TITLE 7. BANKING AND SECURITIES

PART 6. CREDIT UNION DEPARTMENT

CHAPTER 91. CHARTERING, OPERATIONS, MERGERS, LIQUIDATIONS

SUBCHAPTER A. GENERAL RULES

7 TAC §91.101

The Credit Union Commission (the Commission) adopts amendments to §91.101 concerning definitions and interpretations, without changes to the proposal as published in the July 28, 2017, issue of the Texas Register (42 TexReg 3719). The amended rule will not be republished.

In general, the purpose of the amendments to §91.101 is to implement changes resulting from the commission's review of Chapter 91 Subchapter A under Texas Government Code, §2001.039. The amendments add one new definition, modify four definitions, and delete two definitions. Interactive teller machine is now defined in this section, while the definitions of catastrophic act and construction or development loan have been deleted as no longer necessary. The definitions of "improved residential property", "loan-to-value ratio", and "loan and extension of credit" have been expanded to enhance consistency with federal regulations. Finally, the definition of "office" was modified to include interactive teller machines.

The department received no comments regarding the proposed amendments.

The amendments are adopted 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.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on November 3, 2017.

TRD-201704449

Harold E. Feeney

Commissioner

Credit Union Department

Effective date: November 23, 2017

Proposal publication date: July 28, 2017

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


7 TAC §91.115

The Credit Union Commission (the Commission) adopts amendments to §91.115 concerning user safety at unmanned teller machines, without changes to the proposal as published in the July 28, 2017, issue of the Texas Register (42 TexReg 3722). The amended rule will not be republished.

In general, the purpose of the amendments to §91.115 is to implement changes resulting from the commission's review of Chapter 91 Subchapter A under Texas Government Code, §2001.039. The adopted amendments will reduce regulatory burden by authorizing delivery of notice by electronic means in certain circumstances. In addition, the adopted amendments would provide clarification, better readability, and technical corrections.

The department received no comments regarding the proposed amendments.

The amendments are adopted 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 §59.310, which provides that the commission shall adopt rules to implement Subchapter D of Finance Code, Chapter 59.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on November 3, 2017.

TRD-201704450

Harold E. Feeney

Commissioner

Credit Union Department

Effective date: November 23, 2017

Proposal publication date: July 28, 2017

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


7 TAC §91.121

The Credit Union Commission (the Commission) adopts amendments to §91.121, concerning the form of consumer complaint notification, without changes to the proposal as published in the July 28, 2017, issue of the Texas Register (42 TexReg 3724). The amended rule will not be republished.

In general, the purpose of the amendments to §91.121 is to implement changes resulting from the commission's review of Chapter 91 Subchapter A under Texas Government Code, §2001.039. The proposed amendment will allow the required notice to be in a form that is substantially similar to the current required notice. In addition, the proposed changes will alter the content of the required notice to include the department's facsimile number and an email address as well as provide clarification and better readability.

The department received no comments regarding the proposed amendments.

The amendments are adopted 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 §15.409 which requires the Commission to adopt rules for directing complaints to the Department.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on November 3, 2017.

TRD-201704451

Harold E. Feeney

Commissioner

Credit Union Department

Effective date: November 23, 2017

Proposal publication date: July 28, 2017

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


SUBCHAPTER B. ORGANIZATION PROCEDURES

7 TAC §91.205

The Credit Union Commission (the Commission) adopts amendments to §91.205 concerning the name of a credit union, without changes to the proposal as published in the July 28, 2017, issue of the Texas Register (42 TexReg 3725). The amended rule will not be republished.

In general, the purpose of the amendments to §91.205 is to implement changes resulting from the commission's review of Chapter 91, Subchapter B, under Texas Government Code, §2001.039. The adopted amendment further expounds on the point that credit unions are solely responsible for any unauthorized use or infringement on a business trade name. In addition, the adopted changes will emphasize the need for appropriate due diligence in selecting a credit union name.

The department received no comments regarding the proposed amendments.

The amendments are adopted 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 §122.003 which sets out requirements for a credit union name.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on November 3, 2017.

TRD-201704452

Harold E. Feeney

Commissioner

Credit Union Department

Effective date: November 23, 2017

Proposal publication date: July 28, 2017

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


7 TAC §91.209

The Credit Union Commission (the Commission) adopts amendments to §91.209, concerning the submission of call reports and other information requests, with changes to the proposal as published in the July 28, 2017, issue of the Texas Register (42 TexReg 3725). The amended rule will be republished.

In general, the purpose of the amendments to §91.209 is to implement changes resulting from the commission's review of Chapter 91 Subchapter B under Texas Government Code, §2001.039. The adopted amendment would eliminate the specific due date for submission of call reports to avoid any conflict or confusion should the National Credit Union Administration (NCUA) establish a different date for submitting its Form 5300.

The department received no comments regarding the proposed amendments.

The amendments are adopted 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 §122.101, which directs credit unions to submit call reports to the commissioner.

§91.209.Call Reports and Other Information Requests.

(a) Each credit union shall prepare and submit, in a manner prescribed by the commissioner, a quarterly financial and statistical report. Unless the commissioner orders otherwise, call reports (Form 5300) timely filed with the National Credit Union Administration will comply with the reporting requirements of this subsection. If a credit union fails to file the quarterly report on time, the commissioner may charge the credit union a penalty of $100 for each day or fraction of a day the report is in arrears.

(b) Any credit union that makes, files, or submits a false or misleading financial and statistical report required by subsection (a) of this section, is subject to an enforcement action pursuant to the Finance Code, Chapter 122, Subchapter F.

(c) A credit union shall prepare and forward to the Department any supplemental report or other document that the Commissioner may, from time to time require, and must comply with all instructions relating to completing and submitting the supplemental report or document. For the purposes of this section, the Commissioner's request may be directed to all credit unions or to a group of credit unions affected by the same or similar issue, shall be in writing, and must specifically advise the credit union that the provisions of this section apply to the request. If a credit union fails to file a supplemental report or provide a requested document within the timeframe specified in the instruction, after notice of non-receipt, the commissioner may levy a penalty of $50 for each day or fraction of a day such report or document is in arrears.

(d) If a credit union fails to file any report or provide the requested information within the specified time, the commissioner, or any person designated by the commissioner, may examine the books, accounts, and records of the credit union, prepare the report or gather the information, and charge the credit union a supplemental examination fee as prescribed in §97.113 of this title (relating to Fees and Charges). The credit union shall pay the fee to the department within thirty days of the assessment.

(e) Any penalty levied under this section shall be paid within 30 days of the levy. Penalties received after the due date will be subject to a monthly 10% fee unless waived by the commissioner for good cause shown.

(f) The Department may, in lieu of imposing the penalty authorized by subsection (a) of this section, order a credit union to pay an amount, fixed by the Commissioner, that is minimally sufficient to cause the NCUA to reduce or negate its own penalty assessment against the credit union under Section 202 of the Federal Credit Union Act (12 U.S.C. §1782) for late or false/misleading filing of a quarterly call report (Form 5300). The Department shall abate the penalty, in part if the National Credit Union Administration exercises its authority to impose a civil money penalty for the same late or false/misleading filing. The penalty, assessed by the Department, however, shall not be decreased below the amount authorized to be assessed under subsection (a) of this section.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Officeof the Secretary of State on November 3, 2017.

TRD-201704458

Harold E. Feeney

Commissioner

Credit Union Department

Effective date: November 23, 2017

Proposal publication date: July 28, 2017

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


SUBCHAPTER J. CHANGES IN CORPORATE STATUS

7 TAC §91.1003

The Credit Union Commission (the Commission) adopts amendments to §91.1003 concerning voluntary mergers and consolidations, without changes to the proposal as published in the July 28, 2017, issue of the Texas Register (42 TexReg 3726). The amended rule will not be republished.

In general, the purpose of the amendments to §91.1003 is to implement changes resulting from the commission's review of Chapter 91, Subchapter J under Texas Government Code, §2001.039. The proposed amendment would require credit unions to include in their merger plan a description of any arrangements providing a substantial increase in compensation or benefits, of any sort, to a board member or senior management employee in connection with the merger/consolidation. The amendments also defined the term "substantial" to be an amount that exceeds $1,000 in total.

The Commission received one comment regarding the proposed amendments. The commenter, Texas Trust Credit Union, supported the concept that some reporting may be appropriate but suggested that some type of materiality threshold should be established to avoid the need to disclose small or minimal amounts for such things as appreciation plaques or awards. The Commission agrees that a de minimis reporting exception is appropriate, and as originally published the amendments provide that only amounts that exceed $1,000 are required to be reported. It is not the intention of the Commission to substitute its business judgment for that of the boards of the credit unions on reasonable compensation arrangements. The amendments are strictly focused on transparency and the principle that full disclosure usually results in more informed and better credit union decisions.

The amendments are adopted 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 §122.156, which sets out the requirements for rules adopted for mergers or consolidations.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on November 3, 2017.

TRD-201704459

Harold E. Feeney

Commissioner

Credit Union Department

Effective date: November 23, 2017

Proposal publication date: July 28, 2017

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