TITLE 7. BANKING AND SECURITIES

PART 6. CREDIT UNION DEPARTMENT

CHAPTER 97. COMMISSION POLICIES AND ADMINISTRATIVE RULES

SUBCHAPTER A. GENERAL PROVISIONS

7 TAC §97.104

The Credit Union Commission (the Commission) proposes to repeal §97.104, concerning petitions for adoption or amendment of rules. This rule is being replaced by §7.500 which updates the rule and relocates it in a new subchapter entitled rulemaking for better transparency and ease of reference.

The repeal of the rule is proposed as a result of the Department's general rule review and informal comments from interested parties. The Department believes that greater clarity and ease of use could be achieved if the existing §97.104 was updated and relocated to a new subchapter.

Harold E. Feeney, Commissioner, has determined that for the first five year period the rule is repealed there will be no fiscal implications for state or local government as a result of repealing the rule.

Mr. Feeney has also determined that for each year of the first five years the rule is repealed, the public benefits anticipated as a result of repealing and replacing the rule will be ease of use by interested persons. There is no anticipated effect on small businesses as a result of repealing and replacing the rule. There is no economic cost anticipated to credit unions or individuals for repealing and replacing the rule.

Written comments on the proposal may be submitted in writing to Harold E. Feeney, Commissioner, Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699 or by email to CUDMail@cud.texas.gov. To be considered, a written comment must be received on or before 5:00 p.m. on the 31st day after the date the proposal is published in the Texas Register.

The repeal is proposed under the provision of the Texas Finance Code,§15.402, which authorizes the Commission to adopt reasonable rules for administering Title 2, Chapter 15 and Title 3, Subchapter D of the Texas Finance Code.

The specific sections affected by the proposed repeal are Government Code, §2001.021.

§97.104.Petitions for Adoption or Amendment of Rules.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 10, 2017.

TRD-201701030

Harold E. Feeney

Commissioner

Credit Union Department

Earliest possible date of adoption: April 23, 2017

For further information, please call: (512) 837-9236


7 TAC §97.105

The Credit Union Commission (the Commission) proposes amendments to §97.105 concerning frequency of examination. The proposed amendments to §97.105 clarify that the annual examination requirement means credit unions must be examined at least once during each twelve-month period. The proposed amendments also provide specific authority for the Department to extend the annual examination intervals to 18 months without prior written approval of the Commission.

The amendments are proposed as a result of the Department's general rule review, under Tex. Government Code §2001.039, which was published in December 2016.

The proposed amendments help ensure that examination resources are appropriately and efficiently directed to credit unions commensurate with the credit union's size and risk profile.

Harold E. Feeney, Commissioner, has determined that for the first five year period the proposed amendments are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the amended rule.

Mr. Feeney has also determined that for each year of the first five years the proposed amendments are in effect, the public benefits anticipated as a result of enforcing the rule will be greater clarity of the rule. There will be no effect on small or micro businesses as a result of adopting the amended rule. There is no economic cost anticipated to the credit union system or to individuals for complying with the amended rule if adopted.

Written comments on the proposed amendments may be submitted in writing to Harold E. Feeney, Commissioner, Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699 or by email to CUDMail@cud.texas.gov. To be considered, a written comment must be received on or before 5:00 p.m. on the 31st day after the date the proposal is published in the Texas Register.

The amendments are proposed under Texas Finance Code, §15.402, which authorizes the Commission to adopt reasonable rules for administering Title 2, Chapter 15 and Title 3, Subchapter D of the Texas Finance Code and under Texas Finance Code §126.051, concerning examinations.

The specific section affected by the proposed amended rule is Texas Finance Code, §126.051.

§97.105.Frequency of Examination.

The department shall perform an examination of each credit union authorized to do business under the Act at least once during each 12-month period [year]. Annual examination intervals may be extended by the Department to a maximum 18 months, subject to safety and soundness considerations. Intervals between examinations shall not exceed 18 months, unless a longer interval is authorized in writing by the commission. In lieu of conducting an examination required by this rule, the commissioner in the exercise of discretion may accept examinations or reports from other credit union supervisory agencies or insuring organizations.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 10, 2017.

TRD-201701031

Harold E. Feeney

Commissioner

Credit Union Department

Earliest possible date of adoption: April 23, 2017

For further information, please call: (512) 837-9236


SUBCHAPTER F. RULEMAKING

7 TAC §97.500, §97.501

The Credit Union Commission (Commission) proposes new Subchapter F of 7 TAC, Chapter 97. The new subchapter, entitled Rulemaking, contains two new rules which describe procedures for petitions to initiate rulemaking proceedings and hearings on proposed rules.

The new rules are proposed to comply with the provisions of Government Code §2001.021 and §2001.29, which requires a state agency to prescribe the procedures for the submission, consideration, and disposition of a petition to initiate rulemaking and provide an opportunity for a public hearing before the agency adopts a substantive rule.

Section 97.500, Petitions to Initiate Rulemaking Proceedings, replaces §97.104 that the Commission is concurrently proposing repeal as published elsewhere in this issue of the Texas Register. The new rule sets out the procedure for an interested person to petition the Department to initiate rulemaking proceedings.

Section 97.501, Hearings on Proposed Rules, is proposed to implement the provisions of Government Code §2001.029, which requires a state agency to grant an opportunity for a public hearing before it adopts a substantive rule if a public hearing is requested. The new rule authorizes the commissioner or his designee to hold these hearings and set appropriate hearing processes and procedures.

Harold E. Feeney, Commissioner has determined that for the first five year period the new rules are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the proposed new rules.

Mr. Feeney has also determined that for each year of the first five years the proposed new rules are in effect, the public benefits anticipated as a result of enforcing the rules will be greater clarity and ease of use of the rules. There is no anticipated effect on small businesses as a result of adopting the new rules. There is no economic cost anticipated to credit unions or individuals for complying with the new rules if adopted.

Written comments on the proposal may be submitted in writing to Harold E. Feeney, Commissioner, Credit Union Department, 914 East Anderson Lane, Austin, Texas 78752-1699 or by email to CUDMail@cud.texas.gov. To be considered, a written comment must be received on or before 5:00 p.m. on the 31st day after the date the proposal is published in the Texas Register.

The new rules are proposed under the provisions of the Texas Finance Code, §15.402, which authorizes the Commission to adopt reasonable rules for administering Title 2, Chapter 15 and Title 3, Subchapter D of the Texas Finance Code, and under Government Code §2001.021 and §2001.029, which directs the Commission to adopt rules for an interested person to petition the Department to initiate rulemaking proceedings and provide an opportunity for a public hearing before the agency adopts a substantive rule.

The specific section affected by the proposal rule is Government Code §2001.021 and §2001.029.

§97.500.Petitions to Initiate Rulemaking Proceedings.

(a) Petitions to initiate rulemaking proceeding pursuant to Government Code, §2001.021, must be submitted to the Department in writing. A petition must include:

(1) a brief explanation of the proposed rule;

(2) the full text of the proposed rule, and, if the petition is to amend an existing rule, the text of the rule that clearly identifies any words to be added or deleted from the existing text by underlining new language and striking through language to be deleted; and

(3) a concise explanation of the legal authority to adopt the proposed rule, including a specific reference to the particular statute or other authority that authorizes it.

(b) When the Department receives a rulemaking petition, the Department shall review it for compliance with the requirements of subsection (a) of this section. If the petition is determined to comply, the Department shall notify the applicant that the petition has been accepted for filing and will be processed in accordance with Government Code, §2001.021(c). If it is determined the petition does not comply with subsection (a), the Department shall notify the applicant in writing of all deficiencies found and give the petitioner an opportunity to cure them by filing an amended petition. If no amended petition curing the deficiencies is filed with the Department by 5:00 p.m. on the 15th calendar day following the date that the Department mailed a notice of deficiencies to the petitioner, the petition shall be deemed denied for the reasons stated in the deficiency notice without the necessity of further action.

(c) If the petition is accepted for filing, within 60 days of the date that a petition is accepted for filing, the Department must either deny the petition for reasons stated in writing or initiate a rulemaking proceeding.

§97.501.Hearing on Proposed Rules.

(a) The Department shall grant an opportunity for a public hearing before adoption of any substantive rule as required by Government Code, §2001.029(b), or other applicable statute.

(b) The hearing may be held by the commissioner or by any other person designated by the commissioner. In the exercise of discretion, the commissioner may impose reasonable time limits on presentation of evidence and argument, determine the order of the presentations, and conduct the hearing in a manner suitable to the particular proceeding. Public hearings on proposed rules are neither contested cases nor full legal adversary proceedings. Ex parte prohibitions do not apply.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 10, 2017.

TRD-201701028

Harold E. Feeney

Commissioner

Credit Union Department

Earliest possible date of adoption: April 23, 2017

For further information, please call: (512) 837-9236