By:  Oliveira                                          H.B. No. 775
       73R1691 LJD-F
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the organization and regulation of state savings banks;
    1-3  providing penalties.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  The Texas Savings Bank Act is enacted to read as
    1-6  follows:
    1-7                    CHAPTER 1.  GENERAL PROVISIONS
    1-8        Sec. 1.01.  SHORT TITLE.  This Act may be cited as the "Texas
    1-9  Savings Bank Act."
   1-10        Sec. 1.02.  PURPOSE.  The purpose of this Act is to
   1-11  facilitate the delivery of credit for home ownership and family and
   1-12  community purposes, increase the savings base of the state, and
   1-13  provide local control of the means of finance and the accumulation
   1-14  of capital through the state chartering of depository institutions
   1-15  known as savings banks, and to provide savings bank regulation that
   1-16  is readily responsive to changes in local economic conditions.
   1-17        Sec. 1.03.  DEFINITIONS.  In this Act:
   1-18              (1)  "Administrative procedure act" means the
   1-19  Administrative Procedure and Texas Register Act (Article 6252-13a,
   1-20  Vernon's Texas Civil Statutes).
   1-21              (2)  "Appropriate banking agency"
   1-22                    (A)  means:
   1-23                          (i)  with respect to a Texas-chartered
   1-24  savings bank, the Savings and Loan Department of Texas;
    2-1                          (ii)  with respect to a federal savings
    2-2  bank, the Office of Thrift Supervision;
    2-3                          (iii)  with respect to a Texas-chartered
    2-4  savings and loan association, the Savings and Loan Department of
    2-5  Texas;
    2-6                          (iv)  with respect to a federal savings and
    2-7  loan association, the Office of Thrift Supervision;
    2-8                          (v)  with respect to a Texas-chartered
    2-9  bank, the Banking Department of Texas; and
   2-10                          (vi)  with respect to a national bank, the
   2-11  Office of the Comptroller of the Currency; and
   2-12                    (B)  includes:
   2-13                          (i)  in all cases where a state bank is a
   2-14  member of the Federal Reserve System, the board of governors of the
   2-15  Federal Reserve System;
   2-16                          (ii)  in all cases where required by the
   2-17  Federal Deposit Insurance Act (12 U.S.C. Section 1811 et seq.), the
   2-18  Federal Deposit Insurance Corporation; and
   2-19                          (iii)  in all cases, the successors of the
   2-20  state and federal agencies specified in this subdivision.
   2-21              (3)  "Capital stock" means, with respect to a capital
   2-22  stock savings bank, the units into which the proprietary interest
   2-23  in the savings bank is divided.
   2-24              (4)  "Capital stock savings bank" means a savings bank
   2-25  authorized to issue capital stock.
   2-26              (5)  "Commissioner" means the savings and loan
   2-27  commissioner.
    3-1              (6)  "Company" means a corporation, partnership, trust,
    3-2  joint-stock company, association, unincorporated organization, or
    3-3  other legal entity, or a combination of any of those entities
    3-4  acting in concert.
    3-5              (7)  "Control" means the possession of the power to
    3-6  direct or cause the direction of the management and policies of a
    3-7  savings bank by either direct or indirect means.  An individual or
    3-8  company is deemed to have control if, individually or acting in
    3-9  concert with others, the individual or company directly or
   3-10  indirectly owns, controls, holds with the power to vote, or holds
   3-11  proxies representing, 25 percent or more of the voting stock or
   3-12  voting rights of a savings bank.
   3-13              (8)  "Deposit account" means a savings account,
   3-14  certificate of deposit, withdrawable deposit, demand deposit
   3-15  account, checking account, or any other appropriate term referring
   3-16  to the amount of money a savings bank owes to an account holder as
   3-17  a result of the deposit of funds in the savings bank.
   3-18              (9)  "Deposit liability" means the aggregate amount of
   3-19  money owed to deposit account holders of a savings bank at any one
   3-20  particular time, as shown by the books of the savings bank and
   3-21  after applying any legal or contractual reductions.
   3-22              (10)  "Domestic savings bank" means a savings bank
   3-23  organized under the laws of this state and subject to this Act.
   3-24              (11)  "Earnings on account" means either interest
   3-25  contractually payable or dividends declared payable to holders of
   3-26  deposit accounts in a savings bank.
   3-27              (12)  "Federal Deposit Insurance Corporation" includes
    4-1  its successor or successors.
    4-2              (13)  "Federal savings bank" means a savings bank
    4-3  incorporated under the laws of the United States whose principal
    4-4  business office is located in this state.
    4-5              (14)  "Finance commission" means The Finance Commission
    4-6  of Texas.
    4-7              (15)  "Financial institution" means a state or federal
    4-8  savings bank, a state or federal savings and loan association, or a
    4-9  state or national bank.
   4-10              (16)  "Foreign savings bank" means a savings bank whose
   4-11  principal office is located outside this state and that has been
   4-12  organized under the laws of a state or territory of the United
   4-13  States other than this state or under the laws of the United
   4-14  States.
   4-15              (17)  "Holding company" means any company that directly
   4-16  or indirectly controls a savings bank or controls any other company
   4-17  that is a savings bank holding company.
   4-18              (18)  "Loss reserves" means the aggregate amount of the
   4-19  reserves allocated by a savings bank for the sole purpose of
   4-20  absorbing losses.
   4-21              (19)  "Member" means, with respect to a mutual savings
   4-22  bank, a person holding an account with the savings bank, assuming
   4-23  or obligated on a loan in which the savings bank has an interest,
   4-24  or owning property that secures a loan in which the savings bank
   4-25  has an interest.
   4-26              (20)  "Mutual savings bank" means a savings bank not
   4-27  authorized to issue capital stock.
    5-1              (21)  "Regulatory capital" means a common stockholders'
    5-2  equity, including retained earnings, noncumulative perpetual
    5-3  preferred stock and related earnings, minority interests in the
    5-4  equity accounts of fully consolidated subsidiaries, and other
    5-5  elements as established by the rules of the commissioner and the
    5-6  finance commission.
    5-7              (22)  "Savings bank" means an institution organized
    5-8  under or subject to this Act.
    5-9              (23)  "Stockholder" means the owner of one or more
   5-10  shares of a savings bank's capital stock.
   5-11              (24)  "Subsidiary" means a company that is controlled
   5-12  by a savings bank or by a company that is controlled, directly or
   5-13  indirectly, by a savings bank.  For purposes of this subdivision, a
   5-14  savings bank is considered to control a company if the savings bank
   5-15  directly or indirectly or acting in concert with one or more other
   5-16  individuals or entities or through one or more subsidiaries:
   5-17                    (A)  owns, controls, or holds with the power to
   5-18  vote, or holds proxies representing, more than 25 percent of the
   5-19  voting stock or voting rights of the company;
   5-20                    (B)  controls in any manner the election of a
   5-21  majority of the directors of the company; or
   5-22                    (C)  is a general partner in or has contributed
   5-23  more than 25 percent of the equity capital of the company.
   5-24              (25)  "Surplus" means the aggregate amount of the
   5-25  undistributed earnings of a savings bank held as undivided profits
   5-26  or unallocated reserves for general corporate purposes and any
   5-27  paid-in surplus held by the savings bank.
    6-1              (26)  "Surviving financial institution" means the
    6-2  entity that is the result of a merger or consolidation of a foreign
    6-3  savings bank and a domestic savings bank or of a merger or
    6-4  consolidation of a savings bank and another financial institution.
    6-5              (27)  "Unpursued cause of action" means an existing
    6-6  claim belonging to a savings bank on which a suit or other
    6-7  effective action has not been filed or taken by or on behalf of the
    6-8  savings bank before the expiration of six months after the cause of
    6-9  action arose, involving:
   6-10                    (A)  a claim for monetary damages or recovery of
   6-11  property;
   6-12                    (B)  a claim for equitable relief;
   6-13                    (C)  a cause of action for breach of contract or
   6-14  for enforcement of a contract; or
   6-15                    (D)  a claim on a fidelity bond.
   6-16              (28)  "Unsafe and unsound practices" means, with
   6-17  respect to the operation of a savings bank, an action or inaction
   6-18  that is likely to cause insolvency or substantial dissipation of
   6-19  assets or earnings or to otherwise reduce the ability of the
   6-20  savings bank to timely satisfy withdrawal requests of deposit
   6-21  account holders.
   6-22              (29)  "Withdrawal value of deposit account" means the
   6-23  net amount of money, after the application of any legal or
   6-24  contractual reduction, that may be withdrawn at any particular time
   6-25  by an account holder from a deposit account.
   6-26        Sec. 1.04.  EFFECT OF HEADINGS.  The division of this Act
   6-27  into chapters and sections and the captions of chapters and
    7-1  sections are for convenience and have no legal effect in construing
    7-2  the provisions of this Act.
    7-3              CHAPTER 2.  INCORPORATION AND ORGANIZATION
    7-4        Sec. 2.01.  APPLICATION OF LAWS RELATING TO GENERAL BUSINESS
    7-5  CORPORATIONS.  The Texas Business Corporation Act, the Texas
    7-6  Miscellaneous Corporation Laws Act (Article 1302-1.01 et seq.,
    7-7  Vernon's Texas Civil Statutes), and other law relating to general
    7-8  business corporations are applicable to a savings bank to the
    7-9  extent not inconsistent with this Act or the proper business of a
   7-10  savings bank.
   7-11        Sec. 2.02.  FEDERAL INSURANCE OF DEPOSIT ACCOUNTS REQUIRED.
   7-12  A savings bank must obtain and maintain federal insurance of
   7-13  deposit accounts through an insurance corporation created by an Act
   7-14  of the United States Congress.
   7-15        Sec. 2.03.  STATUS AS INTERNAL REVENUE SERVICE THRIFT
   7-16  INSTITUTION.  A savings bank must qualify for and maintain the
   7-17  asset test of Section 7701(a)(19) of the Internal Revenue Code of
   7-18  1986 (26 U.S.C. Section 7701(a)(19)).
   7-19        Sec. 2.04.  INCORPORATION AND INITIAL CAPITAL.  A savings
   7-20  bank may be organized on the application of five or more adult
   7-21  residents of this state.  The minimum initial capital of a savings
   7-22  bank shall be fixed by rules adopted by the commissioner and the
   7-23  finance commission, but the amount may not be less than the amount
   7-24  required to obtain insurance of deposit accounts by the Federal
   7-25  Deposit Insurance Corporation or the amount required of national
   7-26  banks, whichever is greater.  The initial capital shall be paid in
   7-27  cash before the savings bank may begin business.
    8-1        Sec. 2.05.  CONTENTS OF APPLICATION.  (a)  An application to
    8-2  incorporate a savings bank must be in a form specified by the
    8-3  commissioner, signed by each incorporator, and submitted to the
    8-4  commissioner with the filing fee.  An application consists of:
    8-5              (1)  two copies of the proposed articles of
    8-6  incorporation setting forth the name of the savings bank, the site
    8-7  of the principal office, and the names and addresses of the initial
    8-8  directors;
    8-9              (2)  two copies of the bylaws under which the savings
   8-10  bank proposes to operate;
   8-11              (3)  statements, exhibits, maps, and other data
   8-12  sufficiently detailed and comprehensive to enable the commissioner
   8-13  to make findings under Section 2.11 of this Act;
   8-14              (4)  other information relating to the proposed savings
   8-15  bank and its operation required by the rules of the commissioner
   8-16  and the finance commission; and
   8-17              (5)  financial information about the applicants,
   8-18  incorporators, directors, or stockholders required by the rules of
   8-19  the commissioner and the finance commission.
   8-20        (b)  Financial information submitted under Subsection (a) of
   8-21  this section is confidential and not subject to public disclosure
   8-22  unless the commissioner finds that the disclosure is necessary and
   8-23  in the public interest.
   8-24        (c)  If an application is to incorporate a capital stock
   8-25  savings bank, the articles of incorporation must set out:
   8-26              (1)  the aggregate number of shares of common stock
   8-27  that the savings bank may issue;
    9-1              (2)  the par value of each share or a statement that
    9-2  the shares are without par value;
    9-3              (3)  a statement of whether the savings bank may issue
    9-4  preferred stock;
    9-5              (4)  the amount of stock that has been subscribed and
    9-6  will be paid for before the savings bank begins business; and
    9-7              (5)  a separate statement of the name and address of
    9-8  each subscriber, the amount subscribed by each subscriber, and the
    9-9  amount of paid-in surplus with which the savings bank will begin
   9-10  business.
   9-11        (d)  If an application is to incorporate a mutual savings
   9-12  bank, the articles of incorporation must include a statement of the
   9-13  amount of deposit liability of the savings bank and the amount of
   9-14  the expense fund with which the savings bank will begin business.
   9-15        (e)  The bylaws of the proposed savings bank must provide for
   9-16  the voting rights of the members, if a mutual savings bank, or the
   9-17  stockholders, if a capital stock savings bank.
   9-18        (f)  The articles of incorporation and statements of fact
   9-19  submitted to the commissioner in connection with an application
   9-20  must be subscribed and sworn to before an officer authorized to
   9-21  administer oaths.
   9-22        Sec. 2.06.  MANAGING OFFICER.  An applicant is not required
   9-23  to specify the name and qualifications of the proposed managing
   9-24  officer of the proposed savings bank at a hearing concerning the
   9-25  granting of the application or in a public record.  This
   9-26  information may be presented to the commissioner at any time, but a
   9-27  savings bank may not begin business unless it first presents to the
   10-1  commissioner the name and qualifications of its proposed managing
   10-2  officer and that managing officer is approved as qualified by the
   10-3  commissioner.
   10-4        Sec. 2.07.  COMMON STOCK.  (a)  Before approving an
   10-5  application, the commissioner shall require that a capital stock
   10-6  savings bank have an aggregate amount of capital in the form of
   10-7  stock and paid-in surplus as specified by the rules of the
   10-8  commissioner and of the finance commission.  Paid-in surplus may be
   10-9  used instead of earnings to pay organizational and operating
  10-10  expenses and earnings on deposit accounts and to meet any loss
  10-11  reserve requirements.  If the application is not approved or if the
  10-12  proposed savings bank does not begin business, the stock
  10-13  subscriptions for capital stock, less any lawful expenditures,
  10-14  shall be returned pro rata to the subscribers.
  10-15        (b)  A savings bank may not purchase, directly or indirectly,
  10-16  any of its own shares of common stock after the stock is issued.
  10-17  Common stock may not be retired or redeemed until all liabilities
  10-18  of the savings bank have been satisfied in full, including all
  10-19  amounts due to holders of deposit accounts, unless prior written
  10-20  permission is obtained from the commissioner and the retirement or
  10-21  redemption is authorized by a majority vote of the savings bank's
  10-22  stockholders at an annual meeting or a special meeting called for
  10-23  that purpose.  The basis of the retirement or redemption must be
  10-24  first approved by the commissioner and consent must be obtained in
  10-25  writing from the Federal Deposit Insurance Corporation and filed
  10-26  with the commissioner.  Preferred stock may be retired or redeemed
  10-27  in the manner provided by the articles of incorporation or a
   11-1  resolution of the board of directors of the savings bank
   11-2  establishing the rights and preferences relating to the stock.
   11-3  Both common and preferred stock must be fully paid for in cash in
   11-4  advance of issuance.  A savings bank may not make a loan against
   11-5  the shares of its outstanding common or preferred stock.
   11-6        Sec. 2.08.  PREFERRED STOCK.  (a)  If the articles of
   11-7  incorporation permit, shares of preferred stock may be divided into
   11-8  and issued in series.  Each series must be clearly designated to
   11-9  distinguish its shares from the shares of other series or classes.
  11-10  All or part of a series and variations in the relative rights and
  11-11  preferences between different series may be fixed and determined by
  11-12  the articles of incorporation, but all shares of the same class
  11-13  must be identical except for the following rights and preferences:
  11-14              (1)  the rate of dividend;
  11-15              (2)  the price, terms, and conditions at which shares
  11-16  may be redeemed;
  11-17              (3)  the amount payable on shares in the event of
  11-18  involuntary liquidation;
  11-19              (4)  the amount payable on shares in the event of
  11-20  voluntary liquidation;
  11-21              (5)  a sinking fund provision for the redemption or
  11-22  purchase of shares;
  11-23              (6)  the terms and conditions of conversion of shares
  11-24  that may be converted; and
  11-25              (7)  voting rights.
  11-26        (b)  If the articles of incorporation permit, the board of
  11-27  directors by resolution may divide classes of preferred stock into
   12-1  series and, within the limitations provided by this chapter and the
   12-2  articles of incorporation, may determine the relative rights and
   12-3  preferences of the shares of the series.  Before the shares may be
   12-4  issued, a copy of the resolution shall be submitted to the
   12-5  commissioner.  If the resolution conforms to this Act, the
   12-6  commissioner shall file it in the commissioner's office.  A
   12-7  resolution filed by the commissioner is considered to be an
   12-8  amendment to the savings bank's articles of incorporation.
   12-9        (c)  The extent to which preferred stock may be included as
  12-10  regulatory capital of a savings bank is subject to the rules
  12-11  adopted by the commissioner and the finance commission.
  12-12        Sec. 2.09.  EXPENSE FUND REQUIREMENTS FOR PROPOSED MUTUAL
  12-13  SAVINGS BANK.  Before approving the articles of incorporation of a
  12-14  mutual savings bank, the commissioner shall require the savings
  12-15  bank to have subscriptions for an aggregate amount of deposit
  12-16  accounts and an expense fund in an aggregate amount established by
  12-17  rule of the commissioner and the finance commission as necessary
  12-18  for the successful operation of a mutual savings bank.  The expense
  12-19  of organizing a savings bank, its operating expenses, and earnings
  12-20  on accounts declared and paid or credited to its deposit account
  12-21  holders may be paid out of the expense fund until the savings
  12-22  bank's earnings are sufficient to pay those amounts.  The amounts
  12-23  contributed to the expense fund do not constitute a liability of
  12-24  the savings bank except as provided by this chapter.  The
  12-25  contributions may be repaid pro rata to the contributors from the
  12-26  net earnings of a savings bank after provision for required loss
  12-27  reserve allocations and payment or credit of earnings declared on
   13-1  accounts.  If a savings bank is liquidated before contributions to
   13-2  the expense fund are repaid, any contributions to the expense fund
   13-3  remaining unspent after the payment of expenses of liquidation,
   13-4  creditors, and the withdrawal value of deposit accounts shall be
   13-5  paid to the contributors pro rata.  The books of a savings bank
   13-6  must reflect the expense fund.  Contributors to an expense fund
   13-7  shall be paid dividends on the amounts contributed to the same
   13-8  extent a deposit account is paid dividends, and for this purpose
   13-9  the contributions are considered deposit accounts of the savings
  13-10  bank.
  13-11        Sec. 2.10.  HEARING ON APPLICATION TO INCORPORATE.  (a)  When
  13-12  a complete application to incorporate as defined by rules adopted
  13-13  by the commissioner and the finance commission is filed, the
  13-14  commissioner shall issue public notice of the application and shall
  13-15  give any interested party an opportunity to appear, present
  13-16  evidence, and be heard for or against the application.  A hearing
  13-17  officer designated by the commissioner shall hold the hearing.
  13-18        (b)  The hearing officer shall file with the commissioner a
  13-19  report on the hearing containing findings of fact on each condition
  13-20  set out by Section 2.11 of this Act and the evidence on which those
  13-21  findings are based.
  13-22        Sec. 2.11.  APPROVAL OR DENIAL OF APPLICATION TO INCORPORATE.
  13-23  (a)  The commissioner may not approve an application to incorporate
  13-24  unless:
  13-25              (1)  the prerequisites to incorporation required by
  13-26  this chapter have been satisfied;
  13-27              (2)  the character, responsibility, and general fitness
   14-1  of the persons named in the articles of incorporation command
   14-2  confidence and warrant belief that the business of the proposed
   14-3  savings bank will be honestly and efficiently conducted in
   14-4  accordance with the intent and purpose of this Act and that the
   14-5  proposed savings bank will have qualified full-time management;
   14-6              (3)  there is a public need for the proposed savings
   14-7  bank, and the volume of business in the community in which the
   14-8  proposed savings bank will conduct its business indicates that a
   14-9  profitable operation is probable; and
  14-10              (4)  the operation of the proposed savings bank will
  14-11  not unduly harm any existing savings bank or state or federal
  14-12  savings and loan association.
  14-13        (b)  If the commissioner makes each finding under Subsection
  14-14  (a) of this section, the commissioner shall enter an order
  14-15  approving the application and stating the findings required by
  14-16  Subsection (a) of this section, issue under official seal a
  14-17  certificate of incorporation, and deliver a copy of the approved
  14-18  articles of incorporation and bylaws to the incorporators.  The
  14-19  commissioner shall retain a copy of the articles of incorporation
  14-20  and bylaws as a permanent file.  On delivery of the certificate to
  14-21  the incorporators, the savings bank is a corporate body with
  14-22  perpetual existence unless terminated by law and may exercise the
  14-23  powers of a savings bank beginning on the date the commissioner
  14-24  certifies receipt of satisfactory proof that the required amount of
  14-25  capital was received by the savings bank, free of encumbrance.
  14-26        (c)  If the commissioner is unable to make all findings
  14-27  required under Subsection (a) of this section, the commissioner
   15-1  shall enter a written order denying the application and stating the
   15-2  grounds for the denial.  A copy of the order shall be delivered to
   15-3  the designated representative of the incorporators by certified
   15-4  mail.
   15-5        Sec. 2.12.  DISSOLUTION OF SAVINGS BANK FOR FAILURE TO BEGIN
   15-6  BUSINESS.  A savings bank shall begin business not later than the
   15-7  first anniversary of the date of the approval of its application.
   15-8  The incorporators may request from the commissioner an extension of
   15-9  the deadline.  If good cause is shown, the commissioner may grant a
  15-10  reasonable extension of the deadline.  Failure to begin business as
  15-11  required by this Act is a ground for rescission of a savings bank's
  15-12  charter by the commissioner.
  15-13        Sec. 2.13.  CORPORATE NAME.  The name of a savings bank must
  15-14  include the words "State Savings Bank."  These words must be
  15-15  preceded by an appropriate descriptive word or words approved by
  15-16  the commissioner.  The commissioner may not approve the
  15-17  incorporation of a savings bank having the same name as another
  15-18  financial institution authorized to do business in this state under
  15-19  this Act, the Texas Savings and Loan Act (Article 852a, Vernon's
  15-20  Texas Civil Statutes), or The Texas Banking Code (Article 342-101
  15-21  et seq., Vernon's Texas Civil Statutes), or a name so nearly
  15-22  resembling the name of another financial institution as to be
  15-23  calculated to deceive unless the savings bank is formed by the
  15-24  reincorporation, reorganization, or consolidation of the other
  15-25  financial institution or on the sale of the property or franchise
  15-26  of the other savings bank.  A person or company, either domestic or
  15-27  foreign, other than a state or federal savings bank, may not do
   16-1  business under a name or title that contains the words "savings
   16-2  bank," that indicates or reasonably implies that the business is
   16-3  the character or kind of business carried on or transacted by a
   16-4  savings bank, or that is calculated to lead any person to believe
   16-5  that its business is that of a savings bank.  On application by the
   16-6  commissioner or any savings bank, a court of competent jurisdiction
   16-7  may issue an injunction to restrain a person or company from
   16-8  violating this section.
   16-9        Sec. 2.14.  ESTABLISHMENT OF ADDITIONAL OFFICES; CHANGE OF
  16-10  OFFICE LOCATION OR NAME.  Without the prior approval of the
  16-11  commissioner given in accordance with the rules of the commissioner
  16-12  and the finance commission, a savings bank may not establish an
  16-13  office other than the principal office stated in its articles of
  16-14  incorporation, move an office from its immediate vicinity, or
  16-15  change its name.  The commissioner may permit a savings bank to
  16-16  establish additional offices within this state or any other state
  16-17  or territory of the United States in accordance with the rules of
  16-18  the commissioner and the finance commission.  If requested, the
  16-19  commissioner shall give a person who might be affected by the
  16-20  establishment of additional offices or the change of office
  16-21  location or name an opportunity to be heard under Section 12.08 of
  16-22  this Act.
  16-23                     CHAPTER 3.  CORPORATE CHANGES
  16-24        Sec. 3.01.  CONVERSION INTO STATE-CHARTERED SAVINGS BANK.
  16-25  (a)  A financial institution may be converted into a savings bank
  16-26  under this Act on a majority vote of the members or stockholders of
  16-27  the financial institution cast at an annual meeting or a special
   17-1  meeting called to consider the action.  Copies of the minutes of
   17-2  the proceedings of the meeting of members or stockholders, verified
   17-3  by affidavit of the secretary or an assistant secretary, must be
   17-4  submitted to the commissioner and mailed to the appropriate banking
   17-5  agency within 10 days after the date of the meeting.  A sworn copy
   17-6  of the proceedings of the meeting is presumptive evidence of the
   17-7  holding and action of the meeting after its filing  with the
   17-8  commissioner.  At a meeting to vote on a conversion to a domestic
   17-9  savings bank, the members or stockholders shall also vote on the
  17-10  directors of the savings bank.  The proposed directors shall
  17-11  execute two copies of an application for certificate of
  17-12  incorporation as provided in Chapter 2 of this Act.  Each proposed
  17-13  director shall sign and acknowledge the application for certificate
  17-14  of incorporation as a subscriber to the savings bank and shall sign
  17-15  and acknowledge the proposed bylaws as an incorporator of the
  17-16  savings bank.
  17-17        (b)  The commissioner on receipt of the application and
  17-18  verified copy of the minutes shall conduct an examination of the
  17-19  financial institution seeking conversion.  Following the
  17-20  examination, the commissioner shall approve the conversion without
  17-21  a hearing if the commissioner determines that the converting
  17-22  financial institution is in sound condition and meets all
  17-23  standards, conditions, and requirements of Chapter 2 of this Act or
  17-24  relevant rules adopted by the commissioner and the finance
  17-25  commission.  On approval of the conversion, the incorporators shall
  17-26  insert a paragraph preceding the testimonium clause in the
  17-27  certificate of incorporation stating that the savings bank is
   18-1  incorporated by conversion from another financial institution.
   18-2        (c)  An applicant is entitled to a hearing under the
   18-3  administrative procedure act if the commissioner denies an
   18-4  application to convert and a written request for a hearing is
   18-5  delivered to the commissioner within 10 days after the date of
   18-6  denial.  A hearings officer designated by the commissioner shall
   18-7  hold the hearing.  Within 30 days after the date the hearing is
   18-8  completed, the commissioner shall enter a final order either
   18-9  approving or denying the application.  An applicant has the right
  18-10  to appeal a final order to a district court of Travis County with
  18-11  the commissioner named as defendant.  The commissioner is not
  18-12  required to file an appeal bond in any cause arising under this
  18-13  section.  Filing an appeal under this section does not stay an
  18-14  order of the commissioner.
  18-15        (d)  On the conversion of a financial institution into a
  18-16  savings bank, the corporate existence of the financial institution
  18-17  does not terminate, but the new savings bank is a continuation of
  18-18  the entity of the converting financial institution.  All property
  18-19  of the converting financial institution, including its rights,
  18-20  titles, and interests in and to all property of whatever kind,
  18-21  whether real, personal, or mixed, and things in action, and every
  18-22  right, privilege, interest, and asset of any conceivable value or
  18-23  benefit then existing, or pertaining to the financial institution,
  18-24  or which would inure to it, immediately by operation of law and
  18-25  without any conveyance or transfer and without any further act or
  18-26  deed remains and vests in and continues to be the property of the
  18-27  savings bank into which the financial institution converted.  The
   19-1  new savings bank has, holds, and enjoys those properties, rights,
   19-2  privileges, interests, and assets in its own right as fully and to
   19-3  the same extent as they were possessed, held, and enjoyed by the
   19-4  converting financial institution.  The new savings bank as of the
   19-5  time the conversion takes effect has and succeeds to all the
   19-6  rights, obligations, and relations of the converting financial
   19-7  institution.  The new savings bank shall file a copy of the order
   19-8  of conversion in all counties in which the converting financial
   19-9  institution owns real property.  All pending actions and other
  19-10  judicial proceedings to which the financial institution is a party
  19-11  are not abated or discontinued by reason of the conversion, but may
  19-12  be prosecuted to final judgment, order, or decree in the same
  19-13  manner as if the conversion into the new savings bank did not
  19-14  occur.  The new savings bank may continue any pending action in its
  19-15  corporate name as the new savings bank, and any judgment, order, or
  19-16  decree may be rendered for or against it that might have been
  19-17  rendered for or against the converting financial institution
  19-18  previously involved in the judicial proceedings.
  19-19        Sec. 3.02.  CONVERSION INTO FINANCIAL INSTITUTION.  (a)  The
  19-20  finance commission shall adopt rules establishing the conditions
  19-21  under which a savings bank subject to this Act may be converted
  19-22  into another financial institution.  The rules must ensure that a
  19-23  proposed conversion does not cause undue harm to the public
  19-24  interest or to any other existing financial institution.
  19-25        (b)  A conversion by a savings bank may be initiated by the
  19-26  adoption of a resolution by a majority vote of the members or
  19-27  stockholders of a savings bank entitled to vote at an annual
   20-1  meeting or special meeting called to consider the conversion.  The
   20-2  resolution must declare that the savings bank shall be converted.
   20-3  A copy of the minutes of the proceedings of the meeting of the
   20-4  stockholders or members, verified by affidavit of the secretary or
   20-5  an assistant secretary, must be filed in the office of the
   20-6  commissioner within 10 days after the date of the meeting.  A sworn
   20-7  copy of the proceedings of the meeting is presumptive evidence of
   20-8  the holding and action of the meeting after its filing with the
   20-9  commissioner.
  20-10        (c)  Within 10 days after the date of receipt of an
  20-11  application to convert and a copy of the minutes, the commissioner
  20-12  shall either consent to the conversion by written order or set a
  20-13  hearing to consider whether the proposed conversion complies with
  20-14  the conditions established by the finance commission.  The hearing
  20-15  must be held within 25 days after the date of the filing of the
  20-16  conversion application unless a later date is agreed to by the
  20-17  savings bank and the commissioner.  The commissioner or a hearing
  20-18  officer designated by the commissioner shall conduct the hearing as
  20-19  a contested case in compliance with the administrative procedure
  20-20  act, except that a proposal for decision may not be made and a
  20-21  final decision or order must be rendered by the commissioner within
  20-22  15 days after the date of the close of the hearing.  If the
  20-23  commissioner denies an application to convert, the administrative
  20-24  procedure act governs a motion for rehearing and available judicial
  20-25  review.
  20-26        (d)  If the commissioner consents to the conversion, the
  20-27  savings bank, within three months after the date of the
   21-1  commissioner's written order, shall consummate the conversion in
   21-2  the manner prescribed and authorized by the applicable laws of this
   21-3  state or the United States.  A copy of the charter issued to the
   21-4  new financial institution by the appropriate banking agency or the
   21-5  certificate showing the organization of the new financial
   21-6  institution, certified by the secretary or assistant secretary of
   21-7  the appropriate banking agency, must be filed with the
   21-8  commissioner.  Failure to file the charter or certificate with the
   21-9  commissioner does not affect the validity of the conversion.
  21-10        (e)  On the grant of a charter by the appropriate banking
  21-11  agency, the savings bank receiving the new charter ceases existence
  21-12  as a savings bank incorporated under this Act and is not subject to
  21-13  the supervision and control of the commissioner under this Act.
  21-14        (f)  On the conversion of a savings bank into another
  21-15  financial institution, the corporate existence of the savings bank
  21-16  does not terminate, but the new financial institution is a
  21-17  continuation of the entity of the converting savings bank.  The new
  21-18  financial institution retains all property, rights, and obligations
  21-19  of the converting savings bank and is subject to the provisions of
  21-20  Section 3.01(d) of this Act as if it were a new savings bank under
  21-21  that section to the extent the provisions can be made applicable to
  21-22  the new financial institution.
  21-23        Sec. 3.03.  REORGANIZATION, MERGER, AND CONSOLIDATION.  (a)
  21-24  Under a plan adopted by the board of directors and approved by the
  21-25  commissioner, and subject to Chapter 11 of this Act and Article
  21-26  XVI, Section 16, of the Texas Constitution, a savings bank may
  21-27  reorganize, merge, or consolidate with another financial
   22-1  institution if the plan of reorganization, merger, or consolidation
   22-2  is approved by a majority of the total votes that the members or
   22-3  stockholders are entitled to cast.  Approval may be voted at either
   22-4  an annual meeting or at a special meeting called to consider the
   22-5  action.  A stockholder of a capital stock savings bank has the same
   22-6  dissenter's rights as a stockholder of a domestic corporation under
   22-7  the Texas Business Corporation Act.  In all cases the corporate
   22-8  continuity of the resulting corporation possesses the same property
   22-9  rights and obligations as those of a savings bank that has
  22-10  converted in accordance with this Act.  The home office of the
  22-11  financial institution in the proposed merger possessing the largest
  22-12  assets shall be designated as the home office of the surviving
  22-13  financial institution unless a different home office is approved by
  22-14  the commissioner.
  22-15        (b)  On receiving a plan of reorganization, merger, or
  22-16  consolidation, the commissioner shall give public notice of the
  22-17  proposed reorganization, merger, or consolidation in the county or
  22-18  counties in which the financial institutions participating in the
  22-19  proposed plan have offices and shall give any interested party an
  22-20  opportunity to appear, present evidence, and be heard for or
  22-21  against the proposed plan.  A hearing officer designated by the
  22-22  commissioner shall hold the hearing.  If a protest is not received
  22-23  on or before the date of hearing, the commissioner or hearing
  22-24  officer may dispense with the hearing.  The provisions of the
  22-25  administrative procedure act applicable to a contested case apply
  22-26  to the hearing, except that the notice and hearing provisions of
  22-27  that Act and of this section do not apply to an application under
   23-1  this section if the commissioner has designated the merger to be a
   23-2  supervisory merger under the rules adopted by the finance
   23-3  commission, and in that event, the application and all information
   23-4  relating to the application is confidential and privileged from
   23-5  public disclosure.
   23-6        (c)  The commissioner shall issue an order denying the
   23-7  proposed plan if:
   23-8              (1)  the reorganization, merger, or consolidation would
   23-9  substantially lessen competition or be in restraint of trade and
  23-10  would result in a monopoly or be in furtherance of a combination or
  23-11  conspiracy to monopolize or attempt to monopolize the financial
  23-12  industry in any part of the state, unless the anticompetitive
  23-13  effects of the proposed reorganization, merger, or consolidation
  23-14  are clearly outweighed in the public interest by the probable
  23-15  effect of the reorganization, merger, or consolidation in meeting
  23-16  the convenience and needs of the community to be served;
  23-17              (2)  the proposed plan is not in the best interest of
  23-18  the financial institutions that are parties to the plan;
  23-19              (3)  the experience, ability, standing, competence,
  23-20  trustworthiness, or integrity of the management of the financial
  23-21  institutions proposing the plan is such that the reorganization,
  23-22  merger, or consolidation would not be in the best interest of the
  23-23  financial institutions that are parties to the plan;
  23-24              (4)  after reorganization, merger, or consolidation the
  23-25  surviving financial institution would not:
  23-26                    (A)  be solvent;
  23-27                    (B)  have adequate capital structure; or
   24-1                    (C)  be in compliance with the laws of this
   24-2  state;
   24-3              (5)  the financial institutions proposing the plan have
   24-4  not furnished all of the information pertinent to the application
   24-5  reasonably requested by the commissioner; or
   24-6              (6)  the financial institutions proposing the plan are
   24-7  not acting in good faith.
   24-8        (d)  If the surviving financial institution is an entity
   24-9  other than a savings bank, the commissioner may accept the
  24-10  procedures and decision of the appropriate banking agency having
  24-11  jurisdiction over the surviving financial institution in addition
  24-12  to or in lieu of the requirements of this section.
  24-13        Sec. 3.04.  MERGER OF SUBSIDIARY CORPORATION INTO SAVINGS
  24-14  BANK.  (a)  One or more corporations organized under the law of
  24-15  this state may merge into a savings bank that owns all of the
  24-16  corporations' capital stock under a plan of merger adopted by
  24-17  majority votes of the boards of directors of the savings bank and
  24-18  each corporation.
  24-19        (b)  The original and a copy of the articles of merger must
  24-20  be submitted to the secretary of state and the commissioner.  The
  24-21  articles of merger must be executed by the president or
  24-22  vice-president and a secretary or assistant secretary of the
  24-23  savings bank and each corporation and must include:
  24-24              (1)  the names of the savings bank and each
  24-25  corporation;
  24-26              (2)  a copy of the resolutions of the savings bank and
  24-27  each corporation adopting the plan of merger;
   25-1              (3)  a statement of the number of shares of each class
   25-2  issued or authorized by each corporation;
   25-3              (4)  a statement that all capital stock of each
   25-4  corporation is owned by the savings bank; and
   25-5              (5)  a statement incorporating the provisions of
   25-6  Subsection (f) of this section.
   25-7        (c)  For a merger to be effective, it must be approved by
   25-8  both the secretary of state and the commissioner.  If the secretary
   25-9  of state determines that the articles of merger comply with
  25-10  applicable law and that all fees and franchise taxes due from the
  25-11  corporation have been paid, the secretary of state shall approve
  25-12  the articles of merger as provided by Subsection (d) of this
  25-13  section.  If the commissioner determines that the articles of
  25-14  merger comply with applicable law and that the merger is in the
  25-15  best interest of the savings bank, the commissioner shall approve
  25-16  the articles of merger as provided by Subsection (d) of this
  25-17  section.
  25-18        (d)  On approval of articles of merger, the commissioner and
  25-19  the secretary of state shall each:
  25-20              (1)  endorse "filed" and the date of the approval on
  25-21  the original and a copy of the articles of merger;
  25-22              (2)  file the original and a copy of the articles of
  25-23  merger in the records of the commissioner's office or the secretary
  25-24  of state's office, as appropriate; and
  25-25              (3)  issue and deliver to the savings bank a
  25-26  certificate of merger, attaching a copy of the articles of merger.
  25-27        (e)  A merger takes effect when the latter of the required
   26-1  certificates of merger is issued.
   26-2        (f)  After a merger, the merged corporation ceases to exist
   26-3  as a separate entity, and only the savings bank survives.  The
   26-4  savings bank assumes the rights and obligations of the corporation
   26-5  and owns the property of the corporation.  The articles of
   26-6  incorporation of the savings bank are considered amended to the
   26-7  extent that a change is stated in the plan of merger.
   26-8        (g)  Section 3.03 of this Act does not apply to a merger
   26-9  under this section.
  26-10        Sec. 3.05.  VOLUNTARY LIQUIDATION.  At an annual meeting or a
  26-11  special meeting called for that purpose, a savings bank by majority
  26-12  vote of its members or stockholders may resolve to liquidate and
  26-13  dissolve the savings bank.  Before a liquidation resolution may
  26-14  take effect, a copy of the resolution, certified by the president
  26-15  and secretary of the savings bank, together with an itemized
  26-16  statement of the savings bank's assets and liabilities sworn to by
  26-17  a majority of its board of directors, must be filed with and
  26-18  approved by the commissioner.  After the commissioner's approval of
  26-19  the resolution, the savings bank may not accept any additional
  26-20  deposit accounts or additions to deposit accounts or make any
  26-21  additional loans, and all its income  and receipts in excess of
  26-22  actual expenses of liquidation of the savings bank must be applied
  26-23  to the discharge of its liabilities.  The board of directors of the
  26-24  savings bank, under the supervision of the commissioner and in
  26-25  accordance with a plan of liquidation approved by the commissioner,
  26-26  shall then liquidate the affairs of the savings bank and reduce its
  26-27  assets to cash for the purpose of paying, satisfying, and
   27-1  discharging all existing liabilities and obligations of the savings
   27-2  bank, including the full withdrawal value of all deposit accounts,
   27-3  with the balance remaining, if any, to be distributed to the
   27-4  members or stockholders of record on the date of adoption by the
   27-5  savings bank of the resolution to liquidate, according to their
   27-6  liquidation rights.  All expenses incurred by the commissioner or
   27-7  any of the commissioner's representatives during the course of
   27-8  liquidation shall be paid from the assets of the savings bank.  On
   27-9  completion of liquidation, the board of directors shall file with
  27-10  the commissioner a final report and accounting of the liquidation.
  27-11  An approval of the report by the commissioner operates as a
  27-12  complete and final discharge of the board of directors and each
  27-13  member in connection with the liquidation of the savings bank.
  27-14        Sec. 3.06.  INTERIM CHARTER.  (a)  For the purposes of this
  27-15  section:
  27-16              (1)  "Reorganizing institution" means a financial
  27-17  institution the commissioner considers to be in an unsafe
  27-18  condition.
  27-19              (2)  "Merged institution" means an existing financial
  27-20  institution that is merged into an acquiring savings bank.
  27-21        (b)  Application may be made to the commissioner to
  27-22  incorporate a savings bank for the purpose of purchasing the
  27-23  assets, assuming the liabilities other than liability to
  27-24  stockholders, and continuing the business of a reorganizing
  27-25  institution, or for the purpose of acquiring by merger a merged
  27-26  institution.
  27-27        (c)  An application must include information required by the
   28-1  commissioner or by a rule of the commissioner and the finance
   28-2  commission.  The capitalization of the savings bank must be in an
   28-3  amount determined by the commissioner as sufficient to carry out
   28-4  the purposes for which incorporation is requested.
   28-5        (d)  The administrative procedure act does not apply to an
   28-6  application to reorganize or merge a financial institution the
   28-7  commissioner considers to be in an unsafe condition.  The
   28-8  application and all information relating to the application are
   28-9  confidential and privileged from public disclosure.
  28-10        (e)  If the commissioner finds that the business of a
  28-11  reorganizing or merged institution can be effectively continued
  28-12  under the proposed articles of incorporation and that the proposed
  28-13  reorganization or merger is in the best interest of the savers,
  28-14  depositors, creditors, and stockholders, if any, of the
  28-15  reorganizing institution or the merged institution and the public
  28-16  in general, the commissioner shall state those findings in writing
  28-17  and issue a certificate of incorporation.  On issuance of the
  28-18  certificate, the savings bank is a corporate body and a
  28-19  continuation of the reorganizing or merged institution, subject to
  28-20  all the reorganizing or merged institution's liabilities,
  28-21  obligations, duties, and relations.  The savings bank may exercise
  28-22  the powers of a savings bank under the laws of this state.
  28-23        (f)  In the case of an acquisition merger, a stockholder of a
  28-24  capital stock financial institution has the same dissenter's rights
  28-25  that a stockholder in a domestic business corporation has under the
  28-26  Texas Business Corporation Act.
  28-27        (g)  Section 3.03(c) of this Act does not apply to an
   29-1  application under this section if the commissioner considers the
   29-2  institution to be reorganized or merged to be in an unsafe
   29-3  condition, and the commissioner may approve the reorganization or
   29-4  merger if the commissioner finds from the application and all
   29-5  information submitted with it that the proposed reorganization or
   29-6  merger is in the best interest of the savers, depositors,
   29-7  creditors, and stockholders, if any, of the reorganizing or merged
   29-8  institution and the public.
   29-9        Sec. 3.07.  CHANGE OF CONTROL.  (a)  A change in the control
  29-10  of a savings bank may not occur unless an application for approval
  29-11  of the change of control is filed with and approved by the
  29-12  commissioner.
  29-13        (b)  The application must be on a form prescribed by the
  29-14  commissioner and must be made under oath.  Except to the extent
  29-15  expressly waived by the commissioner, the application must contain:
  29-16              (1)  the identity, personal and corporate history, as
  29-17  applicable, business background and experience, and financial
  29-18  condition of each person or company by whom or on whose behalf the
  29-19  acquisition is to be made, including a description of the
  29-20  managerial resources and future prospects of each acquiring party
  29-21  and a description of any material pending legal or administrative
  29-22  proceedings to which the applicant is a party;
  29-23              (2)  the terms and conditions of any proposed
  29-24  acquisition and the manner in which the acquisition is to be made;
  29-25              (3)  the identity, source, and amount of the funds or
  29-26  other consideration used or to be used in making the acquisition,
  29-27  and if any part of those funds or other consideration was or is to
   30-1  be borrowed or otherwise obtained for the purpose of making the
   30-2  acquisition, a description of the transaction, the names of the
   30-3  parties, and arrangements, agreements, or understandings with those
   30-4  parties;
   30-5              (4)  any plans or proposals that an acquiring party
   30-6  making the acquisition may have to liquidate the savings bank, sell
   30-7  its assets, merge it with any company, or make any other major
   30-8  changes in its business, corporate structure, or management;
   30-9              (5)  the terms and conditions of any offer, invitation
  30-10  agreement, or arrangement under which any voting security of the
  30-11  savings bank will be acquired and any contract affecting that
  30-12  security or its financing after it is acquired;
  30-13              (6)  information establishing that the requirements
  30-14  under Subsection (d) of this section are satisfied; and
  30-15              (7)  other information that the commissioner:
  30-16                    (A)  by rule requires; or
  30-17                    (B)  orders to be included in a particular
  30-18  application.
  30-19        (c)  The applicant shall pay a filing fee when the applicant
  30-20  files an application.  A proposal to acquire voting securities  of
  30-21  a savings bank subject to this section may be made by an
  30-22  individual, two or more individuals acting in concert, any type of
  30-23  partnership, corporation, syndicate, trust, or any other
  30-24  organization, or any combination of those individuals or entities.
  30-25  The information required by the commissioner may be required of
  30-26  each member of the group, as directed by the commissioner.  Notice
  30-27  of the application, its date of filing, and the identity of all
   31-1  parties to the application shall be submitted to the Texas Register
   31-2  by the commissioner on receipt of the application for publication
   31-3  in the next issue of the Texas Register following the date the
   31-4  information is received.  Information obtained by the commissioner
   31-5  under this section, other than published information, is
   31-6  confidential and may not be disclosed by the commissioner or any
   31-7  officer or employee of the Savings and Loan Department of Texas,
   31-8  except nothing in this section prohibits the commissioner from
   31-9  disclosing, on request, the identity of the actual or beneficial
  31-10  owner of any savings bank chartered under this Act.  The
  31-11  commissioner, in the commissioner's discretion and if the
  31-12  commissioner deems it necessary or proper in the enforcement of the
  31-13  laws of any state or the United States and in the best interest of
  31-14  the public, may also divulge information to any appropriate banking
  31-15  agency or any appropriate governmental department, agency, or
  31-16  instrumentality of this state, another state, or the United States.
  31-17        (d)  The commissioner, subject to Subsections (e) and (f) of
  31-18  this section, shall issue an order denying an application unless
  31-19  the commissioner determines that the applicant has established
  31-20  that:
  31-21              (1)  the acquisition would not:
  31-22                    (A)  substantially lessen competition;
  31-23                    (B)  in any manner be in restraint of trade that
  31-24  would result in a monopoly; and
  31-25                    (C)  be in furtherance of a combination or
  31-26  conspiracy to monopolize or attempt to monopolize the financial
  31-27  industry in any part of the state;
   32-1              (2)  the financial condition of any acquiring party
   32-2  does not jeopardize the financial stability of the savings bank
   32-3  being acquired;
   32-4              (3)  plans or proposals to liquidate or sell the
   32-5  savings bank or its assets, if any, are in the best interest of the
   32-6  savings bank;
   32-7              (4)  the experience, ability, standing, competence,
   32-8  trustworthiness, or integrity of the applicant is such that the
   32-9  acquisition would be in the best interest of the savings bank; and
  32-10              (5)  the savings bank would be solvent, have adequate
  32-11  capital structure, and be in compliance with the laws of this state
  32-12  after the acquisition.
  32-13        (e)  Notwithstanding Subsection (d)(1) of this section, the
  32-14  commissioner is not required to deny an application if the
  32-15  commissioner determines that:
  32-16              (1)  the anticompetitive effects of the proposed
  32-17  acquisition are clearly outweighed in the public interest by the
  32-18  probable effect of the acquisition in meeting the convenience and
  32-19  needs of the community to be served; and
  32-20              (2)  the proposed acquisition is not in violation of
  32-21  any law of this state or the United States.
  32-22        (f)  The commissioner shall issue an order denying an
  32-23  application if the commissioner determines that the applicant:
  32-24              (1)  has failed to furnish all information pertinent to
  32-25  the application reasonably requested by the commissioner; or
  32-26              (2)  is not acting in good faith.
  32-27        (g)  When the commissioner determines that an application for
   33-1  approval of change of control is complete, the commissioner shall
   33-2  issue public notice of the application and shall give any
   33-3  interested party an opportunity to appear, present evidence, and be
   33-4  heard for or against the application.  A hearing officer designated
   33-5  by the commissioner shall hold the hearing.  A hearing is not
   33-6  required if no party provides written notice to the commissioner,
   33-7  within 10 days of the date of publication of the notice of
   33-8  application, of intention to appear and present evidence at the
   33-9  hearing and if the commissioner finds that the application complies
  33-10  with all statutory requirements for approval within 30 days after
  33-11  the date of the completion of a hearing, the commissioner shall
  33-12  enter a final order either approving or denying the application.
  33-13  An applicant may appeal a final order to a district court of Travis
  33-14  County with the commissioner as defendant.  Either party to the
  33-15  action may appeal from the district court of Travis County to the
  33-16  appellate court having jurisdiction of the cause.  The appeal is at
  33-17  once returnable to the appellate court having jurisdiction of the
  33-18  cause, and that action has precedence in that appellate court over
  33-19  all causes of a different character pending in that court.  The
  33-20  commissioner is not required to give any appeal bond in any cause
  33-21  arising under this section.  Filing an appeal under this section
  33-22  does not stay an order of the commissioner.
  33-23        (h)  This section does not apply to a conversion,
  33-24  reorganization, merger, consolidation, or voluntary liquidation
  33-25  under this chapter.
  33-26        (i)  This section does not excuse or diminish the notice
  33-27  provisions required elsewhere in this Act.
   34-1        (j)  This section may not be construed to prevent the
   34-2  commissioner from investigating, commenting on, or seeking to
   34-3  enjoin or set aside any transfer of voting securities of a savings
   34-4  bank, whether or not the transfer is subject to this section, if
   34-5  the commissioner deems the transfer to be against the public
   34-6  interest.
   34-7        (k)  If it appears to the commissioner that a person
   34-8  committed or is about to commit a violation of this section or a
   34-9  rule or order of the commissioner adopted under this section, the
  34-10  attorney general on behalf of the commissioner may apply to a
  34-11  district court of Travis County for an order prohibiting the
  34-12  violation and for other equitable relief as the case may require.
  34-13        (l)  A person commits an offense if the person wilfully and
  34-14  knowingly makes a materially false or misleading statement to the
  34-15  commissioner with respect to the information required by this
  34-16  section.  An offense under this subsection is a Class A
  34-17  misdemeanor.  This subsection is cumulative of other remedies
  34-18  contained in this section.
  34-19        (m)  When it appears a change in control may have occurred
  34-20  without prior approval, the commissioner may call a hearing to
  34-21  determine whether there was in fact a change in control, whether
  34-22  unauthorized persons or corporations having no apparent ownership
  34-23  interest in the savings bank, acting alone or in concert with
  34-24  others, effectively have indirect controlling or dominating
  34-25  influence over the management or policies of a savings bank, and
  34-26  whether an order requiring divestiture of unapproved or indirect
  34-27  control or other appropriate supervisory order should be issued.
   35-1                CHAPTER 4.  SUPERVISION AND REGULATION
   35-2        Sec. 4.01.  REGULATORY AUTHORITY.  The Savings and Loan
   35-3  Department of Texas and the commissioner shall regulate savings
   35-4  banks and subsidiary corporations of savings banks operating under
   35-5  this Act and shall enforce this Act.
   35-6        Sec. 4.02.  ANNUAL INDEPENDENT AUDIT REQUIRED.  Each savings
   35-7  bank shall obtain within 90 days after the date of the close of
   35-8  each of its fiscal years an audit by an independent accounting firm
   35-9  that is a member of the American Institute of Certified Public
  35-10  Accountants or its successor.  Copies of the audit together with
  35-11  all correspondence reasonably related to the audit shall be
  35-12  provided to the commissioner.  The commissioner and the finance
  35-13  commission may adopt rules as necessary to implement this section.
  35-14        Sec. 4.03.  INTEREST IN SAVINGS BANKS PROHIBITED.  (a)
  35-15  Neither a savings bank nor a director, officer, employee, or
  35-16  representative of a savings bank may grant or give a loan or
  35-17  gratuity, directly or indirectly, to the commissioner, an employee
  35-18  of the Savings and Loan Department of Texas, or a spouse of the
  35-19  commissioner or an employee.
  35-20        (b)  The commissioner or an employee of the Savings and Loan
  35-21  Department of Texas may not:
  35-22              (1)  hold an office or position in any domestic savings
  35-23  bank or exercise any right to vote on any domestic savings bank
  35-24  matter by reason of being a member or stockholder of the savings
  35-25  bank;
  35-26              (2)  hold an interest, directly or indirectly, in any
  35-27  domestic savings bank; or
   36-1              (3)  undertake any indebtedness as a borrower, directly
   36-2  or indirectly, or endorser, surety, or guarantor, or sell or
   36-3  otherwise dispose of any loan or investment to any domestic savings
   36-4  bank.
   36-5        (c)  Notwithstanding Subsection (b) of this section, the
   36-6  commissioner or an employee of the Savings and Loan Department of
   36-7  Texas may hold a deposit account at a savings bank and receive
   36-8  earnings on the account.
   36-9        (d)  If the commissioner or an employee of the Savings and
  36-10  Loan Department of Texas has any prohibited, direct or indirect
  36-11  right or interest in a domestic savings bank at the time of the
  36-12  individual's appointment or employment, the commissioner or
  36-13  employee shall dispose of the right or interest within 60 days
  36-14  after the date of appointment or employment.  If the commissioner
  36-15  or an employee of the Savings and Loan Department of Texas is
  36-16  indebted as a borrower, directly or indirectly, or is an endorser,
  36-17  surety, or guarantor on a note to a domestic savings bank at the
  36-18  time of appointment or employment, the commissioner or employee may
  36-19  continue in that capacity until that debt is paid.
  36-20        (e)  If a loan or other note of the commissioner or an
  36-21  employee of the Savings and Loan Department of Texas is acquired by
  36-22  a savings bank, the commissioner or employee may continue as a
  36-23  borrower, endorser, surety, or guarantor of the loan or note until
  36-24  the loan or note is paid.
  36-25        Sec. 4.04.  RULES.  The commissioner and the finance
  36-26  commission may adopt rules not inconsistent with this Act necessary
  36-27  for the supervision and regulation of savings banks and for the
   37-1  protection of the public investing in savings banks, including, but
   37-2  not limited to, rules on:
   37-3              (1)  the minimum amounts of capital required to
   37-4  incorporate and operate as a savings bank, but not less than the
   37-5  amounts required of corresponding national banks;
   37-6              (2)  the fees and procedures for processing, hearing,
   37-7  and deciding applications filed with the commissioner or the
   37-8  Savings and Loan Department of Texas under this Act;
   37-9              (3)  the books and records that a savings bank shall
  37-10  keep and the location at which the books and records shall be
  37-11  maintained;
  37-12              (4)  the accounting principles and practices that a
  37-13  savings bank shall observe;
  37-14              (5)  the conditions under which records may be copied
  37-15  or reproduced for permanent storage before the originals are
  37-16  destroyed;
  37-17              (6)  the form, content, and time of publication of
  37-18  statements of condition and the form and content of annual reports
  37-19  and other reports that are to be prepared and published or filed by
  37-20  a savings bank;
  37-21              (7)  the manner by which assets, liabilities, and
  37-22  transactions in general are to be described on the books of a
  37-23  savings bank, so that each entry will be an accurate description of
  37-24  the subject matter of the entry;
  37-25              (8)  the conditions under which the commissioner may
  37-26  require assets to be charged off or reserves established by
  37-27  transfer from surplus or paid-in capital due to depreciation or
   38-1  overstatement of value;
   38-2              (9)  the powers of a savings bank to make loans and
   38-3  investments, containing provisions reasonably necessary to ensure
   38-4  that loans made by a savings bank are consistent with sound lending
   38-5  practices and that the savings bank's investment will promote the
   38-6  purposes of this Act, including provisions governing:
   38-7                    (A)  the type of loans and the conditions under
   38-8  which a savings bank may originate, make, or sell loans;
   38-9                    (B)  the conditions under which a savings bank
  38-10  may purchase or participate in loans made by other lenders;
  38-11                    (C)  the conditions for the servicing of loans
  38-12  for other lenders;
  38-13                    (D)  the conditions under which a savings bank
  38-14  may lend money on the security of loans made by others;
  38-15                    (E)  the conditions under which a savings bank
  38-16  may pledge loans held by it as collateral for borrowings by the
  38-17  savings bank;
  38-18                    (F)  the conditions under which savings banks may
  38-19  invest in securities and debt instruments;
  38-20                    (G)  the documentation that a savings bank must
  38-21  have in its files at the time of funding or purchase of a loan, an
  38-22  investment, or a participation in a loan;
  38-23                    (H)  the form and content of statements of
  38-24  expenses and fees and other charges that are paid by borrowers or
  38-25  that borrowers are obligated to pay;
  38-26                    (I)  title information that must be maintained;
  38-27                    (J)  borrower's insurance coverage of property
   39-1  securing loans;
   39-2                    (K)  appraisal reports;
   39-3                    (L)  financial statements of borrowers;
   39-4                    (M)  the fees or other compensation that may be
   39-5  paid to an officer, director, employee, affiliated person,
   39-6  consultant, or any third party in connection with the procuring of
   39-7  any loan for a savings bank;
   39-8                    (N)  the conditions under which the savings bank
   39-9  may advance funds to pay taxes, assessments, insurance premiums,
  39-10  and other similar charges for the protection of its interest in
  39-11  property securing its loans;
  39-12                    (O)  the terms and conditions under which a
  39-13  savings bank may acquire and deal in real property;
  39-14                    (P)  the valuation on a savings bank's books of
  39-15  real property held by it;
  39-16                    (Q)  the terms and conditions governing the
  39-17  investment by a savings bank in subsidiary corporations, the powers
  39-18  that may be exercised by subsidiaries, and the activities that may
  39-19  be engaged in by subsidiaries; and
  39-20                    (R)  other matters considered necessary to
  39-21  administer properly each type of transaction;
  39-22              (10)  change of control of a savings bank;
  39-23              (11)  conduct, management, and operation of savings
  39-24  banks;
  39-25              (12)  withdrawable accounts, bonuses, plans, and
  39-26  contracts for savings programs;
  39-27              (13)  mergers, consolidations, reorganizations,
   40-1  conversions, and liquidations;
   40-2              (14)  establishment of additional offices and change of
   40-3  office location or name;
   40-4              (15)  holding companies, including requirements for
   40-5  registration and periodic reporting of a holding company with the
   40-6  commissioner and transactions between a holding company, any
   40-7  affiliate of a holding company, or a savings bank; and
   40-8              (16)  limitations on loans to one borrower, but not
   40-9  less restrictive limitations than those imposed on a savings
  40-10  association under Section 5(u) of the Home Owners' Loan Act (12
  40-11  U.S.C. Section 1464(u)).
  40-12        Sec. 4.05.  PROHIBITED TRANSACTIONS.  A savings bank or
  40-13  subsidiary corporation of a savings bank may not engage in any
  40-14  transaction in violation of a rule adopted under this Act.
  40-15        Sec. 4.06.  EXAMINATIONS.  (a)  The commissioner shall
  40-16  periodically examine the affairs of each savings bank and its
  40-17  subsidiaries and the transactions of any holding company related to
  40-18  the holding company's savings bank subsidiaries.
  40-19        (b)  The commissioner, a deputy commissioner, or an examiner
  40-20  or auditor of the commissioner shall have free access to all books
  40-21  and records of a savings bank, subsidiary corporation, or holding
  40-22  company and to books and records relating to a savings bank's
  40-23  business kept by an officer, agent, or employee of a savings bank,
  40-24  subsidiary corporation, or holding company.  The commissioner,
  40-25  deputy commissioner, examiner, or auditor may subpoena witnesses
  40-26  and administer oaths or affirmations in examination of the
  40-27  directors, officers, agents, or employees of a savings bank,
   41-1  subsidiary corporation, or holding company, or any other person in
   41-2  relation to the savings bank's affairs, transactions, and condition
   41-3  and may require and compel by subpoena the production of records,
   41-4  books, papers, contracts, or other documents.  On a witness'
   41-5  failure to obey a subpoena or refusal to appear or answer in
   41-6  connection with an examination, the commissioner may apply to a
   41-7  district court of Travis County for an order requiring obedience of
   41-8  the subpoena or testimony of the witness.  The court shall issue
   41-9  the order if it finds that good cause exists for issuing the
  41-10  subpoena or taking the testimony.  Failure to obey a court order
  41-11  may be punished as contempt of court.
  41-12        (c)  An examination may be performed in conjunction with an
  41-13  examination by the Federal Deposit Insurance Corporation or any
  41-14  other federal depository institutions regulatory agency having
  41-15  jurisdiction over a savings bank.  The commissioner may accept an
  41-16  examination made by an appropriate banking agency in lieu of an
  41-17  examination under this section.
  41-18        (d)  The commissioner, at the savings bank's cost, may
  41-19  perform an extra or additional examination or audit or devote
  41-20  extraordinary attention to the affairs of a savings bank if the
  41-21  commissioner determines the conditions of the savings bank justify
  41-22  the examination, audit, or extraordinary attention.
  41-23        (e)  Promptly on completion of a report, a copy of the
  41-24  examination or audit report shall be furnished to the savings bank
  41-25  examined or audited.
  41-26        Sec. 4.07.  FEES.  The commissioner and the finance
  41-27  commission, acting under the rulemaking power delegated by Article
   42-1  5, Chapter II, The Texas Banking Code (Article 342-205, Vernon's
   42-2  Texas Civil Statutes), and Section 4.04 of this Act, shall
   42-3  establish the amount of the fees to be charged by the commissioner
   42-4  for supervision and examination of savings banks, for filing an
   42-5  application or other documents, for conducting a hearing, and for
   42-6  other services performed by the commissioner and the commission's
   42-7  office, and the time and manner of payment of the fees.  Fees
   42-8  collected by the commissioner shall be deposited and used in
   42-9  accordance with Section (h), Article 5, Chapter II, The Texas
  42-10  Banking Code (Article 342-205, Vernon's Texas Civil Statutes).
  42-11        Sec. 4.08.  CONFIDENTIALITY.  The commissioner and any
  42-12  examiner, supervisor, conservator, liquidator, inspector, deputy,
  42-13  assistant clerk, or other employee of the Savings and Loan
  42-14  Department of Texas appointed or acting under this Act shall keep
  42-15  confidential any facts or information regarding a savings bank
  42-16  obtained in the course of an examination or by reason of the
  42-17  individual's official position, unless the public duty of the
  42-18  person requires otherwise.  A person who violates this section or
  42-19  wilfully makes a false official report on the condition of a
  42-20  savings bank shall be removed from office or further employment
  42-21  with the Savings and Loan Department of Texas.  A report of an
  42-22  examination made to the commissioner is confidential and not for
  42-23  public record or inspection, except that the commissioner for good
  42-24  reason may make the report public.  This section does not prevent
  42-25  the proper exchange of information relating to savings banks and
  42-26  the business of savings banks with the representatives of
  42-27  regulatory authorities of other states or to any other department,
   43-1  agency, or instrumentality of this state, another state, or the
   43-2  United States if the commissioner determines the disclosure
   43-3  necessary or proper for the enforcement of the laws of this state,
   43-4  another state, or the United States.  Unless otherwise provided by
   43-5  this Act, this section does not apply to facts, information, or
   43-6  reports of investigations obtained or made by the commissioner or
   43-7  the commissioner's staff in connection with an application for
   43-8  charter or a hearing held by the commissioner under this Act, and
   43-9  those facts, information, or reports may be included in the record
  43-10  of the appropriate hearing.  The commissioner shall report promptly
  43-11  to the finance commission when a supervisory order is issued under
  43-12  Chapter 5 of this Act.  The commissioner shall furnish information
  43-13  about a savings bank or person as the finance commission may
  43-14  require in executive session, and all information discussed in the
  43-15  executive session is confidential.
  43-16        Sec. 4.09.  ANNUAL STATEMENTS AND REPORTS.  Each savings bank
  43-17  shall prepare and publish in January of each year in a newspaper of
  43-18  general circulation in the county in which the home office of the
  43-19  savings bank is located a statement of its financial condition as
  43-20  of the last business day of December of the preceding year.  The
  43-21  statement must be in the form prescribed or approved by the
  43-22  commissioner.  On or before the last day of January in each year, a
  43-23  savings bank shall make a written report to the commissioner, on a
  43-24  form to be prescribed and furnished by the commissioner, of its
  43-25  affairs and operations, including a complete statement of its
  43-26  financial condition with a statement of income and expenses since
  43-27  its last annual report under this section.  The president,
   44-1  vice-president, or secretary of the savings bank shall sign the
   44-2  report.  Each savings bank shall also make other reports as the
   44-3  commissioner may require from time to time in the form and filed on
   44-4  the dates as the commissioner prescribes and signed in the same
   44-5  manner as the annual report.
   44-6                        CHAPTER 5.  ENFORCEMENT
   44-7        Sec. 5.01.  GROUNDS FOR SUPERVISORY INTERVENTION.  The
   44-8  commissioner may intervene in the affairs of a savings bank if:
   44-9              (1)  the savings bank, a director, officer, agent, or
  44-10  other person participating in the conduct of the affairs of the
  44-11  savings bank, a subsidiary of the savings bank, or a holding
  44-12  company of the savings bank:
  44-13                    (A)  is engaging in, has engaged in, or is about
  44-14  to engage in an unsafe and unsound practice in conducting the
  44-15  affairs of the savings bank;
  44-16                    (B)  is engaging in, has engaged in, or is about
  44-17  to engage in a violation of the articles of incorporation or bylaws
  44-18  of the savings bank;
  44-19                    (C)  is engaging in, has engaged in, or is about
  44-20  to engage in a violation of any law, rule, or supervisory order
  44-21  applicable to the savings bank or a violation of any condition that
  44-22  the commissioner or the finance commission has imposed on the
  44-23  savings bank by written order, directive, or agreement; or
  44-24                    (D)  has filed materially false or misleading
  44-25  information in a filing required under Section 3.07 of this Act;
  44-26              (2)  a director, officer, employee, agent, or other
  44-27  person participating in the conduct of the affairs of the savings
   45-1  bank, a subsidiary of the savings bank, or a holding company of the
   45-2  savings bank committed or is about to commit:
   45-3                    (A)  a fraudulent or criminal act in the conduct
   45-4  of the savings bank, subsidiary, or holding company's affairs that
   45-5  may cause the savings bank or subsidiary to become insolvent or be
   45-6  in danger of insolvency, or another act that threatens immediate or
   45-7  irreparable harm to the general public or the savings bank, its
   45-8  deposit account holders or creditors, or the subsidiary;
   45-9                    (B)  a breach of fiduciary duty causing or
  45-10  probably causing the savings bank or subsidiary to suffer
  45-11  substantial financial losses or other damages, or a breach of
  45-12  fiduciary duty that would seriously prejudice the interest of the
  45-13  holders of deposit accounts or other security issued by the savings
  45-14  bank;
  45-15                    (C)  a breach of an order or instruction of the
  45-16  commissioner or a conservator or supervisor in charge of the
  45-17  savings bank's affairs;
  45-18                    (D)  a refusal to submit to interrogation under
  45-19  oath by the commissioner or the commissioner's agent with respect
  45-20  to the affairs of the savings bank; or
  45-21                    (E)  a material alteration, concealment, removal,
  45-22  or falsification of books or records of the savings bank, a
  45-23  subsidiary, or a holding company;
  45-24              (3)  the savings bank is insolvent, in imminent danger
  45-25  of insolvency, or engaged in or is about to engage in making loans
  45-26  or investments and the market value of the investments or the value
  45-27  of the security for the loans is materially overstated; or
   46-1              (4)  the savings bank failed to maintain proper books
   46-2  and records from which the true financial condition of the savings
   46-3  bank or the state of its affairs can be determined or refused to
   46-4  authorize and direct a person having possession of the savings
   46-5  bank's or a subsidiary's books, papers, records, or accounts to
   46-6  permit the commissioner or a duly authorized representative of the
   46-7  commissioner to inspect or examine them.
   46-8        Sec. 5.02.  TYPES OF SUPERVISORY ORDER; SERVICE;
   46-9  CONFIDENTIALITY.  (a)  If the commissioner has reasonable cause to
  46-10  believe that one or more grounds for intervention under Section
  46-11  5.01 of this Act exist or are imminent, the commissioner may issue
  46-12  without notice and hearing one or more of the following types of
  46-13  temporary supervisory orders as necessary to correct and eliminate
  46-14  the grounds for supervisory action:
  46-15              (1)  an order to cease and desist from continuing a
  46-16  particular action, an order to take affirmative action, or both;
  46-17              (2)  a removal or prohibition order suspending or
  46-18  prohibiting a director, officer, employee, agent, or any other
  46-19  person participating in the affairs of the savings bank from
  46-20  further participation in the conduct of the affairs of the savings
  46-21  bank or another savings bank subject to this Act;
  46-22              (3)  an order requiring divestiture of control of a
  46-23  savings bank obtained under Section 3.07 of this Act;
  46-24              (4)  an order requiring the forfeiture and payment of a
  46-25  civil penalty in an amount of not more than $25,000 by a director,
  46-26  officer, employee, agent, or other person participating in the
  46-27  affairs of the savings bank or another savings bank subject to this
   47-1  Act; or
   47-2              (5)  an order placing the affairs of the savings bank
   47-3  under the control of a conservator designated in the order, who may
   47-4  take possession and control of the books, records, assets,
   47-5  liabilities, and business of the savings bank and manage it under
   47-6  the direction of the commissioner.
   47-7        (b)  A temporary supervisory order issued by the commissioner
   47-8  takes effect when issued and must reasonably detail the facts
   47-9  constituting the grounds for the order.
  47-10        (c)  Service of a temporary supervisory order may be made by
  47-11  certified or registered mail or by personal delivery by an agent of
  47-12  the commissioner.  Service on a savings bank is completed on
  47-13  receipt of the order by an officer or director of the savings bank.
  47-14        (d)  A temporary or final supervisory order and all notices,
  47-15  correspondence, or other records relating to the order are
  47-16  confidential and may not be revealed to the public, except for good
  47-17  reason as determined by the commissioner, in a hearing or judicial
  47-18  proceeding under Section 5.03 or 5.04 of this Act, or to assert a
  47-19  defense under Section 5.05(g) of this Act.  However, the
  47-20  commissioner may disclose the information to a department, agency,
  47-21  or instrumentality of this state, another state, or the United
  47-22  States if the commissioner determines that the disclosure is
  47-23  necessary or proper for the enforcement of the laws of this state,
  47-24  another state, or the United States.
  47-25        Sec. 5.03.  HEARING ON TEMPORARY SUPERVISORY ORDER.  (a)  A
  47-26  temporary supervisory order becomes final and unappealable on the
  47-27  15th day after the date on which it is issued unless the savings
   48-1  bank or a party affected by the order requests before that date a
   48-2  hearing before the commissioner on the issue of whether the order
   48-3  should be vacated, made permanent, or modified.  The commissioner
   48-4  shall set the matter for hearing at the offices of the Savings and
   48-5  Loan Department of Texas.  The date for the hearing may not be
   48-6  earlier than the 10th day or later than the 30th day after the date
   48-7  of the request.
   48-8        (b)  The hearing shall be conducted as a contested case under
   48-9  the administrative procedure act.  The commissioner may enter a
  48-10  final order that vacates the temporary order or makes it permanent
  48-11  in its original or a modified form consistent with the facts found
  48-12  by the commissioner.  A final order shall be entered by the
  48-13  commissioner not later than the 15th day after the date of the
  48-14  completion of the hearing.
  48-15        (c)  A temporary order may not be stayed pending a hearing
  48-16  unless the commissioner orders a stay, and a final order may not be
  48-17  stayed pending judicial review unless the reviewing court orders a
  48-18  stay for good cause.
  48-19        Sec. 5.04.  ENFORCEMENT OF SUPERVISORY ORDER.  (a)  If the
  48-20  savings bank or any person designated in an order violates or is
  48-21  about to violate the order, the commissioner may apply for
  48-22  injunctive relief in a district court in Travis County.  A bond is
  48-23  not required of the commissioner with respect to injunctive relief
  48-24  granted.
  48-25        (b)  If a savings bank or a person designated in a final
  48-26  order fails to comply with or otherwise violates the order, the
  48-27  commissioner may, after giving notice, assess a civil penalty
   49-1  against the savings bank, the designated person, or both in an
   49-2  amount not to exceed $1,000 each for each day of the violation.
   49-3  The savings bank may not reimburse or indemnify a person for all or
   49-4  any part of the civil penalty.  In addition to any other remedy
   49-5  provided by law, the commissioner may institute a suit for
   49-6  injunctive relief and for collection of the civil penalty in a
   49-7  district court in Travis County.  A bond is not required of the
   49-8  commissioner with respect to injunctive relief granted.
   49-9        Sec. 5.05.  PLACING SAVINGS BANK UNDER CONSERVATOR.  (a)
  49-10  Before or at a hearing on an order placing a savings bank under a
  49-11  conservator, the board of directors of the savings bank may present
  49-12  to the commissioner a plan to continue the operation of the savings
  49-13  bank in a manner that will correct or eliminate the grounds for the
  49-14  order.  If the commissioner approves the plan or a modification of
  49-15  the plan, the commissioner shall vacate the order and place the
  49-16  savings bank under conservatorship conditioned on the approved
  49-17  plan's implementation and diligent prosecution.
  49-18        (b)  If no plan for continuing operations of the savings bank
  49-19  is approved by the commissioner, the conservator shall continue to
  49-20  manage the affairs of the savings bank under the direction and
  49-21  supervision of the commissioner unless the order is otherwise
  49-22  modified or vacated by subsequent order of the commissioner or as a
  49-23  result of judicial review.
  49-24        (c)  The conservator and any deputy or assistant conservator
  49-25  appointed by the commissioner, on behalf of and under the
  49-26  supervision and direction of the commissioner, shall take charge of
  49-27  the books, records, property, assets, liabilities, and business of
   50-1  the savings bank and shall conduct the business and affairs of the
   50-2  savings bank.  The conservator shall remove the causes and
   50-3  conditions that necessitated the conservatorship.  The conservator
   50-4  shall make reports to the commissioner as the commissioner
   50-5  requires.  The conservator shall preserve, protect, and recover the
   50-6  assets or property of the savings bank, including claims or causes
   50-7  of action belonging to or that may be asserted by the savings bank.
   50-8  The conservator may deal with that property in the capacity of
   50-9  conservator and may file, prosecute, or defend against a suit by or
  50-10  against the savings bank if the conservator considers that action
  50-11  necessary to protect the interested party or property affected by
  50-12  the suit.
  50-13        (d)  During the conservatorship, an officer, director,
  50-14  shareholder, employee, agent, or other person participating in the
  50-15  conduct of the affairs of the savings bank shall act according to
  50-16  the instructions of the conservator and shall exercise only the
  50-17  authority that the conservator expressly grants.
  50-18        (e)  The commissioner shall determine the cost incident to
  50-19  the conservatorship, and that cost shall be paid out of the assets
  50-20  of the savings bank as the commissioner directs.
  50-21        (f)  Suit filed against a savings bank or its conservator
  50-22  while a conservatorship order is in effect must be brought in a
  50-23  court of competent jurisdiction in Travis County.  The conservator
  50-24  may file suit in a court of competent jurisdiction in Travis County
  50-25  against any person for the purpose of preserving, protecting, or
  50-26  recovering assets or property of the savings bank, including a
  50-27  claim or cause of action belonging to or that may be asserted by
   51-1  the savings bank.
   51-2        (g)  During the period of conservatorship or supervisory
   51-3  control under Section 5.06 of this Act, a savings bank's promise or
   51-4  agreement to make a loan of money that is not otherwise
   51-5  unenforceable under Chapter 26, Business & Commerce Code, and is
   51-6  made before the order imposing conservatorship or supervisory
   51-7  control, is not enforceable against the savings bank unless the
   51-8  promise or agreement or a memorandum of the promise or agreement
   51-9  is:
  51-10              (1)  in writing setting forth the material terms of the
  51-11  loan and its repayment;
  51-12              (2)  signed by a duly authorized officer or employee of
  51-13  the savings bank and the person to whom the promise or agreement
  51-14  was made; and
  51-15              (3)  approved by the board of directors of the savings
  51-16  bank.
  51-17        (h)  The conservator shall serve for the period necessary to
  51-18  accomplish the purposes of the conservatorship.  If the savings
  51-19  bank is rehabilitated to the satisfaction of the commissioner, it
  51-20  shall be returned to the management of the board of directors under
  51-21  terms that are reasonable and necessary to prevent recurrence of
  51-22  the conditions creating the need for conservatorship.
  51-23        (i)  During a conservatorship, the commissioner may impose
  51-24  limitations on withdrawals of deposit accounts from a savings bank
  51-25  on a determination that the interest of deposit account holders and
  51-26  creditors of the savings bank are best protected by the
  51-27  limitations.  The commissioner shall issue an order detailing the
   52-1  limitations imposed and containing a statement in reasonable detail
   52-2  of the facts constituting the grounds for the imposition of the
   52-3  limitations.  The limiting order becomes effective on the service
   52-4  of the order on the conservator.  Service may be made by certified
   52-5  or registered mail or by personal delivery by an agent of the
   52-6  commissioner and is complete on receipt by the conservator.
   52-7  Immediately on receipt of the limiting order, a conservator shall
   52-8  place a copy of the order at the main entrance of the savings bank
   52-9  and deposit account withdrawals in violation of the order may not
  52-10  be permitted after its posting.  The limiting order becomes final
  52-11  and unappealable on the 15th day after the date on which it is
  52-12  posted in accordance with this section unless at least 20 percent
  52-13  of the total number of deposit account holders affected by the
  52-14  order request before that date a hearing before the commissioner on
  52-15  the issue of whether the order should be vacated, made permanent,
  52-16  or modified.  The commissioner shall set the matter for hearing in
  52-17  the offices of the Savings and Loan Department of Texas.  The date
  52-18  for the hearing may not be earlier than the 10th day or later than
  52-19  the 30th day after the date of the request.  The hearing shall be
  52-20  conducted as a contested case under the administrative procedure
  52-21  act.  The commissioner may issue a final order that vacates the
  52-22  limiting order or makes it permanent in its original or modified
  52-23  form consistent with the facts found by the commissioner.  A
  52-24  limiting order may not be stayed pending a hearing unless the
  52-25  commissioner orders a stay, and a final order may not be stayed
  52-26  pending judicial review unless the reviewing court orders a stay
  52-27  for good cause.
   53-1        Sec. 5.06.  VOLUNTARY SUBMISSION TO SUPERVISORY CONTROL.  The
   53-2  board of directors of a savings bank may consent to the
   53-3  commissioner's placing the savings bank under supervisory control.
   53-4  The commissioner may appoint a supervisor and one or more deputy
   53-5  supervisors who have the powers of a conservator under Section 5.05
   53-6  of this Act and other powers established by agreement between the
   53-7  commissioner and the board of directors.  The supervisory control
   53-8  continues until the problems giving rise to the supervisory control
   53-9  are corrected.  The costs of the supervisory control shall be fixed
  53-10  by the commissioner and paid by the savings bank.
  53-11        Sec. 5.07.  LIQUIDATION BY COMMISSIONER'S ORDER.  (a)  If it
  53-12  appears doubtful to the commissioner that a savings bank subject to
  53-13  a conservatorship order can be successfully rehabilitated, the
  53-14  commissioner may close the savings bank under Section 5.09 of this
  53-15  Act or may set a hearing to determine whether the savings bank
  53-16  should be liquidated.  Notice of any hearing shall be given not
  53-17  later than the 10th day before the hearing date by certified mail
  53-18  to the officers and directors of the savings bank and by
  53-19  publication in a newspaper of general circulation in the county in
  53-20  which the principal office of the savings bank is located.
  53-21        (b)  If the commissioner closes a savings bank under Section
  53-22  5.09 of this Act or finds after a hearing under Subsection (a) of
  53-23  this section that the savings bank cannot be rehabilitated and that
  53-24  it is in the public interest and the best interest of the deposit
  53-25  account holders and creditors of the savings bank that it be closed
  53-26  and its assets liquidated, the commissioner may issue an order of
  53-27  liquidation appointing a liquidating agent and dissolving the
   54-1  savings bank.  The corporate existence of the savings bank
   54-2  continues for three years after the date the order of liquidation
   54-3  is issued for the purpose of adjusting and settling claims not
   54-4  disposed of during the liquidation.  If necessary, the commissioner
   54-5  may appoint a special liquidating agent for that purpose at the
   54-6  completion of the liquidation.
   54-7        (c)  Under the supervision of the commissioner, the
   54-8  liquidating agent shall:
   54-9              (1)  receive and take possession of the books, records,
  54-10  assets, and property of the savings bank in liquidation;
  54-11              (2)  sell, enforce collection of, and liquidate the
  54-12  assets and property of the savings bank in liquidation;
  54-13              (3)  sue in the name of the liquidating agent or in the
  54-14  name of the savings bank in liquidation;
  54-15              (4)  defend actions brought against the liquidating
  54-16  agent or the savings bank in liquidation;
  54-17              (5)  receive, examine, and pass on claims against the
  54-18  savings bank in liquidation, including claims of depositors;
  54-19              (6)  make distribution and payment to creditors,
  54-20  deposit account holders, stockholders, and members as their
  54-21  interests may appear;
  54-22              (7)  execute documents and papers and take other
  54-23  actions that the liquidating agent considers necessary or desirable
  54-24  to the liquidation; and
  54-25              (8)  give notice to creditors and deposit account
  54-26  holders directing them to present and prove their claims, by
  54-27  publishing the notice once a week for three successive weeks in a
   55-1  newspaper of general circulation in each county in which the
   55-2  savings bank in liquidation maintained an office or branch for the
   55-3  transaction of business on the date it ceased unrestricted
   55-4  operations.
   55-5        (d)  The notice under Subsection (c)(8) of this section must
   55-6  require all depositors and creditors to file written proofs of
   55-7  claim at the address designated in the notice.  Within 30 days
   55-8  after the date of the first publication of the notice, the
   55-9  liquidating agent shall mail a similar notice to each depositor and
  55-10  creditor shown on the books of the savings bank at the address
  55-11  reflected on the savings bank's books.
  55-12        (e)  Under supervision of the commissioner, the liquidating
  55-13  agent shall from time to time make a ratable liquidation dividend
  55-14  on claims that have been proved to the satisfaction of the
  55-15  liquidating agent or adjusted in a court of competent jurisdiction
  55-16  and, after the assets of the savings bank have been liquidated,
  55-17  shall make further liquidation dividends on claims previously
  55-18  proved or adjusted.  For this purpose the statement of an amount
  55-19  due to a claimant shown on the books and records of the savings
  55-20  bank may be accepted instead of a formal proof of claim on behalf
  55-21  of the claimant.  A final dividend may not be paid before the
  55-22  beginning of the 19th month after the date of the first publication
  55-23  of notice as prescribed in this section.  All claims filed after
  55-24  the declaration and payment of any dividend before the expiration
  55-25  of the 18 months qualify, if approved, to participate in dividends
  55-26  previously paid before any additional dividend is declared.  Claims
  55-27  that are presented after the 18th month do not qualify to
   56-1  participate in any dividend or distribution of assets until after
   56-2  full payment of all approved claims presented during the period.
   56-3        (f)  A deposit account holder, creditor, or other person
   56-4  asserting any claim of any character against a savings bank in the
   56-5  process of liquidation under this section must present, before the
   56-6  beginning of the 19th month after the date of the first publication
   56-7  of notice provided in this section, the claim in writing to the
   56-8  commissioner or the liquidating agent, at the address that has been
   56-9  designated in the notice provided in this section.  A claim must
  56-10  state the facts supporting the claim, set out any right of priority
  56-11  of payment or other specific rights asserted by the claimant, and
  56-12  be signed and sworn to by the claimant.
  56-13        (g)  Within three months after the date of the receipt of a
  56-14  claim against a savings bank in liquidation, unless the time is
  56-15  extended by written agreement with the claimant, the liquidating
  56-16  agent shall approve or reject the claim in whole or in part.  If
  56-17  the liquidating agent approves a claim or any part of the claim,
  56-18  the liquidating agent shall classify the claim and enter it and the
  56-19  action on the claim in a claim register.  If the liquidating agent
  56-20  rejects a claim in whole or in part or denies any right of priority
  56-21  of payment or any other right asserted by the claimant, the
  56-22  liquidating agent shall notify the claimant of the action by
  56-23  registered mail.
  56-24        (h)  Within three months after the date of mailing of notice
  56-25  by the liquidating agent as provided by the preceding subsection, a
  56-26  claimant may sue on the claim in a district court of Travis County.
  56-27  If the claimant does not sue, the action of the liquidating agent
   57-1  is final on the expiration of that period.  The trial of a suit is
   57-2  de novo as if originally filed in that court and is subject to the
   57-3  rules of procedure and appeal applicable to civil cases.
   57-4        (i)  On liquidation of a savings bank, claims for payment
   57-5  have the following priority:
   57-6              (1)  obligations incurred by the commissioner or the
   57-7  liquidating agent, fees and assessments due to the Savings and Loan
   57-8  Department of Texas, and expenses of liquidation, all of which may
   57-9  be covered by the proper reserve of funds;
  57-10              (2)  approved claims of creditors, to the extent that
  57-11  the claims are secured by or constitute a lien on the assets or
  57-12  property of the savings bank;
  57-13              (3)  approved claims of deposit account holders against
  57-14  the general liquidating account of the savings bank;
  57-15              (4)  approved claims of general creditors, and the
  57-16  unsecured portion of any creditor obligation described in
  57-17  Subdivision (2) of this subsection;
  57-18              (5)  claims otherwise proper but not filed within the
  57-19  time prescribed by this section;
  57-20              (6)  approved claims of subordinated creditors; and
  57-21              (7)  claims of stockholders of the savings bank.
  57-22        (j)  At any time after the expiration of 18 months after the
  57-23  date of the first publication notice specified in this section and
  57-24  after the liquidating agent liquidates all assets of the savings
  57-25  bank capable of liquidation or realizes sufficient funds from the
  57-26  liquidation to pay the costs of liquidation and all claims filed
  57-27  and established and to leave funds available for the payment of all
   58-1  nonclaiming deposit account holders and creditors, the liquidating
   58-2  agent shall declare and pay a final dividend.  The liquidating
   58-3  agent shall deposit all unclaimed dividends and all funds available
   58-4  for nonclaiming deposit account holders and creditors in one or
   58-5  more state-chartered financial institutions for the benefit of the
   58-6  deposit account holders and creditors entitled to those dividends
   58-7  or funds.  The liquidating agent shall pay a deposit account holder
   58-8  or creditor, on demand, any amount held for the benefit of the
   58-9  deposit account holder or creditor.  If the liquidating agent is in
  58-10  doubt as to the identity of a claimant or a claimant's right to the
  58-11  amount held, the liquidating agent shall reject the claim and
  58-12  notify the claimant by registered mail.  Within three months after
  58-13  the date of the mailing of the notice, the claimant may bring suit
  58-14  against the liquidating agent in a district court of Travis County
  58-15  to recover the funds.  The suit is in the nature of an action in
  58-16  rem and governed by the rules of procedure and appeal applicable to
  58-17  civil cases.  The judgment in the suit is binding on all persons
  58-18  interested in the dividends or funds.  If a suit is not filed
  58-19  within the time prescribed, the liquidating agent's rejection of
  58-20  the claim is final.  After paying a final dividend and performing
  58-21  each act necessary or proper for the benefit of the deposit account
  58-22  holders and creditors in connection with the liquidation of the
  58-23  assets of a savings bank, the liquidating agent shall file with the
  58-24  commissioner a final report of the liquidation.
  58-25        (k)  The commissioner shall determine the cost incident to
  58-26  the liquidation and that cost shall be paid out of the assets of
  58-27  the savings bank as the commissioner directs.
   59-1        (l)  The provisions of the administrative procedure act
   59-2  relating to a contested hearing apply to any hearing called by the
   59-3  commissioner under this section.
   59-4        Sec. 5.08.  COMPLETION OF LIQUIDATION.  The commissioner may
   59-5  remove a liquidating agent and appoint another agent with or
   59-6  without cause.  If a liquidating agent resigns, dies, or becomes
   59-7  unable to serve for any reason, the commissioner shall promptly
   59-8  appoint another agent.  When a liquidation is complete, the
   59-9  liquidating agent shall certify that fact to the commissioner, and
  59-10  the commissioner shall issue an order closing the liquidation.
  59-11  After a closing order, the commissioner and the liquidating agent
  59-12  are released and discharged from any further duty, obligation, or
  59-13  liability in connection with the administration of the affairs of
  59-14  the savings bank, and a person does not have and may not maintain
  59-15  any claim, suit, or action against the commissioner or the
  59-16  liquidating agent, individually or in their official capacities,
  59-17  except a suit to recover unclaimed deposits as provided in this
  59-18  section.
  59-19        Sec. 5.09.  CLOSING OF SAVINGS BANK BY COMMISSIONER OR
  59-20  DIRECTORS.  (a)  Notwithstanding any other provision of this
  59-21  chapter, the commissioner or the commissioner's authorized
  59-22  representative may close a savings bank if, after an examination,
  59-23  the commissioner determines that:
  59-24              (1)  the interests of the deposit account holders and
  59-25  creditors of the savings bank are jeopardized because of the
  59-26  savings bank's insolvency or imminent insolvency or a substantial
  59-27  dissipation of assets or earnings of the savings bank due to a
   60-1  violation of law or rules or an unsafe or unsound practice; and
   60-2              (2)  closing the savings bank and liquidating its
   60-3  assets is in the best interest of the deposit account holders and
   60-4  creditors.
   60-5        (b)  On closing a savings bank under this section, the
   60-6  commissioner may liquidate the savings bank as provided by this
   60-7  chapter or may tender the assets and all affairs of the savings
   60-8  bank to the Federal Deposit Insurance Corporation and appoint the
   60-9  Federal Deposit Insurance Corporation as receiver or liquidating
  60-10  agent to act in accordance with this chapter or federal law.  If
  60-11  the Federal Deposit Insurance Corporation accepts the tender and
  60-12  appointment, it may act without bond or other security as to the
  60-13  appointment and, without court supervision, may exercise all
  60-14  rights, powers, and privileges provided by the laws of this state
  60-15  to a receiver or liquidating agent, as applicable, and any
  60-16  applicable right, power or privilege available under federal law.
  60-17  On acceptance of the appointment, the possession of and title to
  60-18  all the assets, business, and property of the savings bank pass to
  60-19  the Federal Deposit Insurance Corporation without the execution of
  60-20  instruments of conveyance, assignment, transfer, or endorsement.
  60-21  If the Federal Deposit Insurance Corporation pays the insured
  60-22  deposit liabilities of a savings bank that was closed or is being
  60-23  liquidated under this chapter, whether or not the Federal Deposit
  60-24  Insurance Corporation has become receiver or liquidating agent, the
  60-25  Federal Deposit Insurance Corporation is subrogated, to the extent
  60-26  of the payment, to all rights that the owners of the deposit
  60-27  accounts have against the savings bank.
   61-1        (c)  Not later than the second day, excluding legal holidays,
   61-2  after the day that the commissioner closes a savings bank under
   61-3  this section, the savings bank, acting by resolution of its board
   61-4  of directors, may sue in a district court of Travis County to
   61-5  prohibit the commissioner from taking further action under this
   61-6  section.  The court may restrain the commissioner from taking
   61-7  further action until a hearing on the merits.  If the court
   61-8  restrains the commissioner, it shall instruct the commissioner to
   61-9  hold the assets and affairs of the savings bank in the
  61-10  commissioner's possession until disposition of the suit.  On
  61-11  receipt of that instruction, the commissioner shall refrain from
  61-12  taking further action, except the commissioner, with the approval
  61-13  of the district judge, may take action as necessary or proper to
  61-14  prevent loss or depreciation in the value of the assets.  The court
  61-15  as soon as possible shall hear the suit on its merits and shall
  61-16  enter a judgment prohibiting or refusing to prohibit the
  61-17  commissioner from proceeding under this section.  This judgment may
  61-18  be appealed as in other civil cases, but the commissioner,
  61-19  regardless of the judgment entered by the trial court or any
  61-20  supersedeas bond filed, retains possession of the assets of the
  61-21  savings bank until final disposition on appeal.
  61-22        (d)  A board of directors may, by resolution and with the
  61-23  consent of the commissioner, close a savings bank and tender its
  61-24  assets and all its affairs to the commissioner for disposition as
  61-25  authorized by this section.
  61-26                 CHAPTER 6.  CORPORATE ADMINISTRATION
  61-27        Sec. 6.01.  BOARD OF DIRECTORS.  (a)  The business of a
   62-1  savings bank shall be directed by a board of directors of not fewer
   62-2  than five or more than 21 members elected by majority vote at each
   62-3  annual meeting of the members or stockholders.  A savings bank
   62-4  authorized to issue capital stock may provide in its bylaws that
   62-5  all or at least a majority of its board of directors must be
   62-6  stockholders.
   62-7        (b)  The number of directors may be changed, within the
   62-8  prescribed limits, by resolution adopted at any annual meeting of
   62-9  members or stockholders or any special meeting called for that
  62-10  purpose.
  62-11        Sec. 6.02.  ORGANIZATIONAL MEETINGS.  Within 30 days after
  62-12  the date on which the corporate existence of a savings bank begins,
  62-13  the initial board of directors shall hold an organizational meeting
  62-14  and, under the provisions of this Act and the bylaws, shall elect
  62-15  officers and take other action as appropriate in connection with
  62-16  beginning the transaction of business by the savings bank.  The
  62-17  commissioner on good cause shown may extend by order the time
  62-18  within which the organizational meeting is to be held.
  62-19        Sec. 6.03.  QUALIFICATION OF DIRECTORS; VACANCIES.  (a)  A
  62-20  person may not be a member of the board of directors of a savings
  62-21  bank if the person:
  62-22              (1)  is not a citizen of the United States;
  62-23              (2)  is not at least 18 years of age;
  62-24              (3)  has been adjudicated bankrupt or convicted of a
  62-25  criminal offense involving dishonesty or breach of trust, unless
  62-26  given prior written approval to be a member of the board by the
  62-27  commissioner;
   63-1              (4)  has a final judgment entered against the person
   63-2  for a sum of money that has remained unsatisfied or unsecured for
   63-3  more than six months after the date of the judgment's entry, unless
   63-4  the commissioner gives the person prior written approval to be a
   63-5  member of the board or unless the judgment was satisfied of record
   63-6  more than one year before the date of the election; or
   63-7              (5)  is a director, officer, or employee of another
   63-8  savings bank, unless given the prior written approval to be a
   63-9  member of the board by the commissioner.
  63-10        (b)  The bylaws of a savings bank may prescribe other
  63-11  qualifications for directors.
  63-12        (c)  A vacancy on the board of directors is filled by a
  63-13  majority vote of the remaining directors, though less than a
  63-14  quorum, by electing a director to serve until the next annual
  63-15  meeting of members or stockholders.  If a vacancy on the board of
  63-16  directors occurs from any cause, the remaining directors may
  63-17  continue direction of the savings bank until the vacancy is filled.
  63-18        Sec. 6.04.  OFFICERS.  The officers of a savings bank consist
  63-19  of a president, one or more vice-presidents, a secretary, and other
  63-20  officers as prescribed by the bylaws.  The officers are elected by
  63-21  a majority vote of the board of directors.  The managing officer
  63-22  must be a member of the board of directors.
  63-23        Sec. 6.05.  INDEMNITY BONDS OF DIRECTORS, OFFICERS, AND
  63-24  EMPLOYEES.  Each savings bank shall maintain on file with the
  63-25  commissioner an effective blanket indemnity bond with an adequate
  63-26  corporate surety protecting the savings bank from loss by or
  63-27  through any fraud, dishonesty, forgery or alteration, larceny,
   64-1  theft, embezzlement, robbery, burglary, holdup, wrongful or
   64-2  unlawful abstraction, misappropriation, or any other dishonest or
   64-3  criminal action or omission by any officer or employee of the
   64-4  savings bank or any director of the savings bank when performing
   64-5  the duty of an officer or employee.  A savings bank that employs
   64-6  collection agents that for any reason are not covered by a bond as
   64-7  required shall provide for the bonding of each collection agent in
   64-8  an amount equal to at least twice the average monthly collection of
   64-9  the agent.  The agents shall make settlement with the savings bank
  64-10  at least monthly.  Bond coverage is not required of an agent that
  64-11  is a financial institution insured by the Federal Deposit Insurance
  64-12  Corporation.  The amounts and form of bonds and the sufficiency of
  64-13  the surety on the bonds must be approved by the board of directors
  64-14  and the commissioner.  Each bond must provide that a cancellation
  64-15  of the bond either by the surety or the insured does not become
  64-16  effective until the 30th day after the date on which written notice
  64-17  is given to the commissioner unless the commissioner gives prior
  64-18  approval to an earlier date.
  64-19        Sec. 6.06.  MEETINGS OF STOCKHOLDERS OR MEMBERS; VOTING
  64-20  RIGHTS; PROXIES.  The members or stockholders of a savings bank
  64-21  shall hold an annual meeting at the time fixed in the bylaws of the
  64-22  savings bank.  Special meetings may be called as provided in the
  64-23  bylaws.  The voting rights of a person who is entitled to vote at
  64-24  an annual or special meeting of the savings bank shall be the same
  64-25  as those of a shareholder in a domestic business corporation under
  64-26  the Texas Business Corporation Act.  The bylaws must provide the
  64-27  manner of computing the number of votes that a member or
   65-1  stockholder is entitled to cast.  For a capital stock savings bank,
   65-2  the bylaws may provide that only holders of capital stock may vote.
   65-3  Voting may be in person or by proxy.  A proxy must be in writing
   65-4  and signed by the member or stockholder or a duly authorized
   65-5  attorney in fact and be filed with the secretary.  Unless otherwise
   65-6  specified in the proxy, a proxy continues in force from year to
   65-7  year until a revocation in writing is delivered to the secretary or
   65-8  until superseded by a subsequent proxy.  The bylaws of a savings
   65-9  bank must specify the quorum requirements and other voting
  65-10  requirements for conducting business at membership meetings.
  65-11        Sec. 6.07.  ACCESS TO BOOKS AND RECORDS.  (a)  Each borrower
  65-12  or deposit account holder of a savings bank has the right to
  65-13  inspect the books and records of the savings bank that relate to
  65-14  the borrower's or deposit account holder's loan or account.  Except
  65-15  for the borrower's or deposit account holder's right of inspection,
  65-16  the right of inspection and examination of the books and records of
  65-17  a savings bank is limited to the commissioner and the
  65-18  commissioner's duly authorized representatives under Section 4.06
  65-19  of this Act, persons authorized to act for the savings bank, and an
  65-20  authorized agent of a governmental agency that has insured the
  65-21  deposit accounts of the savings bank.  In a judicial proceeding,
  65-22  the court may order the production of books, records, and files;
  65-23  however, the books, records, and files of a savings bank are not
  65-24  admissible as evidence in any proceeding concerning the validity of
  65-25  a tax assessment or the collection of delinquent taxes, penalties,
  65-26  and interest, unless a stockholder or deposit account holder is a
  65-27  proper party to the proceeding, in which event the books, files,
   66-1  and records pertaining to the account of the party are admissible,
   66-2  or unless the savings bank is a proper party to the proceeding, in
   66-3  which event any book, file, or record material to the proceeding is
   66-4  admissible.  A person is not entitled to a partial or complete list
   66-5  of the names of stockholders of a stock savings bank or the members
   66-6  of a mutual savings bank unless expressly permitted by the board of
   66-7  directors.
   66-8        (b)  Each stockholder of a capital stock savings bank has the
   66-9  same rights to examine the relevant books and records of a savings
  66-10  bank as a shareholder of a business corporation under the Texas
  66-11  Business Corporation Act.
  66-12        Sec. 6.08.  AMENDMENT OF ARTICLES OF INCORPORATION OR BYLAWS.
  66-13  A savings bank, by resolution adopted by a majority vote of those
  66-14  entitled to vote attending an annual meeting or a special meeting
  66-15  called for that purpose, may amend its articles of incorporation or
  66-16  bylaws in a manner not inconsistent with this Act.  An amendment
  66-17  may not take effect before it is filed with and approved by the
  66-18  commissioner.
  66-19        Sec. 6.09.  CONFLICTS OF INTEREST.  (a)  Except as the
  66-20  commissioner and the finance commission may provide by rule, a
  66-21  director or officer may not:
  66-22              (1)  receive directly or indirectly any commission on
  66-23  or benefit from a loan made by the savings bank;
  66-24              (2)  pay for services rendered to a borrower from the
  66-25  savings bank in connection with a loan;
  66-26              (3)  direct or require a borrower on a mortgage to
  66-27  negotiate an insurance policy on the mortgage property through any
   67-1  particular insurance company, attempt to divert to a particular
   67-2  insurance broker the business of borrowers from the savings bank,
   67-3  or refuse to accept an insurance policy on the mortgaged property
   67-4  because it was not negotiated through a particular insurance
   67-5  broker;
   67-6              (4)  become an endorser, surety, or guarantor, or in
   67-7  any manner an obligor for a loan made by the savings bank;
   67-8              (5)  borrow or use, individually or as agent or partner
   67-9  of another, directly or indirectly, funds of the savings bank;
  67-10              (6)  become the owner of real property on which the
  67-11  savings bank holds a mortgage unless the loan is fully secured by:
  67-12                    (A)  a first-lien mortgage on property that is to
  67-13  be occupied as the director's or officer's primary residence and
  67-14  that is specifically approved in writing by the board of directors;
  67-15  or
  67-16                    (B)  a deposit maintained by the officer or
  67-17  director with the savings bank; or
  67-18              (7)  engage in any other activity prohibited by a rule
  67-19  of the commissioner and the finance commission.
  67-20        (b)  Except as the commissioner and the finance commission
  67-21  may provide by rule, a savings bank may not make a loan to a
  67-22  corporation in which a director or officer holds stock, options, or
  67-23  warrants to purchase stock in the amount of five percent or more of
  67-24  the outstanding stock, or in which the director and the other
  67-25  directors of the savings bank hold in the aggregate stock, options,
  67-26  or warrants to purchase stock of five percent or more of the
  67-27  outstanding stock.  A deposit with a banking corporation is a loan
   68-1  within the meaning of this section.
   68-2        (c)  This section does not prohibit a savings bank from:
   68-3              (1)  making a loan to a religious corporation, club, or
   68-4  other membership corporation of which one or more directors or
   68-5  officers are members, but in which they have no financial interest;
   68-6              (2)  making a loan to or purchasing guaranteed
   68-7  mortgages from a stock corporation, if a director does not own more
   68-8  than 15 percent of the capital stock of the corporation and the
   68-9  total amount of the capital stock of the corporation owned by all
  68-10  directors of the savings bank is less than 25 percent.
  68-11                          CHAPTER 7.  POWERS
  68-12        Sec. 7.01.  GENERAL CORPORATE POWERS.  Each savings bank has
  68-13  the powers authorized by this Act and other rights, privileges, and
  68-14  powers as may be incidental to or reasonably necessary for the
  68-15  accomplishment of the objects and purposes of the savings bank.
  68-16  Subject to the prior approval of the commissioner, a savings bank
  68-17  may engage in business as a savings bank in any state or territory
  68-18  of the United States to the extent permitted by the laws of that
  68-19  state or territory, either directly or through ownership of another
  68-20  savings bank incorporated under the laws of another state.
  68-21        Sec. 7.02.  POWER TO BORROW.  A savings bank may borrow and
  68-22  give security, subject to the rules adopted by the commissioner and
  68-23  the finance commission.  In addition, at any time through action of
  68-24  its board of directors a savings bank may issue capital notes,
  68-25  debentures, or other capital obligations as are authorized under
  68-26  the rules adopted by the commissioner and the finance commission.
  68-27        Sec. 7.03.  FISCAL AGENT.  A savings bank may act as fiscal
   69-1  agent of the United States and, when so designated by the secretary
   69-2  of the treasury, shall perform under regulations as the secretary
   69-3  may require and may act as agent for any instrumentality of the
   69-4  United States and as agent of this state or any state governmental
   69-5  subdivision or instrumentality.
   69-6        Sec. 7.04.  POWER TO ACT UNDER FEDERAL RETIREMENT PLANS.  A
   69-7  savings bank and a federal savings bank, if its charter and
   69-8  applicable federal rules permit, may exercise all powers necessary
   69-9  to qualify as a trustee or custodian for retirement plans permitted
  69-10  or recognized by federal law and may invest funds held in that
  69-11  capacity in the accounts of the institution if the trust or
  69-12  custodial retirement plan does not prohibit the investment.
  69-13        Sec. 7.05.  INVESTMENT IN BANKING PREMISES.  A savings bank
  69-14  may invest in real estate, buildings, and related facilities,
  69-15  including parking, and in leasehold improvements for rented
  69-16  facilities for use by the savings bank as its banking premises.
  69-17        Sec. 7.06.  LIMITATION ON LOANS TO ONE BORROWER.  A savings
  69-18  bank may not make loans to any one borrower to a greater extent
  69-19  than:
  69-20              (1)  a savings association is permitted under Section
  69-21  5(u) of the Home Owners' Loan Act (12 U.S.C. Section 1464(u)); or
  69-22              (2)  permitted by rule adopted under Section 4.04(16).
  69-23        Sec. 7.07.  INVESTMENTS IN EQUITY SECURITIES.  (a)  A savings
  69-24  bank or a subsidiary may not invest in stock or equity securities
  69-25  unless the securities qualify as investment grade securities under
  69-26  rules adopted by the commissioner and the finance commission.
  69-27  Additionally, a savings bank may not invest in stock or equity
   70-1  securities unless the securities are eligible investments for a
   70-2  federal savings and loan association.
   70-3        (b)  The limitations of Subsection (a) do not apply to equity
   70-4  securities:
   70-5              (1)  issued by any United States government-sponsored
   70-6  corporation including the Federal National Mortgage Association,
   70-7  the Federal Home Loan Mortgage Corporation, and the Student Loan
   70-8  Marketing Association; or
   70-9              (2)  issued by a service corporation, an operating
  70-10  subsidiary, or a finance subsidiary of the savings bank.
  70-11        (c)  The commissioner and the finance commission may adopt
  70-12  rules necessary to implement this section, including eligible
  70-13  investment criteria, investment diversification, and resource
  70-14  management requirements.
  70-15        Sec. 7.08.  TRUST POWERS.  A savings bank may exercise trust
  70-16  powers in compliance with state law, subject to the prior written
  70-17  approval of the commissioner.  The commissioner's approval must be
  70-18  based on findings that the applicant's savings bank is in
  70-19  compliance with its regulatory capital requirements, is well
  70-20  managed, and exhibits earnings, resources, and managerial talent
  70-21  adequate to maintain a trust department.
  70-22        Sec. 7.09.  COMMERCIAL LOANS.  Subject to the rules of the
  70-23  commissioner and the finance commission, a savings bank may lend
  70-24  and invest not more than 15 percent of its total assets in
  70-25  commercial loans.  A commercial loan is a non-real estate loan for
  70-26  business, commercial, corporate, or agricultural purposes.
  70-27        Sec. 7.10.  SUBSIDIARIES.  (a)  With the prior consent of the
   71-1  commissioner and subject to the rules of the commissioner and the
   71-2  finance commission, a savings bank may invest in subsidiary
   71-3  corporations created under general corporate law for corporate
   71-4  organizations.
   71-5        (b)  A savings bank may not make any investment in a
   71-6  subsidiary corporation if its aggregate investments in subsidiaries
   71-7  would exceed 10 percent of its total assets.
   71-8        (c)  The subsidiary corporation is subject to regulation and
   71-9  examination by the commissioner, and the subsidiary corporation
  71-10  shall pay the cost of the regulation and examination.
  71-11        (d)  The commissioner and the finance commission shall adopt
  71-12  rules on permitted activities of a subsidiary corporation.
  71-13        Sec. 7.11.  PARITY.  Subject to the limitations and
  71-14  restrictions prescribed by rule of the commissioner and the finance
  71-15  commission, a savings bank may make a loan or investment or engage
  71-16  in an activity permitted under state law for banks or savings and
  71-17  loan associations, or under the laws of the United States for
  71-18  federal savings and loan associations, savings banks, or national
  71-19  banks with principal offices located in this state.
  71-20        Sec. 7.12.  LOAN EXPENSES.  (a)  Subject to Subsection (b) of
  71-21  this section, a savings bank may require borrowers to pay all
  71-22  reasonable expenses incurred in connection with the making,
  71-23  closing, disbursing, extending, readjusting, or renewing of loans.
  71-24  Those expenses may be collected by the savings bank from the
  71-25  borrower and retained by the savings bank or paid to a person
  71-26  rendering services for which a charge has been made, including an
  71-27  officer, director, or employee of the savings bank rendering the
   72-1  service, or the payments may be paid directly by the borrower to
   72-2  the person rendering the service.  Expenses under this section are
   72-3  not a part of the interest or compensation charged by the savings
   72-4  bank for the loan of money.  A savings bank may charge penalties
   72-5  for prepayment or late payments.  Unless otherwise agreed in
   72-6  writing, prepayment of the principal shall be applied to the final
   72-7  installment of the note or other obligation until that installment
   72-8  is fully paid, and further prepayments shall be applied to
   72-9  installments in the inverse order of their maturity.
  72-10        (b)  A savings bank may charge a borrower the reasonable
  72-11  value of services rendered in connection with the making of a
  72-12  consumer loan, and only expenses necessary and proper for the
  72-13  protection of the lender and actually incurred in connection with
  72-14  the making of the loan may be charged.
  72-15        Sec. 7.13.  ADVANCES TO PAY TAXES OR OTHER CHARGES.  (a)  A
  72-16  savings bank may pay taxes, assessments, insurance premiums, and
  72-17  other similar charges for the protection of the savings bank's
  72-18  interests in property securing the savings bank's real estate
  72-19  loans.  Those payments are advances and may be carried on the
  72-20  savings bank's books as an asset of the savings bank for which the
  72-21  savings bank may charge and collect interest, or the payments may
  72-22  be added to the unpaid balance of the loan to which they apply as
  72-23  of the first day of the month in which the payments are made.  The
  72-24  payments constitute a valid lien against the real estate securing
  72-25  the loan for which they are made.
  72-26        (b)  A savings bank may require a borrower to pay monthly in
  72-27  advance, in addition to interest and principal, an amount equal to
   73-1  one-twelfth of the estimated annual taxes, assessments, insurance
   73-2  premiums, and other charges on the real estate securing a loan, to
   73-3  enable the savings bank to pay the charges as they become due.  The
   73-4  amount of the monthly payment may be increased or decreased as
   73-5  necessary to meet the charges.  A savings bank may carry the
   73-6  payments in trust in an account or may credit them to the
   73-7  indebtedness and advance the money for charges as they come due.  A
   73-8  savings bank shall keep a record of the status of taxes,
   73-9  assessments, insurance premiums, and other charges on all real
  73-10  estate securing its loans and on all real and personal property
  73-11  owned by the savings bank.
  73-12        Sec. 7.14.  RIGHT TO ACT TO AVOID LOSS.  This Act does not
  73-13  deny a savings bank the right to invest its funds, operate a
  73-14  business, manage or deal in property, or take any other action over
  73-15  whatever period may be reasonably necessary to avoid loss on a loan
  73-16  or investment made or an obligation created in good faith in the
  73-17  usual course of business of the savings bank, as authorized by this
  73-18  Act and rules adopted under this Act.  This Act does not prohibit a
  73-19  savings bank from developing or building on land acquired by it
  73-20  under this section or from completing the construction of a
  73-21  building under a construction loan contract in which the borrower
  73-22  has failed to comply with the terms of the contract.
  73-23        Sec. 7.15.  GENERAL POWERS.  A savings bank has the powers
  73-24  specifically conferred by this Act, including the following general
  73-25  corporate powers:
  73-26              (1)  to sue and be sued, complain, and defend in its
  73-27  corporate name;
   74-1              (2)  to adopt and operate reasonable bonus plans,
   74-2  profit-sharing plans, stock bonus plans, stock option plans,
   74-3  pension plans, and similar incentive plans for its directors,
   74-4  officers, and employees, subject to any limitations contained in
   74-5  this Act or rules adopted under this Act;
   74-6              (3)  to make reasonable donations for the public
   74-7  welfare or for charitable, scientific, religious, or educational
   74-8  purposes;
   74-9              (4)  to pledge its assets to secure deposits of public
  74-10  money of the United States, when required by the United States,
  74-11  including revenue and funds the deposit of which is subject to
  74-12  control or regulation of the United States or any of its officers,
  74-13  agents, or employees;
  74-14              (5)  to pledge its assets to secure deposits of public
  74-15  money of any state or any political corporation or subdivision of
  74-16  any state;
  74-17              (6)  to become a member of or deal with any corporation
  74-18  or agency of the United States or this state, to the extent that
  74-19  the corporation or agency assists in furthering or facilitating
  74-20  savings banks' purposes or powers, and to that end to purchase
  74-21  stock or securities of the corporation or agency or deposit money
  74-22  with the corporation or agency, and to comply with any other
  74-23  conditions of membership credit;
  74-24              (7)  to acquire and hold membership in a Federal Home
  74-25  Loan Bank or the Federal Reserve System;
  74-26              (8)  to hold title to assets of any kind and to
  74-27  administer those assets as necessary if their acquisition occurred
   75-1  as a result of the collection or liquidation of loans, investments,
   75-2  or discounts;
   75-3              (9)  to receive and repay deposits and accounts of all
   75-4  types in keeping with this Act and the rules of the commissioner
   75-5  and the finance commission; and
   75-6              (10)  to lend and invest its money as authorized by
   75-7  this Act and by the rules of the commissioner and the finance
   75-8  commission.
   75-9        Sec. 7.16.  INVESTMENT WITHIN SAVINGS BANK'S LOCAL SERVICE
  75-10  AREA.  (a)  Each savings bank shall maintain in its portfolio at
  75-11  least 15 percent of its local service area deposits in the
  75-12  following categories of assets and investments:
  75-13              (1)  first and second lien residential mortgage loans
  75-14  or foreclosed residential mortgage loans originated from within the
  75-15  savings bank's local service area;
  75-16              (2)  home improvement loans;
  75-17              (3)  interim residential construction loans;
  75-18              (4)  mortgage-backed securities secured by loans from
  75-19  within the savings bank's local service area; and
  75-20              (5)  loans for community reinvestment purposes.
  75-21        (b)  The commissioner and the finance commission shall adopt
  75-22  rules to implement this section.  The rules shall define a savings
  75-23  bank's local service area and the categories of loans and
  75-24  investments described in Subsection (a) of this section.  The
  75-25  commissioner, in accordance with rules adopted under this
  75-26  subsection, may grant certain limited-term waivers from the
  75-27  requirements of Subsection (a) of this section if quality loans in
   76-1  the categories described in that subsection are not available from
   76-2  within the savings bank's local service area.
   76-3                        CHAPTER 8.  OPERATIONS
   76-4        Sec. 8.01.  GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.  Each
   76-5  savings bank shall maintain its books and records according to
   76-6  generally accepted accounting principles and according to rules
   76-7  adopted by the commissioner and the finance commission.
   76-8        Sec. 8.02.  LIQUIDITY.  Unless approved in advance by the
   76-9  commissioner, a savings bank shall maintain a minimum of 10 percent
  76-10  of its assets in cash, balances in a federal reserve bank or passed
  76-11  through a federal home loan bank or another depository institution
  76-12  to a federal reserve bank under the Federal Reserve Act, or other
  76-13  readily marketable investments, including unencumbered federal
  76-14  government sponsored enterprises securities, as allowed by rules
  76-15  adopted by the commissioner and the finance commission.
  76-16        Sec. 8.03.  REGULATORY CAPITAL.  A savings bank shall
  76-17  maintain regulatory capital in the amount prescribed by rules of
  76-18  the commissioner and the finance commission.  The amount may not be
  76-19  less than the amount of regulatory capital required for a
  76-20  corresponding national bank.
  76-21        Sec. 8.04.  COMPUTATION OF NET INCOME.  A savings bank shall
  76-22  close its books at the times that its bylaws provide for the
  76-23  purpose of determining the gross income of the savings bank for the
  76-24  period since the date of the last closing of its books.  The net
  76-25  income for the period is the amount of the gross income minus the
  76-26  amount of the expenses of operating the savings bank for the
  76-27  period.
   77-1        Sec. 8.05.  EARNINGS ON ACCOUNTS.  A savings bank may
   77-2  contract to pay interest on deposit accounts or may pay earnings on
   77-3  deposit accounts in the form of dividends declared by the board of
   77-4  directors.  Earnings in the form of interest or dividends shall be
   77-5  computed and paid according to rules adopted by the commissioner
   77-6  and the finance commission.
   77-7        Sec. 8.06.  DIVIDENDS ON CAPITAL STOCK.  The board of
   77-8  directors of a capital stock savings bank may declare and pay
   77-9  dividends out of current or retained income, in cash or additional
  77-10  stock, to the holders of record of the stock outstanding on the
  77-11  date the dividends are declared.
  77-12        Sec. 8.07.  USE OF SURPLUS ACCOUNTS AND EXPENSE FUND
  77-13  CONTRIBUTIONS.  A savings bank, at a closing date, may use all or
  77-14  part of a surplus account, whether earned or paid-in, or expense
  77-15  fund contributions on its books to meet expenses of operating the
  77-16  savings bank for the period just closed, required transfers to loss
  77-17  reserves, or the payment or credit of earnings on deposit accounts.
  77-18                     CHAPTER 9.  DEPOSIT ACCOUNTS
  77-19        Sec. 9.01.  DEPOSITS.  A savings bank may receive deposit of
  77-20  funds subject to withdrawals or to be paid on checks of the deposit
  77-21  account holder.  Those deposits must be payable on demand, without
  77-22  notice, unless the contract of deposit expressly provides
  77-23  otherwise.
  77-24        Sec. 9.02.  NO LIMITATION ON DEPOSIT ACCOUNTS.  There is no
  77-25  limit on the number and value of deposit accounts that a savings
  77-26  bank may accept unless limits are fixed by its board of directors.
  77-27        Sec. 9.03.  WHO MAY OPEN A DEPOSIT ACCOUNT.  Investments in
   78-1  deposit accounts may be made with cash only and may be made by any
   78-2  person, in the person's own right or in a trust or other fiduciary
   78-3  capacity, and by any partnership, association, corporation,
   78-4  political subdivision, or public and governmental unit or entity.
   78-5        Sec. 9.04.  CONTRACTS.  Each holder of a deposit account
   78-6  shall execute a contract setting forth any special terms and
   78-7  provisions applicable to the account and the conditions on which
   78-8  withdrawals may be made.   The contract may not be inconsistent
   78-9  with this Act.  The contract shall be held by the savings bank as
  78-10  part of its records pertaining to the deposit account.  The
  78-11  contract in respect to deposit accounts of political subdivisions
  78-12  and public and governmental units or entities shall provide that
  78-13  the holder of the deposit account may not become a member of the
  78-14  savings bank.
  78-15        Sec. 9.05.  TRANSFER OF DEPOSIT ACCOUNTS.  Deposit accounts
  78-16  are transferable on the books of the savings bank only on
  78-17  presentation of evidence of transfer satisfactory to the savings
  78-18  bank, accompanied by proper application for transfer by the
  78-19  transferee.  The transferee shall accept the deposit account
  78-20  subject to the terms and conditions of the contract, the bylaws of
  78-21  the savings bank, and the provisions of its charter.  A savings
  78-22  bank may treat the holder of record of a deposit account as the
  78-23  owner of the account for all purposes without being affected by any
  78-24  notice to the contrary, unless the savings bank acknowledges in
  78-25  writing a pledge of the deposit account.
  78-26        Sec. 9.06.  DEPOSIT ACCOUNTS OF MINORS.  A savings bank and
  78-27  any federal savings bank may accept a deposit account from a minor
   79-1  as the sole and absolute owner of the deposit account and may pay
   79-2  withdrawals, accept pledges to the savings bank, and act in any
   79-3  manner with respect to the deposit account on the order of the
   79-4  minor.  A payment or delivery of rights to a minor or a receipt or
   79-5  acquittance signed by a minor who holds a deposit account is a
   79-6  valid and sufficient release and discharge of the institution for
   79-7  any payment so made or delivery of rights to the minor.  The
   79-8  receipt, acquittance, pledge, or other action required by the
   79-9  institution to be taken by the minor is binding on the minor as if
  79-10  the minor were of full age and legal capacity, except that if a
  79-11  parent or guardian of the minor desires that the minor not have
  79-12  authority to pledge, hypothecate, control, transfer, or make
  79-13  withdrawals from the deposit account, that fact may be made known
  79-14  to the savings bank in writing by the parent or guardian, in which
  79-15  event the right of the minor to pledge, hypothecate, control,
  79-16  transfer, or make withdrawals from the deposit account during the
  79-17  minority of the minor may not be executed  by the minor except with
  79-18  the joinder of the parent or guardian.  In the event of the death
  79-19  of the minor, the receipt or acquittance of a parent or guardian of
  79-20  the minor is a valid and sufficient discharge of the institution
  79-21  for any sum or sums not exceeding in the aggregate $1,000.
  79-22        Sec. 9.07.  APPLICABILITY OF PROBATE CODE.  The applicable
  79-23  provisions of Chapter XI, Texas Probate Code, govern deposit
  79-24  accounts held in a savings bank.
  79-25        Sec. 9.08.  PLEDGE TO SAVINGS BANKS OF JOINT DEPOSIT
  79-26  ACCOUNTS.  The pledge or hypothecation to a savings bank or federal
  79-27  savings bank of all or part of a deposit account issued in the
   80-1  names of two or more persons, signed by a person on whose signature
   80-2  withdrawals may be made from the deposit account, is, unless the
   80-3  terms of the deposit account provide specifically to the contrary,
   80-4  a valid pledge and transfer to the institution of that part of the
   80-5  deposit account pledged or hypothecated and does not operate to
   80-6  sever or terminate the joint and survivorship ownership of all or
   80-7  any part of the deposit account.
   80-8        Sec. 9.09.  DEPOSIT ACCOUNTS OF FIDUCIARIES.  A savings bank
   80-9  or a federal savings bank doing business in this state may accept
  80-10  deposit accounts in the name of an administrator, executor,
  80-11  custodian, guardian, trustee, or other fiduciary for a named
  80-12  beneficiary, and the fiduciary may vote as a member as if the
  80-13  membership were held absolutely and may open and make additions to,
  80-14  and withdraw from, the deposit account in whole or in part.  Except
  80-15  as otherwise provided by law, a payment to a fiduciary or a receipt
  80-16  or acquittance signed by a fiduciary to whom any payment is made is
  80-17  a valid and sufficient release and discharge of an institution for
  80-18  the payment so made.  If a person holding a deposit account in a
  80-19  fiduciary capacity dies and the probate court does not give to the
  80-20  savings bank written notice of the revocation or termination of the
  80-21  fiduciary relationship or of any other disposition of the
  80-22  beneficial estate, the withdrawal value of the deposit account and
  80-23  earnings on the deposit account or other rights relating to the
  80-24  deposit account, at the option of the institution, may be paid or
  80-25  delivered, in whole or in part, to the beneficiaries, and the
  80-26  savings bank has no further liability for the deposit account.
  80-27        Sec. 9.10.  TRUST ACCOUNTS WHERE TRUST INSTRUMENT NOT
   81-1  DISCLOSED.  If a deposit account is opened by a person claiming to
   81-2  be a trustee for another and notice of the existence and terms of a
   81-3  legal and valid trust other than written claim against the deposit
   81-4  account is not provided to the savings bank, withdrawals from the
   81-5  deposit account may be made on the signature of the person claiming
   81-6  to be the trustee, and in the event of the death of the trustee,
   81-7  the withdrawal value of the deposit account or any part of the
   81-8  deposit account, together with earnings on the deposit account, may
   81-9  be paid to the person for whom the deposit account was stated to
  81-10  have been opened,  and the savings bank has no further liability
  81-11  for the deposit account.
  81-12        Sec. 9.11.  POWERS OF ATTORNEY ON DEPOSIT ACCOUNTS.  A
  81-13  savings bank doing business in this state may continue to recognize
  81-14  the authority of an attorney in fact authorized in writing to
  81-15  manage or to make withdrawals either in whole or in part from the
  81-16  deposit account of a member until it receives written notice or is
  81-17  on actual notice of the revocation of the authority.  For the
  81-18  purposes of this section, written notice of the death or
  81-19  adjudication of incompetency of a member constitutes written notice
  81-20  of revocation of the authority of the attorney.
  81-21        Sec. 9.12.  DEPOSIT ACCOUNTS AS LEGAL INVESTMENTS.  All
  81-22  administrators, executors, guardians, trustees, and other
  81-23  fiduciaries; counties, municipalities, and all other political
  81-24  subdivisions or instrumentalities of this state; business and
  81-25  nonprofit corporations; charitable or educational corporations or
  81-26  associations; and banks, savings and loan associations, credit
  81-27  unions, and all other financial institutions may invest funds held
   82-1  by them in deposit accounts of a savings bank doing business in
   82-2  this state.  An investment made by an insurance company is eligible
   82-3  for tax reducing purposes under Articles 4.10 and 4.11, Insurance
   82-4  Code.  An investment by a school district of any of its funds in
   82-5  accounts that are insured by the Federal Deposit Insurance
   82-6  Corporation meets the requirements of Sections 20.42 and 23.79,
   82-7  Education Code.
   82-8        Sec. 9.13.  REDEMPTION OF DEPOSIT ACCOUNTS.  If funds are on
   82-9  hand for the purpose and no contractual prohibition exists, a
  82-10  savings bank may redeem, in a manner determined by the board of
  82-11  directors, all or any part of any of its deposit accounts by giving
  82-12  30 days' notice by certified mail addressed to each affected
  82-13  deposit account holder at the holder's last address as recorded on
  82-14  the books of the savings bank.  Redemption of deposit accounts must
  82-15  be done on a nondiscriminatory basis.  A savings bank may not
  82-16  redeem deposit accounts if the savings bank is subject to
  82-17  conservatorship or a supervisory control action under Chapter 5 of
  82-18  this Act, unless directed to do so by the commissioner.  The
  82-19  redemption price of a deposit account redeemed shall be the
  82-20  account's withdrawal value.  If notice of redemption has been given
  82-21  and on or before the redemption date the funds necessary for the
  82-22  redemption have been set aside to be, and continue to be, available
  82-23  for redemption, earnings on the deposit accounts called for
  82-24  redemption cease to accrue beginning on the date specified as the
  82-25  redemption date, and all rights with respect to the deposit
  82-26  accounts other than the right of the deposit account holder of
  82-27  record to receive the redemption price terminate on the redemption
   83-1  date.
   83-2        Sec. 9.14.  LIEN ON DEPOSIT ACCOUNTS.  A savings bank or a
   83-3  federal savings bank doing business in this state has a lien,
   83-4  without further agreement or pledge, on all deposit accounts owned
   83-5  by any account holder to whom or on whose behalf the savings bank
   83-6  has made an advance of money by loan or otherwise.  On default in
   83-7  the repayment or satisfaction of the account holder's obligation,
   83-8  the savings bank, without notice to or consent of the account
   83-9  holder, may cancel on its books all or any part of the deposit
  83-10  account owned by the account holder and apply the value of the
  83-11  deposit account in payment on account of the obligation.  A savings
  83-12  bank may by written instrument waive its lien in whole or in part
  83-13  on any deposit account.  A savings bank may take a pledge of
  83-14  deposit accounts of the savings bank owned by an account holder
  83-15  other than the borrower as additional security for a loan secured
  83-16  by a deposit account, real estate, or both.
  83-17        Sec. 9.15.  METHOD OF PAYING EARNINGS ON DEPOSIT ACCOUNT.
  83-18  Dividends or interest shall be credited to a deposit account on the
  83-19  books of the savings bank unless a deposit account holder
  83-20  requests,  and the savings bank  agrees to pay,  dividends or
  83-21  interest on the deposit account in cash.  Dividends payable in cash
  83-22  may be paid by check or bank draft.
  83-23                    CHAPTER 10.  HOLDING COMPANIES
  83-24        Sec. 10.01.  REGISTRATION.  A holding company shall register
  83-25  with the  commissioner on forms prescribed by the commissioner
  83-26  within 90 days after the date of becoming a holding company.  The
  83-27  forms must include information, under oath or otherwise, on the
   84-1  financial condition, ownership, operations, management, and
   84-2  intercompany relations of the holding company and its subsidiaries,
   84-3  and on related matters the commissioner finds necessary and
   84-4  appropriate.  On application, the commissioner may extend the time
   84-5  within which a holding company shall register and file the required
   84-6  information.
   84-7        Sec. 10.02.  REPORTS.  Each holding company and each
   84-8  subsidiary of a holding company, other than a savings bank, shall
   84-9  file with the commissioner reports required by the commissioner.
  84-10  The reports must be made under oath and must be in the form and for
  84-11  the periods prescribed by the commissioner.  Each report must
  84-12  contain information concerning the operations of the holding
  84-13  company and its subsidiaries as the commissioner may require.
  84-14        Sec. 10.03.  BOOKS AND RECORDS.  Each holding company shall
  84-15  maintain books and records as may be prescribed by the
  84-16  commissioner.
  84-17        Sec. 10.04.  EXAMINATIONS.  Each holding company and each
  84-18  subsidiary of a holding company is subject to examinations as the
  84-19  commissioner may prescribe.  The holding company shall pay the cost
  84-20  of an examination.  The confidentiality provisions of Section 4.08
  84-21  of this Act apply to this section.  The commissioner may furnish
  84-22  examination and other reports to any appropriate governmental
  84-23  department, agency, or instrumentality of this state, another
  84-24  state, or the United States.  For purposes of this section, the
  84-25  commissioner, to the extent deemed feasible, may use reports filed
  84-26  with or examinations made by appropriate federal agencies or
  84-27  regulatory authorities of other states.
   85-1        Sec. 10.05.  AGENT FOR SERVICE OF PROCESS.  The commissioner
   85-2  may require a holding company or a person, other than a
   85-3  corporation, connected with a holding company to execute and file a
   85-4  prescribed form of irrevocable appointment of agent for service of
   85-5  process.
   85-6        Sec. 10.06.  RELEASE FROM REGISTRATION.  The commissioner at
   85-7  any time, on the commissioner's own motion or on application, may
   85-8  release a registered holding company from a registration made by
   85-9  the company if the commissioner determines that the company no
  85-10  longer controls a savings bank.
  85-11        Sec. 10.07.  TRANSACTIONS WITH AFFILIATES.  Transactions
  85-12  between a subsidiary savings bank of a holding company and any
  85-13  affiliate of the savings bank subsidiary are subject to rules
  85-14  adopted by the commissioner and the finance commission.
  85-15        Sec. 10.08.  RULES.  The commissioner and the finance
  85-16  commission shall adopt rules providing for registration and
  85-17  reporting of holding companies, setting limitations on the
  85-18  activities and investments of holding companies, and providing for
  85-19  other matters as may be appropriate under this chapter.
  85-20              CHAPTER 11.  FOREIGN FINANCIAL INSTITUTIONS
  85-21        Sec. 11.01.  LIMITATION ON RIGHT TO DO BUSINESS AS A SAVINGS
  85-22  BANK.  (a)  A person, firm, company, association, fiduciary,
  85-23  partnership, or corporation by whatever name called may not do
  85-24  business as a savings bank in this state or maintain an office in
  85-25  this state for the purpose of doing business in this state unless
  85-26  it is:
  85-27              (1)  a domestic savings bank;
   86-1              (2)  a federal savings bank;
   86-2              (3)  a foreign savings bank that is a surviving
   86-3  financial institution holding a certificate of authority issued
   86-4  under Section 11.07 of this Act; or
   86-5              (4)  a foreign savings bank that was a foreign savings
   86-6  and loan association holding a certificate of authority issued
   86-7  pursuant to Section 61 of Senate Bill No. 111, Acts 1929, 41st
   86-8  Legislature, 2nd Called Session, page 100, Chapter 61.
   86-9        (b)  The prohibition in this section does not apply to any
  86-10  activity that does not constitute transacting business in this
  86-11  state under Section B, Article 8.01, Texas Business Corporation
  86-12  Act.
  86-13        Sec. 11.02.  RENEWAL OF OUTSTANDING CERTIFICATES.  A foreign
  86-14  savings bank holding a certificate of authority under Section 11.07
  86-15  of this Act may renew the certificate from year to year by the
  86-16  payment of a renewal fee in January of each year in an amount set
  86-17  annually by resolution of the finance commission.  The savings bank
  86-18  shall pay the same examination charges paid by a domestic savings
  86-19  bank under Section 4.07 of this Act, together with all traveling
  86-20  expenses of the examination, except that if the examination fee is
  86-21  inadequate to defray all expenses of the examination, the savings
  86-22  bank shall pay the additional cost.  Examinations may not be made
  86-23  more than once a year.
  86-24        Sec. 11.03.  CONTRACTS DEEMED MADE IN THIS STATE.  A contract
  86-25  made by any foreign savings bank with any citizen of this state is
  86-26  a Texas contract and shall be construed by the courts of this state
  86-27  according to the laws of this state.
   87-1        Sec. 11.04.  RIGHTS, PRIVILEGES, AND OBLIGATIONS OF FOREIGN
   87-2  SAVINGS BANKS WITH CERTIFICATES OF AUTHORITY.  (a)  A foreign
   87-3  savings bank operating under a certificate of authority under
   87-4  Section 11.07 of this Act has the rights and privileges of a
   87-5  savings bank created under this Act, and its deposit accounts are
   87-6  eligible for investment to the same extent as those of a domestic
   87-7  savings bank.  This Act and rules adopted under this Act are
   87-8  applicable to a foreign savings bank with respect to its operations
   87-9  in this state and may be enforced by the commissioner.  A foreign
  87-10  savings bank may not be considered a savings bank organized under
  87-11  the laws of this state.
  87-12        (b)  The commissioner, in exercising the supervisory and
  87-13  regulatory authority granted under Chapters 4 and 5 of this Act,
  87-14  may enter into cooperative agreements with regulatory authorities
  87-15  of other states to facilitate the regulation of foreign savings
  87-16  banks doing business in this state and may accept reports of
  87-17  examinations and other records from those regulatory authorities in
  87-18  lieu of conducting examinations outside this state.
  87-19        (c)  A foreign savings bank operating in this state as
  87-20  authorized by this chapter may not exercise any powers, perform any
  87-21  functions, or offer any services that a domestic savings bank could
  87-22  not exercise, perform, or offer.
  87-23        Sec. 11.05.  POWER OF COMMISSIONER TO REVOKE CERTIFICATE.
  87-24  The commissioner may issue an order against a foreign savings bank
  87-25  holding a certificate of authority to do business in this state in
  87-26  the same manner as against a domestic savings bank under Chapter 5
  87-27  of this Act.  On failure or refusal of a foreign savings bank to
   88-1  comply with a final order of the commissioner, the commissioner may
   88-2  revoke a certificate of authority held by the savings bank.  On
   88-3  revocation of the certificate of authority of a foreign savings
   88-4  bank, an agent of the savings bank may not transact business in
   88-5  this state, except to receive payments to apply on loan contracts
   88-6  then in effect and to pay withdrawal requests.
   88-7        Sec. 11.06.  FEDERAL SAVINGS BANKS.  A federal savings bank
   88-8  is not a foreign corporation or foreign savings bank.  Unless
   88-9  federal laws or regulations provide otherwise, a federal savings
  88-10  bank and the members of a federal savings bank have all of the
  88-11  rights, powers, privileges, benefits, immunities, and exemptions
  88-12  that are provided by this Act and other laws of this state relating
  88-13  to a savings bank or its members.  This provision is in addition to
  88-14  and supplemental to any provision of this Act which by specific
  88-15  reference is applicable to a federal savings bank and its members.
  88-16        Sec. 11.07.  MERGER OR CONSOLIDATION OF FOREIGN AND DOMESTIC
  88-17  SAVINGS BANKS.  (a)  A domestic savings bank may merge or
  88-18  consolidate with a foreign savings bank under a plan adopted by the
  88-19  board of directors of both savings banks and approved by the
  88-20  commissioner.  The plan of merger or consolidation must be approved
  88-21  by a majority of the total vote that the members or stockholders of
  88-22  the domestic savings bank are entitled to cast.  Approval may be
  88-23  voted at either an annual meeting or at a special meeting called to
  88-24  consider that action.  A stockholder of a domestic savings bank
  88-25  that is a capital stock association has the same dissenter's rights
  88-26  as a shareholder of a domestic corporation under the Texas Business
  88-27  Corporation Act.
   89-1        (b)  If presented with a plan of merger or consolidation of a
   89-2  foreign savings bank and a domestic savings bank, the commissioner
   89-3  shall give public notice of the proposed merger or consolidation in
   89-4  each county in which the domestic savings bank has an office and
   89-5  shall give any interested party an opportunity to appear, present
   89-6  evidence, and be heard for or against the proposed plan.  A hearing
   89-7  officer designated by the commissioner shall hold the hearing.  If
   89-8  a protest is not received on or before the date of hearing, the
   89-9  hearing may be dispensed with by the commissioner or hearing
  89-10  officer.  The provisions of the administrative procedure act
  89-11  applicable to a contested case do not apply to an application if
  89-12  the domestic savings bank is considered by the commissioner to be
  89-13  in an unsafe condition, and in that event, the application and all
  89-14  information related to the application are confidential and
  89-15  privileged from public disclosure.
  89-16        (c)  The commissioner shall issue an order denying the
  89-17  proposed plan if the commissioner finds that any of the conditions
  89-18  of Section 3.03(c) of this Act exist.  In addition, if the
  89-19  surviving savings bank is the foreign savings bank, the
  89-20  commissioner shall deny the application if:
  89-21              (1)  the laws of the state in which the foreign savings
  89-22  bank has its principal place of business do not permit savings
  89-23  banks of that state to merge or consolidate with a domestic savings
  89-24  bank if the surviving savings bank is the domestic savings bank; or
  89-25              (2)  the foreign savings bank is controlled by a
  89-26  holding company that has its principal place of business in a state
  89-27  the laws of which do not permit savings banks of that state to
   90-1  merge or consolidate with a domestic savings bank if the surviving
   90-2  savings bank is the domestic savings bank.
   90-3        (d)  If a surviving savings bank is a foreign savings bank,
   90-4  the commissioner may enforce any conditions, restrictions, and
   90-5  requirements on the surviving savings bank that could have been
   90-6  enforced by the state in which the foreign savings bank has its
   90-7  principal place of business with respect to a merger or
   90-8  consolidation in that state in which the surviving savings bank is
   90-9  a domestic savings bank.
  90-10        (e)  If the commissioner approves a proposed plan of merger
  90-11  or consolidation, the commissioner shall issue an order approving
  90-12  the merger or consolidation.  If the surviving savings bank is the
  90-13  foreign savings bank, the commissioner shall issue and deliver to
  90-14  the surviving savings bank a certificate of authority to do
  90-15  business as a savings bank within this state for a period that
  90-16  expires January 31 of the next calendar year.  If the surviving
  90-17  savings bank is the domestic savings bank, it shall continue to
  90-18  operate under the terms of its charter and the laws and rules
  90-19  applicable to a domestic savings bank.
  90-20                 CHAPTER 12.  MISCELLANEOUS PROVISIONS
  90-21        Sec. 12.01.  EXEMPTION FROM SECURITIES LAWS.  Deposit
  90-22  accounts, certificates, and other evidences of interest in the
  90-23  deposit liability of savings banks subject to this Act and of
  90-24  federal savings banks are not securities for any purpose under The
  90-25  Securities Act (Article 581-1 et seq., Vernon's Texas Civil
  90-26  Statutes), and securities of those savings banks other than
  90-27  interest in the deposit liability of the savings banks are not
   91-1  subject to the registration requirements of that Act.  A person
   91-2  whose principal occupation is as an officer of a savings bank is
   91-3  exempt from the registration and licensing provisions of The
   91-4  Securities Act with respect to the person's participation in a sale
   91-5  or other transaction involving securities of the savings bank of
   91-6  which the person is an officer.
   91-7        Sec. 12.02.  ACKNOWLEDGMENTS BY MEMBERS AND EMPLOYEES.  A
   91-8  public officer qualified to take acknowledgments or proofs of
   91-9  written instruments is not disqualified from taking the
  91-10  acknowledgments or proofs of any instrument in writing in which a
  91-11  savings bank or federal savings bank is interested by reason of the
  91-12  officer's membership in or stockholding in or employment by the
  91-13  savings bank.
  91-14        Sec. 12.03.  CLOSING PLACES OF BUSINESS.  A savings bank may
  91-15  close its place of business at any time the board of directors of
  91-16  the savings bank determines to do so.
  91-17        Sec. 12.04.  SAVINGS BANKS PROHIBITED FROM ISSUING STOCK OR
  91-18  SHARES NOT AUTHORIZED BY THIS ACT.  A savings bank may not issue
  91-19  any form of stock, share, account, or investment certificate except
  91-20  as permitted by this Act.
  91-21        Sec. 12.05.  AD VALOREM TAXATION OF PROPERTY OF SAVINGS
  91-22  BANKS.  A domestic or federal savings bank doing business in this
  91-23  state shall render for ad valorem taxation all of its real estate
  91-24  as other real estate is rendered.  Personal property of a domestic
  91-25  or federal savings bank is valued as other personal property is
  91-26  valued for assessment in this state and shall be rendered by the
  91-27  savings bank to the appropriate assessing unit or units in the
   92-1  following manner:
   92-2              (1)  furniture, fixtures, equipment, and automobiles
   92-3  shall be rendered where the property is located in the same manner
   92-4  as other similar property; and
   92-5              (2)  the remainder of the personal property of a
   92-6  savings bank shall be rendered as a whole in the city and county
   92-7  where its principal office is located at the value remaining after
   92-8  deducting from the total value of the savings bank's entire assets
   92-9  the following:
  92-10                    (A)  all debts of every kind and character owed
  92-11  by the savings bank;
  92-12                    (B)  all tax-free securities owned by the savings
  92-13  bank;
  92-14                    (C)  the loss reserves and surplus of the savings
  92-15  bank;
  92-16                    (D)  the deposit liability of the savings bank;
  92-17  and
  92-18                    (E)  the appraised value of its furniture,
  92-19  fixtures, and real estate.
  92-20        Sec. 12.06.  STATE TAXATION OF SAVINGS BANKS.  A domestic or
  92-21  federal savings bank doing business in this state shall be taxed by
  92-22  the state in the same manner and to the same extent as a
  92-23  corresponding savings and loan association.
  92-24        Sec. 12.07.  INITIATION OF RULEMAKING BY SAVINGS BANKS.  If
  92-25  20 percent or more of the savings banks subject to this Act
  92-26  petition the commissioner in writing requesting the adoption,
  92-27  amendment, or repeal of a rule, the commissioner shall initiate
   93-1  rulemaking proceedings under Subsection (e), Article 5, Chapter II,
   93-2  The Texas Banking Code (Article 342-205, Vernon's Texas Civil
   93-3  Statutes).
   93-4        Sec. 12.08.  HEARING PROCEDURES.  (a)  Notice of a hearing
   93-5  held under an order issued under Chapter 5 of this Act shall be
   93-6  given to all parties affected by the order.  Notice of other
   93-7  hearings held under this Act shall be given to all domestic and
   93-8  federal savings banks in the county where the subject matter of the
   93-9  hearing is or will be situated.
  93-10        (b)  Opportunity shall be afforded any interested party to
  93-11  respond and present evidence and argument on all issues involved in
  93-12  a hearing held under this Act.
  93-13        (c)  On the written request of any interested party, the
  93-14  commissioner shall keep a formal record of the proceedings of a
  93-15  hearing held under this Act.
  93-16        (d)  A decision or order adverse to a party who appeared and
  93-17  participated in a hearing must be in writing and include findings
  93-18  of fact and conclusions of law, separately stated, on all issues
  93-19  material to the decision reached.  Findings of fact, if set forth
  93-20  in statutory language, must be accompanied by a concise and
  93-21  explicit statement of the underlying facts supporting the findings.
  93-22        (e)  A decision or order entered after hearing is final and
  93-23  appealable on the 15th  day after the date the decision or order is
  93-24  entered unless a motion for rehearing is filed by a party within
  93-25  that period, and if the motion for rehearing is overruled, the
  93-26  decision or order is appealable after the date the order overruling
  93-27  the motion is entered.
   94-1        (f)  Parties to a hearing shall be notified promptly either
   94-2  personally or by mail of any decision, order, or other action taken
   94-3  in respect to the subject matter of the hearing.
   94-4        Sec. 12.09.  JUDICIAL REVIEW.  The administrative procedure
   94-5  act governs judicial review of an act, order, ruling, or decision
   94-6  of the commissioner or a rule adopted under this Act.
   94-7        Sec. 12.10.  PENALTY FOR FAILING TO COMPLY WITH LAW.  The
   94-8  commissioner may require a savings bank that knowingly violates or
   94-9  fails to comply with this Act or a rule adopted under this Act to
  94-10  pay not more than $1,000 a day to the Savings and Loan Department
  94-11  of Texas for each day of the violation or failure after lawful
  94-12  notice of the delinquency by the commissioner.  The attorney
  94-13  general may file suit for the collection of the penalty on
  94-14  certification by the commissioner of the failure or refusal of the
  94-15  savings bank to remit the assessed penalty.
  94-16        Sec. 12.11.  APPLICABILITY OF CHAPTER 4, BUSINESS & COMMERCE
  94-17  CODE.  A savings bank is subject to and has the benefit of Chapter
  94-18  4, Business & Commerce Code, with respect to all items paid,
  94-19  collected, settled, negotiated, or otherwise handled for customers
  94-20  of the savings bank.
  94-21        Sec. 12.12.  APPLICABILITY OF OTHER LAW.  (a)  Except as
  94-22  provided in Subsection (b) of this section, a reference in statutes
  94-23  of this state, including Title 79, Revised Statutes (Article
  94-24  5069-1.01 et seq., Vernon's Texas Civil Statutes), the Government
  94-25  Code, and the Local Government Code, or in a rule adopted under the
  94-26  statutes to a "savings and loan association," "savings and loan,"
  94-27  or "association" in the context of a savings and loan association
   95-1  is also a reference to a savings bank, as defined in this Act.
   95-2        (b)  Subsection (a) of this section does not apply to this
   95-3  Act, the Texas Savings and Loan Act (Article 852a, Vernon's Texas
   95-4  Civil Statutes), The Texas Banking Code (Article 342-101 et seq.,
   95-5  Vernon's Texas Civil Statutes), or the Penal Code.
   95-6        Sec. 12.13.  EMERGENCY CLOSING OF A SAVINGS BANK.  (a)  If
   95-7  the officers of a savings bank determine that an emergency that
   95-8  affects or may affect the savings bank's officers or operations
   95-9  exists or is impending, the officers, in the reasonable and proper
  95-10  exercise of their discretion, may determine to not conduct the
  95-11  involved operations or open the savings bank's offices on any
  95-12  business or banking day or, if the savings bank is open, to close
  95-13  the offices or suspend and close the involved operations during the
  95-14  continuation of the emergency.  The office or operations closed may
  95-15  remain closed until the officers determine the emergency has ended
  95-16  and for additional time reasonably required to reopen.  However, an
  95-17  office or operations may not remain closed for more than 48
  95-18  consecutive hours, excluding other legal holidays, without the
  95-19  approval of the commissioner.  A savings bank closing an office or
  95-20  operations under this section shall give the commissioner prompt
  95-21  notice of its action as conditions permit and by any means
  95-22  available.
  95-23        (b)  In this section, "emergency" means a condition or
  95-24  occurrence that physically interferes with the conducting of normal
  95-25  business at the offices of a savings bank or of particular savings
  95-26  bank operations or that poses an imminent or existing threat to the
  95-27  safety or security of persons, property, or both.  In addition to
   96-1  other causes, an emergency may arise as a result of:
   96-2              (1)  fire, flood, earthquake, hurricane, tornado, wind,
   96-3  rain, or snowstorm;
   96-4              (2)  labor dispute and strike;
   96-5              (3)  power failure;
   96-6              (4)  transportation failure;
   96-7              (5)  interruption of communication facilities;
   96-8              (6)  shortage of fuel, housing, food, transportation,
   96-9  or labor;
  96-10              (7)  robbery or burglary;
  96-11              (8)  actual or threatened enemy attack;
  96-12              (9)  epidemic or other catastrophe;
  96-13              (10)  riot or other civil commotion; or
  96-14              (11)  any other actual or threatened acts of
  96-15  lawlessness or violence.
  96-16        (c)  A day on which a savings bank or one or more of its
  96-17  operations is closed during all or part of its normal business
  96-18  hours under this section is considered to be a legal holiday for
  96-19  the savings bank to the extent it suspends operations.  Liability
  96-20  or loss of rights does not arise on the part of a savings bank or a
  96-21  director, officer, or employee of the savings bank from a closing
  96-22  authorized by this section.
  96-23        (d)  A provision of this section is in addition to and not in
  96-24  substitution for or in limitation of any other provision of this
  96-25  Act or other law of this state or the United States authorizing the
  96-26  closing of a savings bank or excusing the delay by a savings bank
  96-27  in the performance of its duties and obligations because of
   97-1  emergencies or conditions beyond the savings bank's control or
   97-2  otherwise.
   97-3        Sec. 12.14.  AUTHORIZATION OF DERIVATIVE SUITS.  (a)  The
   97-4  commissioner may bring a derivative suit in the right of a savings
   97-5  bank based on an unpursued cause of action if:
   97-6              (1)  the commissioner determines the savings bank has
   97-7  an unpursued cause of action and that suit on that cause should be
   97-8  brought to protect the interest of the savings bank, the
   97-9  stockholders, members, or creditors of the savings bank, or the
  97-10  public interest; and
  97-11              (2)  the savings bank has not brought suit on the cause
  97-12  before the 30th day after the date on which the commissioner gives
  97-13  notice to the savings bank that the suit should be brought.
  97-14        (b)  Venue of a derivative suit, unless venue is mandatory,
  97-15  is in a district court of Travis County.
  97-16        (c)  The commissioner may employ legal counsel to bring and
  97-17  prosecute a derivative suit.  The commissioner may pay counsel from
  97-18  funds appropriated for the operation of the Savings and Loan
  97-19  Department of Texas or may require the savings bank for which the
  97-20  suit is brought to pay the counsel directly or to reimburse the
  97-21  Savings and Loan Department of Texas for the payment.  An amount
  97-22  equal to the amount of the proceeds of a judgment on the suit, less
  97-23  unreimbursed costs and expenses, including attorney's fees incurred
  97-24  by the Savings and Loan Department of Texas in prosecuting the
  97-25  suit, shall be paid to the savings bank.
  97-26        Sec. 12.15.  LIABILITIES OF COMMISSIONER AND OTHERS; DEFENSE
  97-27  BY ATTORNEY GENERAL.  The commissioner, a member of the finance
   98-1  commission, a deputy commissioner, an examiner, or any other
   98-2  officer or employee of the Savings and Loan Department of Texas is
   98-3  not personally liable for damages arising from the person's
   98-4  official acts or omissions unless the acts or omissions are corrupt
   98-5  or malicious.  The attorney general shall defend an action brought
   98-6  against such a person by reason of the person's official acts or
   98-7  omissions, regardless of whether at the time of the initiation of
   98-8  the action the defendant is an officer or employee of the Savings
   98-9  and Loan Department of Texas.
  98-10        SECTION 2.  Article 2, Chapter I, The Texas Banking Code
  98-11  (Article 342-102, Vernon's Texas Civil Statutes), is amended by
  98-12  amending Subdivisions (12) and (13) and adding Subdivisions (26)
  98-13  and (27) to read as follows:
  98-14              (12)  "State Savings and Loan Association" or "State
  98-15  Association"--Any savings and loan association <or savings bank>
  98-16  heretofore or hereafter organized under the laws of this State.
  98-17              (13)  "Federal Savings and Loan Association"--Any
  98-18  savings and loan association <or savings bank> heretofore or
  98-19  hereafter organized under the laws of the United States of America.
  98-20              (26)  "Savings Bank"--Any savings bank organized under
  98-21  or subject to the Texas Savings Bank Act.
  98-22              (27)  "Federal Savings Bank"--Any savings bank
  98-23  organized under the laws of the United States of America.
  98-24        SECTION 3.  Article 3, Chapter I, The Texas Banking Code
  98-25  (Article 342-103, Vernon's Texas Civil Statutes), is amended to
  98-26  read as follows:
  98-27        Art. 3.  Finance Commission--General Powers.  A.  There is
   99-1  hereby established and created The Finance Commission of Texas
   99-2  which shall consist of nine (9) members.  The Finance Commission
   99-3  shall:
   99-4              (1)  adopt rules and determine general policies for the
   99-5  regulation of state banks, state associations, savings banks, and
   99-6  the consumer credit industry in the state;
   99-7              (2)  consult and advise the Banking Commissioner,
   99-8  Savings and Loan Commissioner, and Consumer Credit Commissioner on
   99-9  the implementation and enforcement of the rules and policies
  99-10  adopted by the Finance Commission; and
  99-11              (3)  carry out other duties, powers, and authority as
  99-12  may be conferred by law.
  99-13        B.  The Finance Commission shall make a thorough and
  99-14  intensive study of the Texas banking, savings and loan, savings
  99-15  bank, and consumer credit statutes, respectively, with a view to so
  99-16  strengthening said statutes as to attain and maintain the maximum
  99-17  degree of protection to depositors, stockholders, shareholders, and
  99-18  consumers, and shall report every two (2) years to the Legislature
  99-19  by filing with the Clerks of the Senate and the House of
  99-20  Representatives the results of its study, together with its
  99-21  recommendations.
  99-22        SECTION 4.  Section 2, Article 4, Chapter I, The Texas
  99-23  Banking Code (Article 342-104, Vernon's Texas Civil Statutes), is
  99-24  amended to read as follows:
  99-25        2.  Two (2) members of the Finance Commission shall be
  99-26  savings <and loan> executives.  For the purposes of this article
  99-27  <section> a savings <and loan> executive is a person who:
  100-1              (i)  has had five (5) years or more executive
  100-2  experience in the seven (7) years next preceding the person's
  100-3  appointment in a State or Federal Savings and Loan Association, a
  100-4  savings bank, or a federal savings bank in a capacity not lower
  100-5  than cashier;<,> and
  100-6              (ii)  <who> at the time of the person's appointment is
  100-7  an officer in a State association or a savings bank.
  100-8        SECTION 5.  Section 4, Article 4, Chapter I, The Texas
  100-9  Banking Code (Article 342-104, Vernon's Texas Civil Statutes), is
 100-10  amended to read as follows:
 100-11        4.  The members of the Finance Commission who are not banking
 100-12  executives or savings <and loan> executives shall be selected by
 100-13  the Governor on the basis of recognized business ability.  Those
 100-14  members may not be banking executives, savings <and loan>
 100-15  executives, or controlling shareholders in a bank, <or> savings and
 100-16  loan association, or savings bank.  At least one of those members
 100-17  must be a certified public accountant.
 100-18        SECTION 6.  Article 14, Chapter I, The Texas Banking Code
 100-19  (Article 342-114, Vernon's Texas Civil Statutes), is amended to
 100-20  read as follows:
 100-21        Art. 14.  SAVINGS AND LOAN/SAVINGS BANK RULES AND
 100-22  REGULATIONS--LOANS AND INVESTMENTS--ADVISORY POWERS.  The Finance
 100-23  Commission, through resolutions, may promulgate general rules and
 100-24  regulations not inconsistent with the Constitution and Statutes of
 100-25  this State, and from time to time amend the same, which rules and
 100-26  regulations shall be applicable alike to all State associations and
 100-27  savings banks, and may authorize State associations and savings
  101-1  banks to invest their funds in any manner and to the same extent
  101-2  which said association or savings banks could invest such funds
  101-3  under existing or any future law, rule or regulation were they
  101-4  organized and operating as a Federal Savings and Loan Association
  101-5  or Federal savings bank under the laws of the United States,
  101-6  provided, however, that this authority shall not be construed in
  101-7  any wise to confer authority to abridge, or diminish or limit any
  101-8  rights or powers specifically given to State associations or
  101-9  savings banks by the statutory laws of this State.  In addition to
 101-10  such powers as may be conferred upon the Finance Commission by this
 101-11  Act, <or by> the Savings and Loan Act of Texas, or the Texas
 101-12  Savings Bank Act, as amended, the Finance Commission shall have the
 101-13  following duties:
 101-14        (a)  When in the judgment of the Finance Commission,
 101-15  protection of investors in State associations or savings banks
 101-16  requires additional regulations or limitations, to promulgate such
 101-17  additional rules and regulations as will in its judgment prevent
 101-18  State associations or savings banks from concentrating an excessive
 101-19  or unreasonable portion of their resources in any particular type
 101-20  or character of loan or security authorized by the Texas Savings
 101-21  and Loan Act or the Texas Savings Bank Act.
 101-22        (b)  When in the judgment of the Finance Commission,
 101-23  establishment of standards or changes in existing standards for
 101-24  investment are necessary, to establish standards through rules and
 101-25  regulations for investments by State associations or savings banks,
 101-26  which standards may also establish a limit in the amount which
 101-27  State associations or savings banks may invest in any particular
  102-1  type or character of investment to an amount or percentage based
  102-2  upon assets or net worth.
  102-3        (c)  To advise with the Savings and Loan Commissioner as to
  102-4  the forms to be prescribed for the filing of the annual statements
  102-5  with the Savings and Loan Department and the forms to be prescribed
  102-6  for the publication of the annual financial statements by State
  102-7  associations and savings banks.
  102-8        (d)  To confer with the Savings and Loan Commissioner, the
  102-9  Chairman of the Federal Deposit Insurance Corporation, and the
 102-10  District Director of the Office of Thrift Supervision <and with the
 102-11  President of the regional Federal Home Loan Bank of the district in
 102-12  which State associations are members> on general and special
 102-13  business and economic conditions affecting State associations and
 102-14  savings banks.
 102-15        (e)  To request information and to make recommendations with
 102-16  respect to matters within the jurisdiction of the Savings and Loan
 102-17  Commissioner as relating to the savings and loan and savings bank
 102-18  business, including recommendations as to legislation affecting
 102-19  such institutions, providing, that no information regarding the
 102-20  financial condition of any State savings and loan association or
 102-21  savings bank obtained through examination or otherwise shall be
 102-22  divulged to any member of the Finance Commission, nor shall any
 102-23  member of the Finance Commission be given access to the files and
 102-24  records of the Department appertaining thereto; provided, further,
 102-25  however, that the Commissioner may disclose to the Finance
 102-26  Commission any file or record pertinent to any hearing or matter
 102-27  pending before the Finance Commission.
  103-1        SECTION 7.  Sections (a)-(d), (g)-(i), and (k), Article 5,
  103-2  Chapter II, The Texas Banking Code (Article 342-205, Vernon's Texas
  103-3  Civil Statutes), are amended to read as follows:
  103-4        (a)  By and with the advice and consent of the Senate, the
  103-5  Finance Commission of Texas, by at least five (5) affirmative
  103-6  votes, shall elect a Savings and Loan Commissioner who shall serve
  103-7  at the pleasure of the Finance Commission and who shall be an
  103-8  employee of said Commission and subject to its orders and
  103-9  direction.  The Savings and Loan Commissioner shall have had not
 103-10  less than seven (7) years experience in the executive management of
 103-11  a savings and loan association or savings bank or in savings and
 103-12  loan or savings bank supervision.  The Savings and Loan
 103-13  Commissioner shall receive such compensation as is fixed by the
 103-14  Finance Commission.  The compensation shall be paid from funds of
 103-15  the Savings and Loan Department.
 103-16        (b)  The Savings and Loan Commissioner, subject to the
 103-17  approval of the Finance Commission, shall appoint one or more
 103-18  Deputy Savings and Loan Commissioners, one of which shall have the
 103-19  same qualifications required of the Savings and Loan Commissioner
 103-20  and shall be designated by the Savings and Loan Commissioner to be
 103-21  vested with all of the powers and perform all of the duties of the
 103-22  Savings and Loan Commissioner during the absence or inability of
 103-23  the Savings and Loan Commissioner.  The Savings and Loan
 103-24  Commissioner may also appoint a Hearing Officer or Officers to
 103-25  conduct such investigations or public hearings as may be required
 103-26  by law of the Savings and Loan Commissioner.  The Hearing Officer
 103-27  or Officers shall be vested for the purpose of such investigations
  104-1  or public hearings with the power and authority as the Savings and
  104-2  Loan Commissioner would have if he were personally conducting such
  104-3  investigation or public hearing, provided that the Hearing Officer
  104-4  or Officers shall not be authorized to make any order upon the
  104-5  final subject matter of such investigation or hearing; and
  104-6  provided, further, that the record of any investigation or public
  104-7  hearing conducted before the Hearing Officer may be considered by
  104-8  the Savings and Loan Commissioner in the same manner and to the
  104-9  same extent as evidence that is adduced before him personally in
 104-10  any such proceeding.  The Savings and Loan Commissioner shall also
 104-11  appoint Savings and Loan and Savings Bank Examiners.  Each Deputy
 104-12  Savings and Loan Commissioner, the Savings and Loan and Savings
 104-13  Bank Examiners, each Hearing Officer, and all other officers and
 104-14  employees of the Savings and Loan Department shall receive such
 104-15  compensation as is fixed by the Finance Commission which shall be
 104-16  paid from the funds of the Savings and Loan Department.
 104-17        (c)  The Savings and Loan Commissioner, each Deputy Savings
 104-18  and Loan Commissioner, each Hearing Officer, each Savings and Loan
 104-19  and Savings Bank Examiner, and every other officer and employee of
 104-20  the Savings and Loan Department specified by the Finance
 104-21  Commission, shall, before entering upon the duties of his office,
 104-22  take an oath of office and make a fidelity bond in the sum of Ten
 104-23  Thousand Dollars ($10,000) payable to the Governor of the State of
 104-24  Texas, and his successors in office, in individual, schedule or
 104-25  blanket form, executed by a surety appearing upon the list of
 104-26  approved sureties acceptable to the United States Government.  Each
 104-27  bond required under this Article shall be in the form approved by
  105-1  the Finance Commission.  The premiums for such bonds shall be paid
  105-2  out of the funds of the Savings and Loan Department.
  105-3        (d)  Upon the appointment and qualification of a Savings and
  105-4  Loan Commissioner under this Act such Savings and Loan Commissioner
  105-5  shall in person or by and through the Deputy Savings and Loan
  105-6  Commissioner, Savings and Loan and Savings Bank Examiners, or other
  105-7  officers of the Savings and Loan Department, supervise and
  105-8  regulate, in accordance with the rules and regulations promulgated
  105-9  by the Savings and Loan Commissioner together with the Finance
 105-10  Commission, all savings and loan associations and savings banks
 105-11  doing business in this State (except Federal Savings and Loan
 105-12  Associations or Federal Savings Banks organized and existing under
 105-13  Federal Law).
 105-14        (g)  The Savings and Loan Commissioner shall attend each
 105-15  meeting of the Finance Commission at which matters relating to
 105-16  savings and loan associations or savings banks will be considered,
 105-17  but he shall not vote.
 105-18        (h)  The Savings and Loan Commissioner and the Finance
 105-19  Commission shall establish reasonable and necessary fees for the
 105-20  administration of the Texas Savings and Loan Act (Article 852a,
 105-21  Vernon's Texas Civil Statutes) and the Texas Savings Bank Act and
 105-22  support of the Finance Commission as provided by Article 11C,
 105-23  Chapter I, of this Code.  The Savings and Loan Commissioner shall
 105-24  collect all fees, penalties, charges and revenues required to be
 105-25  paid by savings and loan associations and savings banks and shall
 105-26  from time to time as directed by the Finance Commission submit to
 105-27  such Commission a full and complete report of the receipts and
  106-1  expenditures of the Savings and Loan Department, and the Finance
  106-2  Commission may from time to time examine the financial records of
  106-3  the Savings and Loan Department or cause them to be examined.  In
  106-4  addition, the financial transactions of the Savings and Loan
  106-5  Department are subject to audit by the state auditor in accordance
  106-6  with Chapter 321, Government Code, and the actual costs of such
  106-7  audits shall be paid to the State Auditor from the funds of the
  106-8  Savings and Loan Department.  Notwithstanding anything to the
  106-9  contrary contained in any other law of this State, beginning
 106-10  September 1, 1985, all sums of money paid to the Savings and Loan
 106-11  Department from all sources shall be deposited in the State
 106-12  Treasury to the credit of a special fund to be known as the Savings
 106-13  and Loan Department Expense Fund and may be used only for the
 106-14  expenses incurred by the Savings and Loan Department and Finance
 106-15  Commission.  All expenses incurred by the Savings and Loan
 106-16  Department shall be paid only from such fund.  The Finance
 106-17  Commission shall promulgate and adopt such rules and regulations as
 106-18  may be necessary to coordinate the operation of the Savings and
 106-19  Loan Department with the operation of the Banking Department and
 106-20  the Office of Consumer Credit Commissioner.
 106-21        (i)  Insofar as the provisions of this Section may conflict
 106-22  with any other provisions of The Texas Banking Code of 1943, as
 106-23  amended, or Senate Bill No. 111, Acts 1929, 41st Legislature, page
 106-24  100, Chapter 61, as amended, or the Texas Savings and Loan Act of
 106-25  1963, Chapter 113, Acts 58th Legislature, 1963, page 269, et seq.,
 106-26  or the Texas Savings Bank Act, as amended, the provisions of this
 106-27  Act shall control; except that the terms "Savings and Loan," and
  107-1  "Savings and Loan Association," as used herein, are intended to and
  107-2  shall have the same meaning as the terms "Building and Loan" and
  107-3  "Building and Loan Association" as used in said Statutes.
  107-4        (k)  An officer or employee of the Savings and Loan
  107-5  Department may not be an officer, employee, or paid consultant of a
  107-6  trade association in the savings and loan industry or the savings
  107-7  bank industry.
  107-8        SECTION 8.  Section 3, Article 9, Chapter VI, The Texas
  107-9  Banking Code (Article 342-609, Vernon's Texas Civil Statutes), is
 107-10  amended to read as follows:
 107-11        Sec. 3.  In this article, "financial institution" means a
 107-12  state or national bank, <or> state or federal savings and loan
 107-13  association, or state or federal savings bank  maintaining an
 107-14  office, branch, or agency office in this state or otherwise engaged
 107-15  in the business of lending money or extending credit in this state.
 107-16        SECTION 9.  Section 4, Article 5, Chapter VII, The Texas
 107-17  Banking Code (Article 342-705, Vernon's Texas Civil Statutes), is
 107-18  amended to read as follows:
 107-19        Sec. 4.  In this article "financial institution" means a
 107-20  state or national bank, <or> state or federal savings and loan
 107-21  association, or state or federal savings bank maintaining an
 107-22  office, branch, or agency office in this state or otherwise engaged
 107-23  in the business of lending money or extending credit in this state.
 107-24        SECTION 10.  Section 5(a), Article 5, Chapter VII, The Texas
 107-25  Banking Code (Article 342-705, Vernon's Texas Civil Statutes), is
 107-26  amended to read as follows:
 107-27        (a)  This article does not restrict or apply to amendment of
  108-1  a depository contract, addition of a new term or provision to a
  108-2  depository contract, or disclosure or production of deposits or of
  108-3  records of accounts and other financial institution <bank> records
  108-4  if the amendment, addition, or disclosure is made under or in
  108-5  substantial compliance with applicable federal law, including
  108-6  regulations.  This article does not restrict or apply to the use or
  108-7  disclosure by a financial institution <bank> of information or
  108-8  records pertaining to deposits, accounts, or financial institution
  108-9  <bank> transactions if the use or disclosure is made in good faith
 108-10  in the usual course of the financial business of the financial
 108-11  institution <bank>, is made by the financial institution <bank> in
 108-12  the course of the litigation affecting its interests, or is made
 108-13  with express or implied consent of the depositor or customer.  This
 108-14  article does not apply to the investigation or prosecution of
 108-15  criminal offenses.
 108-16        SECTION 11.  Section 32.71(a), Penal Code, is amended to read
 108-17  as follows:
 108-18        (a)  An officer, director, member of any committee, clerk, or
 108-19  agent of any savings and loan association or savings bank in this
 108-20  state commits an offense if the person embezzles, abstracts, or
 108-21  misapplies money, funds, or credits of the association or savings
 108-22  bank, issues or puts into circulation any warrant or other order
 108-23  without proper authority, issues, assigns, transfers, cancels, or
 108-24  delivers up any note, bond, draft, mortgage, judgment, decree, or
 108-25  other written instrument belonging to the association or savings
 108-26  bank, certifies to or makes a false entry in any book, report, or
 108-27  statement of or to the association or savings bank, with intent to
  109-1  deceive, injure, or defraud the association or savings bank or a
  109-2  member of the association or savings bank for the purpose of
  109-3  inducing any person to become a member of the association or
  109-4  savings bank or to deceive anyone appointed to examine the affairs
  109-5  of the association or savings bank.
  109-6        SECTION 12.  Section 32.72(a), Penal Code, is amended to read
  109-7  as follows:
  109-8        (a)  Any person commits an offense if the person for the
  109-9  purpose of influencing the actions of an association or savings
 109-10  bank or its employees, agents, or representatives or for the
 109-11  purpose of influencing the actions of The Finance Commission of
 109-12  Texas, the savings and loan commissioner, or employees, agents, or
 109-13  representatives of the Savings and Loan Department of Texas,
 109-14  knowingly:
 109-15              (1)  removes, mutilates, destroys, or conceals a paper,
 109-16  book, or record of a savings and loan association or savings bank
 109-17  or of the savings and loan commissioner or the Savings and Loan
 109-18  Department of Texas for the purpose of concealing a fact or
 109-19  suppressing evidence;
 109-20              (2)  makes, passes, alters, or publishes a false,
 109-21  counterfeit, or forged instrument, paper, document, statement, or
 109-22  report to a savings and loan association or savings bank or to the
 109-23  savings and loan commissioner or the Savings and Loan Department of
 109-24  Texas; or
 109-25              (3)  substantially overvalues land, property, security,
 109-26  an asset, or income in connection with a transaction with a savings
 109-27  and loan association or savings bank without substantiation,
  110-1  justification, or supporting documentation generally accepted by
  110-2  appraisal standards.
  110-3        SECTION 13.  The importance of this legislation and the
  110-4  crowded condition of the calendars in both houses create an
  110-5  emergency and an imperative public necessity that the
  110-6  constitutional rule requiring bills to be read on three several
  110-7  days in each house be suspended, and this rule is hereby suspended,
  110-8  and that this Act take effect and be in force from and after its
  110-9  passage, and it is so enacted.