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Results of Texas CU Commission and Rules Committee Meetings
Monday, March 7, 2016 7:00 AM

The Texas Credit Union Commission Rules Committee met on Thursday, March 3. The members discussed issues related to field of membership and mandatory rule reviews, including home equity rules.

The committee recommended that the Commission withdraw the previously proposed changes to field of membership (FOM) rules that were published for comment on Oct. 30, 2015. Based on the comments received, the committee voted to recommend for publication and comment the proposed amendments to 7 TAC 91.301 that establishes political subdivisions within reasonable proximity of the location of a credit union as a presumptive "local service area." 

The proposed amendments also allow credit unions to include in their FOM areas designated by a credit union development district. Once added, the credit union must establish an office or facility in that credit union development district.

The Rules Committee recommended re-adoption of the current sections 7 TAC 91.302 (Election or Other Membership Vote by Electronic Balloting, Early Voting, Absentee Voting, or Mail Balloting), 91.310 (Annual Report to Membership), and 91.315 (Relating to Members Access to Credit Union Documents), and recommended publication of proposed rules under new section 7 TAC 97.200 to implement HB 3337 related to tuition reimbursement for employees/administrators of state agencies.

The committee discussed the mandatory rule review of 7 TAC, Part 8, Chapter 151 relating to home equity lending procedures, which will be done by the joint financial regulatory agencies. It also discussed the need for a review of the Credit Union Department’s member business loan rules for state-chartered credit unions under 7 TAC 91.709 after NCUA’s recent amendment to 12 CFR Part 723 for federally chartered credit unions.

The Texas Credit Union Commission met on Friday, March 4, and voted to adopt the Rules Committee's recommendations on FOM and rule reviews. The commissioners voted to allow the Department to make a budgetary adjustment so that it can pay in 2016 for a technology project originally scheduled to for payment in 2015.

Commissioner Feeney reviewed the status of the state credit union system. Despite the challenging economic environment, credit unions report positive membership growth, strong asset quality, good earnings performance, and higher net worth positions.

As of September 30, 2015, credit unions saw an annualized growth rate of 7.5 percent, and the average net worth ratio rose from 10.02 percent to 10.15 percent over the preceding year. Loan growth in that year was 10.9 percent. Shares grew 6.5 percent and loan delinquency rates remained the same. Thirty-four credit unions have a CAMEL rating of 3 or above.

One new credit union has been chartered this year: Jafari No-Interest Credit Union, which is the first state-chartered credit union in Texas since 2008. Jafari will be a member of the Cornerstone Credit Union League.

Approval was granted for the submission of the Department’s Annual Risk Assessment Report and for the proposed amendments to the policies manual as part of its annual policy review. The Ethics Standards Policy will include a new annual disclosure and prohibition of certain contracts statements prescribed by new laws in the 84th Legislative Session. The budget policy will see two changes:  the budget approval will change from the February meeting to the first meeting of the calendar year, and the Department will have the authority to use legally obligated funds from previous fiscal year for services rendered in the next fiscal year.

Commissioners tabled the issue of adopting a new weapons policy concerning the new open-carry law in Commission public meetings in order to have more time to discuss the issue.

The Department developed a Strategic Plan for fiscal years 2017-2021, and the Commission approved it for submission. It includes plans to increase the number of staff at the agency by five over the next few years, reduce turnover of examiners, retain quality employees, increase continuing education, and improve the use of technology to make the agency more efficient. All components of the strategic plan are subject to review and approval in yearly budget proposals.

The general budget assumptions and parameters to be used in guiding the development of the Department’s FY 2017 budget will remain primarily the same, with the addition of an adjusted travel stipend for overnight stay policy. The current policy will be amended to increase the stipend for higher levels of travel.

Five credit unions received resolutions commemorating their milestone anniversary dates: Fellowship CU, Intercorp CU, Members Choice CU, NCE CU, and Pasadena Postal CU.

Following an executive session, Robert Etheridge was approved as the new deputy commissioner.

The next meetings of the Rules Committee will take place July 7 at 1:00 p.m., and the Commission’s will be July 8 at 9:00 a.m. The location for the meetings will be announced at a later date.

Contact Texas Credit Union Association President Jeff Huffman at 469-385-6488 or for more information.