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Texas Bankers Pushing Hard for Passage of HB 1752
Wednesday, April 26, 2017 7:00 AM

The House Investments and Financial Services Committee heard HB 1752 by Rep. Jessica Farrar (D-Houston) on Tuesday. This bill is the companion to SB 714, the Senate bill that would impose additional requirements on credit unions when opening new or modifying existing accounts that offer a payable-on-death (POD) feature.

Rep. Farrar described the bill as a "piggyback" to a bill passed in 2015 that required very specific language, layout, and consumer acknowledgements to the disclosure on POD accounts. The Texas Credit Union Association worked with the authors of SB 1791 in 2015 to secure an exemption from the changes for state and federal credit unions.

HB 1752 is a response to requests for a simplified disclosure form from bankers. In addition to removing the requirement that each paragraph be initialed, it also simplifies the form and removes the exemption for credit unions.

Scott Rose, CEO of Alliance Credit Union in Lubbock, and Carolyn Jordan, SVP of Neighborhood Credit Union in Dallas, testified on behalf of their credit unions and the Texas Credit Union Association in opposition to HB 1752. Testifying that their credit unions' new account process already informs their members of the POD feature, committee members were told 60 percent of Alliance’s members select the feature, and 50 percent do so at Neighborhood.

"We believe we do a good job of that and do not need these requirements on our industry," said Rose.

"Borrowers expect to get loans wherever they are, and this new requirement makes it more difficult for credit unions to compete with banks due to the extra requirements," said Jordan. "The general public can get loans without depositing into an account at a bank, but credit union members cannot."

David Shurtz, general counsel at EECU in Fort Worth, also testified before the committee raising concerns about the cost to implement these changes on credit unions and the negative effect on access to credit from credit unions.

Testimony from the bank industry was supportive of the bill, including stating that the removal of existing requirements on banks in the opening of accounts and the disclosures banks are required to make would benefit banks, and the Legislature requiring credit unions to be subject to these new requirements would be "just gravy."

Jeff Huffman, Texas Credit Union Association president said, "The testimony from the credit union witnesses really laid out for the committee the differences between the credit union and bank business models and that the changes imposed on credit unions by HB 1752 will hurt CUs while benefiting banks, but ultimately hurting Texas consumers."

Rep. Farrar said she believes there are "some wrinkles" to iron out with the bill, which was left pending.

For more information, please contact Texas Credit Union Association President Jeff Huffman at 469-385-6488 or