CHAPTER 126. CREDIT UNION SUPERVISION AND REGULATION
FINANCE CODE
TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES
SUBTITLE D. CREDIT UNIONS
CHAPTER 126. CREDIT UNION SUPERVISION AND REGULATION
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 126.001. APPOINTMENT OF CONSERVATOR OR LIQUIDATING AGENT.
The commissioner may appoint any person, including the share and
deposit guaranty corporation or credit union provided for by
Section 15.410, as a conservator or a liquidating agent under
this chapter.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.002. CONFIDENTIALITY OF INFORMATION. (a) Except as
provided by Subsections (b) and (c), information obtained
directly or indirectly by the department in any manner, including
by application or examination, concerning the financial condition
or business affairs of a credit union and the files and records
of the department relating to that information, except a
statement intended for publication, are confidential.
(b) Confidential information may not be disclosed to a member of
the commission, and a member of the commission may not be given
access to the files or records of the department, except that the
commissioner may disclose to the commission information, files,
and records pertinent to a hearing or matter pending before the
commission or the commissioner.
(c) The commissioner may disclose the information described by
Subsection (a) to a law enforcement agency 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.
(d) Information obtained by the department from a federal or
state supervisory agency that is confidential under federal law
or the laws of that state may not be disclosed except as provided
by the applicable federal or state law.
(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.
(f) Discovery of confidential information from a person subject
to this subtitle or Chapter 15 under subpoena or other legal
process must comply with rules adopted under this subtitle,
Chapter 15, and any other applicable law. The rules may:
(1) restrict release of confidential information to the portion
directly relevant to the legal dispute at issue; and
(2) require that a protective order, in a form and under
circumstances specified by the rules, be issued by a court before
release of the confidential information.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 157, Sec. 13, eff. Sept. 1,
1999; Acts 2003, 78th Leg., ch. 533, Sec. 45, eff. Sept. 1, 2003.
Sec. 126.003. ENFORCEABILITY OF AGREEMENT MADE BY CREDIT UNION
BEFORE CONSERVATORSHIP OR LIQUIDATION. An agreement that tends
to diminish or defeat the interest of the conservator or
liquidating agent in an asset acquired under this chapter, either
as security for a loan or by purchase, is not valid against the
conservator or liquidating agent unless the agreement is:
(1) in writing;
(2) executed by the credit union and each person claiming an
adverse interest under the agreement, including the obligor,
contemporaneously with the acquisition of the asset by the credit
union;
(3) approved by the board with the approval recorded in the
minutes of the board; and
(4) an official record of the credit union continuously from the
time of its execution.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER B. EXAMINATIONS
Sec. 126.051. EXAMINATIONS. (a) The department, through
examiners it appoints and in accordance with commission rules,
shall periodically examine the books and records of each credit
union.
(b) In lieu of an examination under this section, the
commissioner may accept:
(1) the examination report of a regulator authorized to examine
a credit union, foreign credit union, federal credit union, or
other financial institution; or
(2) the audit report of an accountant, satisfactory to the
commissioner, who has made and submitted a report of the
condition of the affairs of a credit union, foreign credit union,
federal credit union, or other financial institution.
(c) The commissioner may accept all or part of a report in lieu
of all or part of an examination. An accepted part of the report
has the same validity as an examination under this section.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 2003, 78th Leg., ch. 533, Sec. 46, eff. Sept. 1,
2003.
Sec. 126.052. ACCESS TO INFORMATION. An officer, director,
agent, or employee of a credit union shall give an examiner free
access to any information relating to the credit union's
business, including access to books, papers, securities, and
other records.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.053. WITNESSES; PRODUCTION OF DOCUMENTS. (a) In an
examination conducted under this subchapter, the commissioner or
the commissioner's designee may:
(1) subpoena witnesses;
(2) administer an oath or affirmation to a person, including any
officer, director, agent, or employee of a credit union, and
examine the person under oath or affirmation on any subject the
commissioner considers pertinent to the financial condition or
the safety and soundness of the activities of a credit union; or
(3) require and compel by subpoena the production of documents
that are not voluntarily produced, including books, papers,
securities, and records.
(b) The commissioner may apply to a district court in Travis
County for an order requiring a person to obey a subpoena, to
appear, or to answer questions in connection with the examination
or investigation.
(c) The court shall issue an order under Subsection (b) if the
court finds good cause to issue the subpoena or to take
testimony.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 2003, 78th Leg., ch. 533, Sec. 47, eff. Sept. 1,
2003.
Sec. 126.054. REPORT OF EXAMINATION. (a) An examiner shall
report the results of an examination, including a general
statement of the credit union's affairs, on a form prescribed by
the commissioner and approved by the commission.
(b) The department shall send a copy of the report to the board
not later than the 30th day after the examination date.
(c) The report of examination is confidential. The commissioner
may provide a copy of the report to other parties as described in
Section 126.002(c).
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 157, Sec. 14, eff. Sept. 1,
1999.
Sec. 126.055. FEE. The commission may establish and a credit
union shall pay a fee based on the cost of performing an
examination of the credit union.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 157, Sec. 15, eff. Sept. 1,
1999.
SUBCHAPTER C. CONSERVATORSHIP ORDER
Sec. 126.101. CONSERVATORSHIP ORDER; APPOINTMENT OF CONSERVATOR.
(a) The commissioner may immediately issue a conservatorship
order and appoint a conservator to manage a credit union's
affairs if:
(1) the commissioner, in performing the duties under this
subtitle, finds that:
(A) the credit union is insolvent or in imminent danger of
insolvency; or
(B) the credit union or an employee, officer, or director of a
credit union, including an honorary or advisory director has:
(i) violated this subtitle, a rule adopted under this subtitle,
or another law that applies to credit unions;
(ii) violated or neglected a final order of the commissioner or
commission;
(iii) refused to submit to examination under oath;
(iv) refused to permit the commissioner or the commissioner's
representative to examine the credit union's records and affairs,
including books, papers, and accounts;
(v) conducted the credit union's business in an unsafe,
unauthorized, or unlawful manner; or
(vi) 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
or control, including books, papers, and accounts, following the
commissioner's request for the granting of that authority and
direction; and
(2) the commissioner determines that the finding under
Subdivision (1) is sufficiently severe to require immediate
affirmative action to prevent further dissipation of the credit
union's assets.
(b) The order must clearly state the grounds for
conservatorship.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.102. SERVICE OF ORDER. (a) A conservatorship order
must be served personally to an officer or director of the credit
union by the commissioner, the deputy commissioner, or another
person authorized by the commissioner.
(b) Service may be by mail if an officer or director is not
available for service on the date of issuance.
(c) Service by certified or registered mail:
(1) must be addressed to the credit union at the address shown
for its principal office by department records; 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.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.103. EFFECT OF ORDER. Following service of a
conservatorship order:
(1) the commissioner shall take possession and control of the
credit union's books, records, property, assets, and business;
and
(2) the credit union shall cease all operations except those
authorized by the commissioner and conducted under the
commissioner's supervision.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.104. REPLY TO ORDER. Not later than the 30th day after
the date on which a conservatorship order is served, the board
shall file a written reply to the order.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.105. APPEAL OF ORDER; HEARING. (a) The board may file
a written appeal of the conservatorship order with the
commissioner. The appeal must include a certified copy of the
board resolution.
(b) If the board 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 appeal is received.
(c) The commissioner shall give the credit union notice of the
date, time, and place of the hearing.
(d) The filing of an appeal does not suspend the order, and the
order remains in effect until the commission's final disposition
of the appeal.
(e) Not later than the 45th day after a proposal for decision is
received from the State Office of Administrative Hearings, the
commission shall meet to consider the proposal.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.106. FAILURE TO FILE REPLY OR REQUEST HEARING. (a) If
the board does not file a reply to the conservatorship order as
required by Section 126.104 or fails to request and appear at the
hearing provided for by Section 126.105, 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.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.107. EXTENSION OF DATE AND TIME FOR HEARING. The
parties may agree to extend the date and time of the hearing.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.108. CONFIDENTIALITY; DISCLOSURE. A conservatorship
order and a copy of a notice, correspondence, transcript,
pleading, or other document relating to the order are
confidential and may be disclosed only in a related legal
proceeding or as otherwise authorized by law. The commissioner
may release to the public information regarding the existence of
an order if the commissioner concludes that release of the
information would enhance effective enforcement of the order.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 2003, 78th Leg., ch. 533, Sec. 48, eff. Sept. 1,
2003.
SUBCHAPTER D. ADMINISTRATION OF CONSERVATORSHIP
Sec. 126.151. CONSERVATOR SUBJECT TO COMMISSION CONTROL. A
conservator shall exercise the powers authorized under Sections
126.152-126.154 subject to commission rules and under the
commissioner's supervision.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.152. GENERAL POWERS OF CONSERVATOR. The conservator
may:
(1) take possession and control of the books, records, property,
assets, and business of the credit union;
(2) conduct the business and affairs of the credit union;
(3) sell or assign assets to the conservator; and
(4) perform any other action as necessary in connection with the
conservatorship.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.153. POWERS RELATING TO CLAIMS. The conservator may:
(1) determine the existence and amount of claims;
(2) allow proved claims of security, preference, or priority;
(3) disallow unproved claims of security, preference, or
priority; and
(4) settle or release a claim in favor of or against the credit
union.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.154. POWER TO REPUDIATE BURDENSOME TRANSACTION. The
conservator may repudiate a contract or unexpired lease the
conservator considers burdensome to the credit union.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.155. POWER TO PROTECT, PRESERVE, AND RECOVER PROPERTY.
(a) The conservator may take measures necessary to preserve,
protect, and recover the assets or property of the credit union,
including filing a lawsuit against any person.
(b) An asset or property of the credit union includes a claim or
cause of action that belongs to or that may be asserted by the
credit union.
(c) The conservator may deal with that property in the capacity
of conservator.
(d) The conservator may file, prosecute, or defend a suit
brought by or against the credit union if the conservator
considers it necessary to protect the interested party or
property affected by the suit.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.156. DUTIES OF CONSERVATOR. The conservator shall:
(1) take actions as directed by the commissioner to remove the
causes and conditions that made the conservatorship necessary;
and
(2) report to the commissioner from time to time during the
conservatorship as required by the commissioner.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.157. TERM OF CONSERVATOR. The conservator shall serve
until the purposes of the conservatorship are accomplished.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.158. TRANSFER OF MANAGEMENT OF REHABILITATED CREDIT
UNION. If the credit union is rehabilitated, the conservator
shall return the management of the credit union to the board
under terms that are reasonable and necessary to prevent a
recurrence of the conditions that created the need for
conservatorship.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.159. COST OF CONSERVATORSHIP. (a) The commissioner
shall determine and approve any reasonable expenses attributable
to the service of a conservator, including costs incurred by the
department and the compensation and expenses of the conservator
and any professional employees appointed to represent or assist
the conservator. The commissioner or an employee of the
department may not receive compensation in addition to salary for
serving as conservator, but the department may receive
reimbursement for the fully allocated personnel cost associated
with the service of the commissioner or the employee as
conservator.
(b) All approved expenses shall be paid by the credit union. The
department has a lien against the assets and money of the credit
union to secure payment of approved expenses. The lien has a
higher priority than any other lien against the credit union.
(c) Notwithstanding this subchapter, the credit union may retain
attorneys and hire other persons to assist the credit union in
contesting or satisfying the requirements of an order of
conservatorship. The commissioner shall authorize the payment of
reasonable fees and expenses for the attorneys and other persons
as expenses of the conservatorship.
(d) The commissioner may waive or defer collection of assessment
or examination fees by the department from the credit union
during a period of conservatorship if the waiver or deferral
would appear to benefit the prospects for rehabilitation. As a
condition of release from conservatorship, the commissioner may
require the rehabilitated credit union to pay or develop a
reasonable plan for payment of any deferred fees.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 2003, 78th Leg., ch. 533, Sec. 49, eff. Sept. 1,
2003.
Sec. 126.160. JURISDICTION AND VENUE. (a) A suit filed against
a credit union while the credit union is under conservatorship,
or against a person in connection with an action taken or
decision made by that person as a conservator of a credit union,
must be brought in Travis County regardless of whether the credit
union remains under conservatorship.
(b) A suit filed by the conservator under Section 126.155 may be
brought in Travis County.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 2003, 78th Leg., ch. 533, Sec. 50, eff. Sept. 1,
2003.
Sec. 126.161. EXHAUSTION OF ADMINISTRATIVE REMEDIES.
Administrative remedies must be exhausted before a court may:
(1) assert jurisdiction over a claim against the conservator or
the credit union; or
(2) restrain or otherwise affect the exercise of the powers or
functions of the conservator.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER E. LIQUIDATION ORDER; INJUNCTION
Sec. 126.201. LIQUIDATION ORDER; APPOINTMENT OF LIQUIDATING
AGENT. 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.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.202. SERVICE OF ORDER. The commissioner shall serve a
liquidation order in the same manner provided for service of a
conservatorship order.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.203. SUIT FOR INJUNCTION. (a) Not later than the
fifth day after the date on which the liquidation order is
served, a credit union that has not requested or consented to a
liquidation order may, if authorized by certified board
resolution, sue to enjoin the commissioner from liquidating the
credit union.
(b) The suit must be brought in the district court of the county
in which the credit union's principal office is located.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.204. ACTION PENDING INJUNCTION HEARING. (a) The
court, without notice or hearing, may restrain the commissioner
from liquidating the credit union's assets until after a hearing
on the suit is held.
(b) If the court restrains the commissioner, the court shall
instruct the commissioner to hold the credit union's assets in
the commissioner's possession and control until disposition of
the suit.
(c) With court approval, the commissioner may take any necessary
or proper action to prevent loss or depreciation in the value of
the assets.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.205. HEARING ON INJUNCTION; APPEAL. (a) The court, as
soon as possible, shall hear the suit and shall enter a judgment
enjoining or refusing to enjoin the commissioner from liquidating
the credit union's assets.
(b) The commissioner, regardless of the judgment entered by the
trial court or any supersedeas bond filed, shall retain
possession and control of the credit union's assets until final
disposition of any appeal of the judgment.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.206. NATIONAL CREDIT UNION ADMINISTRATION AS
LIQUIDATING AGENT. (a) The commissioner may tender a credit
union that has been closed for liquidation to the National Credit
Union Administration or its successor as liquidating agent if the
shares and deposits of the credit union were insured by the
National Credit Union Share Insurance Fund or its successor on
the date of closing.
(b) After acceptance of tender of the credit union, the National
Credit Union Administration or its successor, as liquidating
agent of the credit union, shall perform the acts and duties that
it considers necessary or desirable and that are permitted or
required by federal law or this chapter. The National Credit
Union Administration, as liquidating agent, is not subject to
commission control.
(c) If the National Credit Union Share Insurance Fund pays the
insured share and deposit liabilities of a credit union that is
being liquidated under this subchapter, the National Credit Union
Administration is subrogated, to the extent of the payment, to
all rights that the owners of the share or deposit accounts have
against the credit union.
Added by Acts 2003, 78th Leg., ch. 533, Sec. 51, eff. Sept. 1,
2003.
SUBCHAPTER F. ADMINISTRATION OF LIQUIDATION
Sec. 126.251. PERMISSIBLE ACTIVITIES IN LIQUIDATION. (a) A
credit union in liquidation continues in existence to discharge
debts, collect and distribute assets, and wind up the credit
union's business.
(b) The credit union may sue and be sued to enforce debts and
obligations until its affairs are fully adjusted.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.252. COMPENSATION OF CREDIT UNION EMPLOYEES AND
OFFICERS. (a) This chapter does not prevent compensation of a
salaried employee or officer of a credit union during the credit
union's liquidation.
(b) The compensation is considered an incidental expense of the
liquidation.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.253. LIQUIDATING AGENT SUBJECT TO COMMISSION CONTROL.
The liquidating agent shall perform the duties required by the
following sections subject to commission rules and under the
commissioner's supervision:
(1) Sections 126.254-126.258; and
(2) Sections 126.301, 126.302, 126.304, 126.305, and 126.306.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.254. POSSESSION, CONSOLIDATION, AND DISPOSITION OF
ASSETS. The liquidating agent shall:
(1) receive and take possession of the books, records, assets,
and property of the credit union;
(2) sell, enforce collection of, and liquidate assets and
property; and
(3) sell or assign assets to the liquidating agent subject to
Section 126.353.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.36, eff. Sept. 1,
1999.
Sec. 126.255. COMPOUND DEBTS. The liquidating agent shall
compound all bad or doubtful debts.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.256. COURT ACTION BY LIQUIDATING AGENT. The
liquidating agent shall:
(1) sue in the name of the liquidating agent or may sue in the
name of the credit union; and
(2) defend an action brought against the liquidating agent or
the credit union.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.257. REPUDIATION OF BURDENSOME TRANSACTIONS. The
liquidating agent shall repudiate a contract or unexpired lease
the liquidating agent considers burdensome to the credit union.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.258. EXECUTION OF DOCUMENTS; OTHER NECESSARY ACTS. The
liquidating agent may execute any document and perform any other
action that:
(1) the liquidating agent considers necessary or desirable to
discharge the liquidating agent's duties; and
(2) may be necessary under this subchapter and Subchapter G.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.259. JURISDICTION AND VENUE. (a) A suit against a
credit union or its liquidating agent while a liquidation order
is in effect must be brought in Travis County.
(b) The liquidating agent may file suit in Travis County to
preserve, protect, or recover the credit union's assets or
property.
(c) An asset or property of the credit union includes a claim or
cause of action that belongs to or that may be asserted by the
credit union.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.260. EXHAUSTION OF ADMINISTRATIVE REMEDIES. Except as
provided by Subchapter E, administrative remedies must be
exhausted before a court may:
(1) assert jurisdiction over a claim against the liquidating
agent or the credit union; or
(2) restrain or otherwise affect the exercise of the powers or
functions of the liquidating agent.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER G. CLAIMS RELATING TO CREDIT UNION IN LIQUIDATION
Sec. 126.301. CLAIMS AGAINST CREDIT UNION. The liquidating
agent shall:
(1) determine the existence and amount of claims;
(2) allow proved claims of security, preference, or priority;
(3) settle or release a claim in favor of or against the credit
union;
(4) disallow unproved claims of security, preference, or
priority; and
(5) make distributions to and pay creditors and members of the
credit union as their interests appear.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.302. NOTICE TO CREDITORS AND MEMBERS. (a) The
liquidating agent shall give notice to creditors and members to
present and prove their claims.
(b) The notice must be published once a week for three
successive weeks in a newspaper of general circulation in each
county in which the credit union maintained an office or branch
to transact business on the date the credit union ceased
unrestricted operations.
(c) When the aggregate book value of the assets and property of
the credit union being liquidated is less than $10,000, the
commissioner shall declare the credit union to be a "no
publication" liquidation, and publication of notice to creditors
and members under this section is not required.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.303. PRIORITY OF CLAIMS. The liquidating agent shall
use the credit union's assets to pay, in the following order:
(1) secured creditors to the extent of the value of their
collateral;
(2) liquidation expenses, including a surety bond if required;
(3) depositors;
(4) general creditors, including secured creditors to the extent
that their claims exceed the value of their collateral; and
(5) distributions to members in proportion to the shares held by
each member.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.304. LIQUIDATION DIVIDENDS. (a) The liquidating agent
from time to time shall make a ratable liquidation dividend on
claims that have been:
(1) proved to the satisfaction of the board or the liquidating
agent; or
(2) adjusted by a court.
(b) After the credit union's assets have been liquidated, the
liquidating agent shall make further liquidation dividends on
claims previously proved or adjusted.
(c) For purposes of making a further liquidation dividend under
Subsection (b), the liquidating agent may accept the statement of
an amount due a claimant as shown on the credit union's books and
records instead of a formal proof of claim filed on the
claimant's behalf.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.305. PAYMENT OF CLAIMS IN "NO PUBLICATION" LIQUIDATION.
(a) In a "no publication" liquidation, the liquidating agent
shall determine from all sources available, and within the limits
of the credit union's available money, the amounts due to
creditors and members.
(b) Not earlier than the 61st day after the date on which the
liquidating agent is appointed, the liquidating agent shall
distribute the credit union's money to creditors and members
ratably and as their interests appear.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.306. BARRED CLAIMS. (a) A claim not filed before the
liquidating agent pays the final liquidation dividend is barred.
(b) A claim rejected by the liquidating agent is barred unless
suit to appeal the liquidating agent's rejection is filed within
three months after the date of notice of rejection.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER H. LIQUIDATING AGENT
Sec. 126.351. REMOVAL OF LIQUIDATING AGENT. (a) On finding
that the liquidating agent has failed to properly perform the
liquidating agent's duties in a timely and efficient manner or
has violated this subtitle or a rule adopted under this subtitle,
the commissioner by removal order may take possession and control
of the books, records, property, assets, and business of the
credit union.
(b) The removal order must:
(1) remove the liquidating agent and appoint a successor
liquidating agent to complete the liquidation and the winding up
of the credit union's affairs subject to the commissioner's
supervision and control; and
(2) be served on the liquidating agent being removed.
(c) The removal order takes effect immediately on service.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.352. REPLACEMENT OF LIQUIDATING AGENT. The
commissioner shall appoint another liquidating agent on a
liquidating agent's resignation, death, illness, removal,
desertion, or incapacity to function.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.353. CONFLICT OF INTEREST. (a) The liquidating agent
may not acquire an asset of the credit union in liquidation or
purchase a loan of the credit union without the commissioner's
prior written approval.
(b) A liquidating agent may not obtain from the liquidation
compensation or profit for:
(1) direct or indirect personal benefit;
(2) the benefit of a family member of or a person associated
with the liquidating agent; or
(3) the benefit of a business enterprise with which the
liquidating agent is associated, other than the credit union.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.354. COMPENSATION. (a) A liquidating agent is
entitled to receive reasonable compensation during the
liquidation.
(b) The compensation is considered an incidental expense of the
liquidation.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER I. COMPLETION OF LIQUIDATION
Sec. 126.401. CERTIFICATE OF LIQUIDATION AND DISTRIBUTION. The
commissioner shall prescribe the form of a certificate to be
completed by the liquidating agent attesting that distribution
has been made and liquidation is complete.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.402. CANCELLATION OF CERTIFICATE OF INCORPORATION. The
commissioner, on receipt and approval of the certificate executed
under Section 126.401, shall cancel the credit union's
certificate of incorporation.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.403. WINDING UP OF CREDIT UNION BUSINESS. During the
three-year period following cancellation of the credit union's
certificate of incorporation, the credit union continues to exist
and the liquidating agent, or a successor or other person
designated by the commissioner, may act on the credit union's
behalf to:
(1) pay, satisfy, or discharge an existing liability or
obligation;
(2) collect and distribute assets; and
(3) act as required to adjust and wind up the credit union's
business and affairs, including suing or being sued in the credit
union's corporate name.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER J. VOLUNTARY LIQUIDATION
Sec. 126.451. BOARD RESOLUTION. Unless the commissioner has
issued a liquidation order, the board may adopt a resolution
recommending voluntary dissolution of the credit union and
directing submission of the question of liquidation to the
members of the credit union.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.452. NOTIFICATION TO COMMISSIONER OF PROPOSED
LIQUIDATION. Not later than the fifth day after the date on
which the board's resolution recommending voluntary dissolution
is adopted, the board's presiding officer shall notify the
commissioner in writing of the reasons for the proposed
liquidation.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.453. NOTICE OF MEETING TO LIQUIDATE. Notice of the
special meeting to consider voluntary liquidation shall be mailed
by first-class mail to each member of the credit union and the
commissioner not later than the 10th day before the date of the
meeting.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.454. CREDIT UNION OPERATIONS BEFORE AND AFTER VOTE.
Immediately after notice under Section 126.453 is mailed, the
commissioner may restrict control or give direction with respect
to the continued business of the credit union pending
consideration of voluntary liquidation by the members. During
that period, no member shall withdraw an aggregate amount in
excess of the share insurance covered by the credit union. No new
extensions of credit shall be funded during the period between
the board of directors' adoption of the resolution recommending
voluntary liquidation and the membership meeting called to
consider voluntary liquidation, except for the issuance of loans
fully secured by a pledge of shares and the funding of
outstanding loan commitments approved before adoption of the
resolution. If the vote to dissolve and liquidate the credit
union is affirmative, the credit union may conduct only business
incidental to liquidation.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 2003, 78th Leg., ch. 533, Sec. 52, eff. Sept. 1,
2003.
Sec. 126.455. VOTE ON VOLUNTARY LIQUIDATION. At a special
meeting called to consider the proposed liquidation, a majority
of the credit union members, 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.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 2003, 78th Leg., ch. 533, Sec. 53, eff. Sept. 1,
2003.
Sec. 126.456. NOTICE TO COMMISSIONER OF AFFIRMATIVE VOTE TO
LIQUIDATE. (a) The board's presiding officer or president and
the secretary shall notify the commissioner of the intention to
liquidate not later than the fifth day after the affirmative vote
to dissolve and liquidate.
(b) The person notifying the commissioner must include a list of
the names and addresses of the credit union's officers and
directors with the notice.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 126.457. APPOINTMENT OF LIQUIDATING AGENT. (a) If the
members approve the liquidation, the board shall appoint a
liquidating agent to:
(1) conserve and collect the credit union's assets;
(2) wind up the credit union's affairs;
(3) discharge the credit union's debts;
(4) distribute the credit union's assets; and
(5) take any other action necessary and incidental to
liquidating the credit union.
(b) The National Credit Union Administration or other insuring
organization has the right of first refusal to be appointed as
liquidating agent of any credit union that it insures.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 2003, 78th Leg., ch. 533, Sec. 54, eff. Sept. 1,
2003.
Sec. 126.458. APPLICATION OF LAW TO CREDIT UNION IN VOLUNTARY
LIQUIDATION. A credit union in the process of voluntary
dissolution and liquidation remains subject to this subtitle and
Chapter 15, including provisions for examination by the
commissioner, and the credit union shall furnish reports as
required by the commissioner.
Added by Acts 2003, 78th Leg., ch. 533, Sec. 55, eff. Sept. 1,
2003.