Current through Reg. 49, No. 38; September 20, 2024
(a)
General. Membership in a credit union shall be limited to one or more groups,
each of which (the Group) has its own community of interest as outlined under
Texas Finance Code Section
RSA 122.051.
The commissioner may impose a geographical limitation on
any Group if the commissioner reasonably determines that the applicant credit
union does not have the ability to serve a larger group or there are other
operational or management concerns.
(b) Other persons eligible for membership. A
number of persons by virtue of their close relationship to a Group may be
included in the field of membership at the option of the applicant credit
union. These include:
(1) members of the
family or household of a member of the Group;
(2) volunteers performing services for or on
behalf of the Group;
(3)
organizations owned or controlled by a member or members of the Group, and any
employees and members of those organizations;
(4) spouses of persons who died while in the
Group;
(5) employees of the credit
union; and
(6) subsidiaries of the
credit union and their employees; and businesses and other organizations whose
employees or members are within the Group.
(c) Multiple-groups.
(1) The commissioner may approve a credit
union's original articles of incorporation and bylaws or a request for approval
of an amendment to a credit union's bylaws to serve one or more communities of
interest or a combination of types of communities of interest.
(2) In addition to general requirements,
special requirements pertaining to multiple-Group applications may be required
before the commissioner will grant such a certificate or approve such an
amendment.
(A) Each Group to be included in
the proposed field of membership of the credit union must have its own
community of interest.
(B) Each
associational or occupational Group must individually request inclusion in the
proposed credit union's field of membership.
(d) Overlap protection.
(1) The commissioner will only consider the
financial effect of an overlap proposed by an application to expand a credit
union's field of membership or when a charter application proposes an overlap
for a Group of 3,000 members or more.
(2) The commissioner will weigh the
information in support of the application and any information provided by a
protesting or affected credit union. If the applicant has the financial
capacity to serve the financial needs of the proposed members, demonstrates
economic feasibility, complies with the requirements of this rule, and no
protestant reasonably establishes a basis for denying the request, it shall be
approved.
(3) If a finding is made
that overlap protection is warranted, the commissioner shall reject the
application or require the applicant to limit or eliminate the overlap by
adding exclusionary language to the text of the amendment, e.g., "excluding
persons eligible for primary membership in any occupation or association based
credit union that has an office within a specified proximity of the applicant
credit union at the time membership is sought." Exclusionary clauses are rarely
appropriate for inclusion on a geographic community of interest.
(4) Generally, if the overlapped credit union
does not submit a notice of protest form, and the department determines that
there is no safety and soundness problem, an overlap will be permitted. If,
however, a notice of protest is filed, the commissioner will consider the
following in performing an overlap analysis:
(A) whether the overlap is incidental in
nature, i.e., the group(s) in question is so small as to have no material
effect on the overlapped credit union;
(B) whether there is limited participation by
members of the group(s) in the overlapped credit union after the expiration of
a reasonable period of time;
(C)
whether the overlapped credit union provides requested service;
(D) the financial effect on the overlapped
credit union;
(E) the desires of
the group(s); and
(F) the best
interests of the affected group(s) and the credit union members
involved.
(5) Where a
sponsor organization expands its operations internally, by acquisition or
otherwise, the credit union may serve these new entrants to its field of
membership if they are part of the community of interest described in the
credit union's bylaws. Where acquisitions are made which add a new subsidiary
or affiliate, the group cannot be served until the entity is included in the
field of membership through the application process.
(6) Credit unions affected by the
organizational restructuring or merger of a group within its field of
membership must apply for a modification of their fields of membership to
reflect the group to be served.
(e) Underserved communities.
(1) All credit unions may include underserved
areas or areas designated as a credit union development district in accordance
with Subchapter K (related to Credit Union Development Districts) in their
fields of membership, without regard to location. More than one credit union
can serve the same underserved community.
(2) A credit union desiring to add an
underserved community must document that the area meets the applicable
definition in §91.101 (relating to Definitions and Interpretations). In
addition, the credit union must develop a business plan specifying how it will
serve the community. The business plan, at a minimum, must identify the credit
and depository needs of the community and detail how the credit union plans to
serve those needs. The credit union will be expected to regularly review the
business plan to determine if the community is being adequately served. The
commissioner may require periodic service status reports from a credit union
pertaining to the underserved area to ensure that the needs of the area are
being met, as well as requiring such reports before allowing a credit union to
add an additional underserved area.
(f) Parity with Federal Credit Unions.
Credit unions will be allowed to have, at a minimum, at
least as much flexibility as federal credit unions have in field of membership
regulation. If a credit union proposes a type of Group that the National Credit
Union Administration has previously determined meets the Federal requirements,
the commissioner shall approve the application unless the commissioner finds
that the credit union has not demonstrated sufficient managerial and financial
capacity to safely and soundly serve such expanded membership.
(g) Application. In order to request the
approval of the commissioner to add a Group to its bylaws, a credit union must
submit a written application to the Department. The applicant credit union
shall have the burden to show to the Department such facts and data that
support the requirements and considerations in this rule. In reviewing such
application, the commissioner shall consider:
(1) Whether the Group has adequate unifying
characteristics or a mutual interest such that the safety and soundness of the
credit union is maintained;
(2) The
ability of credit unions to maintain parity and to compete fairly with their
counterparts;
(3) Service by the
credit union that is responsive to the convenience and needs of prospective
members;
(4) Protection for the
interest of current and future members of the credit union; and
(5) The encouragement of economic progress in
this State by allowing opportunity to expand services and facilities.
