S.B. No. 244
 
 
 
 
AN ACT
  relating to the administration, operation, supervision, and
  regulation of credit unions.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 15.403, Finance Code, is amended to read
  as follows:
         Sec. 15.403.  SUPERVISION AND REGULATION OF CREDIT UNIONS.
  (a) The commissioner shall supervise and regulate a credit union
  doing business in this state, other than a federal credit union, in
  accordance with this chapter and Subtitle D, Title 3, including
  rules adopted under this chapter and Subtitle D, Title 3.
         (b)  To the extent necessary to the department's authority to
  supervise and regulate credit unions under this chapter and
  Subtitle D, Title 3, the commissioner may require each credit union
  to conduct business in compliance with federal laws that apply to
  credit unions.
         SECTION 2.  Subsection (d), Section 15.409, Finance Code, is
  amended to read as follows:
         (d)  The department shall periodically notify the person
  filing the complaint and each person who is the subject of the
  complaint [parties] of the status of the complaint until final
  disposition.
         SECTION 3.  Subchapter E, Chapter 15, Finance Code, is
  amended by adding Section 15.4111 to read as follows:
         Sec. 15.4111.  REGULATORY COORDINATION.  To ensure effective
  coordination among and between the department and other state and
  federal agencies, the commissioner and those agencies may enter
  into cooperative, coordinating, or information-sharing agreements
  that are necessary or proper to enforce the state or federal laws
  applicable to credit unions.
         SECTION 4.  Subsection (c), Section 122.008, Finance Code,
  is amended to read as follows:
         (c)  Acceptance of a certificate of incorporation by the
  credit union is conclusive evidence that the credit union is
  authorized to do business under this subtitle.
         SECTION 5.  Section 122.012, Finance Code, is amended by
  amending Subsection (b) and adding Subsection (d) to read as
  follows:
         (b)  A credit union shall provide [After notifying] the
  commissioner with written notice not later than the 30th day before
  the date that the credit union establishes [in writing, a credit
  union may establish and maintain, at locations other than its
  principal place of business,] additional offices or service
  facilities. A new office or service facility must be [that are]
  reasonably necessary to provide services to the credit union's
  members.  The credit union shall additionally notify the
  commissioner in writing not later than the 10th business day after
  [of] the date that the new office or service facility begins
  operating. For purposes of this subsection, an unmanned teller
  machine is not considered a service facility.
         (d)  In accordance with rules adopted by the commission and
  after notifying the commissioner in writing, a credit union may
  close any office or service facility, provided that the credit
  union designates and maintains an office as its principal place of
  business in this state.
         SECTION 6.  Subsections (a) and (c), Section 122.013,
  Finance Code, are amended to read as follows:
         (a)  A foreign credit union may do business in this state if
  it is organized in a state or country that allows any [a] credit
  union organized under this subtitle to do business in that state or
  country.
         (c)  The commissioner may suspend or revoke a foreign credit
  union's authority to do business in this state if the commissioner
  finds that the foreign credit union:
               (1)  has failed to conduct its business in this state in
  a manner consistent with the laws of this state [violated a rule
  adopted under this subtitle];
               (2)  is in an unsafe or unsound condition;
               (3)  refuses to comply with an order of the
  commissioner [is engaged in a pattern of unsafe or unsound
  practices]; [or]
               (4)  refuses to comply with a request by the
  commissioner to review the books and records of the credit union; or
               (5)  has not met or does not meet a [commission]
  requirement imposed by commission rules.
         SECTION 7.  Subchapter A, Chapter 122, Finance Code, is
  amended by adding Section 122.0131 to read as follows:
         Sec. 122.0131.  TEMPORARY FOREIGN CREDIT UNION OFFICE. If a
  state contiguous to this state experiences an emergency, on a
  request by that state's credit union regulatory agency, the
  commissioner may authorize one or more credit unions located in
  that state to open temporary offices in this state to more promptly
  restore credit union services to their members. The commissioner
  shall issue an order permitting the temporary office and specifying
  the period the office may remain open. On a finding that the
  conditions requiring the temporary office continue to exist, the
  commissioner may extend the period the office may remain open. A
  credit union may convert a temporary office authorized under this
  section to a permanent location and operate as a foreign credit
  union if it qualifies to do business in this state as a foreign
  credit union under Section 122.013 and commission rules.
         SECTION 8.  Subsection (f), Section 122.053, Finance Code,
  is amended to read as follows:
         (f)  A director may not vote by proxy.  A [If and to the
  extent provided in the bylaws, a] director may participate in and
  act at any meeting of the board by means of electronic
  communications equipment through which all persons participating
  in the meeting can communicate with each other.  Participation in a
  meeting in the manner authorized by this subsection constitutes
  attendance at a meeting.
         SECTION 9.  Subsections (a) and (c), Section 122.056,
  Finance Code, are amended to read as follows:
         (a)  The board may appoint not more than six [three]
  individuals to serve at the board's pleasure as honorary or
  advisory directors to advise and consult with the board and
  otherwise aid the board in carrying out the board's duties and
  responsibilities.
         (c)  An honorary or advisory director may participate in any
  board deliberation. Except as otherwise provided by Section
  125.402(d), an honorary or advisory director shall hold in
  confidence all information the director receives about a credit
  union during the director's service.
         SECTION 10.  Subsection (a), Section 122.060, Finance Code,
  is amended to read as follows:
         (a)  A credit union shall submit to the commissioner, in a
  form approved by the department, [The board chairman and the
  secretary:
               [(1)  shall execute] a certificate of election that
  provides [states] the name and address of each officer, director,
  and committee member elected or appointed. The certificate must be
  filed within the time prescribed by the commissioner[; and
               [(2)     not later than the 30th day after the date of the
  annual organizational meeting of election or appointment of any
  interim officer, director, or committee member, shall file a copy
  of the certificate of election with the department].
         SECTION 11.  Section 122.061, Finance Code, is amended by
  amending Subsection (a) and adding Subsection (c) to read as
  follows:
         (a)  While serving as a director, honorary director,
  advisory director, committee member, officer, or employee of a
  credit union, a person may not:
               (1)  participate, directly or indirectly, in the
  deliberation on or determination of a question affecting the
  person's pecuniary interest or the pecuniary interest of a member
  of the person's immediate family or of a partnership, association,
  or corporation, other than the credit union, in which the person is
  directly or indirectly interested; or
               (2)  become employed by, engage in, or own an interest
  in a business or professional activity that the person could
  reasonably expect to:
                     (A)  require or induce the person to disclose
  confidential information acquired because of the person's office or
  employment in the credit union; or
                     (B)  impair the person's independence or judgment
  in the performance of the person's duties or responsibilities to
  the credit union.
         (c)  In this section, "member of a person's immediate family"
  means a person's spouse or another person living in the person's
  household.
         SECTION 12.  Section 122.064, Finance Code, is amended to
  read as follows:
         Sec. 122.064.  INDEMNIFICATION. A credit union may elect to
  indemnify a director, officer, employee, or agent of the credit
  union [or another person] and to purchase insurance as if the credit
  union were an "enterprise" as defined by Section 8.001, Business
  Organizations Code, under and subject to the credit union's bylaws
  and written policy. A credit union may not provide any
  indemnification or insurance that would not be permissible under
  Chapter 8, Business Organizations Code, but may elect to impose the
  credit union's own limitations on indemnification[:
               [(1)     by adopting the indemnification and insurance
  procedures of Section 2.22A, Texas Non-Profit Corporation Act
  (Article 1396-2.22A, Vernon's Texas Civil Statutes); or
               [(2)  in another manner determined by the board].
         SECTION 13.  Subsections (a) and (b), Section 122.101,
  Finance Code, are amended to read as follows:
         (a)  A credit union shall prepare [submit to the department
  on] a quarterly [basis a] call report, in a manner approved [on a
  form supplied] by the department, that states the credit union's
  financial condition.  The commissioner may require a credit union
  to file additional financial reports.
         (b)  The credit union must submit the call report on or
  before the due date prescribed [stated on the form supplied] by the
  department.  If a credit union does not submit a report by the due
  date, the commissioner shall charge a late fee in an amount set by
  the commission for each day the report remains unfiled.  The
  commissioner for good cause shown may waive all or part of the late
  fee.
         SECTION 14.  Section 122.201, Finance Code, is amended to
  read as follows:
         Sec. 122.201.  CONVERSION OF STATE CREDIT UNION TO FEDERAL
  CREDIT UNION. (a)  A credit union organized under the laws of this
  state may convert to a credit union under the laws of the United
  States:
               (1)  on an affirmative vote by a majority of the members
  voting at a meeting called for that purpose; and
               (2)  by complying with any rule adopted by the
  commission to facilitate the conversion.
         (b)  On the issuance of a charter by the National Credit
  Union Administration, the credit union:
               (1)  ceases to be a credit union incorporated under
  this subtitle; and
               (2)  is no longer subject to the supervision and
  regulation of the commissioner and department.
         (c)  The converted credit union shall file with the
  commissioner a copy of the charter issued to the credit union by the
  National Credit Union Administration. Failure to file the required
  copy of the charter does not affect the validity of the conversion.
         SECTION 15.  Section 123.106, Finance Code, is amended to
  read as follows:
         Sec. 123.106.  CHANGE OF LOCATION. (a)  A credit union
  changing the location of [may change] its principal place of
  business or any additional office or service facility shall notify
  [a subsidiary place of business to another location by notifying]
  the commissioner in writing of the new location [address] and the
  scheduled or effective date of the change.
         (b)  The credit union must submit notice to the commissioner
  not later than the 30th day before the scheduled or effective date
  of the change. The commissioner may waive or reduce the timing of
  the notice requirement under this subsection.
         SECTION 16.  Section 124.002, Finance Code, is amended to
  read as follows:
         Sec. 124.002.  LIMITATIONS ON INTEREST RATES. The interest
  rate on a loan to a member may not exceed:
               (1)  1-1/2 percent per month on the unpaid balance;
  [or]
               (2)  28 percent a year to the extent that federal credit
  unions are permitted to charge that rate; or
               (3)  a higher rate authorized by law, including a rate
  authorized by Chapter 303.
         SECTION 17.  Section 125.402, Finance Code, is amended by
  amending Subsection (c) and adding Subsection (d) to read as
  follows:
         (c)  The commission may adopt reasonable rules relating to
  the:
               (1)  permissible disclosure of nonpublic personal
  information about [confidentiality of] the accounts of credit union
  members; and
               (2)  duties of the credit union to maintain [that]
  confidentiality of member accounts.
         (d)  The directors, officers, committee members, and
  employees and any honorary or advisory directors of a credit union
  shall hold in confidence all information regarding transactions of
  the credit union, including information concerning transactions
  with the credit union's members and the members' personal affairs,
  except to the extent necessary in connection with making,
  extending, or collecting a loan or extension of credit, or as
  otherwise authorized by this section, commission rules adopted
  under Subsection (c), or other applicable law.
         SECTION 18.  Subsections (c) and (e), Section 126.002,
  Finance Code, are amended to read as follows:
         (c)  The commissioner may disclose the information described
  by Subsection (a) to a law enforcement agency, a share insuring
  organization, or another department, agency, or instrumentality of
  this state, another state, or the United States if the commissioner
  determines that disclosure is necessary or proper to enforce the
  laws of this state applicable to credit unions.
         (e)  Confidential information that is provided by the
  department to a credit union, organization, or service provider of
  a credit union, whether in the form of a report of examination or
  otherwise, is the confidential property of the department.  The
  recipient or an officer, director, employee, or agent of the
  recipient may not make the information public and may not disclose
  the information to a person not officially connected to the
  recipient as an officer, director, employee, attorney, auditor, or
  independent auditor, except as authorized by rules adopted under
  this subtitle. A credit union may disclose a report of examination
  or relevant portions of the report to another credit union
  proposing to merge or consolidate with the credit union or to a
  fidelity bond carrier if the recipient executes a written agreement
  not to disclose information in the report.
         SECTION 19.  Section 126.101, Finance Code, is amended by
  adding Subsection (c) to read as follows:
         (c)  The board may:
               (1)  agree in writing to a conservatorship order; and
               (2)  waive its right to appeal the order under Section
  126.105.
         SECTION 20.  Subsections (b) and (c), Section 126.102,
  Finance Code, are amended to read as follows:
         (b)  Service may be by mail if an officer or director is not
  available for service on the date personal service of the order is
  attempted [of issuance].
         (c)  Service by [certified or registered] mail[:
               [(1)]  must be by certified or registered mail, must be
  addressed to the credit union at the address shown for its principal
  office by department records and to the home address of the chairman
  of the board,[;] and
               [(2)]  is complete on deposit of the order in a
  postpaid, properly addressed wrapper, in a post office or official
  depository under the care and custody of the United States Postal
  Service.
         SECTION 21.  Subsections (a) and (b), Section 126.105,
  Finance Code, are amended to read as follows:
         (a)  Unless the board waives its right to appeal under
  Section 126.101(c), the [The] board may file a written appeal of the
  conservatorship order with the commissioner not later than the 10th
  business day after the date the order is served as provided by
  Section 126.102. The appeal must include a certified copy of the
  board resolution and must state whether the board requests a
  hearing.
         (b)  If the board requests [files an appeal to request] a
  hearing [before the commission], the commissioner shall promptly
  request from the State Office of Administrative Hearings a hearing
  date that is not earlier than the 11th day nor later than the 30th
  day after the date on which the commissioner receives the appeal [is
  received].
         SECTION 22.  Section 126.106, Finance Code, is amended to
  read as follows:
         Sec. 126.106.  FAILURE TO APPEAL [FILE REPLY] OR APPEAR
  [REQUEST HEARING]. [(a)]  If the board does not appeal [file a
  reply to] the conservatorship order or fails to [as required by
  Section 126.104 or fails to request and] appear at the hearing
  provided for by Section 126.105, the credit union is presumed to
  have consented to the commissioner's disposition action, and the
  commissioner may dispose of the conservatorship matter as the
  commissioner considers appropriate.
         [(b)     The credit union is presumed to have consented to the
  commissioner's disposition action and may not contest it.]
         SECTION 23.  Section 126.201, Finance Code, is amended to
  read as follows:
         Sec. 126.201.  LIQUIDATION ORDER; APPOINTMENT OF
  LIQUIDATING AGENT. (a)  After the commissioner has issued a
  conservatorship order and provided an opportunity for hearing, the
  commissioner by liquidation order may appoint a liquidating agent
  and direct that the credit union be liquidated if:
               (1)  the board requests issuance of a liquidation order
  and liquidation of the credit union;
               (2)  the credit union otherwise consents to the
  liquidation; or
               (3)  the commissioner:
                     (A)  finds that the closing of the credit union
  and the liquidation of the credit union's assets are in the public
  interest and the best interest of the credit union's members,
  depositors, and creditors; and
                     (B)  determines that the credit union is not in a
  condition to continue business and cannot be rehabilitated as
  provided by this chapter.
         (b)  If the board consents to the liquidation order and
  waives the necessity of a conservatorship order, the commissioner
  may issue a liquidation order without first issuing a
  conservatorship order.
         SECTION 24.  Section 126.455, Finance Code, is amended to
  read as follows:
         Sec. 126.455.  VOTE ON VOLUNTARY LIQUIDATION. At a special
  meeting called to consider the proposed liquidation, a majority of
  the credit union members voting, but not less than a quorum, may
  vote to dissolve and liquidate the credit union.  Those members
  casting votes by mail or at the meeting constitute a quorum for the
  transaction of business at the special meeting, notwithstanding a
  bylaw provision to the contrary.
         SECTION 25.  Section 126.104, Finance Code, is repealed.
         SECTION 26.  This Act takes effect September 1, 2013.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 244 passed the Senate on
  March 13, 2013, by the following vote:  Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 244 passed the House on
  April 25, 2013, by the following vote:  Yeas 132, Nays 4, two
  present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor