(June 11, 2021) With the signing by the governor of legislation giving the Texas Credit Union Department 12 more years to serve the state’s credit unions and members, the agency’s future for the next dozen years is set.
The state legislature adopted the legislation late last month; Gov. Greg Abbott (R) signed it late last week. The law becomes effective Sept. 1.
In Texas, state agencies are subject to periodic review by the “Sunset Commission,” which in the case of the TCUD is every 12 years. The commission then makes a recommendation to the legislature for continuation of the agency.
In December, the commission found that the state has a “continuing need” for the state credit union department, and that it should be sustained for another 12 years. The commission’s report also said the state “benefits from having a strong credit union industry” and the current organizational structure of the department “is the most efficient and effective approach to regulation at this time.”
In addition to extending the operations of the department, the legislation (among other things) also: requires the department to track more comprehensive complaint and enforcement data to support analysis and guide regulatory activities; and mandates development of a process by the department for notifying and issuing guidance for credit unions about federal statutory or regulatory changes that take effect immediately and conflict with state law.
The TCUD (headed by Commissioner John J. Kolhoff) was created in 1969 and has been an independent agency since. In 2009, the agency earned “self-directed semi-independent (SDSI)” status, authorizing it to set its own fees, budgets, and performance measures independent of the legislative appropriations process. Over the past four decades, the commission has considered nine times folding the TCUD into the state’s Finance Commission (which oversees three agencies supervising banks, savings banks and other types of financial institutions and occupations). Each time, the Sunset Commission has recommended maintaining a separate credit union regulator with its own credit union commission.
“My thanks to the Sunset Advisory Commission, the incredible efforts of our staff, the leadership of the Credit Union Commission and the industry for making this possible; we are stronger together,” said Commissioner Kolhoff. “Thanks also to NASCUS for its support, especially bringing together state and federal agencies to ensure our programs remain efficient, effective, and continue to evolve.”
NASCUS CEO Lucy Ito thanked the state legislature for its decision, and congratulated Commissioner Kolhoff. “The TCUD, and Texas credit unions — through advocacy by the Cornerstone Credit Union League — did a phenomenal job in preparing for and navigating the sunset review process,” Ito said. “We are fortunate to have a system where regulators, credit unions, and leagues can work together to provide an environment with business practices that put members first.”