CHAPTER 123. GENERAL POWERS

State Codes and Statutes

Back To Homepage

State Codes and Statutes

Statutes > Texas > Finance-code > Title-3-financial-institutions-and-businesses > 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.

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;

(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.

(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.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

Loading..

Loading, Please Wait!