*1 The Attorney General of Texas December 22, 1982
MARK WHITE
Attorney General
Honorable Bill M. White opinion No. NW-534 Supreme P. 0. Box 12546 Telex 5121475-2501 Austin, Telecopier 9101674-1367 TX. 76711. Court Building 512/475.02&S [2548] Bexar County Courthouse Criminal District Attorney San Antonio, Texas 78205 association or credit union may Re: Whether a savings and loan depository serve as a hospital district Dear Mr. White: 1607 Main St., Suite 1400 Dallas, TX. 75201-4709 You have requested our opinion as to whether a savings and loan 2141742-6944 association or credit union may serve as a hospital district 4624 Alberta Ave.. Suite El Paso, TX. 79905.2793 9151533-3464 [160] depository. Section 10 of article 4494n. V.T.C.S., provides that: [1220] Dallas Ave., Suite 202 HOUS,O~, 713/650-0666 TX. 77002-6966 depository for such District in the manner provided by law for the selection of county the Board of Hospital Managers of any District created under this Act... shall select a
depositories.... 606 Broadway, Suite 312 Lubbock. TX. 79401.3479 Articles 2544 through 2558a, V.T.C.S., govern the procedure for 6061747-5236 counties to establish a depository or depositories for county money.
Article 2544 and other statutes specifically use the terms "banking corporation, association or individual banker." 4309 N. Tenth. Suite B McAllen. TX. 78501.1665 5121662.4547 It has previously been determined by this office that the
statutory terms "banking corporation, association or individual banker" do not include savings and loan associations and that without 200 Main Plaza, Suite 400 further statutory authorization, savings and loan associations do not San Antonio. TX. 76205.2797 qualify as depositories for political subdivisions. See Attorney 512/225-4191 General Opinions MW-272 (1980); H-1013 (1977); H-723 (1975); M-22 (1967). The same rationale would apply to credit unions as well. An Equal OpportunityI Affirmative Action Employer In Attorney General Opinion H-723, this office concluded that
section 6.14 of article 852a, V.T.C.S., the Texas Savings and Loan Act, does not furnish the requisite authority. That opinion said that this statute does not authorize political subdivisions "to invest in savings accounts of savings and loan associations without regard to legal restrictions found elsewhere upon the disposition of public monies."
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Honorable Bill M. White - Page 2 (Mw-534)
You advise that there have been recent changes in laws governing savings and loan associations and credit unions, see, e.g., 7 T.A.C. sections 67.12, 67.13 (1981), section 91.95(c) (1980), and suggest that these changes might affect prior opinions of this office regarding the eligibility of such associations and credit unions to serve as county depositories. See, e.g., Attorney General Opinions M-22 (1967); V-120 (1947). Although these changes provide the authority for credit unions and savings and loan associations to perform some of the same functions as banks, this alone does not provide the previously mentioned requisite statutory authority that would permit them to serve as county depositories within the ambit of articles 2544 through 2558a, V.T.C.S.
Indeed, in Attorney General Opinion WW-838-A (1961), this office concluded that the basic differences in the business transacted by a commercial bank and a credit union made inapplicable to credit unions article 342-903 of the Banking Code, which prohibits a state bank from engaging in business in more than one place.
In reaching this conclusion, this office stated: [Although] credit unions exercise two of the most important functions of banking, the receiving of deposits and the lending of money, it must be recognized that credit unions or associations are not ‘banks’ as that term is defined in the Texas Banking Code of 1943... or as that term is commonly used and understood. Furthermore, the operations of a credit union in receiving deposits or lending money are substantially different from the corresponding operations of a commercial bank, and in fact, the functions and underlying concept of a credit union are basically different from those of a conrmerciol bank.
The opinion goes on to detail other basic functions of banking that distinguish banks from credit unions and would also distinguish them from savings and loan associations.
It is our conclusion that a credit union or savings and loan association may not serve as a county depository without specific statutory authority. The statutory terms "banking corporation, association or individual banker" do not embrace credit unions or savings and loan associations and therefore do not furnish the requisite authority.
Honorable Bill M. White - Page 3 (MW-534)
SUMMARY A hospital district is not authorized to invest its funds in a savings and loan association or credit union without specific statutory authorization.
MARK WHITE Attorney General of Texas JOHN W. FAINTER, JR.
First Assistant Attorney General
RICHARD E. GRAY III
Executive Assistant Attorney General
Prepared by Jon Bible
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Susan L. Garrison, Chairman
Jon Bible
Rick Gilpin
Patricia Hinojosa
Jim Moellinger
Charmaine Rhodes
Bruce Youngblood