I&. J. M. Falkner          opinionx00.s-136
BssxkingCon~~ia~iaU~
DapartmentofBBankin~       yes Conetrrlction
                                           of Article 2481,
Austin 14, Texas               Vepnon~sOfvil Statutes,regard-
                               ing the deo2aratfonand payment
Dear XrIr.
         Falknert              of div9dend6by credit unf.one.

     YOU ham requested m opinfon of this oTfice conosming the aLtthor-
ity of creditunions,organizedand rsgul.ated under Artioles2461-248413,
yarn6n% Civil Statutas,to dcd.e~ettlvidnnde from their txcnm~ inoome
accumulatedfrom prior years.

        Article 2481, V. C. S.p~ads as follows:

             "At the annual meeting a dividendmay be declaredfrom
        iaoomewhich has been a&zaUy collectedduring the fircal
        gear neat preoediq or during the modha which have elap6ed
        ainos the associationbegan businees,and which remainsafter
        the deductionof all expenfae6, and the amountz-equiradto be
        eet apart e.6a guarantyfund. Such dividendshall be paid on
        all fully paid shares oW56tWdfag at the oloas of the fiscal
        year, but sharesvhioh beoomtfully paid dnrlng t&s year shall
        be entitledonly to a proportionalpart of maid dividend,oal-
        oulatedfrom the first day of the month followingsuch payment
        in full. Dividend6due to a member shall be paid to him in
        Cash or creditedto the accountof pertly paid shares for whiah
        he ha6 aubsorlbed. Dividendsshall not exoeed six par cent (62)
        per annum.e (hkQha6iBadded.)

     !l!his
          office is of the opinionthat creditunionsmay only declare
and pay dividendsfrom lnocmn,less expense6and ten peroent for the
guarantyfund, actuallycollecteddurfngthe fiscal year next preceding.

     A oonstnaotlonshouldnot be adoptedwhich would make any of the
worde in the srtatuts aaemllainglewo. 39 Tex. Jur. 208, Stat&w, Sec. X.2.
To hold that the statutepermitscreditunions to declarea dividendfrom
their past net profitsdisregardsthe statutorywords "from Incomewhich
has been actuallyoolleotedduring the fiscal year next preoeding."
                                                            -,   . .




Mr. J. W. Falkner,     page two (Opinions-186)



     A6 an aid to the proper oonstructiouof this statute,wa may refer
to other provision6of the Aot regulatingoredit union6. Article 2480,
v. 0. s.,reaaBi

          "Immediatelybefore a meeting    of the directors&,&&
     to recommendthe deolaratloaof a divider& the supervisory
     committeeshall make a thoroughaudit of the receipts,dls-
     burskments,income,assetsend liabilitiesof the assooia-
     tion for the fisoal year, and shall make a full report thert-
     on to the dlrnotors. Said report shall be read at the annual
     meeting and shall be filed and preservedwith the reoorisof
     the association.* (Fa~phasir added.)

     It is apparentthat the report referredto in Article 2480 ia esetn-
tial to the proper determinationof the dividend. It is a fiscalyear
report of a creditunion'sbusiness,end this faot reflect.6 that the direc-
tors are relegatedto Ithefisoalyear when a6certainingthe amount of the
dividendto be declared.

     Further,your departm6nt.
                            has oonstruedthe etatute60 as to permit
the declarationof the dividendonly from the incomecollectedduring the
precedingfiaoal year. Thie departmentaloonst-ructionis persuasivein
the constructionof this law. 39 Tex. Jur. 235, statutes,Sec. 126.

     The statutorylanguage*or during the month6 whioh have elppaedsince
the assooiationbagan business"must refer to newly createdcreditunion6
who6e fiscalyear date is reachedbefore the completionof a calendaryear.




                      Artiole2481, V. C. S.,permitsoredit unions
                  to declareand pay dividend6from only the income,
                  less expensesand ten percentfor the guaranty
                  fund, oolleotedduring the fisloal
                                                  year Dext pre-
                  oeding the dividendpayment.

APPROVED:                               Yours very truly,

Mert Starnes                            JORRBENSREPF'RRD

                                         WALL- Id.&!4id
Oil and Gas Division

John Atchison                           Williamw. Guild
Reviewer                                AssistantAttorneyGeneral

WillD. Davis
Reviewer
Mr. J. W. Falkner,page three (OpinionS-186)



Albert M. Morrow
SpecialReviewer

L. W. Gray
SpecialReviewer

IWi6  Grant
First A6616tant

Johu Ben Shepperd
AttorneyGeneral
