Court Opinion

ID: 4132188
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:23:59.217487+00
Date Added: 2024-06-11T14:33:52.280878
License: Public Domain

The Attorney                General of Texas
                                             June        22,   1978
JOHN L. HILL
Attorney General

                   Honorable Ben T. Reyes                             Opinion No. II-1192
                   Chairman
                   House Committee on Rules                           Re: Authority of Credit Union
                   State Capitol                                      Commissioner to refuse applica-
                   Austin, Texas 787ll                                tion for charter.

                   Dear Representative   Reyes:

                          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:

                                                    p.     4796
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

                                          p.   4797
Honorable Ben T. Reyes   -   Page 3    (H- 1192 )

C. ROBERT HEATH, Chairmah
Opinion Committee

jsn

                                      p.   4798