1. (a) Purchase, lease and sale of property.

   1. (1) Fixed assets. For the purposes of this rule, the term means real property, premises, and furniture, fixtures and equipment as defined herein. Premises include real property with any improvements or leasehold interest where the credit union transacts or intends to transact business. Furniture, fixtures and equipment includes all office furnishings (e.g. tables, chairs, desks, file cabinets, curtains, drapes, rugs, etc.), office machines, word processing equipment, computer hardware and software, automated terminals, and heating and cooling equipment. The term does not extend to any real property which may be conveyed to the credit union in satisfaction of debts previously contracted in the course of business, nor to such real estate as the credit union shall purchase at sale on judgements, decrees, mortgage or deed of trust foreclosures under A security agreement held by the credit union, but a credit union shall not bid at such sale a larger amount than is necessary to satisfy the debts and costs owed the credit union.
   2. (2) Limitations. A credit union may purchase fixed assets or enter into a contract for the purchase or lease of fixed assets primarily for its own use in conducting business if the aggregate of all such investments does not exceed five percent of total assets.
   3. (3) Restrictions. A credit union shall not purchase real estate (land or buildings) for the principal purpose of engaging in real estate rentals or speculation.

   4. (4) Transactions with insiders. Without the prior approval of a disinterested majority of the board of directors recorded in the minutes or, if a disinterested majority cannot be obtained, the prior written approval of the commissioner, a credit union may not directly or indirectly:

      1. (A) sell or lease an asset of the credit union to a director, committee member, or senior executive staff; or
      2. (B) purchase or lease an asset in which a director, committee member, or senior executive staff has an interest.
   5. (5) Use requirement. If real property or leasehold interest is acquired for future expansion, the credit union must partially satisfy the "primarily for its own use in conducting business" requirement within five years after the credit union makes the investment.
   6. (6) Waiver. The commissioner may, upon written application, waive or modify any of the limitations or restrictions placed on the investment of fixed assets.

   7. (7) Written application. A credit union shall submit such statements and reports as the commissioner may, in his discretion, require in support of a waiver or modification of the limits imposed upon the investment of fixed assets. Such reports and statements shall include but not be limited to:

      1. (A) a description of the proposal in terms of cost, usage, location and method of financing;
      2. (B) a statement of the economic advantage and disadvantages relating to the proposed investment; and
      3. (C) current and past financial data of the credit union.
2. (b) Closing of an office. A credit union may permanently close any of its established offices. The credit union shall provide notice to its members and the department no later than 60 days prior to the proposed closing. The credit union shall also post a notice to members in a conspicuous manner on the premises of the effected office at least 30 days prior to the proposed closing.
3. (c) Credit union service contracts. A credit union may enter into contractual agreements with one or more credit unions or other organizations for the purpose of engaging in authorized activities and/or services that relate to the daily operations of the credit union. Agreements must be in writing and shall advise all parties that the activities and services may be subject to commission rules and examination by the commissioner to the extent permitted by law.

4. (d) Electronic notification. A credit union may, in accordance with written board policy, satisfy any "written" notification requirement of the Act, commission rules, or the credit union's bylaws by electronic means provided:

   1. (1) the member agrees in writing or electronically to use electronic instead of hard-copy notifications;
   2. (2) the member has the ability to print or download the notification;
   3. (3) evidence of the electronic notification is retained in accordance with §91.405 (relating to Records Retention); and
   4. (4) both the credit union and the member have the capacity to receive electronic messages.
5. (e) User fee for shared electronic terminal. A credit union that owns an electronic terminal that is connected to a shared network may impose a fee on a non-member for the use of that terminal if imposition of the fee is disclosed in compliance with applicable federal law.

Source Note:The provisions of this §91.401 adopted to be effective May 11, 2000, 25 TexReg 3948.