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Texas House Passes HB 1626 to Create Credit Union and Bank Development Districts Program
Thursday, May 14, 2015 6:50 AM

The Texas Credit Union Association has been working with Rep. Eric Johnson (D-Dallas) to add "credit union development districts" to HB 1626, which allows local governments to designate areas that need additional traditional financial services as a bank or credit union development district.

Many Texans live in areas that are underserved by credit unions and banks. HB 1626 seeks to address this issue by implementing programs that encourage credit unions and banks to open branches in areas where there is a demonstrated need for credit union and banking services. The Texas Credit Union Association testified in support of the committee substitute which added credit union development districts to the original bill authorizing bank development districts.

The bill authorizes the Credit Union Commission and the Finance Commission to administer and monitor the credit union or banking development district program in consultation with the Texas Economic Development and Tourism Office (TECTO) to adopt the rules regarding the criteria for the designation of the districts. They must consider the location, number, and proximity of sites where services are available in the proposed district, the consumer needs for those services, the economic viability and local credit needs of the community in the district, and the impact that additional services would have on the economic development in the proposed district.

The commissions have up to 120 days to make a determination regarding whether to approve the application from a local government and credit union. 

They could also designate a credit union located in the district to be a depository for public funds. Likewise, the comptroller could designate a credit union as a state depository. A state or federal credit union would be able to participate in a credit union development district if they choose to.

The financial commissions would be required to adopt rules governing the designation of credit union or banking development districts by January 1, 2016.

HB 1626 passed by a vote of 99 to 40 in the House. The bill now goes to the Senate.

Contact Jeff Huffman, president, Texas Credit Union Association, at 469-385-6488 or jhuffman@txcua.coop for more information.