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Texas CU Commission Approves Recommendations at July 13 Meeting
Monday, July 16, 2018 7:00 AM

During its meeting of July 13, the Texas Credit Union Commission welcomed new member Elizabeth “Liz” Bayless who was appointed by Gov. Greg Abbott for a term set to expire on Feb. 15, 2019. She was the executive vice president of the Texas State Affordable Housing Corporation and has extensive experience in the financial industry. 

Following the announcement of Commissioner Harold Feeney’s planned retirement later this year, the Commissioner Evaluation Committee reported that it will begin the search for Feeney’s successor.

The Commission approved the following recommendations by the Rules Committee:

  • Proposed amendments, a new section, and three repeals to Chapter 93. The proposed amendments relate to consistency with the Administrative Procedure Act Texas Government Code, Chapter 2001 (APA), consistency with the State Office of Administrative Hearings (SOAH) procedural rules, better readability and clarification, and technical corrections.
  • Re-adopted the completed rule review of 7 TAC, Part 6, Chapter 91 Subchapters G, concerning lending powers.
    • Approved for publication and comment the proposed amendments to 7 TAC Section 91.712 concerning plastic cards.
  • Approved for publication and comment:
    • Amendments to 7 TAC Section 91.709 concerning member business and commercial loans that will conform the rule to the recent changes to NCUA’s MBL regulation (Part 723) as a result of S. 2155, The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018. The bill amends the Federal Credit Union Act to remove certain loans from the statutory Member Business Loan (MBL) cap—loans that are fully secured by a lien on a 1 to 4 family dwelling that is not the primary residence of the member borrower. Under previous law, a residential loan could only be excluded from the MBL cap if the loan was secured by a dwelling that was the member's primary residence.
    • Amendments to 7 TAC Section 91.121 concerning Complaint Notification to explain how to file a complaint with the Department, how a complaint is handled after receipt, the authority of the Department in reviewing complaints, and the privacy of information provided in a complaint.
    • Amendments to 7 TAC Section 91.403 concerning debt cancellation products to update the standards governing debt cancellation products in order to clarify the expectation for credit unions that offer such products to their members. The proposed changes to:
  • Subsection (a) make clear that credit unions must comply with the Truth in Lending Act (15 U.S.C. 1601) and the applicable provisions of Regulation Z (12 C.F.R. Part 226);
  • Subsection (b) removes language that could be construed to prohibit the offering of a no refund debt cancellation product in a manner that is permitted for federal credit unions; and
  • New subsection (f) adopt and incorporate by reference the guidance issued by NCUA in its Letter to Federal Credit Unions No. 03-FCU- 06 and directs credit unions to look to 12 C.F.R. Part 37 for guidance as to best practices related to the offer and sale of debt cancellation products.

Deputy Commissioner Robert Etheredge reported that the operating environment for Texas credit unions continues to be positive and the Texas economy remains sound. Overall, Texas credit unions are performing well and continue to realize positive loan growth, strong asset quality trends, good earnings performance, and sound net worth positions. Recent trends reflect increases in credit union bottom lines attributed primarily to higher gross income and lower operating costs and provision for loan and lease losses expenses. 

As of March 31, 2018, there are 185 state­-chartered credit unions in Texas with:

  • Assets totaling $41.22 billion, an increase of $2.8 billion since March 31, 2017, for an annualized growth rate of 5.3 percent.
  • The average net worth ratio rose to 10.33 percent, up from the March 31, 2017, level of 10.16 percent.
  • Loans totaling $30.06 billion, an increase of $2.16 billion since March 31, 2017, for an annualized growth rate of 7.7 percent.
  • Shares totaling $35.79 billion, an increase of $1.81 billion, or 5.3 percent since March 31, 2017.
  • The average loan delinquency ratio was 0.65 percent, compared to a ratio of 0.60 percent as of March 31, 2017.

As of March 31, 2018, 37 state-chartered credit unions reported year-to-date net operating losses of $862,169, while the remaining 148 credit unions reported aggregate net income of $86.4 million.

As of May 31, 2018, 26 credit unions were assigned a CAMEL rating of 3 or higher, compared to 22 credit unions at May 31, 2017.

Sixty-eight coastal credit unions impacted by Hurricane Harvey, which saw increases in their delinquency rate, have recovered and the delinquency rate has returned to its pre-hurricane levels.

The proposed budget for FY 2019 is $4,140,909, a 1.9 percent increase over the FY 2018 budget. It includes two strategic initiatives: computer security, software and support for field examiner’s leased laptops, services previously provided by NCUA, and a merit increase funding pool. The Commission approved the proposed budget with an addition for anticipated expenses that will be incurred by the commissioner search.

All meeting materials with full details can be found here.

The next Commission Committee hearing is scheduled for Friday, Nov. 2, at 9 a.m.

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