FARMERS BRANCH, Texas (12/15/14)--Recommended changes to Texas state law that could have proven costly for state-chartered credit unions were dismissed by state officials last week, thanks to the work of the Cornerstone Credit Union League and state Rep. Richard Raymond (D-Laredo), among others.
Staff members of the Texas Sunset Commission, which oversees a number of autonomous state agencies, had proposed a recommendation to move the statutory authority of all Self-Direct, Semi Independent (SDSI) bodies--including the Texas Credit Union Department--from the finance code for financial regulators to the government code (Leaguer Dec. 12).
In short, the shift would have imposed new regulations--such as prohibiting ownership of real property--that could have been burdensome for the state's credit union regulators.
Further, staff made a recommendation that would have required financial regulators to hand over all revenue generated through penalties to the general revenue fund, which would have forced the Texas Credit Union Department to increase assessments on credit unions across Texas to make up the difference.
Cornerstone raised concerns over the recommendations with Rep. Raymond after the draft report was released, and during the initial hearing on the report last month, Raymond noted that the new rules essentially would have levied an indirect tax on credit unions (Leaguer).
Following the hearing, Raymond and his staff worked with commission members to form an amendment that exempted financial regulators from the fund reallocation, thereby eliminating the financial burden on credit unions.
Raymond also crafted amendments that addressed issues with shifting SDSI authority to the government code.
The league was appreciative of the work. "Rep. Raymond really stepped up for credit unions during the sunset review of the SDSI status," said league CEO Dick Ensweiler. "We appreciate his leadership in addressing these important issues and the support other members of the commission gave to his amendment."
Added Texas Credit Union Association President Jeff Huffman: "Rep. Raymond understood the problems that the recommendations in 1.3 would cause, which allowed us to work with him on amendments to the report to address credit union concerns."
The Sunset Commission adopted the amended recommendations last week, which will likely be drafted into full legislation early next year.
"We will continue to monitor the SDSI issue through the 84th Legislature," Huffman said. "It has been an important tool for the credit union commission, and allows the agency to have the proper funding to fulfill their mission."