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SB 714, New Mandates on State and Federal Credit Unions
Wednesday, April 5, 2017 6:50 AM

SB 714 by Sen. Kel Seliger (R-Amarillo) removes requirements on banks when opening new accounts and disclosures relating to the payable-on-death (POD) feature on accounts, while adding new mandates on state and federal credit unions.

The bill would impose additional requirements on credit unions when opening new or modifying existing accounts that offer a POD feature. Ron Fox, CEO of Fort Worth City Credit Union, testified on behalf of his credit union and the Texas Credit Union Association in opposition to the bill.

"Requiring credit unions to comply with these changes will impose unnecessary costs," said Fox. "We have not heard from our members complaining that they are not being informed about POD features on accounts. In fact at my credit union about 70 percent of new accounts include a POD beneficiary."

SB 714 makes changes to a bill passed in 2015 regarding POD accounts. The Texas Credit Union Association worked with the authors of SB 1791 in 2015 to exempt credit unions from the requirements that were mandated for banks. SB 714 removes that exemption and now requires credit unions to comply with the same provisions the banks now object to and want to modify.

The current law as it applies to credit unions is working well."It is unlikely that the detailed requirements that would be mandated by SB 714 on credit unions will increase the number of accounts that include the POD feature," said Texas Credit Union Association President Jeff Huffman. "But, we believe the requirements imposed on credit unions by SB 714 will increase the cost on credit unions, while not significantly benefitting the members. Credit unions need to contact their state senators now asking them to oppose these new government mandates on state and federal credit unions."

SB 714 was left pending.

For more information, please contact Texas Credit Union Association President Jeff Huffman at 469-385-6488 or jhuffman@txcua.coop.