Texas Governor signs bills benefiting credit unions, vetoes one
FARMERS BRANCH, Texas (6/24/15)--Last week was a mixed bag on the legislative front for Texas credit unions.
Texas Gov. Greg Abbott signed into law a bill authorizing the creation of credit union and bank development districts. However, he vetoed a bill that would have authorized prize-linked saving accounts for credit unions and other financial institutions (Leaguer June 23).
Other legislation signed by Abbott addresses insurance for drivers of transportation network companies (TNC) such as Uber and Lyft, and adds foreclosure protections for primary lienholders of vehicles, motorboats, vessels and outboard motors.
HB 1626 allows credit unions to work with local governments to create credit union development districts. A state or federal credit union interested in establishing branches in low-income areas or in neighborhoods that a local government is interested in developing may work with the local government to establish a credit union development district.
The local government can offer incentives to a credit union to locate a branch in a credit union development district including deposit of public funds, tax abatements, or other incentives permissible by law to encourage participation.
The law goes into effect Sept. 1. The Texas Credit Union Commission is required to promulgate rules to implement the bill by Jan. 1.
In vetoing the prize-linked savings legislation, Abbott indicated that the bill would have violated the constitutional prohibition on raffles for any purpose other than charity. The governor stated that to make this change in the law would have required a constitutional amendment being adopted by the Legislature and the voters in Texas.
The TNC legislation sets out insurance requirements for vehicles used in a TNC and requires that claims payments for repairs of vehicles be paid to the repair facility directly or to the owner and lienholder jointly. HB 1733 goes into effect Jan. 1.
HB 2076 adds protections for primary lienholders of vehicles, motorboats, vessels and outboard motors when there is a foreclosure sale relating to a mechanic’s lien. It improves the disclosures to the primary lienholder, clarifies when a mechanic’s lien is extinguished and prohibits the sale of the mechanic's lien to investors. HB 2076 went into effect June 19.