                                          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
