first five years the
proposed amended rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that the public will continue to have two publications,
as well as the Department's website, in which to review to applications for
non-federal credit unions desiring to operate in Texas. There is no anticipated
effect on small businesses as a result of adopting the proposal. There is
no economic cost anticipated to entities that are required to comply with
the amendment as a result of its future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the Texas Register to Lynette Pool, Deputy Commissioner,
Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699.
The amendment is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act).
The specific section affected by this proposed amendment is Texas Finance
Code §§122.013.
§91.104.Notice of Applications.
(a)
Upon receipt of a complete application for authorization
to be granted by the department, the commissioner shall cause notice of such
application to be published in the Texas Register and the department newsletter.
Notice shall be published in both publications at least 30 days prior to taking
action on the request. The activities covered by this requirement are:
(1)
an application for incorporation under Texas Finance Code §122.001;
(2)
a request for an amendment to a credit union's articles
of incorporation under Texas Finance Code §122.011;
(3)
a request for an amendment to a credit union's bylaws
for an expansion of its field of membership under Texas Finance Code §122.011;
[
(4)
an application for merger or consolidation under Texas
Finance Code §122.152
; and
[
(5)
a request by a foreign credit union
to do business in Texas under Texas Finance Code §122.013.
(b)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on January 26, 2000.
TRD-200000522
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.105
The Texas Credit Union Commission proposes new §91.105
pertaining to applications for authorization from the commissioner. The proposed
rule would allow the commissioner to accept applications and other forms prescribed
by federal or other state regulators in lieu of the commissioner's forms.
The commissioner, however, would have the authority to require additional
information if the Department prescribed form did not provide the information
needed to render a decision or to comply with governing statutes and rules.
The new rule is being proposed as a result of the general rule review mandated
by the Government Code and General Appropriations Act. (Both contain provisions
requiring state agencies to review and consider for readoption each of their
rules every four years). Notice of Intention to Review Chapter 91 rules was
published in the
Texas Register
on November
26, 1999 (24 TexReg 10583) for the purpose of accepting public comment. No
comments have been received. However, the Commission has determined from its
review of Chapter 91 that a need exists for this proposed rule.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
She has also determined that for each year of the first five years the
proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that state-chartered credit unions will be able
to reduce duplicative or unnecessary paperwork by not being required to complete
Department-specific forms in the event an application is required by more
than one regulatory body. There is no anticipated effect on small businesses
as a result of adopting the new rule. There is no economic cost anticipated
to entities that are required to comply with the new rule as a result of its
future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the Texas Register to Lynette Pool, Deputy Commissioner,
Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act).
The specific sections affected by these proposed rule are Texas Finance
Code §§ 122.001, 122.011, 122.152, and 122.203.
§91.105.Applications for Authorization from the Commissioner.
The commissioner may accept applications and other forms prescribed
by federal or state regulators in lieu of the commissioner's forms. The foregoing,
however, shall not limit the commissioner's power to require additional information
concerning any application.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on January 26, 2000.
TRD-200000521
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.110
The Texas Credit Union Commission proposes new §91.110
pertaining to protest procedures for applications for authorization from the
commissioner. The proposed rule sets forth the procedure for protesting an
application for authorization to be granted by the commissioner. The new rule
replaces existing §91.204 which is proposed for repeal elsewhere in this
edition of the
Texas Register
.
Proposed §91.110 is substantially the same as the existing §91.204
with two exceptions. Language has been added to reference the statutory requirement
that notice of applications be published in the
Texas Register
. The proposed rule also states that the commissioner
can prescribe the form of the notice of protest.
The new rule is being proposed as a result of the general rule review mandated
by the Government Code and General Appropriations Act. (Both contain provisions
requiring state agencies to review and consider for readoption each of their
rules every four years). Notice of Intention to Review Chapter 91 rules was
published in the
Texas Register
on November
26, 1999 (24 TexReg 10583) for the purpose of accepting public comment. No
comments have been received. However, as a result of its review the Commission
has determined that the need for a rule addressing the protest of applications
continues to exist.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
She has also determined that for each year of the first five years the
proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that state-chartered credit unions' right to
protest an application will be clear and the procedures for doing so will
be clear. There is no anticipated effect on small businesses as a result of
adopting the new rule. There is no economic cost anticipated to entities that
are required to comply with the new rule as a result of its future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the Texas Register to Lynette Pool, Deputy Commissioner,
Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act); §122.007 which requires the commission
by rule to provide for the appeal of a commissioner's order relating to an
application to incorporate; and §122.011 which requires the commission
by rule to provide for the appeal of a commissioner's decision on an amendment
to the articles of incorporation or bylaws.
The specific sections affected by these proposed rule are Texas Finance
Code §§ 122.007, 122.011, and 122.153.
§91.110.Protest Procedures for Applications.
A protestant to an application for authorization to be granted by the
commissioner must file a written notice of protest, in such form as the commissioner
may prescribe, within 30 days of the date that notice of the application is
published in either the Texas Register or the department newsletter, whichever
is later. The notice of protest must provide all information that the protestant
wishes the commissioner to consider in evaluating the application.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on January 26, 2000.
TRD-200000535
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.115
The Texas Credit Union Commission proposes new §91.115
pertaining to safety at unmanned teller machines. The proposal incorporates
the language contained in subsection (b) of §91.401 which is proposed
for repeal elsewhere in this edition of the
Texas
Register
, and incorporates new language which makes the rule conform
more to the requirements of Texas Finance Code, Chapter 59, Subchapter D,
relating to safety at unmanned teller machines.
The new rule is being proposed as a result of the general rule review mandated
by the Government Code and General Appropriations Act. (Both contain provisions
requiring state agencies to review and consider for readoption each of their
rules every four years). Notice of Intention to Review Chapter 91 rules was
published in the
Texas Register
on November
26, 1999 (24 TexReg 10583) for the purpose of accepting public comment. No
comments have been received. However, as a result of its review the Commission
has determined that the need for a rule addressing safety at teller machines
continues to exist and should be set forth in a separate section.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
She has also determined that for each year of the first five years the
proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that credit union member safety at unmanned
teller machines will continue to be promoted. There is no anticipated effect
on small businesses as a result of adopting the new rule. There is no economic
cost anticipated to entities that are required to comply with the new rule
as a result of its future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the Texas Register to Lynette Pool, Deputy Commissioner,
Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699.
The new rule is proposed under the provisions of §59.310
of the Texas Finance Code that the Commission has interpreted to authorize
the Credit Union Commission to adopt rules to implement Subchapter D of Chapter
589, Texas Finance Code.
The specific sections affected by these proposed rules are Texas Finance
Code §§ 59.301 through 59.310.
§91.115.Safety at Unmanned Teller Machines.
(a)
Definitions and Standards.
(1)
Words and terms used in this chapter that are defined in
the Finance Code, §59.301, have the same meanings as defined in the Finance
Code.
(2)
For the purposes of measuring compliance with the
Finance Code, §59.307, candle foot power should be determined under normal,
dry weather conditions, without complicating factors such as fog, rain, snow,
sand or dust storm, or other similar condition.
(b)
Safety evaluations.
(1)
The credit union owner or operator of an unmanned teller
machine shall evaluate the safety of each machine on a basis no less frequently
than annually.
(2)
The safety evaluation shall consider at the least
the factors identified in the Finance Code, §59.308.
(3)
The credit union owner or operator of the unmanned
teller machine may provide the landlord or owner of the property with a copy
of the safety evaluation if an access area or defined parking area for an
unmanned teller machine is not controlled by the credit union owner or operator
of the machine.
(c)
Notice.
(1)
A credit union issuer of access devices shall furnish its
members with a notice of basic safety precautions that each member should
employ while using an unmanned teller machine. The notice shall be delivered
personally or mailed to each member, whose mailing address is in this state,
when an access device is issued, renewed or replaced.
(2)
Content. The notice of basic safety precautions required
by this section must be provided in written form which can be retained by
the member and may include recommendations or advice regarding:
(A)
security at walk-up or drive-up unmanned teller machines;
(B)
protection of code or personal identification numbers;
(C)
procedures for lost or stolen access devices;
(D)
reaction to suspicious circumstances;
(E)
safekeeping and disposition of unmanned teller machine
receipts, such as the inadvisability of leaving an unmanned teller machine
receipt near the unmanned teller machine;
(F)
the inadvisability of surrendering information about the
member's access device over the telephone;
(G)
safeguarding and protecting the member's access device,
such as a recommendation that the member treat the access device as if it
was cash;
(H)
protection against unmanned teller machine fraud, such
as a recommendation that the member compare unmanned teller machine receipts
against the member's monthly statement; and
(I)
other recommendations that the credit union reasonably
believes are appropriate to facilitate the security of its unmanned teller
machine users.
(d)
Lease premises.
(1)
Noncompliance by landlord. Pursuant to the Finance Code, §59.306,
the landlord or owner of property is required to comply with the safety procedures
of the Finance Code, Chapter 59, Subchapter D, if an access area or defined
parking area for an unmanned teller machine is not controlled by the owner
or operator of the unmanned teller machine. If a credit union owner or operator
of an unmanned teller machine on leased premises is unable to obtain compliance
with safety procedures from the landlord or owner of the property, the credit
union shall notify the landlord in writing of the requirements of the Finance
Code, Chapter 59, Subchapter D, and of those provisions for which the landlord
is in noncompliance.
(2)
Enforcement. Noncompliance with safety procedures
required by the Finance Code, Chapter 59, Subchapter D, by a landlord or owner
of property after receipt of written notification from the owner or operator
constitutes a violation of the Finance Code, Chapter 59, Subchapter D, which
may be enforced by the Texas Attorney General.
(e)
Video surveillance equipment. Video surveillance equipment
is not required to be installed at all unmanned teller machines. The credit
union owner or operator must determine whether video surveillance or unconnected
video surveillance equipment should be installed at a particular unmanned
teller machine site, based on the safety evaluation required under the Finance
Code, §59.308. If a credit union owner or operator determines that video
surveillance equipment should be installed, the credit union must provide
for selecting, testing, operating, and maintaining appropriate equipment.
(f)
Unmanned teller machines located in a credit union vestibule.
The provisions of the Finance Code, Chapter 59, Subchapter D, and this section
are applicable to an unmanned teller machine located in a credit union vestibule
if there is 24 hours access to the vestibule from outside the building.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on January 26, 2000.
TRD-200000536
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.120
The Texas Credit Union Commission proposes new §91.120
pertaining to the posting of notice regarding certain loan agreements. Texas
Finance Code §26.02 requires all financial institutions, including credit
unions, to post notices informing members that certain loan agreements must
be in writing. By incorporating this requirement into the commission rules,
credit unions will be become more knowledgeable of the requirement, thus ensuring
compliance.
The new rule is being proposed as a result of the general rule review
mandated by the Government Code and General Appropriations Act. (Both contain
provisions requiring state agencies to review and consider for readoption
each of their rules every four years). Notice of Intention to Review Chapter
91 rules was published in the
Texas Register
on November 26, 1999 (24 TexReg 10583) for the purpose of accepting public
comment. No comments have been received. However, the Commission has determined
from its review of Chapter 91 that a need exists for this proposed rule.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
She has also determined that for each year of the first five years the
proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that credit union members, through the posting
requirement of their credit unions, will be reminded of their rights and obligations
as parties to lending transactions. There is no anticipated effect on small
businesses as a result of adopting the new rule. There is no economic cost
anticipated to entities given that credit unions are already required to comply
with the enabling state statute.
Written comments on the proposal must be submitted within 45 days after
its publication in the Texas Register to Lynette Pool, Deputy Commissioner,
Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act).
The specific sections affected by these proposed rules are Texas Finance
Code § 26.02.
§91.120.Posting of Notice Regarding Certain Loan Agreements.
(a)
As required by the Business and Commerce Code, § 26.02,
all credit unions are required to conspicuously post notices informing members
of the requirements that certain loan agreements must be in writing. The notice
must include the language and be in the format prescribed by the Finance Commission
of Texas in § 3.34 of this title (relating to Posting of Notice in All
Finance Institutions).
(b)
Each credit union shall post the notice required by subsection
(a) in the lobby of each of its offices other than off-premises electronic
deposit facilities.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on January 26, 2000.
TRD-200000534
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.201, §91.202
The Texas Credit Union Commission proposes new §91.201
and §91.202 (pertaining to Incorporation Procedures and Form of Bylaws;
Amendments to Articles of Incorporation and Bylaws).
Proposed new §91.201 would replace existing §91.203 which is
proposed for repeal elsewhere in this edition of the
Texas Register
and proposed new §91.202 would replace existing §91.206
which is also proposed for repeal elsewhere in this edition of the
Texas Register
.
As proposed §91.201 sets forth the procedures for processing an application
to incorporate a new credit union and is substantially the same as the existing §91.203
with one exception. Language has been added to reference the statutory requirement
that the commissioner consider the extent of a potential field of membership
overlap of the welfare and stability of the applicant and other affected credit
unions. Specifically, the new rule establishes four situations in which the
commissioner would not consider an overlap to be adverse to the overlapped
credit union. For situations in which a potential overlap would have an adverse
impact on another credit union and consequently exclusionary language is deemed
necessary, the rule would grant protection for only 24 months. The commissioner
may extend the period for an additional 24 months for good cause shown.
As proposed §91.202 is substantially the same as the existing §91.206
with the following exceptions. First, language requiring notice of an application
has been deleted as that requirement is already set forth in §91.104
pertaining to notice of applications. Furthermore, language stating that the
commissioner may approve an amendment to the standard bylaws if it is consistent
with the purposes of the Texas Credit Union Act and does not violate the Act
or rules adopted thereunder is already stated in the Act. Therefore, this
provision is redundant. Lastly, the subsection in existing §91.206 related
to the commissioner considering adoption of a standard bylaw amendment if
requested by 25 or more credit unions is considered unnecessary. All requests
for changes to the Standard Bylaws for State Chartered Credit Unions are submitted
to the Commission as part of the agenda packets for the Commission's public
meetings. The Commission then has the authority to act upon the request if
deemed appropriate.
The new rules are being proposed as a result of the general rule review
mandated by the Government Code and General Appropriations Act. (Both contain
provisions requiring state agencies to review and consider for readoption
each of their rules every four years). Notice of Intention to Review Chapter
91 rules was published in the November 26, 1999, issue of the
Texas Register
(24 TexReg 10583) for the purpose of accepting public
comment. No comments were received. However, as a result of its review the
Commission has determined that the need for a rule addressing incorporation
procedures continues to exist.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
She has also determined that for each year of the first five years the
proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that state-chartered credit unions will have
a clearer understanding of the process for approving an application to incorporate
a new credit union, as well as how the Department views overlaps. There is
no anticipated effect on small businesses as a result of adopting the new
rule. There is no economic cost anticipated to entities that are required
to comply with the new rule as a result of its future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the Texas Register to Lynette Pool, Deputy Commissioner,
Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act).
The specific sections affected by these proposed rule are Texas Finance
Code §122.001 and §122.006.
§91.201. Incorporation Procedures.
(a)
An application to incorporate a credit union shall be
in writing and supported by such information and data as the commissioner
may require to make the findings necessary for the issuance of a certificate
of incorporation.
(b)
The commissioner shall determine whether or not an application
is complete within thirty days of its receipt and provide written notice of
the determination. If the application is deemed incomplete, the notice shall
provide with reasonable specificity the deficiencies in the application.
(c)
Upon the determination that an application is complete,
the commissioner shall make or cause to be made an investigation and examination
of the facts concerning the applicant. It is essential that the investigation
and examination confirm to the satisfaction of the commissioner that the proposed
institution will have a reasonable opportunity to succeed.
(d)
Proposed credit unions must investigate the possibility
of an overlap with existing state or federal credit unions doing business
in this state prior to submitting an application. When an overlap situation
does arise, officials of the involved entities must attempt to resolve the
overlap issue. Typically, an overlap will not be considered adverse to the
overlapped credit union if:
(1)
the group has 300 or less primary potential members or
the overlap is otherwise incidental in nature;
(2)
the overlapped credit union does not object to the
overlap;
(3)
there is limited participation by members or employees
of the group in the original credit union after the expiration of a reasonable
period of time; or
(4)
a single occupational or associational based credit
union overlaps a community chartered credit union.
(e)
When the applicant and a credit union agree and/or the
commissioner has determined that overlap protection is appropriate, an exclusionary
clause will be included in the proposed field of membership for a period of
24 months from the date the proposed credit union commences business. The
commissioner, for good cause shown, may extend this period for an additional
24 months.
(f)
The commissioner may approve the application conditioned
upon specific requirements being met, but the certificate of incorporation
shall not be issued unless such conditions have been meet within the time
specified in the approval order or any extension as set forth in Finance Code §122.006.
§91.202. Form of Bylaws; Amendments to Articles of Incorporation and Bylaws.
(a)
The Standard Bylaws for State Chartered Credit Unions,
adopted by the commission in 1986 or as subsequently revised or amended, constitute
the standard form of bylaws which shall be used by credit union incorporators.
(b)
The commissioner is expressly authorized to approve deviations
from and amendments to the standard bylaws. The commissioner may approve a
deviation or amendment unless the deviation or amendment violates the Act
or rules of the commission.
(c)
A credit union may request a deviation from the standard
bylaws by submitting a written application to the commissioner. A request
for a deviation shall be considered in the same manner as an application to
amend bylaws under this section.
(d)
Credit unions desiring to amend articles of incorporation
or bylaws must submit a written application, in such form as the commissioner
may prescribe. The application shall include the text of the amendment, the
date that the board of directors adopted the amendment, a brief statement
explaining the purpose of the amendment, information regarding the financial
impact on the credit union if the amendment is approved, and any other information
the commissioner may require to make a decision on the amendment.
(e)
The commissioner shall determine whether or not an application
is complete within thirty day of its receipt and provide written notice of
the determination. If the application is deemed incomplete, the notice shall
provide with reasonable specificity the deficiencies in the application.
(f)
The commissioner does not need to provide notice as prescribed
in §91.103 (relating to Public Notice of Department Activities) and §91.104
(relating to Notice of Applications) for applications that apply for standard
optional field of membership provisions (1), (2), (3), and (4) as contained
in the Standard Bylaws for State Chartered Credit Unions.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State, on January 26, 2000.
TRD-200000543
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
The Texas Credit Union Commission proposes the repeal of several sections
of 7 TAC Chapter 91 General Rules. Specifically, the Commission proposes to
repeal §91.203 Incorporation Procedures; §91.204 Protest Procedures; §91.206
Form of Bylaws; Amendments to Articles of Incorporation and Bylaws; §91.211
Application for A Certificate of Authority to Do Business in the State of
Texas; §91.401 General Powers; §91.402 Records Retention; §91.503
Eligibility to Hold Office and Removal of Directors; §91.506 Director
Meeting Fees and Bond Requirements; and §91.507 Financial Reporting;
Audits and Verification of Accounts.
The Government Code and the General Appropriations Act require each state
agency to review and consider for readoption each rule adopted by that agency
pursuant to the Government Code, Chapter 2001 (Administrative Procedures Act).
Such reviews shall include, at a minimum, an assessment by the agency as to
whether the reason for adopting or readopting the rule continues to exist.
After conducting a preliminary review of its rules, the Commission determined
that the chapter should be updated to (1) repeal rules that are not necessary,
(2) update existing rules based on rules adopted by the State Office of Administrative
Hearings, (3) adopt new rules for pertinent issues that are not addressed
in current rules, and (4) renumber the rules.
Lynette Pool, Deputy Commissioner, has determined that for each year of
the first five years the repeals are in effect, there will be no fiscal implications
for state or local government as a result of enforcing or administering the
repeal of these sections.
Lynette Pool has determined that for each year of the first five years
the repeals are in effect, the public benefit anticipated as a result of the
repeals will be a set of new rules that are more clear and comprehensive.
There will be no effect on small businesses as a result of repealing these
sections. There is no anticipated economic cost to entities that are currently
required to comply with these sections as result of their repeal.
Written comments on the proposed repeals must be submitted within 45 days
after its publication in the
Texas Register
to Lynette Pool, Deputy Commissioner, Credit Union Department, 914 East Anderson
Lane, Austin, Texas, 78752-1699.
Subchapter B. ORGANIZATION PROCEDURES
7 TAC §§91.203, 91.204, 91.206, 91.211
(Editor's note: The text of the following sections proposed for
repeal will not be published. The sections may be examined in the offices
of the Credit Union Department or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The repeals are proposed under the provisions of §15.402
of the Texas Finance Code, which authorizes the commission to adopt reasonable
rules.
The specific sections affected by this proposal are §§122.001,
122.006, 122.007, 122.011, and 122.013 of the Texas Finance Code.
§91.203.Incorporation Procedures.
§91.204.Protest Procedures.
§91.206.Form of Bylaws; Amendments to Articles of Incorporation and Bylaws.
§91.211.Application for a Certificate of Authority to do Business in the State of Texas.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State, on January 27, 2000.
TRD-200000587
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.401, §91.402
(Editor's note: The text of the following sections proposed for
repeal will not be published. The sections may be examined in the offices
of the Credit Union Department or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The repeals are proposed under the provisions of §15.402
of the Texas Finance Code, which authorizes the commission to adopt reasonable
rules.
The specific sections affected by this proposal are §123.001 and §123.110
of the Texas Finance Code.
§91.401.General Powers.
§91.402.Records Retention.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed
with the Office of the Secretary of State, on January 27, 2000.
TRD-200000586
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §§91.503, 91.506, 91.507
(Editor's note: The text of the following sections proposed for
repeal will not be published. The sections may be examined in the offices
of the Credit Union Department or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The repeals are proposed under the provisions of §15.402
of the Texas Finance Code, which authorizes the commission to adopt reasonable
rules.
The specific sections affected by this proposal are §§122.054,
122.062, 122.63, and 123.002 of the Texas Finance Code.
§91.503.Eligibility to Hold Office and Removal of Directors.
§91.506.Director Meeting Fees and Bond Requirements.
§91.507.Financial Reporting; Audits and Verification of Accounts.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed
with the Office of the Secretary of State, on January 27, 2000.
TRD-200000585
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.205
The Texas Credit Union Commission proposes new §91.205
pertaining to use of "credit union" name. The proposed rule would allow credit
unions to do business under an assumed name provided the official name is
used in all official or legal communications or documents, provided the credit
union has received authority from the commissioner, has registered with the
Secretary of State and appropriate county authority, and ensures its members
are aware that the DBA is the same credit union for share/deposit insurance
coverage purposes.
The new rule is being proposed as a result of the general rule review mandated
by the Government Code and General Appropriations Act. (Both contain provisions
requiring state agencies to review and consider for readoption each of their
rules every four years). Notice of Intention to Review Chapter 91 rules was
published in the November 26, 1999, issue of the
Texas Register
(24 TexReg 10583) for the purpose of accepting public
comment. No comments have been received. However, the Commission has determined
from its review of Chapter 91 and conversations with agency staff that a rule
addressing assumed names is needed.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
She has also determined that for each year of the first five years the
proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that state-chartered credit unions will have
the ability to use alternative names for marketing or strategic purposes while
reducing possible confusion among their members. There is no anticipated effect
on small businesses as a result of adopting the new rule. There is no economic
cost anticipated to entities that are required to comply with the new rule
as a result of its future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the
Texas Register
to Lynette
Pool, Deputy Commissioner, Credit Union Department, 914 East Anderson Lane,
Austin, Texas 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act).
The specific sections affected by the rule as proposed are Texas Finance
Code §15.4022 and §122.003.
§91.205. Use of Credit Union Name.
(a)
Unless changed by a bylaw amendment approved by the commissioner
in accordance with the Act and these rules, a credit union shall do business
under the name in which its charter was issued. In addition to the official
charter name, a credit union may do business under an assumed name. However,
the official name as it appears in the bylaws must be used in all official
or legal communications or documents.
(b)
A credit union shall not do business under any name other
than its official name until it has registered the designation with the Secretary
of State and the appropriate county clerk, and has received from the commissioner
a certificate of authority to use an assumed business name.
(c)
The commissioner shall not issue a certificate of authority
to use an assumed business name if the designation might mislead the public
or is not readily distinguishable from, or is deceptively similar to, a name
of another credit union lawfully doing business and that has established an
office in this state.
(d)
It is the responsibility of the credit union officials
to make every reasonable attempt to comply with state and federal law applicable
to corporate names.
(e)
A credit union that intends to use an assumed name shall
take reasonable steps to ensure that members will not become confused and
believe that its different facilities will be mistaken for separate credit
unions or that the shares and deposits in the different facilities are separately
insured. At a minimum, these measures will include:
(1)
Disclosing in signs, advertising, and similar materials
that the facility is a unit of the insured credit union.
(2)
Educating the staff of the credit union regarding
the possibility of member confusion with respect to share/deposit insurance.
(3)
Obtaining from members opening new accounts a signed
statement acknowledging that they are aware that the facility is in fact part
of the insured credit union and that share/deposits held at each facility
are not separately insured.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State, on January 26, 2000.
TRD-200000550
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.210
The Texas Credit Union Commission proposes new §91.210
pertaining to foreign credit unions receiving a certificate of authority to
do business in the state of Texas. The proposed rule would replace existing §91.211
which is proposed for repeal elsewhere in this edition of the
Texas Register
.
As proposed §91.210 is substantially the same as the existing §91.211
with the following exceptions. First, a definition of "foreign credit union"
has been added. Second, the requirement for publishing notice of an application
for a certificate of authority has been deleted; this requirement is being
added to §91.104 relating to notice of applications. Third, language
has been added to require credit unions from other countries that are allowed
to operate branches within Texas by virtue of a federal treaty or agreement
between the U.S. and a foreign county to follow the Act and commission rules.
Lastly, language has been added to indicated that the commissioner can enter
into supervisory agreements with the foreign credit union and/or its regulator
to facilitate examination and supervision of the foreign credit union.
The new rule is being proposed as a result of the general rule review mandated
by the Government Code and General Appropriations Act. (Both contain provisions
requiring state agencies to review and consider for readoption each of their
rules every four years). Notice of Intention to Review Chapter 91 rules was
published in the November 26, 1999, issue of the
Texas Register
(24 TexReg 10583) for the purpose of accepting public
comment. No comments have been received. However, as a result of its review
the Commission has determined that the need for a rule addressing foreign
credit union branch operations in Texas continues to exist.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
She has also determined that for each year of the first five years the
proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that foreign credit unions that provide service
of members residing in Texas will have a clearer understanding of the process
involved for receiving a certificate of authority to do business in Texas.
Furthermore, the Department's ability to supervise those institutions for
the protection of its Texas members will be preserved. There is no anticipated
effect on small businesses as a result of adopting the new rule. There is
no economic cost anticipated to entities that are required to comply with
the new rule as a result of its future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the
Texas Register
to Lynette
Pool, Deputy Commissioner, Credit Union Department, 914 East Anderson Lane,
Austin, Texas 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act).
The specific sections affected by the rule as proposed are Texas Finance
Code §122.013 and §15.411.
§91.210. Certificate of Authority to Do Business in the State of Texas.
(a)
Definition. Foreign credit union, as used in this chapter,
means a credit union that is not chartered under the laws of this state or
the United States and has its main or principal office in another state or
country.
(b)
Application. Prior to commencing business in this state,
a foreign credit union is required to file a written application supported
by such information and data as the commissioner may require to make the findings
necessary for the issuance of a certificate of authority pursuant to Finance
Code §122.013.
(c)
Approval. The application shall not be approved unless
the commissioner finds that the applicant:
(1)
is acting in good faith and the application does not contain
a material misrepresentation;
(2)
is financially sound and has no supervisory problems;
(3)
will conduct its operations in the State of Texas
in accordance with the intent and purpose of the Act and Commission rules;
(4)
has provided evidence of compliance with the Finance
Code, §201.102 concerning registering with the secretary of state to
do business in Texas;
(5)
has share and deposit insurance equivalent to that
required for credit unions organized under the Act;
(6)
has paid a permit fee of $500 for each and every
branch office proposed to be established in the State of Texas;
(7)
has fidelity bond coverage satisfactory to the commissioner;
and
(8)
has provided all other information the commissioner
may require.
(d)
Compliance with Texas law. A credit union chartered by
another state shall comply with the laws of its home state. The laws of the
institution's home state apply, except as follows:
(1)
the laws of this state apply if necessary to preserve
the safety and sound operation of a branch in this state or to otherwise protect
the citizens of this state; and
(2)
any laws of this state regarding home equity lending,
loan interest rates, and consumer protection apply to a branch in this state
of a foreign credit union to the same extent that those laws apply to a Texas
credit union; and
(3)
a foreign credit union that is authorized to operate
a branch in this state may engage in activity only to the extent permissible
for a Texas credit union.
(e)
Federal treaties. If a treaty or agreement exists between
the United States and a foreign country which requires the commissioner to
permit a foreign credit union to operate a branch in this state and the commissioner
determines that the applicant has substantially the same characteristics as
a credit union organized under the Act, then the applicant must comply with
all provisions of the Act and commission rules, unless otherwise permitted
by this section.
(f)
Financial statements. Each foreign credit union that is
operating a branch office within the State of Texas shall furnish to the commissioner
a copy of its annual audited financial statements, if any, or other statements
of financial conditions as the commissioner may require.
(g)
Examinations. The commissioner is authorized to examine
the books and records of any branch office operated in the State of Texas
by a foreign credit union. The costs of examination, as prescribed in §97.113(d)
of this title (relating to Supplemental Examinations), must be fully borne
by the foreign credit union. The supplemental examination fee may be waived
or reduced at the discretion of the commissioner.
(h)
Agreements with other regulators. The commissioner shall
enter into supervisory agreements with the foreign credit union regulators
and, as necessary, the foreign credit unions, as authorized by Finance Code §15.411,
to resolve any conflict of laws and to specify the manner in which the examination,
supervision, and application processes will be coordinated with the regulators.
The agreement may also prescribe the applicable laws governing the powers
and authorities of the foreign branch and may address, but are not limited
to, corporate governance and operational matters. The agreement, however,
shall not limit the jurisdiction or authority of the commissioner to examine,
supervise and regulate a foreign credit union that is operating or seeking
to operate a branch in this state or to take any action or issue any order
with respect to that branch.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State, on January 26, 2000.
TRD-200000551
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.401
The Texas Credit Union Commission proposes new §91.401
pertaining to operational powers of credit unions. The proposed rule would
replace existing §91.401 which is proposed for repeal elsewhere in this
issue of the
Texas Register
.
The proposed rule address the purchase, lease and sale of property; closing
of an office; service contracts; member notifications via electronic means;
and insurance for members. Subsection (a) retains the requirement that credit
unions receive prior approval before exceeding the 5% fixed assets-to-total
assets limitation; further defines the term "fixed assets," and adds certain
requirements concerning transactions with insiders. Subsection (b) requires
member and Department notification if a credit union office is closed. Subsection
(c) expressly authorizes a credit union to enter into service contracts for
services/activities that relates to the daily operations of a credit union.
Subsection (d) is a new provision that allows credit unions to provide required
notices electronically to their members provided certain conditions are met.
Lastly, subsection (e) allows credit unions to charge a user fee for shared
electronic terminals provided notice is given to the user.
The new rule is being proposed as a result of the general rule review mandated
by the Government Code and General Appropriations Act. (Both contain provisions
requiring state agencies to review and consider for readoption each of their
rules every four years). Notice of Intention to Review Chapter 91 rules was
published in the
Texas Register
on November
26, 1999 (24 TexReg 10583) for the purpose of accepting public comment. No
comments have been received. However, as a result of its review the Commission
has determined that the need for a rule further describing state-chartered
credit unions' general powers continues to exist.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
Lynette Pool has also determined that for each year of the first five years
the proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that state-chartered credit unions will have
a clearer understanding of their powers under the Act for the benefit of their
members. There is no anticipated effect on small businesses as a result of
adopting the new rule. There is no economic cost anticipated to entities that
are required to comply with the new rule as a result of its future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the
Texas Register
to Lynette
Pool, Deputy Commissioner, Credit Union Department, 914 East Anderson Lane,
Austin, Texas 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act).
The specific section affected by this proposed rule is Texas Finance Code §123.001.
§91.401.Operational Powers.
(a)
Purchase, lease and sale of property.
(1)
Fixed assets. For the purposes of this rule, the term means
real property, premises, and furniture, fixtures and equipment as defined
herein. Premises include real property with any improvements or leasehold
interest where the credit union transacts or intends to transact business.
Furniture, fixtures and equipment includes all office furnishings (e.g. tables,
chairs, desks, file cabinets, curtains, drapes, rugs, etc.), office machines,
word processing equipment, computer hardware and software, automated terminals,
and heating and cooling equipment. The term does not extend to any real property
which may be conveyed to the credit union in satisfaction of debts previously
contracted in the course of business, nor to such real estate as the credit
union shall purchase at sale on judgements, decrees, mortgage or deed of trust
foreclosures under A security agreement held by the credit union, but a credit
union shall not bid at such sale a larger amount than is necessary to satisfy
the debts and costs owed the credit union.
(2)
Limitations. A credit union may purchase fixed assets
or enter into a contract for the purchase or lease of fixed assets primarily
for its own use in conducting business if the aggregate of all such investments
does not exceed five percent of total assets.
(3)
Restrictions. A credit union shall not purchase real
estate (land or buildings) for the principal purpose of engaging in real estate
rentals or speculation.
(4)
Transactions with insiders. Without the prior approval
of a disinterested majority of the board of directors recorded in the minutes
or, if a disinterested majority cannot be obtained, the prior written approval
of the commissioner, a credit union may not directly or indirectly:
(A)
sell or lease an asset of the credit union to a director,
committee member, or senior executive staff; or
(B)
purchase or lease an asset in which a director, committee
member, or senior executive staff has an interest.
(5)
Use requirement. If real property or leasehold
interest is acquired for future expansion, the credit union must partially
satisfy the "primarily for its own use in conducting business" requirement
within five years after the credit union makes the investment.
(6)
Waiver. The commissioner may, upon written application,
waive or modify any of the limitations or restrictions placed on the investment
of fixed assets.
(7)
Written application. A credit union shall submit such
statements and reports as the commissioner may, in his discretion, require
in support of a waiver or modification of the limits imposed upon the investment
of fixed assets. Such reports and statements shall include but not be limited
to:
(A)
a description of the proposal in terms of cost, usage,
location and method of financing;
(B)
a statement of the economic advantage and disadvantages
relating to the proposed investment; and
(C)
current and past financial data of the credit union.
(b)
Closing of an office. A credit union may permanently close
any of its established offices. The credit union shall provide notice to its
members and the department no later than 60 days prior to the proposed closing.
The credit union shall also post a notice to members in a conspicuous manner
on the premises of the effected office at least 30 days prior to the proposed
closing.
(c)
Service contracts. A credit union may enter into contractual
agreements with one or more credit unions or other organizations for the purpose
of engaging in activities and/or services that relate to the daily operations
of the credit union. Agreements must be in writing and shall advise all parties
that the activities and services may be subject to commission rules and examination
by the commissioner to the extent permitted by law.
(d)
Member notification. A credit union may, by a specific
written board policy, satisfy a "written" notification requirement of the
Act, commission rules, or the credit union's bylaws through electronic communications.
Satisfaction of the notification delivery requirement by electronic communication
can only be achieved if:
(1)
the parties agree to use electronic instead of hard-copy
notifications;
(2)
the parties have the ability to print or download
the notification;
(3)
the system cannot automatically delete the electronic
notification; and
(4)
both parties have the capacity to receive electronic
messages.
(e)
User fee for shared electronic terminal. A credit union
that owns an electronic terminal that is connected to a shared network may
impose a fee for the use of that terminal if imposition of the fee is disclosed
at a time and in a manner that allows a user to avoid the transaction without
incurring the transaction fee.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State, on January 27, 2000.
TRD-200000573
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.405
The Texas Credit Union Commission proposes new §91.405
pertaining to records retention. The proposed rule would replace existing §91.402
which is proposed for repeal elsewhere in this edition of the
Texas Register
.
As proposed §91.405 is substantially the same as the existing §91.402
with the following exceptions. First, subsection (a) specifies that the retention
period for each record starts from the last entry or final action date and
not from the inception of the record. Second, subsection (b) clarifies that
unless otherwise stated in the rule, records may be retained in any form or
format as long as it meets certain conditions pertaining to retrieval or reproduction.
Third, board committee minutes are being added to the ten-year retention schedule.
Fourth, a requirement that a credit union shall provide reasonable protection
from damage by fire and other hazards is being added. Lastly, a subsection
is being added that requires credit unions to furnish promptly and at its
own expense legible, true and complete copies of any record requested by the
Department that is required to be kept by this section.
The new rule is being proposed as a result of the general rule review mandated
by the Government Code and General Appropriations Act. (Both contain provisions
requiring state agencies to review and consider for readoption each of their
rules every four years.) Notice of Intention to Review Chapter 91 rules was
published in the
Texas Register
on November
26, 1999 (24 TexReg 10583) for the purpose of accepting public comment. No
comments have been received. However, as a result of its review the Commission
has determined that the need for a rule addressing records retention continues
to exist.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
Lynette Pool has also determined that for each year of the first five years
the proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that state-chartered credit unions will have
pertinent records available should its members or regulator need access to
them. There is no anticipated effect on small businesses as a result of adopting
the new rule. There is no economic cost anticipated to entities that are required
to comply with the new rule as a result of its future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the
Texas Register
to Lynette
Pool, Deputy Commissioner, Credit Union Department, 914 East Anderson Lane,
Austin, Texas, 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act).
The specific section affected by this proposed rule is Texas Finance Code §123.110.
§91.405.Records Retention.
(a)
General. Every credit union shall make and keep current
accounts, books, and other records of all of its transactions in sufficient
detail to permit examination, audit and verification of financial statements,
schedules, and reports it is required to file with the Department or which
it issues to its members. Such accounts, books and other records shall be
maintained in appropriate form and in sufficient detail to provide all of
the information with respect to the business of the credit union for such
minimum periods as prescribed by this section. The retention period for each
record starts from the last entry or final action date and not from the inception
of the record.
(b)
Manner of maintenance. Except for those records described
in subsection (c) of this section, records may be maintained in whatever manner,
form or format a credit union deems appropriate; provided, however, the records
required by this section must clearly and accurately reflect the information
required, provide an adequate basis for the examination and audit of the information,
and can be retrieved in a readable and useable format. Records may be maintained
in hard copy, automated or electronic form provided the records are easily
retrievable, ready available for inspection, and capable of being reproduced
in a hard copy. A credit union may contract with third party service providers
to maintain records required under this part.
(c)
Permanent retention. The following records must be retained
permanently in their original form:
(1)
charter, bylaws, articles of incorporation, and amendments
thereto;
(2)
currently effective certificates or licenses to operate
under programs of various government agencies, such as a certificate to act
as issuing agent for the sale of United States savings bonds; and
(3)
currently effective membership applications, joint
membership agreements, payable on death agreements, share draft agreements,
signature cards, and any other currently effective account agreements related
to share or deposit accounts.
(4)
A credit union board of directors may by policy elect
to maintain these membership records in other than original form after obtaining
a legal opinion that the proposed methodology continues all legal remedies
as if the original has been retained.
(d)
Ten year retention. Records which are significant to the
continuing operation of the credit union must be retained until the expiration
of ten years following the making of the record or the last entry thereon
or the expiration of the applicable statute of limitations, whichever is later.
The records are:
(1)
minutes of meetings of the members, the board of directors,
and board committees;
(2)
journal and cash record;
(3)
general ledger and subsidiary ledgers;
(4)
for active accounts, one copy of each individual share
and loan ledger or its equivalent;
(5)
comprehensive annual audit reports including evidence
of account verification; and
(6)
examination reports and official correspondence from
the department or any other government agency acting in a regulatory capacity.
(e)
Five year retention. The following records must be retained
until the expiration of five years following the making of the record or the
last entry thereon or the expiration of the applicable statute of limitations,
whichever is later:
(1)
records related to closed accounts including membership
applications, joint membership agreements, payable on death agreements, signature
cards, share draft agreements, and any other account agreements; loan agreements;
and
(2)
for an active account, any account agreement which
is no longer in effect.
(f)
Data processing records. Provisions of this section apply
to records produced by a data processing system. Output reports that substitute
for standard conventional records or that provide the only support for entries
in the journal and cash record should be retained for the minimum period specified
in this rule.
(g)
Protection and storage of records. A credit union shall
provide reasonable protection from damage by fire, flood and other hazards
for records required by this section to be preserved and, in selection of
storage space, safeguard such records from unnecessary exposure to deterioration
from excessive humidity, dryness, or lack of proper ventilation.
(h)
Records destruction. The board of directors shall adopt
a written policy authorizing the destruction of specified records on a continuing
basis upon expiration of specified retention periods.
(i)
Records preservation. All state chartered credit unions
are required to maintain a records preservation program to identify and store
vital records in order that they may be reconstructed in the event the credit
union's records are destroyed. Storage of vital records is the responsibility
of the board but may be delegated to the responsible person(s). A vital records
storage center should be established at some location that is far enough from
the credit union office to avoid the simultaneous loss of both sets of records
in the event of a disaster. Records must be stored every calendar quarter
within 30 days following quarter-end at which time records stored for the
previous quarter may be destroyed. Stored records may be in any form which
can be used to reconstruct the credit union's records. This includes machine
copies, microfilm, or any other usable copy. The records to be stored shall
be for the most recent month-end and are:
(1)
a list of all shares and/or deposits and loan balances
for each member's account. Each balance on the list is to be identified by
an account name or number. Multiple balances of either shares or loans to
one account shall be listed separately;
(2)
a financial statement/statement of financial condition
which lists all the credit union's assets and liability accounts;
(3)
a listing of the credit union's banks, insurance policies
and investments. This information may be marked "permanent" and updated only
when changes are made.
(j)
Records preservation compliance. Credit unions that have
some or all of their records maintained by an off-site data processor are
considered to be in compliance so long as the processor meets the minimum
requirements of this section. Credit unions that have in-house capabilities
shall make the necessary provisions to safeguard the backup of data on a continuing
basis.
(k)
Reproduction of records. A credit union shall furnish promptly,
at its own expense, legible, true and complete copies of any record required
to be kept by this section as are requested by the department.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State, on January 27, 2000.
TRD-200000574
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.501
The Texas Credit Union Commission proposes new §91.501
pertaining to members' eligibility to hold office. The proposed rule would
replace existing §91.503 which is proposed for repeal elsewhere in this
edition of the
Texas Register
.
As proposed §91.501 is substantially the same as the existing §91.503
with two exceptions. Two provisions have been added to the qualifications
for a director: the prospective director cannot have had a final judgement
entered against him/her in a civil action upon the grounds of fraud, deceit,
or mispresentation; nor can the individual have been personally made subject
to an operating directive for cause while serving as an officer, agency, employee
or representative of a financial institution. A new subsection has also been
added that authorizes a credit union to establish continuing education requirements
for directors.
The new rule is being proposed as a result of the general rule review mandated
by the Government Code and General Appropriations Act. (Both contain provisions
requiring state agencies to review and consider for readoption each of their
rules every four years.) Notice of Intention to Review Chapter 91 rules was
published in the
Texas Register
on November
26, 1999 (24 TexReg 10583) for the purpose of accepting public comment. No
comments have been received. However, as a result of its review the Commission
has determined that the need for a rule addressing eligibility to serve on
a board of directors continues to exist.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
She has also determined that for each year of the first five years the
proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that credit union members who wish to serve
on a credit union's board of directors will know the qualifications necessary
for a position. There is no anticipated effect on small businesses as a result
of adopting the new rule. There is no economic cost anticipated to entities
that are required to comply with the new rule as a result of its future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the Texas Register to Lynette Pool, Deputy Commissioner,
Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act); and §122.054 of the Texas Finance Code
that requires the commission to establish by rule the qualifications for a
director.
The specific section affected by this proposed rule is Texas Finance Code §§
122.054.
§91.501.Eligibility to Hold Office.
(a)
Elective office. No credit union shall adopt or amend its
articles of incorporation or bylaws to designate or reserve one or more places
on the board of directors for any member representative of any classification
that restricts or infringes upon the equal rights of all members to vote for,
or seek any position on, the board of directors of the credit union.
(b)
Qualifications. No member may be elected to or serve on
the board of directors if that member:
(1)
has been convicted of any criminal offense involving dishonesty
or breach of trust;
(2)
is not eligible for coverage by the blanket bond required
under the provisions of the Act, or § 91.510 of this title (relating
to Bond and Insurance Requirements);
(3)
has had a final judgement entered against him/her
in a civil action upon the grounds of fraud, deceit, or misrepresentation;
(4)
has caused the credit union to suffer a financial
loss;
(5)
has been removed from office by any regulatory or
government agency as an officer, agent, employee, consultant or representative
of any financial institution;
(6)
has been personally made subject to an operating directive
for cause while serving as an officer, director, or senior executive management
person of a financial institution; or
(7)
has caused or participated in a prohibited activity
or an unsafe or unsound condition at a financial institution which resulted
in the suspension or revocation of the financial institution's certificate
of incorporation, or authority or license to do business.
(c)
Director application. Any member nominated for, or seeking
election to, the board of directors shall submit a written application in
such form as the commissioner may prescribe, together with any additional
information the credit union may request. The application shall be submitted
either to the nominating committee prior to the determination by the committee
of its nominees; or to the board chair within 30 days following the election
of a member who was not nominated by the nominating committee or who was appointed
by the board to fill a vacancy. The applications of the elected/appointed
directors shall be incorporated into and made part of the minutes of the first
board meeting following the election/appointment of those directors. Applications
of unsuccessful nominees shall be destroyed or returned to the nominee upon
request.
(d)
Director education. A credit union may, by written board
policy, establish continuing education requirements for directors. The purpose
of such policy should be to ensure that every director pursues a plan of education
throughout his/her tenure on the board in order to remain current on the law
and other issues affecting the credit union in the rapidly changing financial
services industry. The policy should be appropriate to the size and financial
condition of the credit union and the nature and scope of its operations.
(e)
Disqualification of director. The failure of an elected/appointed
director to complete and return the application or the failure to take the
prescribed oath of office shall disqualify the director designate from holding
office.
(f)
Recall of director. The members of a credit union may remove
a director by a vote of two-thirds of those members voting at any special
or regular meeting of the members; provided, however, that:
(1)
the members voting shall constitute not less than 10% of
the membership eligible to vote in the recall election;
(2)
all members are given at least 30 days notice of the
meeting which shall state the reasons why the meeting has been called; and
(3)
the affected director is afforded an opportunity to
be heard at such meeting prior to a vote on removal.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on January 27, 2000.
TRD-200000582
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.502
The Texas Credit Union Commission proposes new §91.502
pertaining to directors' fees and expenses. The proposed rule would replace
existing §91.506 which is proposed for repeal elsewhere in this edition
of the
Texas Register
.
Proposed §91.502 sets forth the limitations on payment of fees to
and expenses for directors. The limitations in §91.506 are retained,
and two new provisions are added. Specifically, if adopted, a credit union
could not pay such fees if it is operating under a net worth restoration plan,
unless a waiver if first obtained from the commissioner. A credit union would
also be able to reimburse directors and committee members for wages lost or
vacation or compensatory time taken, as required by their employers, to attend
duly called board or committee meetings and training.
The new rule is being proposed as a result of the general rule review mandated
by the Government Code and General Appropriations Act. (Both contain provisions
requiring state agencies to review and consider for readoption each of their
rules every four years.) Notice of Intention to Review Chapter 91 rules was
published in the
Texas Register
on November
26, 1999 (24 TexReg 10583) for the purpose of accepting public comment. No
comments have been received. However, as a result of its review the Commission
has determined that the need for a rule addressing payment of directors' fees
and expenses continues to exist.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
She has also determined that for each year of the first five years the
proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that the spirit of volunteerism will be promoted
and board-related expenses will be contained for the benefit of the credit
union members. There is no anticipated effect on small businesses as a result
of adopting the new rule. There is no economic cost anticipated to entities
that are required to comply with the new rule as a result of its future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the Texas Register to Lynette Pool, Deputy Commissioner,
Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act); and §122.054 of the Texas Finance Code
that requires the commission to establish by rule the qualifications for a
director.
The specific section affected by this proposed rule is Texas Finance Code §§
122.062.
§91.502.Director Fees and Expenses.
(a)
Expense reimbursement. A credit union may, by written board
policy, authorize the payment of reasonable expenses incurred by directors
and committee members and their spouses for attending and participating in
board approved conferences and/or educational programs.
(b)
Wage reimbursement. A credit union may authorize, by board
policy, the payment of lost wages incurred by directors and committee members
for attending duly called meetings and board approved conferences and/or educational
programs. For the purposes of this subsection, lost wages means the actual
amount of net wage reduction incurred, or the dollar equivalent of vacation
or compensatory time a director or committee member is required to take, to
attend such meetings, conferences or training.
(c)
Payment of fees. A credit union may, by written board policy,
authorize the payment of reasonable fees for directors and/or committee members
attending duly called meetings for the conduct of appropriate credit union
business. The policy shall include a schedule of meeting fee amounts and a
provision that fees may be paid only for actual attendance at duly called
meetings. The authority to pay any such fee is subject to the following limitations:
(1)
the credit union is not operating under a Net Worth Restoration
Plan;
(2)
the credit union must not be under supervisory sanctions
imposed by the commissioner pursuant to the Act or commission rule;
(3)
the credit union must notify the commissioner by furnishing
a copy of the policy, and any amendments thereto, at least 30 days prior to
the implementation of the policy or any revisions thereof; and
(4)
the credit union must keep accurate and detailed records
of the fees paid under the policy.
(d)
Review by board. At least annually, the board shall review
the expenses which have been incurred, paid or reimbursed by the credit union
as authorized by this section.
(e)
Waiver by commissioner. The commissioner in the exercise
of discretion may grant a waiver in writing of the limitations described in
subsection (b).
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on February 2, 2000.
TRD-200000738
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.510
The Texas Credit Union Commission proposes new §91.510
pertaining to bond and insurance requirements. The proposed rule would replace
existing §91.506(b) which is proposed for repeal elsewhere in this edition
of the
Texas Register
.
Proposed §91.510 sets forth the minimum insurance coverage required
and the maximum deductible allowed based on a credit union's asset size. The
Commission is proposing to increase minimum coverage thresholds. Credit unions
with total assets of $1 million or less will be required to have coverage
equal to their total assets. The total assets range for the $5 million minimum
coverage requirement is to be lowered from $295 million to $150 million. For
total assets between $1 million and $150 million, the minimum coverage amounts
range between $1-$2.5 million.
The Commission is also proposing changes to the maximum deductible levels.
For credit unions with total assets between $1 million and $150 million, the
maximum deductible would be $2,000 plus 1/1000 of total assets. This is similar
to the current requirement for credit unions with greater than $1 million
in assets although a maximum deductible limit is no longer stated. For credit
unions over $150 million in size, the maximum deductible is to be determined
by the board.
The new rule is being proposed as a result of the general rule review mandated
by the Government Code and General Appropriations Act. (Both contain provisions
requiring state agencies to review and consider for readoption each of their
rules every four years.) Notice of Intention to Review Chapter 91 rules was
published in the
Texas Register
on November
26, 1999 (24 TexReg 10583) for the purpose of accepting public comment. No
comments have been received. However, as a result of its review the Commission
has determined that the need for a rule further clarifying the requirements
for surety bond coverage continues to exist.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
She has also determined that for each year of the first five years the
proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that risks posed from potential insider abuse,
fraud, defalcation or other misdeeds will be mitigated to the extent that
the credit union has surety coverage insuring the credit union against losses
from these events. There is no anticipated effect on small businesses as a
result of adopting the new rule. There is no economic cost anticipated to
entities that are required to comply with the new rule as a result of its
future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the Texas Register to Lynette Pool, Deputy Commissioner,
Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act); and §122.054 of the Texas Finance Code
that requires the commission to establish by rule the qualifications for a
director.
The specific section affected by this proposed rule is Texas Finance Code §§122.063.
§91.510.Bond and Insurance Requirements.
(a)
Fidelity bond. Each credit union shall purchase and maintain
a blanket fidelity bond covering the officers, directors, employees, committee
members, and its agents, against loss caused by dishonesty, burglary, robbery,
larceny, theft, holdup, forgery or alteration of instruments, misplacement
or mysterious disappearance. All carriers writing credit union blanket bonds
must be authorized by the Insurance Commissioner for the state of Texas as
an acceptable fidelity on bonds in this state.
(1)
The amount of coverage to be required for each credit union
shall be determined by the credit union's board of directors, based on its
assessment of the level that would be safe and sound in view of the credit
union's potential exposure to risk. In making its determination the board
shall be guided by the following minimum amounts of blanket bond coverage
required according to asset categories:
Figure: 7 TAC §91.510(a)(1)
(2)
The following maximum amounts of blanket bond deductibles
are authorized according to asset categories:
Figure: 7 TAC §91.510(a)(2)
(3)
A deductible may be applied separately to one or more
insuring clauses in a blanket bond. No deductible will exceed ten percent
of a credit union's unencumbered reserves and undivided earnings unless the
credit union creates a segregated Contingency Reserve for the amount of the
excess. Valuation allowance accounts, e.g., allowance for loan losses, may
not be considered part of the unencumbered reserves and undivided earnings
when determining the maximum deductible.
(4)
The commissioner may require additional coverage of
any credit union when, in his opinion, the fidelity bond in force is insufficient
to provide adequate fidelity coverage. It shall be the duty of the board of
directors to obtain the additional coverage within 30 days after the date
of written notice of the findings by the commissioner.
(5)
After the effective date of this section, any bond
coverage purchased or renewed by any credit union shall conform to this section.
(b)
Cancellation. A fidelity bond must include a provision
requiring written notification by the fidelity to the commissioner prior to
cancellation of any or all coverages set out in the bond which includes a
brief statement of cause for termination.
(c)
Other insurance. Each credit union shall, subject to approval
by the board, purchase appropriate insurance coverages to insure the credit
union and its assets against loss or damage by fire, liability, casualty or
any other insurance risks.
(d)
Board review. The board of directors of each credit union
shall formally approve the credit union's bond and insurance coverages. In
deciding whether to approve the coverages, the board shall review the adequacy
of the standard coverage and the need for supplemental coverage. Documentation
of the board's approval shall be included as part of the minutes of the meeting
at which the board approves coverages. Additionally, the board of directors
shall review the credit union's bond and insurance coverages at least annually
to assess the continuing adequacy of coverage.
(e)
Review by fidelity company. Credit unions which are analyzed
by a fidelity company shall notify the commissioner of the analysis within
30 days of the review commencement. The report of the review is to be provided
to the commissioner upon request. The confidentiality of the report shall
be preserved in the same manner afforded a report of examination conducted
by the department.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on January 27, 2000.
TRD-200000583
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
7 TAC §91.515
The Texas Credit Union Commission proposes new §91.515
pertaining to financial reporting for credit unions. The proposed rule would
replace existing §91.507(a) which is proposed for repeal elsewhere in
this edition of the
Texas Register
.
As proposed §91.515 requires a credit union with $5 million or greater
in total assets to prepare and maintain its records and prepare its financial
statements in accordance with generally accepted accounting principles (GAAP).
Credit unions under $5 million in assets would be able to use any other comprehensive
basis of accounting (OCBOA). Given all credit unions are currently required
to comply with GAAP, this change would provide some regulatory relief to the
smaller credit unions. The new rule also authorizes the commissioner to require
reports in addition to the semi-annual reports required by the Act.
The new rule is being proposed as a result of the general rule review mandated
by the Government Code and General Appropriations Act. (Both contain provisions
requiring state agencies to review and consider for readoption each of their
rules every four years). Notice of Intention to Review Chapter 91 rules was
published in the
Texas Register
on November
26, 1999 (24 TexReg 10583) for the purpose of accepting public comment. No
comments have been received. However, as a result of its review the Commission
has determined that the need for a rule addressing financial reporting requirements
continues to exist.
Lynette Pool, Deputy Commissioner, has determined that there will be no
fiscal implications for state or local government as a result of enforcing
or administering the proposed rule.
She has also determined that for each year of the first five years the
proposed new rule is in effect, the public benefits anticipated as a result
of enforcing the rule will be that as long as state-chartered credit unions
comply with this rule, they will also be in compliance with corresponding
federal laws, thus relaxing the burden of compliance. There is no anticipated
effect on small businesses as a result of adopting the new rule. There is
no economic cost anticipated to entities that are required to comply with
the new rule as a result of its future adoption.
Written comments on the proposal must be submitted within 45 days after
its publication in the Texas Register to Lynette Pool, Deputy Commissioner,
Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699.
The new rule is proposed under the provisions of §15.402
of the Texas Finance Code that authorize the Credit Union Commission to adopt
reasonable rules necessary for administering Subtitle D, Title 3, Texas Finance
Code (Texas Credit Union Act).
The specific sections affected by this proposed rule are Texas Finance
Code §§ 122.101 and 122.102.
§91.515.Financial Reporting.
(a)
Each credit union having assets of $5 million or greater
shall:
(1)
prepare and maintain, on an accrual basis, accurate and
complete records of its business transactions in accordance with generally
accepted accounting principles, except as otherwise directed by regulatory
requirements; and
(2)
prepare its financial statements and reports, including
reports to the members, board of directors, management and the department,
in accordance with generally accepted accounting principles, except as otherwise
directed by regulatory requirements.
(b)
Credit unions having assets of less than $5 million may
use an other comprehensive basis of accounting.
(c)
In addition to the semi-annual report to the department
as prescribed by the Act, the commissioner may require from all credit unions
or from selected categories of credit unions other financial and statistical
reports relating to financial condition and accounting practices.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on January 27, 2000.
TRD-200000581
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: March 12, 2000
For further information, please call: (512) 837-9236
and
]
.
]
Subchapter B. ORGANIZATION PROCEDURES
Chapter 91.
CHARTERING, OPERATIONS, MERGERS, LIQUIDATIONS
Subchapter D. POWERS OF CREDIT UNIONS
Subchapter E. DIRECTION OF AFFAIRS
Subchapter B. ORGANIZATION PROCEDURES
Subchapter D. POWERS OF CREDIT UNIONS
Subchapter E. DIRECTION OF AFFAIRS