ARLINGTON, Va.–The state of Texas has a “continuing need” for its Credit Union Department and it should be sustained for another 12 years, according to a report by the commission that advises the Lone Star State legislature on whether state agencies are effective and should remain in operation.
NASCUS President and CEO Lucy Ito issued a statement praising not only for the decision to retain the Texas Credit Union Department as a separate agency within state government, but also for the state level accountability for regulatory agencies.
“As the recommendation by the Texas Sunset Advisory Commission stated, the Texas Credit Union Department efficiently met its regulatory mission over the sunset period and transferring the department to another agency within state government ‘would have no benefit at this time and the current organizational structure is the best option’,” said Ito. “This report also acknowledges the commission’s belief that credit unions are unique financial institutions deserving of their own, independent regulator.
“Additionally, state credit unions welcome the review by the state of its regulatory structure to ensure accountability of the regulator and reassurance that its mission is being carried out.”
A Benefit to the State
In the report issued with the recommendation, the Texas Sunset Advisory Commission asserted that the state “benefits from having a strong credit union industry” and the current organizational structure of the department “is the most efficient and effective approach to regulation at this time.” The commission is charged with periodically evaluating state agencies and departments, and with issuing recommendations for change (if any) to the agency and state legislature.
The Texas Credit Union Department, headed by Commissioner John J. Kolhoff, was created in 1969 and has been an independent agency since. In 2009, the agency earned “self-directed semi-independent (SDSI)” status, authorizing it to set its own fees, budgets, and performance measures independent of the legislative appropriations process, NASCUS reported.
“As required by state law the Sunset Commission examined whether the department’s functions are still needed and whether the current organizational structure is most effective and efficient. It may also develop a package of changes (if any) to bring to the Texas legislature, according to the commission’s website,” NASCUS stated. “Notably, the report states that the Texas legislature has considered nine times over the last four decades moving the Credit Union Department to the state’s Finance Commission (which oversees three agencies supervising banks, savings banks and other types of financial institutions and occupations).”