# The Attorney General of Texas

December 22, 1982 MARK WHITE Attorney General

Supreme Court Building P. 0. Box 12546 Austin, TX. 76711. 2548 5121475-2501 Telex 9101674-1367 Telecopier 512/475.02&S

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An Equal OpportunityI Affirmative Action Employer HonorableBill M. White CriminalDistrictAttorney Bexar County Courthouse SanAntonio, Texas 78205 opinionNo.NW-534
Re: Whether a savings and loan associationor creditunionmay serve as a hospital district depository
DearMr. White: You have requested our opinion as to whether a savings and loan association or credit union may serve as a hospital district depository. Section 10 of article 4494n. V.T.C.S.,provides that: the Board of Hospital Managers of any District created under this Act... shall select a depository for such District in the manner provided by law for the selection of county depositories.... Articles 2544 through 2558a, V.T.C.S., govern the procedure for counties to establish a depository or depositories for county money. Article 2544 and other statutes specifically use the terms "banking corporation,associationor individualbanker." It has previously been determined by this office that the statutory terms "banking corporation, association or individual banker" do not include savings and loan associationsand thatwithout further statutoryauthorization,savings and loan associationsdo not qualify as depositories for political subdivisions. See Attorney General Opinions MW-272 (1980); H-1013 (1977); H-723 (1975); M-22 (1967). The same rationalewould apply to creditunions as well.
In Attorney General Opinion H-723, this office concluded that section 6.14 of article 852a, V.T.C.S., the Texas Savings and Loan Act, does not furnish the requisiteauthority. That opinion said that this statute does not authorize political subdivisions "to invest in savings accounts of savings and loan associations without regard to legal restrictions found elsewhere upon the disposition of public monies."

p. 1930Honorable BillM. White - Page 2 (Mw-534)

You advise that therehave been recent changes in laws governing savings and loan associations and credit unions, see, e.g., 7 T.A.C. sections 67.12, 67.13 (1981), section 91.95(c) (1980), and suggest that these changes might affect prior opinions of this office regarding the eligibility of such associations and credit unions to serve as county depositories. See, e.g., Attorney General Opinions M-22 (1967); V-120 (1947). Although these changes provide the authority for credit unions and savings and loan associations to perform some of the same functions as banks, this alone does not provide the previously mentioned requisite statutory authority that would permit them to serve as countydepositorieswithin the ambit of articles 2544 through 2558a,V.T.C.S. Indeed, in Attorney General Opinion WW-838-A (1961), this office concluded that the basic differences in the business transactedby a commercialbank and a credit union made inapplicableto creditunions article 342-903 of the Banking Code,which prohibitsa statebank from engaging inbusiness inmore than one place.
In reaching this conclusion,this office stated: [Although]credit unions exercise two of the most important functions of banking, the receiving of deposits and the lending of money, it must be recognized that creditunions or associationsare not ‘banks’ as that term is defined in the Texas Banking Code of 1943... or as that term is commonly used and understood. Furthermore, the operationsof a creditunion in receivingdeposits or lendingmoney are substantiallydifferent from the correspondingoperationsof a commercialbank, and in fact, the functionsand underlying concept of a credit union are basically different from those of a conrmerciol bank. The opinion goes on to detail other basic functions of banking that distinguishbanks from credit unions and would also distinguish them from savingsand loan associations.
It is our conclusion that a credit union or savings and loan association may not serve as a county depository without specific statutory authority. The statutory terms "banking corporation, association or individual banker" do not embrace credit unions or savings and loan associations and therefore do not furnish the requisiteauthority.

p. 1931HonorableBillM. White - Page 3 (MW-534)

SUMMARY
A hospital district is not authorized to invest its funds in a savings and loan association or credit union without specific statutory authorization.

MARK WHITE Attorney General of Texas JOHNW. FAINTER,JR. FirstAssistantAttorney General RICHARD E. GRAY III ExecutiveAssistantAttorney General Preparedby Jon Bible AssistantAttorney General APPROVED: OPINION COMMITTEE Susan L. Garrison,Chairman Jon Bible Rick Gilpin PatriciaHinojosa Jim Moellinger CharmaineRhodes BruceYoungblood

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