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Texas renews state CU Department for 12 years
AUSTIN, Texas (5/28/09)--Texas’ anticipated extension of the Texas Credit Union Department for 12 years has passed the state legislature and is on its way to Texas Gov. Rick Perry for signing. As one of the few states with a separate credit union regulator for state charters, Texas’ healthy credit union system speaks to the value of both the dual-chartering system and an independent regulator, said the Texas Credit Union League (TCUL). With the Texas Sunset process, the state legislature reviews every department in the state every 12 years to examine whether it should continue to exist. Under the process, each agency must perform for its commission a self-review of its roles and responsibilities, including areas where its duties may overlap those of other agencies and the effect of the agency's abolition on loss of federal funding. About 20 to 30 agencies go through the Sunset process each legislative session. The Sunset bill passed both houses by unanimous votes. It was a marked departure from 12 years previous when opponents argued strongly to place credit unions under the regulation of the state’s banking department, TCUL said. “It was a truly epic battle with the banks back in 1997, and we won an uphill battle and surprised many,” said league Vice President of Governmental Affairs Jeff Huffman. “This time, we vowed to win decisively without ugly fights, and are pleased state charters [credit unions] will continue to have their own independent state regulator until 2021.” Much of the work on the Sunset bill was completed during the interim period--the state legislature meets for five months every two years, and hearings, analysis, and negotiations for the Credit Union Department were intense prior to the session. The league gained several concessions favorable to credit unions in the process, particularly in removing new burdens that were initially in the bill. “Our goal with Sunset was to both renew the department for 12 years, and also to ensure that the bill did not unduly expand regulatory powers and burdens on credit unions,” said Dick Ensweiler, league president/CEO. “During a time of significant turmoil in the financial sector, we take great pride in this victory for Texas credit unions.” TCUL worked to successfully remove a new provision that would allow monetary penalties to be levied on credit unions, and worked to keep statutory language to continue allowing for joint 990 filings. The IRS Form 990 is the annual return required from state-chartered credit unions and other tax-exempt organizations. The league also worked to reasonably limit the scope of Sunset-Agency mandated new disclosures for members, such as making information available to members upon request--as required under federal Form 990 law--but not requiring certain sensitive information such as executive pay disclosure be “pushed” out to members who have not requested it. “Our efforts in the interim were key to our success this session,” Ensweiler said. “As with most things at credit unions, the bulk of the work happens behind the scenes. This review is a clear vote of confidence in the effectiveness of the independent regulator keeping credit unions safe and sound, under the leadership of the Texas Credit Union Commission under Chairman Gary Janacek, CEO of Scott & White CU, and the department under Commissioner Harold Feeney.” “We believe there is compelling evidence here for Congress, too,” said league Chief Advocacy Officer Buddy Gill, “as they begin to consider regulatory restructuring and in that frame work, debate on whether to continue to keep the National Credit Union Administration a separate independent regulator. “The Texas credit union regulatory system--separate from regulation of banks--has worked well in Texas to keep credit unions safe, sound and growing to serve seven million members over the past 12 years, enough so that Texas lawmakers unanimously choose to continue it for another 12 years,” Gill added. “We hope our Texas congressional delegation will take that model to heart as regulatory restructuring is contemplated this year in our nation’s capital.”


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