FINANCE CODE
CHAPTER 123. GENERAL POWERS
SUBCHAPTER A. GENERAL POWERS
§ 123.001. GENERAL POWERS. A credit union may exercise
any power necessary or appropriate to accomplish the purposes for
which it is organized and any power granted a corporation
authorized to do business in this state, including any power
specified in this chapter.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.002. INCIDENTAL POWERS. A credit union may
exercise any right, privilege, or incidental power necessary or
appropriate to exercise its specific powers and to accomplish the
purposes for which it is organized.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.003. ENLARGEMENT OF POWERS. (a) A credit union
may engage in any activity in which it could engage, exercise any
power it could exercise, or make any loan or investment it could
make, if it were operating as a federal credit union.
(b) Notwithstanding any other law, and in addition to the
powers and authorities conferred under Subsection (a), a credit
union has the powers or authorities of a foreign credit union
operating a branch in this state if the commissioner finds that
exercise of those powers or authorities is convenient for and
affords an advantage to the credit union's members and maintains
the fairness of competition and parity between the credit union and
any foreign credit union. A credit union does not have the field of
membership powers or authorities of a foreign credit union
operating a branch in this state.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 87, § 3, eff. Sept. 1, 1999; Acts
2003, 78th Leg., ch. 533, § 33, eff. Sept. 1, 2003.
SUBCHAPTER B. OPERATIONAL POWERS
§ 123.101. CONTRACTS. A credit union may make
contracts.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.102. POWER TO SUE AND DEFEND. A credit union may
sue or be sued in the name of the credit union.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.103. PURCHASE AND SALE OF PROPERTY. Subject to
commission rules, a credit union may purchase, hold, lease, or
dispose of property necessary or incidental to the operation or
purpose of the credit union.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.104. MEMBERSHIP IN OTHER ORGANIZATION; OPERATION
AS CENTRAL CREDIT UNION. A credit union may:
(1) be a member of:
(A) another credit union organized under this
subtitle or other law; and
(B) another organization approved by the board;
or
(2) operate, with the commissioner's approval, as a
central credit union.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.105. FEES. (a) A credit union may collect a fee,
determined by the board, for services and administrative costs,
including a fee for a check or draft that is returned because it is
drawn against a closed account or an account containing
insufficient or uncollected money, because of a stop payment order,
or for another similar reason.
(b) A fee under this section is an administrative expense.
The fee is in addition to interest authorized by law and is not a
part of interest collected or agreed to be paid on a loan.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.106. CHANGE OF LOCATION. A credit union may
change its principal place of business or a subsidiary place of
business to another location by notifying the commissioner in
writing of the new address and the effective date of the change.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2003, 78th Leg., ch. 533, § 34, eff. Sept. 1, 2003.
§ 123.107. INSURANCE FOR MEMBERS. A credit union may
purchase or otherwise provide insurance for the benefit or
convenience of its members in accordance with applicable law or
rules adopted by the commission.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 157, § 11, eff. Sept. 1, 1999.
§ 123.108. DONATIONS. A credit union may donate to a
nonprofit, civic, charitable, or community organization as
authorized by the board.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.109. SEAL. A credit union may adopt and use a
common seal and may alter its seal at any time.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.110. RECORDS. (a) A credit union may:
(1) copy any record kept by the credit union; and
(2) dispose of the original record in accordance with
commission rules.
(b) A copy of a record is considered an original record for
any purpose, including admissibility in evidence as an original
record before any court or administrative agency for the purpose of
the copy's admissibility in evidence.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.111. RIGHT TO ACT TO MITIGATE OR AVOID LOSS. This
subtitle does not prohibit a credit union from investing its money,
operating a business, managing or dealing in property, or taking
any other action at any time that is reasonably necessary to avoid
or mitigate a loss on a loan or on an investment made or obligation
created in good faith and in the usual course of the credit union's
business, as authorized by this subtitle or a rule adopted by the
commission.
Added by Acts 2003, 78th Leg., ch. 533, § 35, eff. Sept. 1, 2003.
SUBCHAPTER C. FINANCIAL POWERS
§ 123.201. POWER TO BORROW OR LEND. (a) A credit union
may:
(1) lend its funds, or engage in any other type of
financing transaction authorized by applicable law or rules adopted
by the commission; and
(2) borrow money from any source, subject to
Subsection (b).
(b) A credit union may not incur a debt without the
commissioner's prior approval if the debt will cause the debt of the
credit union, including a deposit of a nonmember financial
institution, to exceed an amount equal to 500 percent of the credit
union's unencumbered reserves and undivided earnings.
(c) The commissioner shall grant or deny a request for
approval under Subsection (b) not later than the 10th day after the
date on which the request is made.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 157, § 12, eff. Sept. 1, 1999.
§ 123.202. RECEIPT, TRANSFER, AND PAYMENT OF MONEY. A
credit union may:
(1) receive and disburse money;
(2) receive a payment on a share or deposit; and
(3) provide for the transfer or withdrawal of money
from an account by the means and through the payment systems that
the board determines best serve the convenience and needs of
members and depositors.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.203. ACCEPTANCE OF MONEY FOR DEPOSIT FROM ANOTHER
ENTITY. A credit union may accept money for deposit by a savings
and loan association, a savings association, the savings department
of a bank, a commercial bank, a savings bank, a trust company, an
insurance company, or any intermediary or other person managing or
holding money on behalf of the credit union or any of the credit
union's members or depositors.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.204. ACTION AS AGENT OR DEPOSITORY OF UNITED
STATES OR OTHER GOVERNMENTAL ENTITY. A credit union may act as
agent or depository of and accept for deposit the money of:
(1) the United States or an agent or instrumentality
of the United States;
(2) this or another state; or
(3) a political subdivision of this or another state,
including:
(A) a municipality;
(B) a county;
(C) a school district; or
(D) another taxing authority.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.205. INVESTMENTS AND SECURITIES. (a) In
accordance with commission rules, a credit union may:
(1) develop and offer investment programs to its
members and depositors; or
(2) act as agent for its members and depositors in the
purchase, sale, or other disposition of a security, an interest in a
mutual fund, or an interest or participation in any other type of
investment.
(b) A credit union may issue and sell securities in
connection with an investment program developed and offered under
Subsection (a)(1).
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.206. ACTION AS FISCAL OR TRANSFER AGENT; TRANSFER
OF CERTAIN INSTRUMENTS; SIGNATURES. A credit union may:
(1) act as fiscal agent or transfer agent;
(2) transfer a registered and countersigned
certificate of stock, bond, or other evidence of indebtedness; or
(3) guarantee a signature.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.207. FIDUCIARY POWERS. A credit union may:
(1) act, under court order or appointment, as
guardian, receiver, trustee, executor, or administrator without
giving bond;
(2) receive an investment from a person acting as a
guardian, receiver, trustee, executor, or administrator under the
Texas Probate Code or Subtitle B, Title 9, Property Code;
(3) act as depository for money paid to a court or
constituting the estate of a deceased person, a minor, or an
incompetent;
(4) accept, execute, and administer a trust as
trustee;
(5) accept funds or money for deposit by a fiduciary,
trustee, receiver, guardian, executor, or administrator; or
(6) act as custodian or trustee of a pension or
profit-sharing plan, including an individual retirement account or
a pension fund of a self-employed individual or of the sponsor of a
credit union.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.208. DIVIDENDS AND INTEREST. (a) A credit union
may:
(1) declare and pay a dividend on a share;
(2) contract for and pay interest on a deposit; or
(3) refund interest to a borrower.
(b) A dividend or interest may be paid at a rate and on the
conditions that the board authorizes.
(c) The commissioner may restrict the payment of a dividend:
(1) if the commissioner issues a cease and desist
order under Section 122.257; or
(2) as necessary to protect the member's interests and
preserve the solvency of the credit union as authorized by
commission rule.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.209. TRANSFER SYSTEM. A credit union may
establish, operate, or participate in a system that allows the
transfer of credit union money or the shares or deposits of its
members by electronic or other means, including a clearinghouse
association, a data processing or other electronic network, the
Federal Reserve System, or any other government payment or
liquidity program.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.210. SALE OF CERTAIN INSTRUMENTS OR SECURITIES;
FEE. A credit union may:
(1) collect, receive, and disburse money:
(A) in connection with the sale of a traveler's
check, money order, cashier's check or draft, treasurer's draft,
similar instrument, or security of any type; or
(B) for another purpose that may provide a
benefit or convenience for its members; and
(2) collect a fee for those services.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 123.211. CERTIFICATES OF INDEBTEDNESS. The
commission by rule may authorize a credit union to issue
certificates of indebtedness that are subordinated to all other
claims of credit union creditors.
Added by Acts 2003, 78th Leg., ch. 533, § 36, eff. Sept. 1, 2003.
§ 123.212. CHECK AND MONEY TRANSFER SERVICES. A credit
union may sell to a person within its field of membership negotiable
checks, money orders, and other similar money transfer instruments
or services and may also cash checks and money orders for a person
within its field of membership for a fee.
Added by Acts 2003, 78th Leg., ch. 533, § 37, eff. Sept. 1, 2003.
