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Texas Senate Votes to Exempt CUs from New Disclosures to Accounts
Tuesday, April 21, 2015 6:55 AM

SB 1791 by Sen. Rodney Ellis (D-Houston), which adds requirements to new account forms, has been amended to exempt state and federal credit unions. The Texas Credit Union Association had concerns with some aspects of the bill as filed and worked with Sen. Ellis to add the amendment on the floor yesterday. The bill was passed by the full Senate. 

Current Texas law allows financial institutions to create POD accounts and sets forth a uniform form that financial institutions may use for account selection. SB 1791 would require financial institutions to explicitly provide information on POD and other account types to people who are opening or modifying an account. The bill would require that account holders initial each paragraph of the form when the statutory form is used. If the suggested form is not used, the bill requires the financial to disclose the information in a specified manner: the disclosures must be made separately from any other account information, before account selection, and in 14-point bold-faced type. If account discussions take place primarily in another language, the disclosures would have to be provided in that language. Finally, the financial institution would be required to notify the customer of the type of account selected.

The amendment creates a new section exempting state and federal credit unions from the new requirements, protecting credit unions from having to spend on printing of new forms and disclosures or incur expensive reprogramming to comply.

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