AUSTIN, Texas—Recommendations made by the Texas Sunset Commission could have some serious implications for the Texas Credit Union Department, should those recommendations ever be implemented.
The recommendations came in a report on the Self-Directed, Semi-Independent (SDSI) status program of eight state agencies, including the state CU regulator. At present, as a SDSI, the state’s credit union commission sets the budget for the Texas CU Department, rather than the state legislature.
More precisely, the recommendation calls for moving TCUD’s statutory authority out of the Finance Code for the Financial Regulators into the Government Code in the SDSI Act. That move would subject the TCUD to many more provisions not included in the Finance Code, some with potential to cause significant problems, such as prohibiting the ownership of real property.
The report also calls for all penalties paid to financial regulators to be swept from their independent funds and sent to the General Revenue Fund. According to the Cornerstone CU League, that would require the TCUD and other financial regulators to increase their assessments on those they regulate to make up the difference, and that includes credit unions.
The Cornerstone league said it has raised its “concerns” with various state legislators. Earlier, Rep. Richard Raymond (D-Laredo) expressed concern about Section 1.3, saying the recommendation had the effect of being "an indirect tax on credit unions,” according to the league.
According to the Cornerstone league, the recommendations will most likely be drafted into legislation during the upcoming session of the Texas Legislature, which begins Jan. 13, 2015.
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