A Texas shoot-out is flaring up over plans that could force state-chartered credit unions there under the same regulator as banks.
Lawmakers there are mulling changes to the Texas Credit Union Commission, which must approve all regulations and applications regarding the nonprofit financial institutions. With the commission's charter set to expire this year, the state Legislature must act before its session ends in June.
To the glee of bank trade groups, a state review panel recommended sweeping changes that would assure the Credit Union Commission only four more years of operation and reduce the number of credit union executives on the nine-member board. Also, credit unions would be required to publish merger and new branch notices in the Texas Register.
Credit union groups oppose the changes and are trying to rally the state's 5 million credit union members to protest.
The commission oversees the 275 state-chartered credit unions, which hold $7 billion of assets.
Like all Texas supervisory commissions, the credit union regulator must be reauthorized every 12 years.
Bankers are lobbying Texas lawmakers to merge the credit union regulator with the Finance Commission, which oversees state banks and thrifts.
The Finance Commission also expires in four years, offering a good opportunity to merge the regulators, said Karen Neeley, general counsel for the Independent Bankers Association of Texas.
In addition, the Credit Union Commission has become a cheerleader for the industry, Ms. Neeley said. That's because two-thirds of the commission's members are credit union executives, she said.
"It's a recipe for disaster," she said.
Credit union representatives said the changes would hurt their industry. Only credit union executives are knowledgeable about the industry's unique non-profit mission, said Terry Young, spokesman for the Texas Credit Union League. Replacing them with representatives of the general public would spell bad news for credit union members.
An independent commission has served the credit union industry well, Mr. Young added.
"Since the commission's inception 29 years ago, there has never been a problem with Texas credit unions," he said. "There has been no money lost, no scandals, no black marks on the credit union movement."