CHAPTER 121. GENERAL PROVISIONS
FINANCE CODE
TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES
SUBTITLE D. CREDIT UNIONS
CHAPTER 121. GENERAL PROVISIONS
Sec. 121.001. SHORT TITLE. This subtitle may be cited as the
Texas Credit Union Act.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 121.0011. POLICY. The purposes of this subtitle are to
safeguard the public interest, to promote public confidence in
credit unions doing business in this state, to provide for the
protection of the interests, shares, and deposits of credit
unions, to delegate to the department rulemaking and
discretionary authority that may be necessary to assure that
credit unions operating under this subtitle may be sufficiently
flexible and readily responsive to changes in economic conditions
and practices, to maintain sound credit union growth and
financial integrity, fiscal responsibility, and independent
judgment in the management of the business affairs of credit
unions, to permit credit unions to effectively provide a full
array of financial and financially related services, to provide
effective supervision and regulation of credit unions and their
fields of membership, and to clarify and modernize the law
governing the credit unions doing business in this state. This
subtitle is the public policy of this state and necessary to the
public welfare.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.15, eff. Sept. 1,
1999; Acts 1999, 76th Leg., ch. 87, Sec. 2, eff. Sept. 1, 1999.
Sec. 121.002. DEFINITIONS. In this subtitle:
(1) "Board" means the board of directors of a credit union.
(2) "Credit union," unless the context relates to a federal
credit union, means a voluntary, cooperative, nonprofit financial
institution authorized to do business in this state under this
subtitle for purposes of:
(A) encouraging thrift among its members;
(B) creating a source of credit at fair and reasonable interest
rates;
(C) developing and providing to its members alternative methods
of financing their purchases at reasonable costs;
(D) providing an opportunity for its members to use and control
their money to improve their economic and social condition; and
(E) conducting any other business, engaging in any other
activity, or providing any other service that may benefit its
members.
(3) "Commission" means the Credit Union Commission.
(4) "Commissioner" means the credit union commissioner.
(5) "Department" means the credit union department.
(6) "Deputy commissioner" means the deputy credit union
commissioner.
(7) "Foreign credit union" means a credit union that is not
organized under the laws of this state or the United States.
(8) "Law enforcement agency" means the Department of Public
Safety of the State of Texas, the Federal Bureau of
Investigation, or any local police or sheriff department.
(9) "Membership share" means a designated share account of a
credit union consisting of the balance held by the credit union
and established by a credit union member in accordance with the
standards specified by the credit union.
(10) "Organization" means a corporation, partnership,
association, limited liability company, or other legal entity.
(11) "Unsafe or unsound condition," with respect to a credit
union, includes:
(A) being insolvent;
(B) having incurred or being likely to incur a loss that will
deplete all or substantially all of the credit union's net worth;
or
(C) being in imminent danger of losing the credit union's share
and deposit insurance or guarantee.
(12) "Unsafe or unsound practice" means an action or inaction in
the operation of a credit union that is contrary to generally
accepted standards of prudent operation, the likely consequences
of which, if continued, would be abnormal and material risk of
loss or danger to a credit union, the credit union's members, or
an organization insuring or guaranteeing the credit union's
shares and deposits.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 157, Sec. 5, eff. Sept. 1,
1999; Acts 2003, 78th Leg., ch. 533, Sec. 6, eff. Sept. 1, 2003.
Sec. 121.003. CREDIT UNIONS SUBJECT TO SUBTITLE. A credit union
organized and existing under the laws of this state is governed
by and authorized to do business under this subtitle.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 121.004. LIBERAL CONSTRUCTION. This subtitle shall be
liberally construed to effect its purposes.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 121.005. HEARINGS. (a) A hearing held under this subtitle
is governed by Chapter 2001, Government Code.
(b) The commission may adopt rules of procedure for a hearing
held under this subtitle.
(c) This section does not apply to a meeting under Section
122.005.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.14(a), eff. Sept.
1, 1999.
Sec. 121.006. PROCEDURE AND RULES APPLICABLE TO CERTAIN
PROCEEDINGS. (a) If the commissioner proposes to revoke a
credit union's certificate of incorporation, the credit union is
entitled to a hearing conducted by the State Office of
Administrative Hearings.
(b) A proceeding for a disciplinary action is governed by
Chapter 2001, Government Code. Rules of practice adopted by the
commission under Section 2001.004, Government Code, applicable to
a proceeding for a disciplinary action may not conflict with
rules adopted by the State Office of Administrative Hearings.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.14(b), eff. Sept.
1, 1999. Amended by Acts 2003, 78th Leg., ch. 533, Sec. 7, eff.
Sept. 1, 2003.