Texas Finance Code Title 3, Chapter 122 - Organizational And Financial Requirements

SUBCHAPTER A INCORPORATION REQUIREMENTS

• Texas Section 122.001 - Application To Incorporate
  (a) Seven or more individuals may apply to incorporate a credit union under this chapter if: (1) each is at least 18 years old; (2)...
• Texas Section 122.002 - Standard Articles Of Incorporation And Bylaws
  (a) To simplify the process of organizing new credit unions, the commission shall prepare standard articles of incorporation and bylaws. (b) The standard forms shall...
• Texas Section 122.003 - Corporate Name; Criminal Penalty
  (a) The name of a credit union must include the words "credit union" or the abbreviation "CU" and an appropriate descriptive word or words, or...
• Texas Section 122.004 - Investigation By Commissioner
  The commissioner may conduct an investigation and obtain any information or report from any person, including a law enforcement agency, that the commissioner considers necessary....
• Texas Section 122.005 - Procedure For Certain Approvals
  (a) This section applies to a request for approval by the commissioner of: (1) an application for incorporation under this subchapter; (2) a request for...
• Texas Section 122.006 - Decision On Application To Incorporate; Issuance Of Certificate
  (a) The commissioner shall approve an application to incorporate a credit union if the commissioner determines: (1) that the incorporators have complied with this chapter...
• Texas Section 122.007 - Appeal To Commission
  (a) The commission by rule shall provide for appeal of the commissioner's order by an incorporator or other aggrieved person. (b) The commissioner's order may...
• Texas Section 122.008 - Effect Of Issuance Of Certificate Of Incorporation
  (a) A credit union's existence begins when the commissioner issues the certificate of incorporation. (b) The certificate of incorporation is conclusive evidence that the incorporators...
• Texas Section 122.009 - Requirements For Commencing Business
  (a) A credit union may not transact business or incur debt that is not incidental to its organization or to obtaining a subscription to or...
• Texas Section 122.010 - Deadline For Commencing Business
  (a) A credit union shall begin business before six months after the date of the order approving the credit union's application. (b) On request and...
• Texas Section 122.011 - Amendment Of Articles Of Incorporation Or Bylaws
  (a) The board may amend the articles of incorporation or bylaws by a two-thirds vote of the directors present at a meeting at which a...
• Texas Section 122.012 - Place Of Business
  (a) A credit union shall maintain on file with the department a statement specifying the street and post office address of the credit union's principal...
• Texas Section 122.013 - Foreign Credit Unions
  (a) A foreign credit union may do business in this state if it is organized in a state or country that allows any credit union...
• Texas Section 122.0131 - Temporary Foreign Credit Union Office
  If a state contiguous to this state experiences an emergency, on a request by that state's credit union regulatory agency, the commissioner may authorize one...

SUBCHAPTER B ADMINISTRATION

• Texas Section 122.014 - Underserved-area Credit Union
  (a) In this section, "secondary capital account" means a nontransactional account in an amount greater than $100,000 as established by the commission that is: (1)...
• Texas Section 122.051 - Membership
  (a) A person may be a member of a credit union only if the person is an incorporator or other person who: (1) shares a...
• Texas Section 122.052 - Meetings Of Members; Voting
  (a) Members of a credit union shall hold an annual or special meeting at the time and place and in the manner provided by the...
• Texas Section 122.053 - Board Of Directors; Terms And Duties
  (a) A board of at least five members shall direct the business and affairs of a credit union. (b) The membership of the credit union...
• Texas Section 122.054 - Qualification Of Directors
  (a) The commission by rule shall establish qualifications for a director. The rules must provide that a person may not serve as director if the...
• Texas Section 122.055 - Vacancies; Removal
  (a) The office of a director becomes vacant if the director dies, resigns, is removed, has been absent from more meetings than the total number...
• Texas Section 122.056 - Honorary Or Advisory Directors
  (a) The board may appoint not more than six individuals to serve at the board's pleasure as honorary or advisory directors to advise and consult...
• Texas Section 122.057 - Officers; Executive Committee
  (a) At the annual organizational meeting, the board shall elect from its membership a chairman, vice chairman, treasurer, and secretary. The offices of treasurer and...
• Texas Section 122.058 - Chief Executive Officer
  (a) The board may employ, elect, or appoint a president, who is the chief executive officer in charge of operations. (b) The president may be...
• Texas Section 122.059 - Delegation Of Management And Loan Approval Authority
  (a) Without written approval of the commissioner, a credit union may not: (1) contract with an individual who is not an officer, director, or employee...
• Texas Section 122.060 - Certificate Of Election
  (a) A credit union shall submit to the commissioner, in a form approved by the department, a certificate of election that provides the name and...
• Texas Section 122.061 - Conflicts Of Interest
  (a) While serving as a director, honorary director, advisory director, committee member, officer, or employee of a credit union, a person may not: (1) participate,...
• Texas Section 122.062 - Compensation
  A person may not receive compensation for serving as a director, honorary director, advisory director, or committee member of a credit union, except that the...
• Texas Section 122.063 - Bond
  The board shall purchase from a surety company authorized to do business in this state a blanket surety or security bond covering each director, honorary...

SUBCHAPTER C OPERATIONS AND FINANCES

• Texas Section 122.064 - Indemnification
  A credit union may elect to indemnify a director, officer, employee, or agent of the credit union and to purchase insurance as if the credit...
• Texas Section 122.101 - Call Reports
  (a) A credit union shall prepare a quarterly call report, in a manner approved by the department, that states the credit union's financial condition. The...
• Texas Section 122.102 - Financial Reporting; Audits
  (a) A credit union shall use the financial reporting forms and observe the accounting principles prescribed by the commission. (b) The board shall: (1) make...
• Texas Section 122.103 - Equity Capital
  A credit union's equity capital consists of: (1) retained earnings; (2) appropriated retained earnings, including net worth and other reserves; (3) undivided earnings; and (4)...
• Texas Section 122.104 - Net Worth Reserve Allocations
  (a) The commission by rule shall require a credit union to contribute to and maintain net worth reserves necessary to protect the interests of its...
• Texas Section 122.105 - Membership Share Reduction
  A credit union may order a reduction in the membership shares of each of its shareholders if: (1) the credit union's losses resulting from a...
• Texas Section 122.106 - Exemption From Certain Taxes
  (a) Except as provided by Subsection (b), a credit union is exempt from a franchise or other license tax. (b) A credit union is not...

SUBCHAPTER D MERGER OR CONSOLIDATION

• Texas Section 122.107 - Notice Of Availability Of Certain Documents
  (a) A credit union regulated under this subtitle and Chapter 15 shall give notice to the credit union's members of the availability on request of...
• Texas Section 122.151 - Authority To Merge Or Consolidate
  (a) A credit union may merge or consolidate with another credit union, under the other credit union's existing articles of incorporation or otherwise, if: (1)...
• Texas Section 122.152 - Application To Merge Or Consolidate
  (a) After agreement by the directors and approval by the members, if applicable, of each credit union or federal credit union, the chairman and secretary...
• Texas Section 122.153 - Decision By Commissioner; Appeal
  (a) Subject to Subsection (b), on approving the merger or consolidation, the commissioner shall return the certificates and plan to the merging or consolidating credit...
• Texas Section 122.1531 - Considerations In Determination
  In determining whether to approve or disapprove the merger or consolidation, the commissioner shall consider the availability and adequacy of financial services in the local...
• Texas Section 122.154 - Property, Obligations, And Liabilities Of Merged Or Consolidated Credit Union
  After a merger or consolidation is effected: (1) the property of the merged or consolidated credit union vests in the surviving credit union without an...
• Texas Section 122.155 - Construction Of Subchapter
  This subchapter shall be construed, when possible, to permit a credit union authorized to do business in this state under other law to merge or...

SUBCHAPTER E CONVERSION

• Texas Section 122.156 - Rules To Address Certain Procedures
  The rules adopted under this subchapter must specify in detail the procedures that: (1) a credit union must follow to obtain commissioner approval of a...
• Texas Section 122.201 - Conversion Of State Credit Union To Federal Credit Union
  (a) A credit union organized under the laws of this state may convert to a credit union under the laws of the United States: (1)...
• Texas Section 122.202 - Conversion Of State Credit Union To Out-of-state Credit Union
  A credit union organized under the laws of this state may convert to a credit union under the laws of another state: (1) on an...

SUBCHAPTER F MISCONDUCT AND ENFORCEMENT

• Texas Section 122.203 - Conversion Of Federal Or Out-of-state Credit Union To State Credit Union
  A credit union organized under the laws of the United States or of another state may convert to a credit union organized under the laws...
• Texas Section 122.251 - Defamation
  (a) A person commits an offense if the person knowingly: (1) makes, circulates, or transmits to another person a false statement that is derogatory to...
• Texas Section 122.252 - Consideration For Loan, Investment, Or Purchase
  (a) A person commits an offense if the person: (1) is a director, honorary director, advisory director, committee member, officer, or employee of a credit...
• Texas Section 122.253 - Loan To Nonmember
  (a) A person commits an offense if the person: (1) is a director, honorary director, advisory director, committee member, officer, or employee of a credit...
• Texas Section 122.254 - False Statements Or Documents; Destruction Of Records
  (a) A person commits an offense if the person, knowingly and with the intent to deceive: (1) makes a false entry on a record, report,...
• Texas Section 122.255 - Determination Of Misconduct
  The commissioner may determine that an officer, director, honorary director, advisory director, or employee of a credit union, or the credit union itself, acting by...
• Texas Section 122.256 - Determination Letter; Board Meeting
  (a) If the commissioner determines from examination or other credible evidence that a credit union is in a condition that may warrant the issuance of...
• Texas Section 122.257 - Cease And Desist Order For Credit Unions
  (a) If the commissioner makes a finding listed in Section 122.255 and determines that an order to cease and desist is necessary and in the...
• Texas Section 122.2575 - Cease And Desist Order For Other Persons
  (a) If it appears to the commissioner that a person who is not authorized to engage in business under this subtitle or the Federal Credit...
• Texas Section 122.258 - Removal Order
  (a) The commissioner by order may remove or prohibit a person who is a current or former officer, director, manager, or employee of a credit...
• Texas Section 122.259 - Hearing On Appeal Of Proposed Order
  (a) If the credit union or a person removed from office or employment files a notice of appeal of a cease and desist order or...
• Texas Section 122.260 - Administrative Penalty; Injunction
  (a) If a credit union or other person designated in a final order under this subchapter does not comply with the order, the commissioner, after...
• Texas Section 122.261 - Confidentiality
  (a) A determination letter, a cease and desist order, a removal order, each copy of a notice or correspondence, and all other documents or records...

Last modified: September 28, 2016