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 

1607 Main St., Suite 1400 

Dallas, TX. 75201-4709 

2141742-6944 

4624 Alberta Ave.. Suite 160 

El Paso, TX. 79905.2793 

9151533-3464 

1220 Dallas Ave., Suite 202 

HOUS,O~, TX. 77002-6966 

713/650-0666 

606 Broadway, Suite 312 

Lubbock. TX. 79401.3479 

6061747-5236 

4309 N. Tenth. Suite B 

McAllen. TX. 78501.1665 

5121662.4547 

200 Main Plaza, Suite 400 

San Antonio. TX. 76205.2797 

512/225-4191 

An Equal OpportunityI 

Affirmative Action Employer 

Honorable Bill M. White 

Criminal District Attorney 

Bexar County Courthouse 

San Antonio, Texas 78205 

opinion No. NW-534 

Re: Whether a savings and loan 

association or credit union may 

serve as a hospital district 

depository 

Dear Mr. 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, association or individual banker." 

It has previously been determined by this office that the 

statutory terms "banking corporation, association or individual 

banker" do not include savings and loan associations and that without 

further statutory authorization, savings and loan associations do 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 rationale would apply to credit unions 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 requisite authority. 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. 1930 
Honorable Bill M. White - Page 2 (Mw-534) 

You advise that there have 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 county depositories within 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 transacted by a 

commercial bank and a credit union made inapplicable to credit unions 

article 342-903 of the Banking Code, which prohibits a state bank from 

engaging in business in more 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 credit unions or associations are 

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 

operations of a credit union in receiving deposits 

or lending money are substantially different from 

the corresponding operations of a commercial bank, 

and in fact, the functions and 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 

distinguish banks from credit unions and would also distinguish them 

from savings and 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 

requisite authority. 

p. 1931 
Honorable Bill M. 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 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

RICHARD E. GRAY III 

Executive Assistant Attorney General 

Prepared by Jon Bible 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Susan L. Garrison, Chairman 

Jon Bible 

Rick Gilpin 

Patricia Hinojosa 

Jim Moellinger 

Charmaine Rhodes 

Bruce Youngblood 

p. 1932