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SB 714 Passes Texas House with Credit Union Exemption Intact
Monday, May 22, 2017 7:00 AM

The Senate bill that would have amended account disclosures and imposed costly requirements on credit unions has passed the Texas House.

"State and federal credit unions across Texas did a super job of activating their grassroots to defeat more unnecessary regulatory burdens that would have been imposed on them by SB 714," said Cornerstone Credit Union League President/CEO Caroline Willard.

As filed, the bill would have removed an exemption that credit unions have had since 2015 when a law was passed to increase public awareness of the payable-on-death (POD) option that makes it possible to transfer assets without going through the probate process. Texas credit union members were adding POD 60 to 80 percent of the time when opening new accounts through member education developed by the credit unions.

The Texas bankers trade groups wanted the changes in the law to simplify the disclosures imposed on them last session by SB 1791, but they also wanted the credit unions to lose their exemption, referring to it in testimony in the House as "just gravy." Estimates showed that the new requirements that would have been imposed on credit unions by SB 714, as filed, could have cost state and federal credit unions millions of dollars to come into compliance and in lost loans through indirect lending programs, online loan applications, and mobile apps.

The Texas Credit Union Association organized a substantial credit union grassroots effort of more than 5,000 calls and emails opposing the new requirements to both the Senate and House members. Thanks to Sens. Hughes, Perry, and Menendez, along with numerous others who stepped up at the critical time to force the bill to the floor for a full debate and to amend SB 714, the credit union exemption from new account requirements was preserved.

TXCUA followed the bill closely as it made its way through the House to ensure that no changes made were detrimental to credit unions. The bankers were very determined to get a law passed that benefited them and hurt credit unions. When SB 714 was held up in the House Investments and Financial Services Committee, bankers added the language passed by the Senate in SB 714 to House Bill 1954 by Rep. Andrew Murr.

"Credit unions prevailed on SB 714 with the help of several key lawmakers, Sen. Bryan Hughes (R-Mineola), Sen. Charles Perry (R-Lubbock), and Sen. José Menéndez (D-San Antonio), along with help from House members Rep. Tan Parker (R-Flower Mound), Rep Dan Flynn (R-Van), and Rep. Jessica Farrar (D-Houston)," said Texas Credit Union Association President Jeff Huffman. "These lawmakers deserve our appreciation for protecting Texas credit unions from SB 714."

The bill now goes to the governor’s desk.

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