HonorableJesse James

StateTreasurer of Texas Austin, Texas

Dear Mr. James: Opinion No. WW-lb98
Re: Whether creditunions should report personal property subject to escheat under Article 3272a, V.C.S., or report.their dormant or inactive'hccounts under Article 3272b,V.C.S.
You have requested the opinion-of this office by -askingthe following question,quoted from your letter of November 27, 1962:

Will you please advise this department, by official opinion, whether credit unions, organized either under the laws of the State of Texas or.of the United States, should report personal property subject to escheat under Article'3272a.R.C.S., or report their dormant or inactive accounts under Article 3272b, R.C.S."

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_: Article 3272a,Vernon's Civil Statutes, requires all !'persons" to reportpersonal property in their possession,which is subject to escheat. Section l(a) of that Article defines-"person"-and is as follows: ?(a)'The term 'person'aS'us~ed'in- thi's Articie'

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means~ any individual, corporation,business association, partnership,governmental or political subdivision or officer,public authority, estate, trust,.trustee,
.. officer of a court, liquidator, two (2) or more persons having a joint or common interest?'or any other legal; commercial, governmental or political entity, except banks, savings and loan associations,banking organizations or institutions." (Emphasissupplied.) :~ If credit unions are excluded from Article 3272ai by the provision quoted above, they would then come within the icope of Article 3272b,Vernon's Civil Statutes. Article 3272b, applies specificallyto holders of personalproperty which are.excluded Article 3212a, Section l(a), supra. These.holders are termed "depositories"in Article 3212b, Section l(a), which states:~ in

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.lHonorableJesseJames, Page 2 WW-1498)

“a. The term depository as used in this Article means any bank, savings and loan association, bankink institutionor organization which receives and holds for othersdenosits of monev or its eouivalent in bankingpractice or other personal property in this State, or in other States for residents-last known to have resided in this State." (Emphasis supplied.) This provisionuses the same generic words in defining depositories as Article 3272a. Section l(a). uses in specifyine~those entities excepted from its application. It will-be noted that althoughArticle 3272b, Section l(a)? use'sadditionalwords in describingdepositories, these additional words are merely a clarificationof what the Legislaturemeant by the terms "banking organizations or institutions"in both Article 3272a and 3272b. Obviously!a credit union is not a bank, nor is it a savings and loan associationin any strict sense. The question then becomes whether a credit union is a "banking organizati.onor institution" within themeaning intended by the Legislature in Article 3272a,and Article 3272b. Title 46,V.C.S., authorizes the formation of credit unions and places them under the supervisionof the State Banking Board and the Banking Commissioner. See Articles 2463, 2465, 2484, and 2484b, V.C.S. .~ : Article 2463,provides that tenor more residents of Texasmay forma creditunion and,

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. . .upon approval of the State Banking Boardmay. become a corporation upon complying with such-provisions of the law regulating'state banks as may be applicable to the transactionot business as herein authorized to be aone.~. ." It is therefore apparent that while a credit union is not synonymouswith either a bank or a savings and loan association, the Legislatureconsiders the credit union to be quite similar in nature to these organizationsand deems it desirable that credit unions be placedunder similar supervision and regulation.. Federal credit unions are organized under the provisions of 12 U.S.C.A. 1153,and subject to the provisions of Title 12, Chapter 14, U.S.C.A. The definition of a federal credit~unionin 12 U.S.C.A. 1152, is the same as that found in Article 2461, V.C;S., defining State credit unions. Federal credit unions are under the supervision of the Bureauof Federal Credit Unions in the Department of Health, EducationandWelfare, and the restrictions and limitations imposed by Chapter 14 and administered by that Bureau are very similar to the Texas statutesapplicable to credit unions,Honorable Jesse James, Page'3~' (WW-1498) '

Article 2462,V.C.S.,'provides that "A credit'unionmay receive the savings of its members in payment for shares or as deposits

. . . Itmay lendmoney to itsmembers within the limitsand subject to' the restrictionsprovidedby law.

. q" Article 24'66, V.C.S., provides that "The by-laws of the credit unions shall: prescribe: 6. The conditionson which de osits may.be received and withdrawn." In Article 2474,V.C.S., we*at "Shares may be issued and deposits received in the name of a minor and such sharesand deposits may, in th discretionof the directors, pazent or guardian.

. ." be withdrawn by such minor or by his '~. -... A federal credit union may lenh‘mon~eyto~membek; to the United States of America, or other specified borrowers. It mav receive payments from.itsmembers on shares, and may.,borrow,from any source amounts up to 50% of its paid-in.and unimpaired"capita1and surplus, These powers are provided in 12 U.S.C.A. 1757. Presumably,a federal credit-unionmay borrowmoney by receiving deposits from members or others. Obviously then, credit'unions exercise two of the most important banking functions, i.e., the lending of money and receiving deposits. It.is apparent that the nature of.a federal credit.union is not significantlydifferent from that~of a State credit union, other than being~organizedunderfederal law and subject to federal regulation, : The Legislaturedid not limit the scope of Article 3272a, Section l(a), and 3272b, Section l(a), to the .words"bank" and "savings and loan association,"but included the words institutions." "bankingorganizations and

One of the principal rules of statutory construction, which we consider applicablehere, is found in Texas Bank.6 Trust Co. v. Austin, 115 Tex. 201, 280 S.W. 161, 162 (192F):,.-

"Andyet no rule of a statutory consfruction,.is more universally recognized than that which compels ,the courts to give some effect to every express declaration of legislative intent. The rule is clearly stated in M.K.&T. Ry. Co. of Texas v, Mahaffey, 105 Tex. .39,8;.150 S.W. 881, citing Justice Harlan's Opinion for theUnited States Supreme Court in Montclairv. Ramsdell, 107 U.S. 152, 2 S.Ct; 395, 21 L.Ed. 431, where it.is;said:

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'It is the duty of the court to give effect, if possible to every clause and word of a statute, avoiding, if it may be, any construction which implies that the Legislature was ignorant of the meaning of the language it employed;'"‘.

Honorable Jesse James,Page 4 (WW-1498)

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If the words "bankingorganizations and institutions"are'to have meaning when used in addition to the terms "bank"and "savings and loan association," inArticles 3272a and 32?2b,we believe that credit unions are within the meaning of those words, Therefore, it is our opinion thatboth federal credit unions and State credit unions should complywithArticle 32?2b, and report their dormant and inactive accountspursuant thereto.

SUMMARY C*edit unions,organized under the laws of the State of Texas or of the United States, should report their dormant or inactiveaccounts under Article 32?2b,V.C.S., rather than reportpersonal property subject to escheat under Article 32?2a,V.C.S.
Yours very truly,
WILL WILSON Attorney General of Texas

t Pruett J Assist:% Attorn:y &eralY
JAP:ca APPROVED: OPINION COMMITTEE
W. V. Geppert, Chairman W. 0. Shultz Tom Peterson Malcolm Quick Marietta Payne
REVIEWED FOR THE ATTORNEY GENERAL BY: Leonard Passmore