7 TAC §91.401
The Texas Credit Union Commission proposes an amendment to §91.401
pertaining to operational powers of credit unions. The proposed amendment,
if adopted, establishes new requirements and limits certain types of activities
as they related to a credit union making insurance products available to its
members. The amendment is contained in subsection (f).
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 rule is in effect, the public benefits anticipated as a result of
enforcing the rule will be that state-chartered credit unions will have clearly
defined requirements for making available insurance products for the benefit
of their members. There is no anticipated effect on small businesses as a
result of adopting the new amendment. There is no economic cost anticipated
to entities that are required to comply with the new amendment as a result
of its future adoption.
Written comments on the proposal must be submitted within 30 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 rule is proposed under the provisions of §123.107 of
the Texas Finance Code that is interpreted as authorizing the Credit Union
Commission to adopt rules that facilitate the provision of insurance by credit
unions for the benefit and convenience of their members.
The specific section affected by this proposed rule is Texas Finance Code §123.107.
§91.401.Operational Powers.
(a)-(e)
(No change.)
(f)
Insurance for members. A credit union
may make insurance programs available to its members, including insurance
programs at the individual member's own expense, if the following conditions
are complied with:
(1)
The purchase of any type of insurance coverage by a member
is voluntary, except as provided in paragraph (2) of this subsection, and
a copy of the written election to purchase the insurance is on file at the
credit union.
(2)
Subject to reasonable requirements, if the insurance
is a condition of a loan, the member who is borrowing may purchase or provide
the insurance from a carrier of the member's choice, or the member who is
borrowing may assign any existing insurance coverage.
(3)
An officer, director, employee, or committee member
of a credit union may not accept anything of value from an insurance agent,
insurance company, or other insurance provider offered to induce the credit
union to sell or offer to sell insurance or other related products or services
to the members of the credit union.
(4)
A credit union may furnish to an insurance carrier
or an agent any membership lists of addresses, without compensation, other
than reimbursement of actual costs, from the insurance carrier or agent, if
such action is approved by the board of directors. A credit union, for an
appropriate fee, may mail marketing materials to its membership if its board
of directors approves such action.
(5)
If a credit union replaces an existing loan or renews
a loan and sells the member new credit life or disability insurance, the credit
union shall cancel the prior insurance and provide the member with a refund
or credit of the unearned premium or identifiable charge before selling the
new insurance to the member.
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 May 8, 2000.
TRD-200003247
Harold E. Feeney
Commissioner
Credit Union Department
Earliest possible date of adoption: June 25, 2000
For further information, please call: (512) 837-9236