Untitled Texas Attorney General Opinion ( 1978 )

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