CHAPTER 123. GENERAL POWERS
FINANCE CODE
TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES
SUBTITLE D. CREDIT UNIONS
CHAPTER 123. GENERAL POWERS
SUBCHAPTER A. GENERAL POWERS
Sec. 123.001. GENERAL POWERS. A credit union may exercise any
power necessary or appropriate to accomplish the purposes for
which it is organized and any power granted a corporation
authorized to do business in this state, including any power
specified in this chapter.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.002. INCIDENTAL POWERS. A credit union may exercise
any right, privilege, or incidental power necessary or
appropriate to exercise its specific powers and to accomplish the
purposes for which it is organized.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.003. ENLARGEMENT OF POWERS. (a) A credit union may
engage in any activity in which it could engage, exercise any
power it could exercise, or make any loan or investment it could
make, if it were operating as a federal credit union.
(b) Notwithstanding any other law, and in addition to the powers
and authorities conferred under Subsection (a), a credit union
has the powers or authorities of a foreign credit union operating
a branch in this state if the commissioner finds that exercise of
those powers or authorities is convenient for and affords an
advantage to the credit union's members and maintains the
fairness of competition and parity between the credit union and
any foreign credit union. A credit union does not have the field
of membership powers or authorities of a foreign credit union
operating a branch in this state.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 87, Sec. 3, eff. Sept. 1,
1999; Acts 2003, 78th Leg., ch. 533, Sec. 33, eff. Sept. 1, 2003.
SUBCHAPTER B. OPERATIONAL POWERS
Sec. 123.101. CONTRACTS. A credit union may make contracts.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.102. POWER TO SUE AND DEFEND. A credit union may sue
or be sued in the name of the credit union.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.103. PURCHASE AND SALE OF PROPERTY. Subject to
commission rules, a credit union may purchase, hold, lease, or
dispose of property necessary or incidental to the operation or
purpose of the credit union.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.104. MEMBERSHIP IN OTHER ORGANIZATION; OPERATION AS
CENTRAL CREDIT UNION. A credit union may:
(1) be a member of:
(A) another credit union organized under this subtitle or other
law; and
(B) another organization approved by the board; or
(2) operate, with the commissioner's approval, as a central
credit union.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.105. FEES. (a) A credit union may collect a fee,
determined by the board, for services and administrative costs,
including a fee for a check or draft that is returned because it
is drawn against a closed account or an account containing
insufficient or uncollected money, because of a stop payment
order, or for another similar reason.
(b) A fee under this section is an administrative expense. The
fee is in addition to interest authorized by law and is not a
part of interest collected or agreed to be paid on a loan.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.106. CHANGE OF LOCATION. A credit union may change its
principal place of business or a subsidiary place of business to
another location by notifying the commissioner in writing of the
new address and the effective date of the change.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 2003, 78th Leg., ch. 533, Sec. 34, eff. Sept. 1,
2003.
Sec. 123.107. INSURANCE FOR MEMBERS. A credit union may
purchase or otherwise provide insurance for the benefit or
convenience of its members in accordance with applicable law or
rules adopted by the commission.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 157, Sec. 11, eff. Sept. 1,
1999.
Sec. 123.108. DONATIONS. A credit union may donate to a
nonprofit, civic, charitable, or community organization as
authorized by the board.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.109. SEAL. A credit union may adopt and use a common
seal and may alter its seal at any time.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.110. RECORDS. (a) A credit union may:
(1) copy any record kept by the credit union; and
(2) dispose of the original record in accordance with commission
rules.
(b) A copy of a record is considered an original record for any
purpose, including admissibility in evidence as an original
record before any court or administrative agency for the purpose
of the copy's admissibility in evidence.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.111. RIGHT TO ACT TO MITIGATE OR AVOID LOSS. This
subtitle does not prohibit a credit union from investing its
money, operating a business, managing or dealing in property, or
taking any other action at any time that is reasonably necessary
to avoid or mitigate a loss on a loan or on an investment made or
obligation created in good faith and in the usual course of the
credit union's business, as authorized by this subtitle or a rule
adopted by the commission.
Added by Acts 2003, 78th Leg., ch. 533, Sec. 35, eff. Sept. 1,
2003.
SUBCHAPTER C. FINANCIAL POWERS
Sec. 123.201. POWER TO BORROW OR LEND. (a) A credit union may:
(1) lend its funds, or engage in any other type of financing
transaction authorized by applicable law or rules adopted by the
commission; and
(2) borrow money from any source, subject to Subsection (b).
(b) A credit union may not incur a debt without the
commissioner's prior approval if the debt will cause the debt of
the credit union, including a deposit of a nonmember financial
institution, to exceed an amount equal to 500 percent of the
credit union's unencumbered reserves and undivided earnings.
(c) The commissioner shall grant or deny a request for approval
under Subsection (b) not later than the 10th day after the date
on which the request is made.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 157, Sec. 12, eff. Sept. 1,
1999.
Sec. 123.202. RECEIPT, TRANSFER, AND PAYMENT OF MONEY. A credit
union may:
(1) receive and disburse money;
(2) receive a payment on a share or deposit; and
(3) provide for the transfer or withdrawal of money from an
account by the means and through the payment systems that the
board determines best serve the convenience and needs of members
and depositors.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.203. ACCEPTANCE OF MONEY FOR DEPOSIT FROM ANOTHER
ENTITY. A credit union may accept money for deposit by a savings
and loan association, a savings association, the savings
department of a bank, a commercial bank, a savings bank, a trust
company, an insurance company, or any intermediary or other
person managing or holding money on behalf of the credit union or
any of the credit union's members or depositors.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.204. ACTION AS AGENT OR DEPOSITORY OF UNITED STATES OR
OTHER GOVERNMENTAL ENTITY. A credit union may act as agent or
depository of and accept for deposit the money of:
(1) the United States or an agent or instrumentality of the
United States;
(2) this or another state; or
(3) a political subdivision of this or another state, including:
(A) a municipality;
(B) a county;
(C) a school district; or
(D) another taxing authority.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.205. INVESTMENTS AND SECURITIES. (a) In accordance
with commission rules, a credit union may:
(1) develop and offer investment programs to its members and
depositors; or
(2) act as agent for its members and depositors in the purchase,
sale, or other disposition of a security, an interest in a mutual
fund, or an interest or participation in any other type of
investment.
(b) A credit union may issue and sell securities in connection
with an investment program developed and offered under Subsection
(a)(1).
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.206. ACTION AS FISCAL OR TRANSFER AGENT; TRANSFER OF
CERTAIN INSTRUMENTS; SIGNATURES. A credit union may:
(1) act as fiscal agent or transfer agent;
(2) transfer a registered and countersigned certificate of
stock, bond, or other evidence of indebtedness; or
(3) guarantee a signature.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.207. FIDUCIARY POWERS. A credit union may:
(1) act, under court order or appointment, as guardian,
receiver, trustee, executor, or administrator without giving
bond;
(2) receive an investment from a person acting as a guardian,
receiver, trustee, executor, or administrator under the Texas
Probate Code or Subtitle B, Title 9, Property Code;
(3) act as depository for money paid to a court or constituting
the estate of a deceased person, a minor, or an incompetent;
(4) accept, execute, and administer a trust as trustee;
(5) accept funds or money for deposit by a fiduciary, trustee,
receiver, guardian, executor, or administrator; or
(6) act as custodian or trustee of a pension or profit-sharing
plan, including an individual retirement account or a pension
fund of a self-employed individual or of the sponsor of a credit
union.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.208. DIVIDENDS AND INTEREST. (a) A credit union may:
(1) declare and pay a dividend on a share;
(2) contract for and pay interest on a deposit; or
(3) refund interest to a borrower.
(b) A dividend or interest may be paid at a rate and on the
conditions that the board authorizes.
(c) The commissioner may restrict the payment of a dividend:
(1) if the commissioner issues a cease and desist order under
Section 122.257; or
(2) as necessary to protect the member's interests and preserve
the solvency of the credit union as authorized by commission
rule.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.209. TRANSFER SYSTEM. A credit union may establish,
operate, or participate in a system that allows the transfer of
credit union money or the shares or deposits of its members by
electronic or other means, including a clearinghouse association,
a data processing or other electronic network, the Federal
Reserve System, or any other government payment or liquidity
program.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.210. SALE OF CERTAIN INSTRUMENTS OR SECURITIES; FEE. A
credit union may:
(1) collect, receive, and disburse money:
(A) in connection with the sale of a traveler's check, money
order, cashier's check or draft, treasurer's draft, similar
instrument, or security of any type; or
(B) for another purpose that may provide a benefit or
convenience for its members; and
(2) collect a fee for those services.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 123.211. CERTIFICATES OF INDEBTEDNESS. The commission by
rule may authorize a credit union to issue certificates of
indebtedness that are subordinated to all other claims of credit
union creditors.
Added by Acts 2003, 78th Leg., ch. 533, Sec. 36, eff. Sept. 1,
2003.
Sec. 123.212. CHECK AND MONEY TRANSFER SERVICES. A credit union
may sell to a person within its field of membership negotiable
checks, money orders, and other similar money transfer
instruments or services and may also cash checks and money orders
for a person within its field of membership for a fee.
Added by Acts 2003, 78th Leg., ch. 533, Sec. 37, eff. Sept. 1,
2003.