1. (a) A credit union by itself, or with other parties, may organize, invest in or make loans to a CUSO which shall be adequately capitalized and which shall be structured and operated as an entity separate and distinct from the credit union. A credit union shall provide written notice to the commissioner at least 15 days prior to making such investment or loans. The credit union shall provide any additional information reasonably requested by the commissioner.
2. (b) An investment in any one CUSO shall not exceed the lesser of 5.0% of the credit union's total assets or the total amount of its reserves and undivided earnings. Loans to any one CUSO shall not exceed the aggregate limit for loans to one member specified by the Texas Finance Code §124.003 or a rule adopted under that section. The total aggregate amount of all investments in all CUSOs by any one credit union shall not exceed 10% of the total assets of the credit union, unless the credit union receives the prior written approval of the commissioner.

3. (c) No credit union may invest in or make loans to a CUSO:

   1. (1) if any officer, director, committee member, or employee of such credit union or any member of the immediate family of such persons owns or makes an investment in the CUSO;
   2. (2) unless the organization is structured as a corporation, limited liability company, registered limited liability partnership, or limited partnership and the credit union has obtained a written legal opinion that the CUSO is established in a manner that will limit the credit union's potential exposure to not more than the loss of funds invested in or loaned to such CUSO;
   3. (3) if the CUSO provides services or engages in activities not described in this rule or which have not been approved by the commissioner in writing; or
   4. (4) unless prior to investing in or making a loan to a CUSO the credit union obtains a written agreement which requires the CUSO to follow GAAP, render financial statements to the credit union at least quarterly, and provide the department, or its representatives, complete access to the CUSO's books and records at reasonable times without undue interference with the business affairs of the CUSO.

4. (d) Permissive activities and services of a CUSO include, but are not limited to:

   1. (1) operational services such as credit and debit card services, cash services, wire transfers, audits, ATM and other EFT services, share draft and check processing and related services, shared service center operations, electronic data processing, development, sale, lease, or servicing of computer hardware and software, loan related services, and any other services or activity related to the operations of credit unions;
   2. (2) financial services such as financial planning and counseling, securities brokerage and dealer activities, estate planning, tax services, insurance services, administering retirement, deferred compensation, and other employee or business benefit plans, or any other service deemed economically beneficial or attractive to the members of the participating credit union or credit unions; or
   3. (3) any other service or activity approved by the commissioner.
5. (e) Senior management staff of a credit union may receive salary, commission, investment income, or other income or compensation from any CUSO affiliated with their credit union provided the individual provides fair and full disclosure initially and annually thereafter to the boards of participating credit unions.
6. (f) If a CUSO is requested by the commissioner to make its books and records available for inspection and examination, the CUSO shall pay a supplemental examination fee as prescribed in §97.113(d) of this title (relating to Supplemental Examinations). The commissioner may waive the supplemental examination fee or reduce the fee as he deems appropriate.
7. (g) The requirements of this rule apply only to investments or loans made after the effective date of this rule.

Source Note:The provisions of this §91.801 adopted to be effective March 8, 1984, 9 TexReg 1155; amended to be effective August 7, 1984, 9 TexReg 4028; amended to be effective March 8, 1994, 19 TexReg 1327; amended to be effective May 13, 1999, 24 TexReg 3473.