Part 6.
CREDIT UNION DEPARTMENT
Chapter 91.
CHARTERING, OPERATIONS, MERGERS, LIQUIDATIONS
Subchapter E. DIRECTION OF AFFAIRS
7 TAC §91.502
The Texas Credit Union Commission adopts new §91.502
pertaining to directors' fees and expenses. The first request for comments
was published in the February 11, 2000 issue of the
Texas Register
(25 TexReg 1011). Based on the number of comments initially
received, the Commission modified the proposal and republished it for comment
in the May 5, 2000 issue of the
Texas Register
(25 TexReg 3883). No changes are being made to that proposed text. This rule
replaces existing §91.506(a) which is being repealed as noticed elsewhere
in this issue of the
Texas Register
.
The rule sets forth the limitations on payment of fees to and expenses
for directors, including a requirement that a credit union cannot pay such
fees if it is operating under a net worth restoration plan unless a waiver
is first obtained from the commissioner.
No comments were received on the proposal.
The new rule is adopted under the provisions of §15.402
of the Texas Finance Code, which is interpreted as authorizing the Credit
Union Commission to adopt reasonable rules necessary for administering Subtitle
D, Title 3, Texas Finance Code (Texas Credit Union Act); and §122.062
of the Texas Finance Code, which authorizes the Commission to establish by
rule the nature of the fees that can be paid to a director, as well as the
type of expenses for which a director may be reimbursed.
The specific section affected by the rule is Texas Finance Code §122.062.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on July 25, 2000.
TRD-200005108
Harold E. Feeney
Commissioner
Credit Union Department
Effective date: August 14, 2000
Proposal publication date: May 5, 2000
For further information, please call: (512) 837-9236
7 TAC §91.506
The Texas Credit Union Commission adopts the repeal §91.506,
without changes as published in the February 11, 2000 issue of the
Texas Register
(25 TexReg 1005).
The rule being repealed as a result of the adoption of two new rules, 7
T.A.C. §91.502 and §91.510, being adopted in conjunction with the
Commission's four-year Rule Review. The new rules are printed elsewhere in
this issue of the
Texas Register
.
No comments were received on the proposal to repeal this section.
This repeal is adopted under the provisions of §122.062
of the Texas Finance Code, which is interpreted as authorizing the Commission
to establish rules regarding the payment of fees and the reimbursement of
other expenditures to credit union board members; and §122.063 of the
Texas Finance Code, which is interpreted as authorizing the Commission to
set the requirements for purchasing a blanket surety or security bond on directors,
officers, employees, and agents of credit unions.
The specific sections affected by the repeal of this rule are §122.062
and 122.063 of the Texas Finance Code.
Filed with the Office of
the Secretary of State on July 25, 2000.
TRD-200005114
Harold E. Feeney
Commissioner
Credit Union Department
Effective date: August 14, 2000
Proposal publication date: February 11, 2000
For further information, please call: (512) 837-9236
7 TAC §91.510
The Texas Credit Union Commission adopts new §91.510
pertaining to bond and insurance requirements. The first request for comments
was published in the February 11, 2000 issue of the
Texas Register
(25 TexReg 1012). Based on the number of comments initially
received, the Commission modified the proposal and republished it for comment
in the May 5, 2000 issue of the
Texas Register
(25 TexReg 3884). No changes to the proposed text are being made. This rule
replaces existing §91.506(b) and (c) which is being repealed as noticed
elsewhere in this issue of the
Texas Register
.
The new rule sets forth the minimum insurance coverage required and the
maximum deductible allowed based on a credit union's asset size. The rule
also removes the requirement that the surety company be approved by the commissioner;
the surety company must, however, be authorized by the commissioner for the
Texas Department of Insurance as an acceptable fidelity on bonds in this state.
The Commission received three comment letters on the proposal from the
Texas Credit Union League, U.S. Employees CU, and Corpus Christi City Employees
CU (CCCECU). One commenter was concerned that coverages in the amounts proposed
may not be available and stated that the Commission needs to ensure that its
rules can be complied with by credit unions. Department staff has ascertained
that such coverages are available. CCCECU opined that if NCUA, the primary
share and deposit share insurer, doesn't object to existing minimum bonding
limits in Texas, then there shouldn't be an urgency to make changes to the
existing bonding requirements. This sentiment is echoed to some extent by
the Texas Credit Union League who stated that out of 32 states surveyed, only
one other state requires bond coverage greater than the amount required by
the share insurer. CCCECU goes on to say that ultimately it is the share insurer
that has the most to lose on any extraordinary bond claim that may jeopardize
a credit union's solvency. The Commission disagrees with this line of thinking.
The Commission is responsible for protecting the citizens of Texas by ensuring
the effective supervision of credit unions under its jurisdiction. Recent
experience has shown the Commission that additional bond coverage is needed.
Furthermore, while the share insurer may be required to pay out funds to members
in the event an extraordinary bond claim puts a credit union into insolvency,
other credit unions may eventually bear the burden as the credit union industry
as a whole is responsible for keeping the share insurance fund adequately
capitalized.
The new rule is adopted 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 §122.063 of the Texas Finance Code
that authorizes the Commission to establish by rule bond requirements.
The specific section affected by this rule is Texas Finance Code §122.063.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on July 25, 2000.
TRD-200005115
Harold E. Feeney
Commissioner
Credit Union Department
Effective date: August 14, 2000
Proposal publication date: May 5, 2000
For further information, please call: (512) 837-9236
7 TAC §91.601
The Texas Credit Union Commission adopts amendments to §91.601
relating to share and deposit accounts. The amended rule is adopted without
change to the proposed text published in the May 5, 2000, issue of the
One amendment gives the board of directors full authority to determine
the type of share and deposit accounts to be offered by the credit union,
along with the terms and conditions of the accounts, provided the board has
adopted and implemented appropriate policies and procedures addressing asset
liability management and maintaining adequate liquidity. Another amendment
eliminates the categorization of deposit and share accounts as capital for
regulatory purposes given that federal law now requires all federally insured
credit unions to follow generally accepted accounting principles for reporting
purposes. The Credit Union Commission has always required Texas credit unions
to comply with GAAP but allowed them to utilize the NCUA's 5300 reports for
reporting purposes in an effort to reduce regulatory burden. A new subsection
was added to conform the conditions for accepting non-member deposits to the
regulations governing federal share and deposit insurance coverage. Lastly,
a credit union accepting noninsured, non-member deposits is now required by
rule to disclose to those depositors that their funds would not be insured.
No comments were received on the proposal.
The amendments are adopted under the provisions of §15.402
of the Texas Finance Code that are interpreted to 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 amended rule are Texas Finance Code, §§123.202,
123.203, and 123.204.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on July 25, 2000.
TRD-200005116
Harold E. Feeney
Commissioner
Credit Union Department
Effective date: August 14, 2000
Proposal publication date: May 5, 2000
For further information, please call: (512) 837-9236
7 TAC §91.602
The Texas Credit Union Commission adopts new §91.602
relating to solicitation and acceptance of brokered deposits without changes
to the proposed text published in the May 5, 2000, issue of the
Texas Register
(25 TexReg 3886).
The rule defines brokered deposits prohibits credit unions experiencing
net worth adequacy problems from accepting them without prior approval of
the commissioner.
No comments were received on the proposal.
The new rule is adopted under the provisions of §15.402
of the Texas Finance Code that is interpreted to 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 rule are Texas Finance Code, §§123.202,
123.203, and 123.204.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on July 25, 2000.
TRD-200005121
Harold E. Feeney
Commissioner
Credit Union Department
Effective date: August 14, 2000
Proposal publication date: May 5, 2000
For further information, please call: (512) 837-9236
7 TAC §91.608
The Texas Credit Union Commission adopts amendments to §91.608
relating to confidentiality of member records, with two nonsubstantive changes
to the proposed text as published in the May 5, 2000, issue of the
Texas Register
(25 TexReg 3887).
One amendment changes the term "reports and/or data" to simply read "information"
in subsections (a) and (b). In paragraph (4) of subsection (a), the Commission
is adding certain terms for clarification purposes. For consistency purposes,
a heading under subsection (b) is being added. Lastly, a new subsection is
added that requires credit unions to develop and implement a written policy
on the protection of personal information of individual members in the credit
union's possession.
One comment was received on the proposal from the Texas Credit Union League
("League"). The League recommended that a new paragraph be added to subsection
(a) to read "(6) as otherwise authorized by law." The addition would then
cover any existing or future legal requirements for disclosure of member information
that are not encompassed in paragraphs (1) through (5). The League also recommended
the insertion of the word "nonpublic" in subsection (c) given that a credit
union is not required to maintain the confidentiality of information generally
available to the public. The Commission agreed on both additions and have
incorporated them into the final rule.
The amendments are adopted under the provisions of §15.402
of the Texas Finance Code that are interpreted to 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 the amended rule is Texas Finance Code, §125.402.
§91.608.Confidentiality of Member Records.
(a)
Confidentiality of members' accounts. No credit union officer,
director, committee member or employee may disclose to any person, other than
the member, or to any company or governmental body the individual savings,
shares, or loan records of any credit union member, contained in any document
or system, by any means unless specifically authorized to do so in writing
by such the members, except as follows:
(1)
reporting credit experience to a bona fide credit reporting
agency, another credit union, or any other bona fide credit-granting business
and/or merchants information exchange, provided that applicable state and
federal laws and regulations pertaining to credit collection and reporting
are followed;
(2)
furnishing information to a duly constituted government
agency or taxing authority, or any subdivision thereof, including law enforcement
agencies;
(3)
furnishing information, orally or in written form, in response
to the order of a court of competent jurisdiction or pursuant to other processes
of discovery duly issuing from a court of competent jurisdiction;
(4)
furnishing reports of loan balances to co-borrowers, co-makers,
and guarantors of loans of a member and of share or deposit account balances,
signature card information, and related transactions to joint account holders;
(5)
furnishing information to and receiving information from
check and draft reporting, clearing, cashing and authorization services relative
to past history of a member's draft and checking accounts at the credit union;
or
(6)
as otherwise authorized by law.
(b)
Non-disclosure statement. Nothing in this rule shall prohibit
the credit union from releasing the name and address of members to assist
the credit union in its marketing efforts or sale of third party products,
provided, however, that the credit union obtains a written non-disclosure
statement providing assurances that the information will be used exclusively
for the benefit of the credit union and no other.
(c)
Privacy policy. Each credit union shall develop, implement
and maintain a written policy on the protection of nonpublic personal information
of individual members in its possession. This policy should contain clear
and readily understandable disclosures about the handling of member information,
and be supported by consistent internal procedures and methods to enhance
compliance by credit union personnel.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on July 25, 2000.
TRD-200005120
Harold E. Feeney
Commissioner
Credit Union Department
Effective date: August 14, 2000
Proposal publication date: May 5, 2000
For further information, please call: (512) 837-9236
7 TAC §91.610
The Texas Credit Union Commission adopts amendments to §91.610
relating to safe deposit box facilities without changes to the proposed text
as published in the May 5, 2000, issue of the
Texas
Register
(25 TexReg 3887).
One amendment adds new subsection (a) that defines the purpose of the rule
and ties it back to the enabling statute, Finance Code §59.110. The remaining
subsections have been renumbered accordingly. The statutory cite contained
in new subsection (f) has also been changed to reflect the codification of
applicable sections of the Texas Civil Statutes into the Texas Finance Code.
No comments were received on the proposal.
The amendments are adopted under the provisions of §15.402
of the Texas Finance Code that are interpreted to 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 amended rule are Texas Finance Code, §§59.110
and 125.508.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on July 25, 2000.
TRD-200005119
Harold E. Feeney
Commissioner
Credit Union Department
Effective date: August 14, 2000
Proposal publication date: May 5, 2000
For further information, please call: (512) 837-9236
7 TAC §91.801
The Texas Credit Union Commission adopts amendments to §91.801
relating to investment in credit union service organizations (CUSOs), without
changes to the proposed text as published in the May 5, 2000, issue of the
The amendments establish a definition for a CUSO and clarify how a credit
union and a CUSO must be operated to demonstrate to the public the separate
corporate existences of the credit union and the CUSO. The amendments also
clarify that notice must be given to the Commissioner only upon a credit union's
initial investment in or loan to a CUSO; and require the board of directors
to specifically establish the maximum amount of assets, relative to the credit
union's net worth, that will be invested in or loaned to any one CUSO subject
to a new limitation on the aggregate loans to and investments in CUSOs of
ten percent of total assets. Another amendment delineates additional permissible
activities and services for CUSOs. Lastly, a new prohibition on investing
in or making loans to a CUSO if revenue-producing activity other than the
performance of services for credit unions or members of credit unions equals
or exceeds one half (1/2) of the CUSO's total revenue has been added. An exception
to this restriction was established for credit unions with a net worth ratio
greater than six percent.
No comments were received on this proposal.
The amendments are adopted under the provisions of §124.352(c)
of the Texas Finance Code that are interpreted to authorize the Credit Union
Commission to adopt rules as necessary to authorize investments under §124.351(a)(1)
of the Texas Finance Code pertaining to other investments.
The specific sections affected by the amended rule are Texas Finance Code, §§124.351
and 124.352.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on July 25, 2000.
TRD-200005126
Harold E. Feeney
Commissioner
Credit Union Department
Effective date: August 14, 2000
Proposal publication date: May 5, 2000
For further information, please call: (512) 837-9236
7 TAC 91.804
The Texas Credit Union Commission adopts new §91.804
relating to custody and safekeeping of purchased investments and repurchased
collateral, without change to the proposed text published in the May 5, 2000,
issue of the
Texas Register
(25 TexReg 3894).
The new rule requires that investments and repurchased collateral be in
the credit union's possession, be recorded as owned by the credit union through
the Federal Reserve Book-Entry System, or be held by a board-approved safekeeper.
A safekeeper may be used only if it is regulated and supervised by either
the Securities and Exchange Commission or by a federal or state financial
institutions regulatory agency.
No comments were received on the proposal.
The new rule is adopted under the provisions of §15.402
of the Texas Finance Code that is interpreted to 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 the new rule is Texas Finance Code, §124.351.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on July 25, 2000.
TRD-200005127
Harold E. Feeney
Commissioner
Credit Union Department
Effective date: August 14, 2000
Proposal publication date: May 5, 2000
For further information, please call: (512) 837-9236
7 TAC §91.805
The Texas Credit Union Commission adopts new §91.805
relating to loan participation investments, without change to the proposed
text published in the May 5, 2000, issue of the
Texas Register
(25 TexReg 3894).
The rule establishes the maximum interest that may be obtained in any single
loan participation and limits the aggregate investment in nonmember participations.
No comments were received on the proposal.
The new rule is adopted under the provisions of §15.402
of the Texas Finance Code that is interpreted to 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 rule is Texas Finance Code, §124.351.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on July 25, 2000.
TRD-200005128
Harold E. Feeney
Commissioner
Credit Union Department
Effective date: August 14, 2000
Proposal publication date: May 5, 2000
For further information, please call: (512) 837-9236
7 TAC §91.901
The Texas Credit Union Commission adopts amendments to §91.901
relating to reserve requirements, with changes to the proposed text as published
in the May 5, 2000, issue of the
Texas Register
(25 TexReg 3895).
The amendments establish definitions for certain terms and revise the mandatory
reserve transfers to more closely align with the requirements for maintaining
federal share insurance. The amendments also impose new requirements on a
credit union to comply with all capital requirements of its insuring organization
and to submit net worth restoration plans should its net worth fall below
a certain level. Lastly, the amendments provide for alternative standards
regarding reserve transfers for new credit unions (those less than ten years
old with $10 million or less in assets) in recognition of the fact that these
institutions need a reasonable time to accumulate net worth.
Two comment letters were received on the proposed amendments from the Texas
Credit Union League (the "League") and U. S. Employees Credit Union. Both
parties commented that the language contained in subsections (a) and (b) concerning
the definition of net worth was confusing or even contradictory. The Commission
recognizes that the published wording could cause confusion and has therefore
modified subsection (b), paragraphs (1) and (3), for clarity.
U.S. Employees Credit Union proposed using a minimum return on assets
(ROA) percentage rather than a percentage of total assets as the basis for
making reserve transfers under a capital restoration plan. The commenter believes
using ROA would set forth a more "definable objective." The Commission has
two reasons for utilizing the percentage of total assets method. Firstly,
this method is mandated by the NCUA's Rules and Regulations to which Texas
credit unions are subject pursuant to federal law. Requiring a separate calculation
for credit unions would be unnecessarily burdensome. Secondly, ROA can be
manipulated based, in part, on the timing of expenses.
The Commission is making one other change to the final text. The definition
of total assets stated in subsection (a)(2) has been modified to match the
definition contained in the federal regulation with which state-chartered
credit unions must comply. This will ensure consistency in reporting for federal
and state compliance purposes. This also addresses the League's concern that
using a static date for calculating total assets could result in a lower than
normal net worth ratio because of seasonal or temporary spikes in total assets.
The amendments are adopted under the provisions of §122.104
of the Texas Finance Code that are interpreted to authorize the Credit Union
Commission to adopt rules requiring credit unions to maintain reserves necessary
to protect the interests of its members.
The specific sections affected by the amended rule are Texas Finance Code, §§122.103
and 122.104.
§91.901.Reserve Requirements.
(a)
Definitions. The following words and terms, when used in
this chapter, shall have the following meanings, unless the context clearly
indicates otherwise.
(1)
Net worth means the retained earnings balance of the credit
union as determined under generally accepted accounting principles. Retained
earnings consists of undivided earnings, regular reserves, and any other appropriations
designated by management, the insuring organization, or the commission. This
means that only undivided earnings and appropriations of undivided earnings
are included in net worth. Net worth does not include the allowance for loan
and lease losses account.
(2)
Net worth ratio means, with respect to a credit union,
the ratio of the net worth of the credit union to the total assets of the
credit union.
(3)
Total assets means the average of the total assets as measured
using one of the following methods:
(A)
average quarterly balance. The average of quarter-end balances
of the four most recent calendar quarters; or
(B)
average monthly balance. The average of month-end balances
over the three calendar months of the calendar quarter; or
(C)
average daily balance. The average daily balance over the
calendar quarter; or
(D)
quarter-end balance. The quarter-end balance of the calendar
quarter as reported on the credit union's call report, and for semi-annual
filers as calculated for the quarters ending March 31 and September 30.
(b)
In accordance with the requirements of §122.104 of
the Act, state-chartered credit unions shall set aside a portion of their
current gross income, prior to the declaration or payment of dividends as
follows:
(1)
A credit union shall transfer in accordance with GAAP the
following amounts at the indicated intervals to its regular reserve account
until its net worth ratio equals 7% of total assets:
(A)
in the case of a monthly dividend period, net worth must
increase monthly by an amount equivalent to at least 0.0334% of its total
assets; and
(B)
in the case of a quarterly, semi-annual or annual dividend
period, net worth must increase quarterly by an amount equivalent to at least
0.1% per quarter of its total assets.
(2)
For a credit union in operation less than ten years or
having assets of less than $10 million, a business plan must be developed
that reflects, among other items, net worth projections consistent with the
following:
(A)
2% net worth ratio by the end of the third year of operation;
(B)
3.5% net worth ratio by the end of the fifth year of operation;
(C)
6% net worth ratio by the end of the seventh year of operation;
and
(D)
7% net worth ratio by the time it reaches $10 million in
total assets or by the end of the tenth year of operation, which ever is shorter.
(3)
Whenever the net worth ratio falls below 7%, the credit
union shall transfer a portion of its current gross income to its regular
reserve in such amounts as described in paragraph (1) of this subsection.
(4)
Special reserves. In addition to the regular reserve, special
reserves to protect the interest of members may be established by board resolution
or by order of the commissioner, from current income or from undivided earnings.
In lieu of establishing a special reserve, the commissioner may direct that
all or a portion of the undivided earnings and any other reserve fund be restricted.
In either case, such directives must be given in writing and state with reasonable
specificity the reasons for such directives.
(5)
Insuring organization's capital requirements. As applicable,
a credit union shall also comply with any and all capital requirements imposed
by an insuring organization as a condition to maintain insurance on share
and deposit accounts.
(c)
Net Worth Restoration Plan.
(1)
When a credit union's net worth ratio falls below 6%, it
must submit a plan to restore and maintain its net worth ratio at the 7% minimum
requirement.
(2)
The net worth restoration plan must be submitted to the
department within 45 calendar days of the occurrence. At a minimum, the plan
shall include the following:
(A)
reasons why the net worth ratio fell below the minimum
requirement;
(B)
descriptions of steps to be taken to restore net worth
to the minimum requirement within specific time frames;
(C)
actions to be taken to maintain the net worth ratio at
the minimum required level and increase it thereafter;
(D)
balance sheet and income projections, including assumptions,
for the current calendar year and one additional calendar year; and
(E)
certification from the board of directors that it will
follow the proposed plan if approved by the department.
(3)
For the purposes of this subsection, a credit union must
determine its net worth no less frequently than once each calendar quarter.
The effective date or date of occurrence for a credit union's net worth ratio
which falls below 6% shall be the most recent to occur of:
(A)
the last day of the calendar month following the end of
the calendar quarter; or
(B)
the date the credit union's net worth ratio is recalculated
by or as a result of its most recent examination.
(4)
If a credit union fails to submit a net worth restoration
plan; or the plan submitted is not deemed adequate to either restore net worth
or restore net worth within a reasonable time; or the credit union fails to
implement its approved net worth restoration plan, the department may impose
the following administrative sanctions in addition to, or in lieu of, any
other authorized regulatory action:
(A)
all unencumbered reserves, undivided earnings, and current
earnings are encumbered as special reserves;
(B)
dividends and interest refunds may not be declared, advertised,
or paid without the prior written approval of the commissioner; and
(C)
any changes to the credit union's board of directors or
senior management staff must receive the prior written approval of the commissioner.
(d)
Revised business plan for new credit unions. A credit union
that has been in operation for less than ten years or has assets of less than
$10 million shall file a written revised business plan within 30 calendar
days of the date the credit union's net worth ratio has failed to increase
consistent with its then-present business plan. Failure to submit a revised
business plan; or submission of a plan not deemed adequate to either increase
net worth or increase net worth within a reasonable time; or failure of the
credit union to implement its revised business plan, may trigger the regulatory
actions described in subsection (c)(4) of this section.
(e)
Unsafe practice. Any credit union which has less than a
6.0% net worth ratio may be deemed to be engaged in an unsafe practice pursuant
to §122.255 of the Finance Code, except that such a credit union which
has entered into and is in compliance with a written agreement or order with
the department or is in compliance with a net worth restoration or revised
business plan approved by the department to increase its net worth ratio will
not be deemed to be engaged in an unsafe practice on account of its inadequate
capital structure. The department is not precluded from taking enforcement
action against a credit union with capital above the minimum requirement if
the specific circumstances deem such action to be appropriate.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on July 25, 2000.
TRD-200005129
Harold E. Feeney
Commissioner
Credit Union Department
Effective date: August 14, 2000
Proposal publication date: May 5, 2000
For further information, please call: (512) 837-9236
7 TAC §91.902
The Texas Credit Union Commission adopts an amendment to §91.902
relating to dividends, without changes to the proposed text as published in
the May 5, 2000, issue of the
Texas Register
(25 TexReg 3895). The amendment requires credit unions in a troubled condition
to seek written approval of the commissioner to pay dividends.
No comments were received on this proposal.
The amendment is adopted under the provisions of §123.208
of the Texas Finance Code that are interpreted to authorize the Credit Union
Commission to adopt rules governing dividend and interest payments as necessary
to protect members' interests and preserve the solvency of a credit union.
The specific sections affected by the amended rule are Texas Finance Code, §§122.103,
122.104, and 123.208.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on July 25, 2000.
TRD-200005130
Harold E. Feeney
Commissioner
Credit Union Department
Effective date: August 14, 2000
Proposal publication date: May 5, 2000
For further information, please call: (512) 837-9236
Subchapter F. ACCOUNTS AND SERVICES
Subchapter H. INVESTMENTS
Subchapter I. RESERVES AND DIVIDENDS
Subchapter J. CHANGES IN CORPORATE STATUS