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CU Development District Bill Clears Texas Senate Committee
Friday, May 22, 2015 7:00 AM

Late Thursday, HB 1626 was voted favorably from the Senate Business & Commerce Committee. This bill moved quickly over the prior 24 hours, getting referred to the committee, set for a hearing, and receiving a vote. Sen. Royce West (D-Dallas) is sponsoring the bill in the Senate.

During the hearing, Sen. Don Huffines (R-Dallas) had several questions of the Texas Credit Union Association witness testifying in support of the bill, wanting more information about how the Credit Union and Bank Development districts would actually work.

The Texas Credit Union Association worked with Rep. Eric Johnson to add credit unions to the bill, which authorizes the Credit Union Commission and the Finance Commission to administer and monitor credit union or banking development district programs. The Commissions will adopt the rules regarding the criteria for the designation of the districts, which would allow local governments to work directly with a credit union to establish a credit union branch in low-income areas, providing assistance to the credit union to allow a branch that might not be an economic option on its own to be established in low-income areas. The local government could provide low-cost public funds as deposits to a state or federal credit union participating in a development district along with other assistance negotiated between the credit union and local government.

The Credit Union and Finance Commissions must consider the location, number, and proximity of sites where services are available in the proposed district, the consumer needs for those services, the economic viability, and local credit needs of the community in the district and the impact that additional services would have on the economic development in the proposed district. The commissions have up to 120 days to make a determination regarding whether to approve the application from a local government and credit union. 

A state or federal credit union would be able to participate in a credit union development district if they choose to, but it is not mandated. The financial commissions would be required to adopt rules governing the designation of credit union or banking development districts by Jan. 1, 2016.

HB 1626 was voted favorably from the committee and now goes to the full Senate.

Contact Jeff Huffman, president, Texas Credit Union Association, at 469-385-6488 or jhuffman@txcua.coop for more information.