CHAPTER 122. ORGANIZATIONAL AND FINANCIAL REQUIREMENTS

Statutes > Texas Statutes > FINANCE CODE > TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES > CHAPTER 122. ORGANIZATIONAL AND FINANCIAL REQUIREMENTS

FINANCE CODE

TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES

SUBTITLE D. CREDIT UNIONS

CHAPTER 122. ORGANIZATIONAL AND FINANCIAL REQUIREMENTS

SUBCHAPTER A. INCORPORATION REQUIREMENTS

Sec. 122.001. APPLICATION TO INCORPORATE. (a) Seven or more

individuals may apply to incorporate a credit union under this

chapter if:

(1) each is at least 18 years old;

(2) a majority are residents of this state;

(3) each has subscribed for at least 10 shares; and

(4) all share the definable community of interest stated in the

articles of incorporation.

(b) The incorporators shall file with the commissioner:

(1) an application in a form prescribed by the commission; and

(2) filing fees required and set by the commission.

(1) two copies of the articles of incorporation, which must

state:

(A) the name of the credit union;

(B) the municipality and county where the credit union's

principal place of business is to be located;

(D) that the credit union's fiscal year is the calendar year;

(E) the initial share accounts;

(F) the name and address of, and the number of shares subscribed

by, each incorporator;

(G) the number of directors constituting the initial board and

the name and address of each person who will serve as director

until the first annual meeting or until a successor is elected

and qualified; and

(H) the definable community of interest shared by the members of

the credit union at the time of incorporation;

(2) two copies of the standard bylaws for the general operation

of the credit union; and

(3) a business plan covering three years and providing a

detailed explanation of actions intended to accomplish the

primary functions of the credit union.

(d) The articles of incorporation must be signed and sworn to.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 8, eff. Sept. 1,

2003.

Sec. 122.002. STANDARD ARTICLES OF INCORPORATION AND BYLAWS.

(a) To simplify the process of organizing new credit unions, the

commission shall prepare standard articles of incorporation and

bylaws.

(b) The standard forms shall be made available without charge to

a person desiring to organize a credit union.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.003. CORPORATE NAME; CRIMINAL PENALTY. (a) The name

of a credit union must include the words "credit union" or the

abbreviation "CU" and an appropriate descriptive word or words,

or an acronym made up of initials of the appropriate descriptive

word or words and ending in "CU," approved by the commissioner.

(b) Unless a credit union is formed by merger or consolidation,

the commissioner may not issue a certificate of incorporation to

the credit union or approve the change of the name of the credit

union if it would have the same name as another credit union or a

name so nearly resembling the name of another credit union as to

be calculated to deceive.

in this state under this subtitle or the Federal Credit Union Act

(12 U.S.C. Section 1751 et seq.), or an organization,

corporation, or association the membership or ownership of which

is primarily confined to credit unions or credit union

organizations, may not do business under or use a name or title

containing the words "credit union" or any derivation of that

term that:

(1) indicates or reasonably implies that the person carries on

or transacts the kind of business carried on or transacted by a

credit union; or

(2) is calculated to lead a person to believe that the business

being conducted is the type of business carried on or transacted

by a credit union.

(d) A person who violates Subsection (c) commits a Class A

misdemeanor.

(e) The commissioner may petition a court to enjoin a violation

of this section.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 157, Sec. 6, eff. Sept. 1,

1999; Acts 2003, 78th Leg., ch. 533, Sec. 9, eff. Sept. 1, 2003.

Sec. 122.004. INVESTIGATION BY COMMISSIONER. The commissioner

may conduct an investigation and obtain any information or report

from any person, including a law enforcement agency, that the

commissioner considers necessary.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.005. PROCEDURE FOR CERTAIN APPROVALS. (a) This

section applies to a request for approval by the commissioner of:

(1) an application for incorporation under this subchapter;

(2) a request for approval of an amendment to a credit union's

articles of incorporation under Section 122.011, including an

amendment to expand the credit union's field of membership; and

(3) a merger or consolidation under Subchapter D.

(b) Before approving a request to which this section applies,

the commissioner shall submit notice of the request to the

secretary of state for publication in the Texas Register. The

commission by rule shall provide for other appropriate public

notice of the request. The commissioner may waive the

requirements of this subsection or permit delayed public notice

on a determination that waiver or delay is in the public

interest. If the requirements of this subsection are waived, the

information that would be contained in a public notice becomes

public information under Chapter 552, Government Code, on the

35th day after the date the request is made.

section applies, the commissioner must accept comment from any

interested party that wishes to comment. This comment may be in

the form of written testimony or may be provided at a meeting

with the commissioner held for the purpose of receiving the

comment. This meeting shall be held if requested by any

interested party. The commissioner may hold the meeting

regardless of whether an interested party requests the meeting.

The commission may establish reasonable rules governing the

circumstances and conduct of the meeting. Chapter 2001,

Government Code, does not apply to the meeting. Not later than

the 60th day after the date the notice is published in the Texas

request is received, the commissioner shall approve or disapprove

the application.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.01(a), eff. Sept.

1, 1999.

Sec. 122.006. DECISION ON APPLICATION TO INCORPORATE; ISSUANCE

OF CERTIFICATE. (a) The commissioner shall approve an

application to incorporate a credit union if the commissioner

determines:

(1) that the incorporators have complied with this chapter and

rules adopted under this chapter; and

(2) from information furnished with the application, the results

of any investigation, the evidence submitted at any hearing, and

information in the department's official records, that:

(A) the character and general fitness of the incorporators and

the members of the initial board warrant belief that the credit

union's business and affairs will be properly administered in

accordance with this subtitle and rules adopted under this

subtitle;

(B) the character and size of the field of membership to be

served by the credit union conform with this subtitle and rules

adopted under this subtitle and favor the credit union's economic

viability; and

acting in good faith and are making the application in accordance

with the purposes of this subtitle.

(b) In addition to the determinations made under Subsection (a)

and in accordance with commission rules, the commissioner shall

consider the effect of overlapping fields of membership on the

applicant credit union and existing state or federal credit

unions doing business in this state. The commissioner may

consider the availability and adequacy of financial services in

the local community and the effect that the incorporation of the

credit union would have on the local community. As a condition of

approval of the application, the commissioner may require the

applicant credit union to limit or eliminate overlaps, in

accordance with the rules, to achieve the purposes of this

subtitle and promote the welfare and stability of those credit

unions.

determinations required by Subsection (a) and approve or deny the

application. The commissioner may make approval of an application

conditional and shall include any conditions in the order

approving the application.

(d) An order of the commissioner or commission shall be promptly

mailed to the incorporators by registered or certified mail.

(e) After the commissioner in the absence of an appeal or the

commission after the conclusion of an appeal approves the

application, the commissioner shall:

(1) issue a certificate of incorporation;

(2) deliver copies of the approved articles of incorporation and

bylaws to the incorporators; and

(3) retain copies of those documents in the department's

permanent files.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.01(b), eff. Sept.

1, 1999; Acts 2003, 78th Leg., ch. 533, Sec. 10, eff. Sept. 1,

2003.

Sec. 122.007. APPEAL TO COMMISSION. (a) The commission by rule

shall provide for appeal of the commissioner's order by an

incorporator or other aggrieved person.

(b) The commissioner's order may be appealed to the commission

not later than the 60th day after the date of the order.

considers necessary or relevant, the commission by written order

shall affirm or reverse the commissioner's decision.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.008. EFFECT OF ISSUANCE OF CERTIFICATE OF

INCORPORATION. (a) A credit union's existence begins when the

commissioner issues the certificate of incorporation.

(b) The certificate of incorporation is conclusive evidence that

the incorporators have complied with this subtitle and that the

credit union is incorporated under this chapter.

evidence that the credit union is authorized to do business under

this subtitle.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.009. REQUIREMENTS FOR COMMENCING BUSINESS. (a) A

credit union may not transact business or incur debt that is not

incidental to its organization or to obtaining a subscription to

or payment for its shares or deposits before it:

(1) has received paid-in shares or deposits of at least $1,000;

(2) has at least 100 members;

(3) has fulfilled all agreements and conditions related to

approval of an application for incorporation and issuance of a

certificate of incorporation; and

(4) has notified the department of its compliance with

Subdivisions (1)-(3).

(b) The commission may adopt reasonable rules to:

(1) require greater minimum membership and paid-in shares or

deposits; or

(2) prescribe additional requirements a credit union must meet

before transacting business or incurring indebtedness.

of a rule adopted under this section if the commissioner finds

that the credit union:

(1) does not have supervisory problems that adversely affect its

ability to operate properly; and

(2) is adequately capitalized.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.010. DEADLINE FOR COMMENCING BUSINESS. (a) A credit

union shall begin business before six months after the date of

the order approving the credit union's application.

(b) On request and for good cause shown, the commissioner may

grant a credit union that has not begun business within the time

prescribed by Subsection (a) a reasonable extension to provide an

opportunity to overcome the cause of the delay.

accordance with commission rules, a commissioner's decision

refusing a request for an extension.

(d) The commissioner may cancel the certificate of incorporation

in accordance with commission rules if a credit union does not

begin business within the prescribed time.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.011. AMENDMENT OF ARTICLES OF INCORPORATION OR BYLAWS.

(a) The board may amend the articles of incorporation or bylaws

by a two-thirds vote of the directors present at a meeting at

which a quorum is present. The board shall submit amendments to

the commissioner.

(b) Unless the amendment is a standard bylaw adopted by the

commission, the commissioner in writing shall approve or

disapprove an amendment.

findings and may take the actions provided by Sections 122.006(a)

and (b). The commissioner may not approve an amendment if the

commissioner finds that it violates this subtitle or rules

adopted under this subtitle. The commissioner shall state with

reasonable specificity the reasons for disapproval. An amendment

takes effect on the commissioner's approval.

(d) The board shall report an amendment to the credit union's

membership not later than the next membership meeting after the

commissioner approves the amendment.

(e) The commission shall adopt rules for an appeal of the

commissioner's decision on an amendment. The commissioner's order

approving or disapproving an amendment may be appealed to the

commission not later than the 60th day after the date of the

order.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.02(a), eff. Sept.

1, 1999; Acts 2003, 78th Leg., ch. 533, Sec. 11, eff. Sept. 1,

2003.

Sec. 122.012. PLACE OF BUSINESS. (a) A credit union shall

maintain on file with the department a statement specifying the

street and post office address of the credit union's principal

place of business.

(b) After notifying the commissioner in writing, a credit union

may establish and maintain, at locations other than its principal

place of business, additional offices or service facilities that

are reasonably necessary to provide services to the credit

union's members. The credit union shall notify the commissioner

in writing of the date that the new office or service facility

begins operating.

office or service facility.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 157, Sec. 7, eff. Sept. 1,

1999.

Sec. 122.013. FOREIGN CREDIT UNIONS. (a) A foreign credit

union may do business in this state if it is organized in a state

or country that allows a credit union organized under this

subtitle to do business in that state or country.

(b) A foreign credit union doing business in this state is

subject to rules adopted under this subtitle and any additional

commission requirement.

union's authority to do business in this state if the

commissioner finds that the foreign credit union:

(1) has violated a rule adopted under this subtitle;

(2) is in an unsafe or unsound condition;

(3) is engaged in a pattern of unsafe or unsound practices; or

(4) does not meet a commission requirement.

(d) The commission may require a foreign credit union operating

in this state to submit periodic reports. The required reports

shall be provided by the foreign credit union or by the credit

union supervisory agency having primary responsibility for that

credit union. Any reporting requirements prescribed by the

commission under this subsection must be consistent with the

reporting requirements applicable to credit unions and

appropriate for the purpose of enabling the commissioner to

regulate credit unions.

(e) A foreign credit union from a jurisdiction that allows a

credit union to exercise additional powers and authorities not

granted in this state may not exercise any of those powers or

authorities in this state until the foreign credit union requests

and obtains permission from the commissioner to exercise those

powers or authorities. If the commissioner determines that there

are no safety and soundness concerns, the commissioner shall

approve the request and shall publish the powers or authorities

granted in the manner authorized by Section 15.4041 or 15.4042

for the issuance of an interpretive statement or an opinion. When

approved, those powers or authorities shall be available to all

credit unions authorized to engage in business under this

subtitle.

(f) A foreign credit union may not use this section to alter or

negate the application to the credit union of any law of this

state regarding:

(1) permissible interest rates;

(2) loan fees; or

(3) licensing or regulatory requirements that relate to

insurance, securities, marketing or sales activities, or real

estate development and that are administered by an agency of this

state.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 157, Sec. 8, eff. Sept. 1,

1999; Acts 2003, 78th Leg., ch. 533, Sec. 12, eff. Sept. 1, 2003.

Sec. 122.014. UNDERSERVED-AREA CREDIT UNION. (a) In this

section, "secondary capital account" means a nontransactional

account in an amount greater than $100,000 as established by the

commission that is:

(1) owned by a person other than an individual; and

(2) subordinated to other creditors.

(b) A credit union may apply to the commissioner for the

designation of the credit union as an underserved-area credit

union.

underserved-area credit union only if:

(1) at least 50 percent of a substantial and well-defined

segment of the credit union's members or potential members who

are at least 15 years of age earn not more than 80 percent of the

state or national household median income, whichever is higher;

(2) the credit union submits an acceptable written strategic

plan for marketing to and serving the segment described by

Subdivision (1); and

(3) the credit union submits other information and satisfies

other criteria as may reasonably be required by the commissioner.

(d) In addition to the powers and authorities granted to credit

unions under this subtitle or otherwise, an underserved-area

credit union may:

(1) issue secondary capital accounts to members or nonmembers of

the credit union on the filing of an application with and the

advance approval of the commissioner; and

(2) accept shares and deposits from nonmembers.

(e) The commission may adopt rules for the organization and

operation of underserved-area credit unions, including rules

requiring disclosures to purchasers of secondary capital accounts

and other rules concerning those accounts.

Added by Acts 2003, 78th Leg., ch. 533, Sec. 13, eff. Sept. 1,

2003.

SUBCHAPTER B. ADMINISTRATION

Sec. 122.051. MEMBERSHIP. (a) A person may be a member of a

credit union only if the person is an incorporator or other

person who:

(1) shares a definable community of interest, in accordance with

the credit union's articles of incorporation or bylaws, including

a community of interest based on occupation, association, or

residence;

(2) has paid an entrance fee or membership fee, or both, as

required by the bylaws;

(3) has complied with the minimum share, including membership

share, requirements or other qualifying account requirements

established by the board; and

(4) has complied with any other requirement of the articles of

incorporation and bylaws.

(b) The state acting through the comptroller as administrator of

the state's deferred compensation program or a political

subdivision acting through an appropriate officer as

administrator of the political subdivision's deferred

compensation program may be a member of a credit union for

purposes of funding a deferred compensation program. The state or

a political subdivision funding a deferred compensation program

is not required to pay an entrance fee.

membership in the credit union under reasonable board standards.

(d) In this subsection, "good cause" includes the act of

physically or verbally abusing a credit union member or employee.

A person's membership in a credit union may be terminated or

suspended for good cause or for not maintaining membership

requirements, under the conditions and in accordance with the

procedures provided in the bylaws. A credit union may also

discontinue providing any or all services to a member for good

cause without terminating or suspending the person's membership.

Termination or suspension of a person's membership in the credit

union or discontinuing services does not relieve the person from

any outstanding obligations owed to the credit union.

(e) Two or more persons within the credit union's field of

membership who have jointly subscribed for one or more share or

deposit accounts under a joint account and who have complied with

all membership requirements may each be admitted to membership.

(f) A credit union authorized to engage in business under this

subtitle may accept as a member any other credit union organized

or chartered under the laws of this or another state or of the

United States. Those credit union members are not entitled to any

voting privileges.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 14, eff. Sept. 1,

2003.

Sec. 122.052. MEETINGS OF MEMBERS; VOTING. (a) Members of a

credit union shall hold an annual or special meeting at the time

and place and in the manner provided by the bylaws.

(b) In determining a question requiring action by the members,

each member may cast only one vote, regardless of the number of

shares the member holds.

means. Mail and electronic balloting shall be conducted in

accordance with commission rules.

(d) A member that is not an organization may not vote by proxy.

A member that is an organization may be represented by and vote

through a designated representative who is authorized, in

writing, by the organization's governing body to represent the

organization.

(e) The credit union's bylaws may establish a minimum age

requirement to vote.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 15, eff. Sept. 1,

2003.

Sec. 122.053. BOARD OF DIRECTORS; TERMS AND DUTIES. (a) A

board of at least five members shall direct the business and

affairs of a credit union.

(b) The membership of the credit union shall elect the board at

an annual membership meeting, from the membership, and in the

manner provided by the bylaws. A board member shall hold office

until a successor is qualified and elected or appointed.

affirmation that the director:

(1) will diligently and honestly perform the director's duties

in administering the credit union's affairs;

(2) although the director may delegate the performance of those

duties, remains responsible for the performance of the duties;

(3) will not knowingly violate or willingly permit the violation

of an applicable law; and

(4) will exercise the care and diligence reasonable and

necessary to administer the affairs of the credit union in a safe

and sound manner.

(d) The bylaws shall prescribe the directors' terms and the

board's duties. A term may not exceed three years. A director may

serve more than one term.

(e) The board shall meet at least once each month.

(f) 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.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 16, eff. Sept. 1,

2003.

Sec. 122.054. QUALIFICATION OF DIRECTORS. (a) The commission

by rule shall establish qualifications for a director. The rules

must provide that a person may not serve as director if the

person:

(1) has been convicted of a criminal offense involving

dishonesty or breach of trust;

(2) is not eligible for coverage under the blanket bond required

by Section 122.063 and rules adopted under this subtitle; or

(3) has defaulted on payment of a voluntary obligation to the

credit union or has otherwise caused the credit union to incur a

financial loss.

(b) The president or an employee of a credit union may not serve

as director of the credit union unless permitted by the credit

union's bylaws. If the bylaws permit the president or an employee

to serve on the board, the bylaws must require that persons serve

on the board so that the president and employees of the credit

union never constitute a majority of the board.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 17, eff. Sept. 1,

2003.

Sec. 122.055. VACANCIES; REMOVAL. (a) The office of a director

becomes vacant if the director dies, resigns, is removed, has

been absent from more meetings than the total number of absences

permitted by commission rule, or does not possess or maintain the

qualifications required to serve on the board.

(b) Unless the bylaws provide otherwise, the remaining directors

by majority vote shall fill a vacancy, regardless of whether the

remaining directors constitute a quorum. A director elected by

the board to fill a vacancy holds office until the next annual

membership meeting, at which the position shall be filled for the

remainder of the unexpired term by vote of the members.

removal procedure provided by the bylaws.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 18, eff. Sept. 1,

2003.

Sec. 122.056. HONORARY OR ADVISORY DIRECTORS. (a) The board

may appoint not more than 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.

(b) An honorary or advisory director:

(1) need not be eligible for membership in the credit union;

(2) is not a member of the board; and

(3) is not entitled to vote on a matter before the board.

board deliberation.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.057. OFFICERS; EXECUTIVE COMMITTEE. (a) At the annual

organizational meeting, the board shall elect from its membership

a chairman, vice chairman, treasurer, and secretary. The offices

of treasurer and secretary may be held by the same individual.

(b) An officer elected under Subsection (a):

(1) serves a one-year term or until the officer's successor is

elected and qualified; and

(2) has the duties the bylaws prescribe.

committee of at least three persons to exercise, between board

meetings, authority specifically delegated by the board under

conditions specified by the board. At each board meeting, the

executive committee shall report to the board regarding any

meeting held or action taken by the committee between board

meetings.

(d) The bylaws may establish a minimum age requirement to hold

office in the credit union.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 19, eff. Sept. 1,

2003.

Sec. 122.058. CHIEF EXECUTIVE OFFICER. (a) The board may

employ, elect, or appoint a president, who is the chief executive

officer in charge of operations.

(b) The president may be a board member but may not be chairman,

vice chairman, or secretary of the credit union. The president

serves at the board's pleasure.

employ, and may discharge, any other officer or employee the

president considers necessary to operate the credit union. The

president shall prescribe the title of an officer or employee

appointed or employed under this subsection.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.059. DELEGATION OF MANAGEMENT AND LOAN APPROVAL

AUTHORITY. (a) Without written approval of the commissioner, a

credit union may not:

(1) contract with an individual who is not an officer, director,

or employee of the credit union or with an organization for the

provision of the management of the credit union; or

(2) delegate to an individual who is not an officer, director,

or employee of the credit union or to an organization the

authority to manage the credit union.

(b) The board may delegate all or part of its power to approve

or disapprove a loan to a credit committee, one or more other

committees, or one or more individuals.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 20, eff. Sept. 1,

2003.

Sec. 122.060. CERTIFICATE OF ELECTION. (a) The board chairman

and the secretary:

(1) shall execute a certificate of election that states the name

and address of each officer, director, and committee member

elected or appointed; 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.

(b) The commission by rule may authorize the commissioner to

obtain other confidential reports relating to a newly elected or

appointed officer, director, or committee member.

organization that contains substantially similar information as

the certificate of election in lieu of the certificate. The

acceptance of such a form does not limit the commissioner's power

to require additional information concerning a newly elected or

appointed officer, director, or committee member.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 21, eff. Sept. 1,

2003.

Sec. 122.061. CONFLICTS OF INTEREST. (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 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.

(b) An interest only as a member of the credit union that is

shared in common with all other members is not a pecuniary

interest within the meaning of Subsection (a)(1).

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.062. COMPENSATION. A person may not receive

compensation for serving as a director, honorary director,

advisory director, or committee member of a credit union, except

that the person may be:

(1) provided with reasonable health, life, accident, liability,

or similar insurance protection;

(2) reimbursed for necessary expenses incurred in the

performance of the person's duties; and

(3) paid the fees and reimbursed for other expenditures

authorized by commission rules.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.063. BOND. The board shall purchase from a surety

company authorized to do business in this state a blanket surety

or security bond covering each director, honorary director,

advisory director, officer, employee, member of an official

committee, attorney, or other agent of the credit union as

required by commission rule.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

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:

(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.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER C. OPERATIONS AND FINANCES

Sec. 122.101. CALL REPORTS. (a) A credit union shall submit to

the department on a quarterly basis a call report, 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 date 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.

date it is due is subject to sanctions provided by this chapter

and Chapter 126.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 1999, 76th Leg., ch. 157, Sec. 9, eff. Sept. 1,

1999; Acts 2003, 78th Leg., ch. 533, Sec. 22, eff. Sept. 1, 2003.

Sec. 122.102. FINANCIAL REPORTING; AUDITS. (a) A credit union

shall use the financial reporting forms and observe the

accounting principles prescribed by the commission.

(b) The board shall:

(1) make a comprehensive annual audit of the credit union's

books and affairs, in accordance with established principles and

commission rules;

(2) submit a summary of the audit report to the credit union's

members at the next annual meeting; and

(3) make a supplementary audit or examination as the board

considers necessary or the commissioner requires.

members' accounts with the credit union's records.

(d) If the commissioner, by examination or other credible

evidence, finds that the board is not complying with this section

or a rule adopted under this section, the commissioner may

appoint an independent person from outside the credit union and

its members to perform an audit. The credit union shall pay the

cost of the audit.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.103. EQUITY CAPITAL. A credit union's equity capital

consists of:

(1) retained earnings;

(2) appropriated retained earnings, including net worth and

other reserves;

(3) undivided earnings; and

(4) other forms of capital in accordance with generally accepted

accounting principles and approved by the commissioner.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 23, eff. Sept. 1,

2003.

Sec. 122.104. NET WORTH RESERVE ALLOCATIONS. (a) The

commission by rule shall require a credit union to contribute to

and maintain net worth reserves necessary to protect the

interests of its members. The rule may:

(1) prescribe the purposes for which the net worth reserves may

be used; and

(2) authorize the commissioner to approve other uses.

(b) The credit union's board may establish reserves in addition

to the required net worth reserves.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 24, eff. Sept. 1,

2003.

Sec. 122.105. MEMBERSHIP SHARE REDUCTION. A credit union may

order a reduction in the membership shares of each of its

shareholders if:

(1) the credit union's losses resulting from a depreciation in

value of its loans or investments or otherwise exceed its

undivided earnings and its reserves, and the estimated value of

its assets is less than the total amount due the shareholders;

(2) a majority vote of the credit union's members present at a

meeting of members called for that purpose approve the reduction;

and

(3) the reduction divides the loss proportionately among the

shareholders.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 25, eff. Sept. 1,

2003.

Sec. 122.106. EXEMPTION FROM CERTAIN TAXES. (a) Except as

provided by Subsection (b), a credit union is exempt from a

franchise or other license tax.

(b) A credit union is not exempt from the franchise tax imposed

by Chapter 171, Tax Code, unless the credit union is exempted by

that chapter.

this chapter is not taxable.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.107. NOTICE OF AVAILABILITY OF CERTAIN DOCUMENTS. (a)

A credit union regulated under this subtitle and Chapter 15 shall

give notice to the credit union's members of the availability on

request of a member of documents related to the credit union's

finances and management, including:

(1) a summary of the most recent annual audit;

(2) the most recent statement of financial condition, such as

nonconfidential pages of the quarterly call report provided under

Section 122.101;

(3) a copy of IRS Form 990 or its successor; and

(4) any other documents that members are entitled to possess, as

determined by the commission.

(b) The notice required by Subsection (a) must be given:

(1) on the credit union's Internet website if the credit union

maintains a website; and

(2) in a newsletter twice a year if the credit union distributes

a newsletter.

this section, including rules prescribing an alternative method

for credit unions that do not maintain an Internet website or

distribute a newsletter to provide their members with notice of

the documents required by Subsection (a).

Added by Acts 2009, 81st Leg., R.S., Ch.

695, Sec. 17, eff. September 1, 2009.

SUBCHAPTER D. MERGER OR CONSOLIDATION

Sec. 122.151. AUTHORITY TO MERGE OR CONSOLIDATE. (a) A credit

union may merge or consolidate with another credit union, under

the other credit union's existing articles of incorporation or

otherwise, if:

(1) the merger or consolidation is in accordance with commission

rules and approved by the commissioner; and

(2) the merger or consolidation takes place under a plan that

has been:

(A) agreed to by a majority of the board of each credit union

joining in the merger or consolidation; and

(B) approved by a majority of the members of each credit union

voting at a meeting of its members called for that purpose.

(b) The commissioner may waive the requirement that the members

of each credit union approve the plan.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.152. APPLICATION TO MERGE OR CONSOLIDATE. (a) After

agreement by the directors and approval by the members, if

applicable, of each credit union or federal credit union, the

chairman and secretary of each credit union or federal credit

union shall execute a certificate of merger or consolidation

that:

(1) includes a copy of the resolution or other action by which

the board agreed to the merger or consolidation plan; and

(2) states:

(A) the time and place of the board meeting at which the board

agreed to the merger or consolidation plan;

(B) the board's vote for and against adoption of the plan;

approved the plan, if applicable;

(D) the membership's vote for and against approval of the plan,

if applicable; and

(E) the name of the surviving credit union.

(b) The merging credit union or a consolidating credit union

shall submit the certificates and a copy of the merger or

consolidation plan to the commissioner.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 26, eff. Sept. 1,

2003.

Sec. 122.153. DECISION BY COMMISSIONER; APPEAL. (a) Subject to

Subsection (b), on approving the merger or consolidation, the

commissioner shall return the certificates and plan to the

merging or consolidating credit unions.

(b) The commissioner may conditionally approve a merger or

consolidation. If approval is conditional, the commissioner:

(1) shall state the condition in the order approving the merger

or consolidation; and

(2) may not deliver the approved certificate until the condition

has been met.

authorize a credit union that is insolvent or is in danger of

insolvency to merge or consolidate with another credit union or

may authorize a credit union to purchase any of the assets of, or

assume any of the liabilities of, another credit union that is

insolvent or in danger of insolvency if the commissioner is

satisfied that:

(1) an emergency requiring expeditious action exists with

respect to the credit union that is insolvent or in danger of

insolvency;

(2) another option is not reasonably available; and

(3) the public interest would best be served by approval of the

merger, consolidation, purchase, or assumption.

(d) If the commissioner disapproves the merger or consolidation

or imposes a condition, the merging or consolidating credit

unions may appeal the commissioner's decision to the commission

in the manner provided by Section 122.007 for an appeal on an

application to incorporate a credit union.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.1531. CONSIDERATIONS IN DETERMINATION. In determining

whether to approve or disapprove the merger or consolidation, the

commissioner shall consider the availability and adequacy of

financial services in the local community and the effect that the

merger or consolidation would have on the local community. The

commission by rule shall establish other appropriate criteria

that the commissioner must consider in making the determination.

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.03(a), eff. Sept.

1, 1999.

Sec. 122.154. PROPERTY, OBLIGATIONS, AND LIABILITIES OF MERGED

OR CONSOLIDATED CREDIT UNION. After a merger or consolidation is

effected:

(1) the property of the merged or consolidated credit union

vests in the surviving credit union without an instrument of

transfer or endorsement; and

(2) the obligations and liabilities of the merged or

consolidated credit union are assumed by the surviving credit

union.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.155. CONSTRUCTION OF SUBCHAPTER. This subchapter shall

be construed, when possible, to permit a credit union authorized

to do business in this state under other law to merge or

consolidate with a credit union authorized to do business under

this subtitle.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.156. RULES TO ADDRESS CERTAIN PROCEDURES. The rules

adopted under this subchapter must specify in detail the

procedures that:

(1) a credit union must follow to obtain commissioner approval

of a merger or consolidation; and

(2) the commissioner must follow in approving or disapproving

the merger or consolidation.

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.03(a), eff. Sept.

1, 1999.

SUBCHAPTER E. CONVERSION

Sec. 122.201. CONVERSION OF STATE CREDIT UNION TO FEDERAL CREDIT

UNION. 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.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.202. CONVERSION OF STATE CREDIT UNION TO OUT-OF-STATE

CREDIT UNION. A credit union organized under the laws of this

state may convert to a credit union under the laws of another

state:

(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 applicable commission rule.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.203. CONVERSION OF FEDERAL OR OUT-OF-STATE CREDIT UNION

TO STATE CREDIT UNION. A credit union organized under the laws

of the United States or of another state may convert to a credit

union organized under the laws of this state by complying with:

(1) the requirements of the jurisdiction under which the

converting credit union is organized; and

(2) commission rules.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER F. MISCONDUCT AND ENFORCEMENT

Sec. 122.251. DEFAMATION. (a) A person commits an offense if

the person knowingly:

(1) makes, circulates, or transmits to another person a false

statement that is derogatory to the financial condition of a

credit union with the intent to injure that credit union; or

(2) counsels, aids, procures, or induces another person to make,

circulate, or transmit a false statement that is derogatory to

the financial condition of a credit union with the intent to

injure that credit union.

(b) An offense under this section is a third degree felony.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.252. CONSIDERATION FOR LOAN, INVESTMENT, OR PURCHASE.

(a) A person commits an offense if the person:

(1) is a director, honorary director, advisory director,

committee member, officer, or employee of a credit union; and

(2) knowingly demands or receives, directly or indirectly,

consideration for the credit union's making a specific loan or

investment or purchasing an asset.

(b) An offense under this section is a Class A misdemeanor.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.253. LOAN TO NONMEMBER. (a) A person commits an

offense if the person:

(1) is a director, honorary director, advisory director,

committee member, officer, or employee of a credit union; and

(2) knowingly permits a loan to be made to a nonmember or

participates in a loan to a nonmember.

(b) An offense under this section is a Class B misdemeanor.

is primarily liable to the credit union for the amount illegally

loaned. The illegality of the loan is not a defense in an action

by the credit union to recover on the loan.

(d) Extending credit to a nonmember as a comaker with a member

or extending credit to a nonmember for the sale of property owned

by the credit union or for the sale of assets acquired in

liquidation or repossession is authorized and is not a loan to a

nonmember. Acquiring a promissory note or other asset by a share

and deposit guaranty corporation or credit union authorized under

Section 15.410, on which a nonmember is liable, is not a loan to

a nonmember.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.254. FALSE STATEMENTS OR DOCUMENTS; DESTRUCTION OF

RECORDS. (a) A person commits an offense if the person,

knowingly and with the intent to deceive:

(1) makes a false entry on a record, report, or statement of a

credit union; or

(2) in connection with an examination or investigation of a

credit union by the commissioner, a deputy commissioner, or the

department's authorized examiner, exhibits a false paper,

instrument, or security or gives under oath a false answer to a

question directly related to the examination or investigation

asked the person by the commissioner, the deputy commissioner, or

the department's authorized examiner.

(b) A person commits an offense if the person knowingly removes,

destroys, or conceals a record of the credit union for the

purpose of concealing a fact or information from the

commissioner, a deputy commissioner, or the department's

authorized examiner.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.255. DETERMINATION OF MISCONDUCT. The commissioner may

determine that an officer, director, honorary director, advisory

director, or employee of a credit union, or the credit union

itself, acting by and through an officer, director, honorary

director, advisory director, or employee, has:

(1) violated this subtitle, a rule adopted under this subtitle,

or another law applicable to a credit union;

(2) violated or refused to comply with a final order of the

commissioner or commission;

(3) wilfully neglected to perform an official or legal duty or

wilfully committed a breach of trust or fiduciary duty;

(4) committed a fraudulent or questionable practice in the

conduct of the credit union's business that endangers the credit

union's reputation or threatens its solvency;

(5) refused to submit to examination under oath or to permit

examination of the credit union's records and affairs by the

commissioner or the commissioner's representative;

(6) failed or refused to authorize and direct another person to

permit the commissioner or the commissioner's representative to

examine the credit union's records in the other person's custody

after the commissioner has requested the authorization of and

direction to the other person;

(7) conducted the credit union's business in an unsafe,

unauthorized, or unlawful manner;

(8) concealed, destroyed, removed, or falsified a record related

to the credit union's business and affairs;

(9) transacted business while the credit union was in an unsafe

or unsound condition;

(10) violated a condition of the credit union's articles of

incorporation or of a written agreement with the commissioner or

the commission; or

(11) committed a criminal act that is a substantial detriment to

the reputation and conduct of the credit union's business.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 27, eff. Sept. 1,

2003.

Sec. 122.256. DETERMINATION LETTER; BOARD MEETING. (a) If the

commissioner determines from examination or other credible

evidence that a credit union is in a condition that may warrant

the issuance of an order under this chapter or Chapter 126, the

commissioner may notify the credit union in writing of the

commissioner's determination, the requirements the credit union

must satisfy to abate the determination, and the time by which

the requirements must be satisfied to avert further

administrative action. The determination letter must be delivered

in person or sent by registered or certified mail, return receipt

requested.

(b) If considered necessary, the commissioner may call a meeting

of the credit union's board. The directors shall attend the

meeting. The commissioner shall present to the board the findings

stated in the determination letter and shall demand the

discontinuance of any violation or unsafe or unsound practice

found.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 28, eff. Sept. 1,

2003.

Sec. 122.257. CEASE AND DESIST ORDER FOR CREDIT UNIONS. (a) If

the commissioner makes a finding listed in Section 122.255 and

determines that an order to cease and desist is necessary and in

the best interest of the credit union involved and its

depositors, creditors, and members, the commissioner may serve on

the credit union, its board, and each offending person an order

to cease and desist from a violation or practice specified in the

order and to take affirmative action that the commissioner

considers necessary to correct a condition resulting from a

violation or unsafe or unsound practice found.

(b) The order must:

(1) be in writing;

(2) be served:

(A) at the meeting called under Section 122.256 or not later

than the 30th day after the date of that meeting; and

(B) by certified or registered mail, addressed to the credit

union at the last address of its principal office as shown by

department records, or by delivery to an officer or director of

the credit union; and

(3) unless the order is effective immediately on service as

provided by Subsection (d), state the effective date of the

order, which may not be before the 10th day after the date the

order is served.

enclosed in a postpaid, properly addressed wrapper, in a post

office or official depository under the care and custody of the

United States Postal Service.

(d) A cease and desist order is effective immediately on service

if the commissioner finds that:

(1) the solvency of the credit union is endangered;

(2) there is a continuing violation of this subtitle or a rule

adopted under this subtitle; or

(3) there is a threat of immediate and irreparable harm to the

public or the credit union or its depositors, creditors, or

members.

(e) The order is final unless, not later than the 10th day after

the date the order is served, the credit union files with the

commissioner written notice of appeal that includes a certified

copy of the board resolution.

(f) A copy of the order shall be entered in the minutes of the

board meeting. The directors shall certify to the commissioner in

writing that each director has read the order.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 29, eff. Sept. 1,

2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

695, Sec. 18, eff. September 1, 2009.

Sec. 122.2575. CEASE AND DESIST ORDER FOR OTHER PERSONS. (a)

If it appears to the commissioner that a person who is not

authorized to engage in business under this subtitle or the

Federal Credit Union Act (12 U.S.C. Section 1751 et seq.) is

violating this subtitle, a rule adopted under this subtitle, or

another state statute or rule relating to the regulation of

credit unions, the commissioner may issue without notice and

hearing an order to cease and desist from continuing a particular

action to enforce compliance with the applicable state statute or

rule relating to the regulation of credit unions. The order must

contain a reasonably detailed statement of the fact on which the

order is made.

(b) If a person against whom an order under this section is made

requests a hearing, the commissioner shall set and give notice of

a hearing before the commissioner or a hearings officer. The

hearing shall be governed by Chapter 2001, Government Code.

to whom the order is issued requests a hearing not later than the

30th day after the date the order is issued. If a hearing has

not been requested not later than the 30th day after the date the

order is made, the order is considered final and nonappealable.

Added by Acts 2009, 81st Leg., R.S., Ch.

695, Sec. 19, eff. September 1, 2009.

Sec. 122.258. REMOVAL ORDER. (a) The commissioner by order may

remove or prohibit a person who is a current or former officer,

director, manager, or employee of a credit union from office,

employment, or further participation in the affairs of a credit

union if the commissioner by examination or other credible

evidence:

(1) finds that:

(A) the person has continued a violation or practice previously

charged and found by the commissioner after issuance of a

determination letter under Section 122.256 or a cease and desist

order under Section 122.257; and

(B) removal or prohibition is necessary and in the best interest

of the credit union and its depositors, creditors, and members;

(2) makes a finding listed in Section 122.255 and determines

that removal or prohibition of the person is immediately

necessary because the person has committed or is about to commit:

(A) a fraudulent or criminal act involving the conduct of the

business of the credit union;

(B) an act that may cause the credit union to become insolvent

or to be placed in imminent danger of insolvency; or

harm to the public or the credit union or its members,

depositors, or creditors.

(b) The removal order must:

(1) state with reasonable certainty the grounds for removal; and

(2) be promptly served on the person removed and on the credit

union in the manner provided by Section 122.257 for service of a

cease and desist order.

authority of office or employment in the credit union. After the

order becomes final, the person removed or prohibited may not

hold office in, be employed by, or participate in the affairs of

any credit union without the prior written approval of the

commissioner. The order is final as of the date of issuance

unless the person removed or prohibited or the credit union, as

evidenced by a certified copy of the board resolution, files

written notice of appeal with the commissioner not later than the

10th day after the day the removal order is served.

(d) A copy of the removal order shall be entered in the board

minutes. An officer shall acknowledge receipt of the order and

certify to the commissioner that each person named in the removal

order has been removed from office or employment.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 533, Sec. 30, eff. Sept. 1,

2003.

Sec. 122.259. HEARING ON APPEAL OF PROPOSED ORDER. (a) If the

credit union or a person removed from office or employment files

a notice of appeal of a cease and desist order or a removal

order, the commissioner shall set a time and place for the

commission to hear the appeal in accordance with commission

rules.

(b) The filing of an appeal does not suspend a removal order or

cease and desist order.

affirm, or modify the commissioner's order and may order that

appropriate action be taken.

(d) A cease and desist order or a removal order is final on

completion of an appeal or otherwise as provided by this

subchapter.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 122.260. ADMINISTRATIVE PENALTY; INJUNCTION. (a) If a

credit union or other person designated in a final order under

this subchapter does not comply with the order, the commissioner,

after giving notice, may assess an administrative penalty against

the credit union, the designated person, or both, in an amount of

not less than $100 or more than $10,000 each for each day of the

violation of the order.

(b) The credit union may not reimbur

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Texas Codes and Statutes

CHAPTER 122. ORGANIZATIONAL AND FINANCIAL REQUIREMENTS