FINANCE CODE
CHAPTER 126. CREDIT UNION SUPERVISION AND REGULATION
SUBCHAPTER A. GENERAL PROVISIONS
§ 126.001. APPOINTMENT OF CONSERVATOR OR LIQUIDATING
AGENT. The commissioner may appoint any person, including the
share and deposit guaranty corporation or credit union provided for
by Section 15.410, as a conservator or a liquidating agent under
this chapter.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.002. CONFIDENTIALITY OF INFORMATION. (a) Except
as provided by Subsections (b) and (c), information obtained
directly or indirectly by the department in any manner, including
by application or examination, concerning the financial condition
or business affairs of a credit union and the files and records of
the department relating to that information, except a statement
intended for publication, are confidential.
(b) Confidential information may not be disclosed to a
member of the commission, and a member of the commission may not be
given access to the files or records of the department, except that
the commissioner may disclose to the commission information, files,
and records pertinent to a hearing or matter pending before the
commission or the commissioner.
(c) The commissioner may disclose the information described
by Subsection (a) to a law enforcement agency or another
department, agency, or instrumentality of this state, another
state, or the United States if the commissioner determines that
disclosure is necessary or proper to enforce the laws of this state
applicable to credit unions.
(d) Information obtained by the department from a federal or
state supervisory agency that is confidential under federal law or
the laws of that state may not be disclosed except as provided by
the applicable federal or state law.
(e) Confidential information that is provided by the
department to a credit union, organization, or service provider of
a credit union, whether in the form of a report of examination or
otherwise, is the confidential property of the department. The
recipient or an officer, director, employee, or agent of the
recipient may not make the information public and may not disclose
the information to a person not officially connected to the
recipient as an officer, director, employee, attorney, auditor, or
independent auditor, except as authorized by rules adopted under
this subtitle.
(f) Discovery of confidential information from a person
subject to this subtitle or Chapter 15 under subpoena or other legal
process must comply with rules adopted under this subtitle, Chapter
15, and any other applicable law. The rules may:
(1) restrict release of confidential information to
the portion directly relevant to the legal dispute at issue; and
(2) require that a protective order, in a form and
under circumstances specified by the rules, be issued by a court
before release of the confidential information.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 157, § 13, eff. Sept. 1, 1999; Acts
2003, 78th Leg., ch. 533, § 45, eff. Sept. 1, 2003.
§ 126.003. ENFORCEABILITY OF AGREEMENT MADE BY CREDIT
UNION BEFORE CONSERVATORSHIP OR LIQUIDATION. An agreement that
tends to diminish or defeat the interest of the conservator or
liquidating agent in an asset acquired under this chapter, either
as security for a loan or by purchase, is not valid against the
conservator or liquidating agent unless the agreement is:
(1) in writing;
(2) executed by the credit union and each person
claiming an adverse interest under the agreement, including the
obligor, contemporaneously with the acquisition of the asset by the
credit union;
(3) approved by the board with the approval recorded
in the minutes of the board; and
(4) an official record of the credit union
continuously from the time of its execution.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
SUBCHAPTER B. EXAMINATIONS
§ 126.051. EXAMINATIONS. (a) The department, through
examiners it appoints and in accordance with commission rules,
shall periodically examine the books and records of each credit
union.
(b) In lieu of an examination under this section, the
commissioner may accept:
(1) the examination report of a regulator authorized
to examine a credit union, foreign credit union, federal credit
union, or other financial institution; or
(2) the audit report of an accountant, satisfactory to
the commissioner, who has made and submitted a report of the
condition of the affairs of a credit union, foreign credit union,
federal credit union, or other financial institution.
(c) The commissioner may accept all or part of a report in
lieu of all or part of an examination. An accepted part of the
report has the same validity as an examination under this section.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2003, 78th Leg., ch. 533, § 46, eff. Sept. 1, 2003.
§ 126.052. ACCESS TO INFORMATION. An officer,
director, agent, or employee of a credit union shall give an
examiner free access to any information relating to the credit
union's business, including access to books, papers, securities,
and other records.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.053. WITNESSES; PRODUCTION OF
DOCUMENTS. (a) In an examination conducted under this
subchapter, the commissioner or the commissioner's designee may:
(1) subpoena witnesses;
(2) administer an oath or affirmation to a person,
including any officer, director, agent, or employee of a credit
union, and examine the person under oath or affirmation on any
subject the commissioner considers pertinent to the financial
condition or the safety and soundness of the activities of a credit
union; or
(3) require and compel by subpoena the production of
documents that are not voluntarily produced, including books,
papers, securities, and records.
(b) The commissioner may apply to a district court in Travis
County for an order requiring a person to obey a subpoena, to
appear, or to answer questions in connection with the examination
or investigation.
(c) The court shall issue an order under Subsection (b) if
the court finds good cause to issue the subpoena or to take
testimony.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2003, 78th Leg., ch. 533, § 47, eff. Sept. 1, 2003.
§ 126.054. REPORT OF EXAMINATION. (a) An examiner
shall report the results of an examination, including a general
statement of the credit union's affairs, on a form prescribed by the
commissioner and approved by the commission.
(b) The department shall send a copy of the report to the
board not later than the 30th day after the examination date.
(c) The report of examination is confidential. The
commissioner may provide a copy of the report to other parties as
described in Section 126.002(c).
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 157, § 14, eff. Sept. 1, 1999.
§ 126.055 FEE. The commission may establish and a
credit union shall pay a fee based on the cost of performing an
examination of the credit union.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 157, § 15, eff. Sept. 1, 1999.
SUBCHAPTER C. CONSERVATORSHIP ORDER
§ 126.101. CONSERVATORSHIP ORDER; APPOINTMENT OF
CONSERVATOR. (a) The commissioner may immediately issue a
conservatorship order and appoint a conservator to manage a credit
union's affairs if:
(1) the commissioner, in performing the duties under
this subtitle, finds that:
(A) the credit union is insolvent or in imminent
danger of insolvency; or
(B) the credit union or an employee, officer, or
director of a credit union, including an honorary or advisory
director has:
(i) violated this subtitle, a rule adopted
under this subtitle, or another law that applies to credit unions;
(ii) violated or neglected a final order of
the commissioner or commission;
(iii) refused to submit to examination
under oath;
(iv) refused to permit the commissioner or
the commissioner's representative to examine the credit union's
records and affairs, including books, papers, and accounts;
(v) conducted the credit union's business
in an unsafe, unauthorized, or unlawful manner; or
(vi) failed or refused to authorize and
direct another person to permit the commissioner or the
commissioner's representative to examine the credit union's records
in the other person's custody or control, including books, papers,
and accounts, following the commissioner's request for the granting
of that authority and direction; and
(2) the commissioner determines that the finding under
Subdivision (1) is sufficiently severe to require immediate
affirmative action to prevent further dissipation of the credit
union's assets.
(b) The order must clearly state the grounds for
conservatorship.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.102. SERVICE OF ORDER. (a) A conservatorship
order must be served personally to an officer or director of the
credit union by the commissioner, the deputy commissioner, or
another person authorized by the commissioner.
(b) Service may be by mail if an officer or director is not
available for service on the date of issuance.
(c) Service by certified or registered mail:
(1) must be addressed to the credit union at the
address shown for its principal office by department records; and
(2) is complete on deposit of the order in a postpaid,
properly addressed wrapper, in a post office or official depository
under the care and custody of the United States Postal Service.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.103. EFFECT OF ORDER. Following service of a
conservatorship order:
(1) the commissioner shall take possession and control
of the credit union's books, records, property, assets, and
business; and
(2) the credit union shall cease all operations except
those authorized by the commissioner and conducted under the
commissioner's supervision.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.104. REPLY TO ORDER. Not later than the 30th day
after the date on which a conservatorship order is served, the board
shall file a written reply to the order.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.105. APPEAL OF ORDER; HEARING. (a) The board
may file a written appeal of the conservatorship order with the
commissioner. The appeal must include a certified copy of the board
resolution.
(b) If the board files an appeal to request a hearing before
the commission, the commissioner shall promptly request from the
State Office of Administrative Hearings a hearing date that is not
earlier than the 11th day nor later than the 30th day after the date
on which the appeal is received.
(c) The commissioner shall give the credit union notice of
the date, time, and place of the hearing.
(d) The filing of an appeal does not suspend the order, and
the order remains in effect until the commission's final
disposition of the appeal.
(e) Not later than the 45th day after a proposal for
decision is received from the State Office of Administrative
Hearings, the commission shall meet to consider the proposal.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.106. FAILURE TO FILE REPLY OR REQUEST
HEARING. (a) If the board does not file a reply to the
conservatorship order as required by Section 126.104 or fails to
request and appear at the hearing provided for by Section 126.105,
the commissioner may dispose of the conservatorship matter as the
commissioner considers appropriate.
(b) The credit union is presumed to have consented to the
commissioner's disposition action and may not contest it.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.107. EXTENSION OF DATE AND TIME FOR HEARING. The
parties may agree to extend the date and time of the hearing.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.108. CONFIDENTIALITY; DISCLOSURE. A
conservatorship order and a copy of a notice, correspondence,
transcript, pleading, or other document relating to the order are
confidential and may be disclosed only in a related legal
proceeding or as otherwise authorized by law. The commissioner may
release to the public information regarding the existence of an
order if the commissioner concludes that release of the information
would enhance effective enforcement of the order.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2003, 78th Leg., ch. 533, § 48, eff. Sept. 1, 2003.
SUBCHAPTER D. ADMINISTRATION OF CONSERVATORSHIP
§ 126.151. CONSERVATOR SUBJECT TO COMMISSION
CONTROL. A conservator shall exercise the powers authorized under
Sections 126.152-126.154 subject to commission rules and under the
commissioner's supervision.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.152. GENERAL POWERS OF CONSERVATOR. The
conservator may:
(1) take possession and control of the books, records,
property, assets, and business of the credit union;
(2) conduct the business and affairs of the credit
union;
(3) sell or assign assets to the conservator; and
(4) perform any other action as necessary in
connection with the conservatorship.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.153. POWERS RELATING TO CLAIMS. The conservator
may:
(1) determine the existence and amount of claims;
(2) allow proved claims of security, preference, or
priority;
(3) disallow unproved claims of security, preference,
or priority; and
(4) settle or release a claim in favor of or against
the credit union.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.154. POWER TO REPUDIATE BURDENSOME
TRANSACTION. The conservator may repudiate a contract or
unexpired lease the conservator considers burdensome to the credit
union.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.155. POWER TO PROTECT, PRESERVE, AND RECOVER
PROPERTY. (a) The conservator may take measures necessary to
preserve, protect, and recover the assets or property of the credit
union, including filing a lawsuit against any person.
(b) An asset or property of the credit union includes a
claim or cause of action that belongs to or that may be asserted by
the credit union.
(c) The conservator may deal with that property in the
capacity of conservator.
(d) The conservator may file, prosecute, or defend a suit
brought by or against the credit union if the conservator considers
it necessary to protect the interested party or property affected
by the suit.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.156. DUTIES OF CONSERVATOR. The conservator
shall:
(1) take actions as directed by the commissioner to
remove the causes and conditions that made the conservatorship
necessary; and
(2) report to the commissioner from time to time
during the conservatorship as required by the commissioner.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.157. TERM OF CONSERVATOR. The conservator shall
serve until the purposes of the conservatorship are accomplished.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.158. TRANSFER OF MANAGEMENT OF REHABILITATED
CREDIT UNION. If the credit union is rehabilitated, the
conservator shall return the management of the credit union to the
board under terms that are reasonable and necessary to prevent a
recurrence of the conditions that created the need for
conservatorship.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.159. COST OF CONSERVATORSHIP. (a) The
commissioner shall determine and approve any reasonable expenses
attributable to the service of a conservator, including costs
incurred by the department and the compensation and expenses of the
conservator and any professional employees appointed to represent
or assist the conservator. The commissioner or an employee of the
department may not receive compensation in addition to salary for
serving as conservator, but the department may receive
reimbursement for the fully allocated personnel cost associated
with the service of the commissioner or the employee as
conservator.
(b) All approved expenses shall be paid by the credit union.
The department has a lien against the assets and money of the credit
union to secure payment of approved expenses. The lien has a higher
priority than any other lien against the credit union.
(c) Notwithstanding this subchapter, the credit union may
retain attorneys and hire other persons to assist the credit union
in contesting or satisfying the requirements of an order of
conservatorship. The commissioner shall authorize the payment of
reasonable fees and expenses for the attorneys and other persons as
expenses of the conservatorship.
(d) The commissioner may waive or defer collection of
assessment or examination fees by the department from the credit
union during a period of conservatorship if the waiver or deferral
would appear to benefit the prospects for rehabilitation. As a
condition of release from conservatorship, the commissioner may
require the rehabilitated credit union to pay or develop a
reasonable plan for payment of any deferred fees.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2003, 78th Leg., ch. 533, § 49, eff. Sept. 1, 2003.
§ 126.160. JURISDICTION AND VENUE. (a) A suit filed
against a credit union while the credit union is under
conservatorship, or against a person in connection with an action
taken or decision made by that person as a conservator of a credit
union, must be brought in Travis County regardless of whether the
credit union remains under conservatorship.
(b) A suit filed by the conservator under Section 126.155
may be brought in Travis County.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2003, 78th Leg., ch. 533, § 50, eff. Sept. 1, 2003.
§ 126.161. EXHAUSTION OF ADMINISTRATIVE
REMEDIES. Administrative remedies must be exhausted before a
court may:
(1) assert jurisdiction over a claim against the
conservator or the credit union; or
(2) restrain or otherwise affect the exercise of the
powers or functions of the conservator.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
SUBCHAPTER E. LIQUIDATION ORDER; INJUNCTION
§ 126.201. LIQUIDATION ORDER; APPOINTMENT OF
LIQUIDATING AGENT. After the commissioner has issued a
conservatorship order and provided an opportunity for hearing, the
commissioner by liquidation order may appoint a liquidating agent
and direct that the credit union be liquidated if:
(1) the board requests issuance of a liquidation order
and liquidation of the credit union;
(2) the credit union otherwise consents to the
liquidation; or
(3) the commissioner:
(A) finds that the closing of the credit union
and the liquidation of the credit union's assets are in the public
interest and the best interest of the credit union's members,
depositors, and creditors; and
(B) determines that the credit union is not in a
condition to continue business and cannot be rehabilitated as
provided by this chapter.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.202. SERVICE OF ORDER. The commissioner shall
serve a liquidation order in the same manner provided for service of
a conservatorship order.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.203. SUIT FOR INJUNCTION. (a) Not later than the
fifth day after the date on which the liquidation order is served, a
credit union that has not requested or consented to a liquidation
order may, if authorized by certified board resolution, sue to
enjoin the commissioner from liquidating the credit union.
(b) The suit must be brought in the district court of the
county in which the credit union's principal office is located.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.204. ACTION PENDING INJUNCTION HEARING. (a) The
court, without notice or hearing, may restrain the commissioner
from liquidating the credit union's assets until after a hearing on
the suit is held.
(b) If the court restrains the commissioner, the court shall
instruct the commissioner to hold the credit union's assets in the
commissioner's possession and control until disposition of the
suit.
(c) With court approval, the commissioner may take any
necessary or proper action to prevent loss or depreciation in the
value of the assets.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.205. HEARING ON INJUNCTION; APPEAL. (a) The
court, as soon as possible, shall hear the suit and shall enter a
judgment enjoining or refusing to enjoin the commissioner from
liquidating the credit union's assets.
(b) The commissioner, regardless of the judgment entered by
the trial court or any supersedeas bond filed, shall retain
possession and control of the credit union's assets until final
disposition of any appeal of the judgment.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.206. NATIONAL CREDIT UNION ADMINISTRATION AS
LIQUIDATING AGENT. (a) The commissioner may tender a credit
union that has been closed for liquidation to the National Credit
Union Administration or its successor as liquidating agent if the
shares and deposits of the credit union were insured by the National
Credit Union Share Insurance Fund or its successor on the date of
closing.
(b) After acceptance of tender of the credit union, the
National Credit Union Administration or its successor, as
liquidating agent of the credit union, shall perform the acts and
duties that it considers necessary or desirable and that are
permitted or required by federal law or this chapter. The National
Credit Union Administration, as liquidating agent, is not subject
to commission control.
(c) If the National Credit Union Share Insurance Fund pays
the insured share and deposit liabilities of a credit union that is
being liquidated under this subchapter, the National Credit Union
Administration is subrogated, to the extent of the payment, to all
rights that the owners of the share or deposit accounts have against
the credit union.
Added by Acts 2003, 78th Leg., ch. 533, § 51, eff. Sept. 1, 2003.
SUBCHAPTER F. ADMINISTRATION OF LIQUIDATION
§ 126.251. PERMISSIBLE ACTIVITIES IN
LIQUIDATION. (a) A credit union in liquidation continues in
existence to discharge debts, collect and distribute assets, and
wind up the credit union's business.
(b) The credit union may sue and be sued to enforce debts and
obligations until its affairs are fully adjusted.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.252. COMPENSATION OF CREDIT UNION EMPLOYEES AND
OFFICERS. (a) This chapter does not prevent compensation of a
salaried employee or officer of a credit union during the credit
union's liquidation.
(b) The compensation is considered an incidental expense of
the liquidation.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.253. LIQUIDATING AGENT SUBJECT TO COMMISSION
CONTROL. The liquidating agent shall perform the duties required
by the following sections subject to commission rules and under the
commissioner's supervision:
(1) Sections 126.254-126.258; and
(2) Sections 126.301, 126.302, 126.304, 126.305, and
126.306.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.254. POSSESSION, CONSOLIDATION, AND DISPOSITION
OF ASSETS. The liquidating agent shall:
(1) receive and take possession of the books, records,
assets, and property of the credit union;
(2) sell, enforce collection of, and liquidate assets
and property; and
(3) sell or assign assets to the liquidating agent
subject to Section 126.353.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 62, § 7.36, eff. Sept. 1, 1999.
§ 126.255. COMPOUND DEBTS. The liquidating agent shall
compound all bad or doubtful debts.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.256. COURT ACTION BY LIQUIDATING AGENT. The
liquidating agent shall:
(1) sue in the name of the liquidating agent or may sue
in the name of the credit union; and
(2) defend an action brought against the liquidating
agent or the credit union.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.257. REPUDIATION OF BURDENSOME TRANSACTIONS. The
liquidating agent shall repudiate a contract or unexpired lease the
liquidating agent considers burdensome to the credit union.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.258. EXECUTION OF DOCUMENTS; OTHER NECESSARY
ACTS. The liquidating agent may execute any document and perform
any other action that:
(1) the liquidating agent considers necessary or
desirable to discharge the liquidating agent's duties; and
(2) may be necessary under this subchapter and
Subchapter G.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.259. JURISDICTION AND VENUE. (a) A suit against
a credit union or its liquidating agent while a liquidation order is
in effect must be brought in Travis County.
(b) The liquidating agent may file suit in Travis County to
preserve, protect, or recover the credit union's assets or
property.
(c) An asset or property of the credit union includes a
claim or cause of action that belongs to or that may be asserted by
the credit union.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.260. EXHAUSTION OF ADMINISTRATIVE
REMEDIES. Except as provided by Subchapter E, administrative
remedies must be exhausted before a court may:
(1) assert jurisdiction over a claim against the
liquidating agent or the credit union; or
(2) restrain or otherwise affect the exercise of the
powers or functions of the liquidating agent.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
SUBCHAPTER G. CLAIMS RELATING TO CREDIT UNION IN LIQUIDATION
§ 126.301. CLAIMS AGAINST CREDIT UNION. The
liquidating agent shall:
(1) determine the existence and amount of claims;
(2) allow proved claims of security, preference, or
priority;
(3) settle or release a claim in favor of or against
the credit union;
(4) disallow unproved claims of security, preference,
or priority; and
(5) make distributions to and pay creditors and
members of the credit union as their interests appear.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.302. NOTICE TO CREDITORS AND MEMBERS. (a) The
liquidating agent shall give notice to creditors and members to
present and prove their claims.
(b) The notice must be published once a week for three
successive weeks in a newspaper of general circulation in each
county in which the credit union maintained an office or branch to
transact business on the date the credit union ceased unrestricted
operations.
(c) When the aggregate book value of the assets and property
of the credit union being liquidated is less than $10,000, the
commissioner shall declare the credit union to be a "no
publication" liquidation, and publication of notice to creditors
and members under this section is not required.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.303. PRIORITY OF CLAIMS. The liquidating agent
shall use the credit union's assets to pay, in the following order:
(1) secured creditors to the extent of the value of
their collateral;
(2) liquidation expenses, including a surety bond if
required;
(3) depositors;
(4) general creditors, including secured creditors to
the extent that their claims exceed the value of their collateral;
and
(5) distributions to members in proportion to the
shares held by each member.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.304. LIQUIDATION DIVIDENDS. (a) The liquidating
agent from time to time shall make a ratable liquidation dividend on
claims that have been:
(1) proved to the satisfaction of the board or the
liquidating agent; or
(2) adjusted by a court.
(b) After the credit union's assets have been liquidated,
the liquidating agent shall make further liquidation dividends on
claims previously proved or adjusted.
(c) For purposes of making a further liquidation dividend
under Subsection (b), the liquidating agent may accept the
statement of an amount due a claimant as shown on the credit union's
books and records instead of a formal proof of claim filed on the
claimant's behalf.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.305. PAYMENT OF CLAIMS IN "NO PUBLICATION"
LIQUIDATION. (a) In a "no publication" liquidation, the
liquidating agent shall determine from all sources available, and
within the limits of the credit union's available money, the
amounts due to creditors and members.
(b) Not earlier than the 61st day after the date on which the
liquidating agent is appointed, the liquidating agent shall
distribute the credit union's money to creditors and members
ratably and as their interests appear.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.306. BARRED CLAIMS. (a) A claim not filed before
the liquidating agent pays the final liquidation dividend is
barred.
(b) A claim rejected by the liquidating agent is barred
unless suit to appeal the liquidating agent's rejection is filed
within three months after the date of notice of rejection.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
SUBCHAPTER H. LIQUIDATING AGENT
§ 126.351. REMOVAL OF LIQUIDATING AGENT. (a) On
finding that the liquidating agent has failed to properly perform
the liquidating agent's duties in a timely and efficient manner or
has violated this subtitle or a rule adopted under this subtitle,
the commissioner by removal order may take possession and control
of the books, records, property, assets, and business of the credit
union.
(b) The removal order must:
(1) remove the liquidating agent and appoint a
successor liquidating agent to complete the liquidation and the
winding up of the credit union's affairs subject to the
commissioner's supervision and control; and
(2) be served on the liquidating agent being removed.
(c) The removal order takes effect immediately on service.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.352. REPLACEMENT OF LIQUIDATING AGENT. The
commissioner shall appoint another liquidating agent on a
liquidating agent's resignation, death, illness, removal,
desertion, or incapacity to function.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.353. CONFLICT OF INTEREST. (a) The liquidating
agent may not acquire an asset of the credit union in liquidation or
purchase a loan of the credit union without the commissioner's
prior written approval.
(b) A liquidating agent may not obtain from the liquidation
compensation or profit for:
(1) direct or indirect personal benefit;
(2) the benefit of a family member of or a person
associated with the liquidating agent; or
(3) the benefit of a business enterprise with which
the liquidating agent is associated, other than the credit union.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.354. COMPENSATION. (a) A liquidating agent is
entitled to receive reasonable compensation during the
liquidation.
(b) The compensation is considered an incidental expense of
the liquidation.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
SUBCHAPTER I. COMPLETION OF LIQUIDATION
§ 126.401. CERTIFICATE OF LIQUIDATION AND
DISTRIBUTION. The commissioner shall prescribe the form of a
certificate to be completed by the liquidating agent attesting that
distribution has been made and liquidation is complete.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.402. CANCELLATION OF CERTIFICATE OF
INCORPORATION. The commissioner, on receipt and approval of the
certificate executed under Section 126.401, shall cancel the credit
union's certificate of incorporation.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.403. WINDING UP OF CREDIT UNION BUSINESS. During
the three-year period following cancellation of the credit union's
certificate of incorporation, the credit union continues to exist
and the liquidating agent, or a successor or other person
designated by the commissioner, may act on the credit union's
behalf to:
(1) pay, satisfy, or discharge an existing liability
or obligation;
(2) collect and distribute assets; and
(3) act as required to adjust and wind up the credit
union's business and affairs, including suing or being sued in the
credit union's corporate name.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
SUBCHAPTER J. VOLUNTARY LIQUIDATION
§ 126.451. BOARD RESOLUTION. Unless the commissioner
has issued a liquidation order, the board may adopt a resolution
recommending voluntary dissolution of the credit union and
directing submission of the question of liquidation to the members
of the credit union.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.452. NOTIFICATION TO COMMISSIONER OF PROPOSED
LIQUIDATION. Not later than the fifth day after the date on which
the board's resolution recommending voluntary dissolution is
adopted, the board's presiding officer shall notify the
commissioner in writing of the reasons for the proposed
liquidation.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.453. NOTICE OF MEETING TO LIQUIDATE. Notice of
the special meeting to consider voluntary liquidation shall be
mailed by first-class mail to each member of the credit union and
the commissioner not later than the 10th day before the date of the
meeting.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.454. CREDIT UNION OPERATIONS BEFORE AND AFTER
VOTE. Immediately after notice under Section 126.453 is mailed,
the commissioner may restrict control or give direction with
respect to the continued business of the credit union pending
consideration of voluntary liquidation by the members. During that
period, no member shall withdraw an aggregate amount in excess of
the share insurance covered by the credit union. No new extensions
of credit shall be funded during the period between the board of
directors' adoption of the resolution recommending voluntary
liquidation and the membership meeting called to consider voluntary
liquidation, except for the issuance of loans fully secured by a
pledge of shares and the funding of outstanding loan commitments
approved before adoption of the resolution. If the vote to dissolve
and liquidate the credit union is affirmative, the credit union may
conduct only business incidental to liquidation.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2003, 78th Leg., ch. 533, § 52, eff. Sept. 1, 2003.
§ 126.455. VOTE ON VOLUNTARY LIQUIDATION. At a special
meeting called to consider the proposed liquidation, a majority of
the credit union members, but not less than a quorum, may vote to
dissolve and liquidate the credit union. Those members casting
votes by mail or at the meeting constitute a quorum for the
transaction of business at the special meeting, notwithstanding a
bylaw provision to the contrary.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2003, 78th Leg., ch. 533, § 53, eff. Sept. 1, 2003.
§ 126.456. NOTICE TO COMMISSIONER OF AFFIRMATIVE VOTE TO
LIQUIDATE. (a) The board's presiding officer or president and
the secretary shall notify the commissioner of the intention to
liquidate not later than the fifth day after the affirmative vote to
dissolve and liquidate.
(b) The person notifying the commissioner must include a
list of the names and addresses of the credit union's officers and
directors with the notice.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 126.457. APPOINTMENT OF LIQUIDATING AGENT. (a) If
the members approve the liquidation, the board shall appoint a
liquidating agent to:
(1) conserve and collect the credit union's assets;
(2) wind up the credit union's affairs;
(3) discharge the credit union's debts;
(4) distribute the credit union's assets; and
(5) take any other action necessary and incidental to
liquidating the credit union.
(b) The National Credit Union Administration or other
insuring organization has the right of first refusal to be
appointed as liquidating agent of any credit union that it insures.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2003, 78th Leg., ch. 533, § 54, eff. Sept. 1, 2003.
§ 126.458. APPLICATION OF LAW TO CREDIT UNION IN
VOLUNTARY LIQUIDATION. A credit union in the process of voluntary
dissolution and liquidation remains subject to this subtitle and
Chapter 15, including provisions for examination by the
commissioner, and the credit union shall furnish reports as
required by the commissioner.
Added by Acts 2003, 78th Leg., ch. 533, § 55, eff. Sept. 1, 2003.
