Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 6 - CREDIT UNION DEPARTMENT › Chapter 91 - CHARTERING, OPERATIONS, MERGERS, LIQUIDATIONS › Subchapter Q - ACCESS TO CONFIDENTIAL INFORMATION › Section 91.8000 - Discovery of Confidential Information

Current through Reg. 49, No. 28; July 12, 2024
(a) Policy. The legislature has determined
				  that certain information is confidential and, with limited exceptions, should
				  not be disclosed. See Texas Finance Code, §
										RSA
				  126.002. Non-disclosure under this section
				  protects the stability of credit unions by preventing disclosures that could
				  adversely impact the institutions. Inappropriate disclosures can result in
				  substantial harm to credit unions and to those persons and entities (including
				  other financial institutions) that have relationships with them. For example,
				  the department may criticize a credit union in an examination report for a
				  financial weakness that does not currently threaten the solvency of the credit
				  union. If improperly disclosed, the criticism can lead to adverse impacts such
				  as the possibility of a "run," short-term liquidity problems, or volatility in
				  costs of funds, which in turn can exacerbate the problem and cause the failure
				  of the credit union. These failures lead to reduced access to credit and
				  greater risk to depositors. Further, since specific loans may be criticized in
				  an examination report, confidentiality of the information protects the
				  financial privacy of borrowers. Finally, protecting confidential information
				  from disclosure facilitates the free exchange of information between the credit
				  union and the regulator, encourages candor, and promotes regulatory
				  responsiveness and effectiveness. Information that does not fall within the
				  meaning of confidential information as defined in this section may be
				  confidential under other definitions and controlled by other laws, and is not
				  subject to this section.
(b)
				  Disclosure prohibited. Pursuant to Finance Code §
										RSA
				  126.002, the department has an absolute
				  privilege against disclosure of its confidential information. Discovery of
				  confidential information from a person subject to §126.002 must comply
				  with subsection (c) of this section. Only a person to whom confidential
				  information has been released pursuant to §126.002 or this rule may
				  disclose that information to another, and only in accordance with that section
				  and this rule.
(c) Discovery of
				  confidential information. A credit union, governmental agency, credit union
				  service organization, service provider, or insuring organization that receives
				  a subpoena or other form of discovery for the release of information that is
				  confidential under §126.002 of the Act shall promptly:
(1) notify the department of the
				  request;
(2) provide the department
				  with a copy of the discovery documentation and, if requested by the department,
				  a copy of the requested information; and
(3) move for a protective order, or its
				  equivalent under applicable rules of procedure. In addition, prior to the
				  release of confidential information, such credit union, governmental agency,
				  credit union service organization, service provider, or insuring organization
				  must obtain a ruling on its motion in accordance with this section.
				  Confidential information may be released only pursuant to a protective order,
				  or its equivalent, in a form consistent with that set out in this section and
				  only if a court with jurisdiction has found that:
(A) the party seeking the information has a
				  substantial need for the information;
(B) the information is directly relevant to
				  the legal dispute in issue; and
(C)
				  the party seeking the information is unable without undue hardship to obtain
				  its substantial equivalent by other means.