The Attorney General of Texas
December 22, 1982
MARK WHITE
Attorney General
Honorable Bill M. White opinion No. NW-534
Supreme Court Building Criminal District Attorney
P. 0. Box 12546
Austin, TX. 76711. 2548
Bexar County Courthouse Re: Whether a savings and loan
5121475-2501 San Antonio, Texas 78205 association or credit union may
Telex 9101674-1367 serve as a hospital district
Telecopier 512/475.02&S depository
1607 Main St., Suite 1400
Dear Mr. White:
Dallas, TX. 75201-4709
2141742-6944 You have requested our opinion as to whether a savings and loan
association or credit union may serve as a hospital district
depository.
4624 Alberta Ave.. Suite 160
El Paso, TX. 79905.2793
9151533-3464 Section 10 of article 4494n. V.T.C.S., provides that:
the Board of Hospital Managers of any District
1220 Dallas Ave.,Suite 202 created under this Act... shall select a
HOUS,O~, TX. 77002-6966
713/650-0666
depository for such District in the manner
provided by law for the selection of county
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
4309 N. Tenth. Suite B corporation, association or individual banker."
McAllen. TX. 78501.1665
5121662.4547 It has previously been determined by this office that the
statutory terms "banking corporation, association or individual
200 Main Plaza, Suite 400 banker" do not include savings and loan associations and that without
San Antonio. TX. 76205.2797 further statutory authorization, savings and loan associations do not
512/225-4191 qualify as depositories for political subdivisions. See Attorney
General Opinions MW-272 (1980); H-1013 (1977); H-723 (1975); M-22
An Equal OpportunityI
(1967). The same rationale would apply to credit unions as well.
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."
p. 1930
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 conrmerciolbank.
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.
p. 1931
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
p. 1932