The Attorney General of Texas 

June 22, 1978 

JOHN L. HILL 

Attorney General 

Honorable Ben T. Reyes 

Chairman 

House Committee on Rules 

State Capitol 

Austin, Texas 787ll 

Dear Representative Reyes: 

Opinion No. II-1192 

Re: Authority of Credit Union 

Commissioner to refuse application for charter. 

You ask whether the Credit Union Commissioner has authority to deny a 

credit union charter on the ground that the applicant’s proposed bylaws 

provide that a certain number of directors shall belong to stated minority 

groups. You inform us that the bylaws are related to the purpose of the 

credit union. 

The procedure for establishing a credit union is set out in articles 2461- 

2.01 through 2461-2.04, V.T.C.S. The incorporators must submit to the 

Commissioners articles of incorporation which state the number of directors 

and the names of the persons who will serve on the initial board of directors. 

V.T.C.S. art. 2461-2.02. In addition, they must file with the Commissioner a 

copy of the bylaws and biographical information concerning each member of 

the original board of directors. V.T.C.S. art. 2461-2.03(a). The Commissioner 

may Investigate the bylaws and biographical information “to determine 

whether the proposed credit union and its Initial board of directors meet the 

requirements of this [Texas Credit Union1 Act and of the regulations 

promulgated under this Act.” V.T.C.S. art. 2461-2.03(c). If the Commissioner 

determines that all statutory requirements and regulations have been 

satisfied, he “shall Issue a certificate of incorporation,” which is conclusive 

evidence of the incorporator’s compliance with the requirements of the 

Credit Union Act. V.T.C.S. arts. 2461-2.03(e), 2461-2.04. If the proposed 

credit union or its initial board of directors does not meet the requirement of 

the Act and regulations, the Commissioner shall deny the application. The 

incorporators may request a hearing following denial. V.T.C.S. art. 2461- 

2.03(d). 

As you state in your request letter, no statute, rule, or regulation 

expressly prohibits the designation of places on the board of directors for 

members of minority ,groups. However, article 2461-3.02 provides in part: 

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Honorable Ben T. Reyes - Page 2 (H-1192) 

At all meetings, each member has only one vote, regardless 

of his shareholdings. No member may vote by proxy. . . . 

Article 2461-5.03(a) provides: 

Directors of the credit union are elected at an annual 

membership meeting, by and from the membership, and in 

the manner provided in the bylaws. 

Article 2461-3.02 establishes a policy of “one member, one vote” for the governance 

of credit unions. The Commissioner has interpreted these provisions as giving each 

member an equal right to seek elective office, without regard to such criteria as 

race or religion, and as barring any bylaw provisions which designate elective 

positions for members of particular groups. On the basis of this interpretation, the 

Commissioner in the past four years has formally denied two written bylaw 

amendments providing designated slots, and has informally denied at least six 

inquiries of this nature. 

The construction of a statute by the agency charged with its administration is 

entitled to weight. Trafficante v. Metropolitan Life Insurance Co., 409 U.S. 205, 

210 (1972); Ex Parte Roloff, 510 S.W.2d 913 (Tex. 1974). See Attorney General 

Opinion H-1084 (1977). In our opinion, the Commissioner’sxterpretation that a 

bylaw which designates certain directorships for members of minority groups does 

not meet the requirements of articles 2461-3.02 and 2461-5.03(a) would be upheld by 

the courts. Thus, we believe the Commissioner may refuse to approve an 

application which includes such bylaws. 

SUMMARY 

The Credit Union Commissioner has authority to deny a 

credit union charter on the ground that the applicant’s 

proposed bylaws require a certain number of directors to 

belong to stated minority groups. 

Attorney General of Texas 

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Honorable Ben T. Reyes - Page 3 (H- 1192 ) 

C. ROBERT HEATH, Chairmah 

Opinion Committee 

jsn 

p. 4798