1-1 By: Romo (Senate Sponsor - Parker) H.B. No. 1790
1-2 (In the Senate - Received from the House May 5, 1993;
1-3 May 6, 1993, read first time and referred to Committee on Economic
1-4 Development; May 25, 1993, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 9, Nays 0;
1-6 May 25, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Parker x
1-10 Lucio x
1-11 Ellis x
1-12 Haley x
1-13 Harris of Dallas x
1-14 Harris of Tarrant x
1-15 Leedom x
1-16 Madla x
1-17 Rosson x
1-18 Shapiro x
1-19 Wentworth x
1-20 COMMITTEE SUBSTITUTE FOR H.B. No. 1790 By: Parker
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the merger, reorganization, or conversion of state or
1-24 federal savings banks, state or federal savings and loan
1-25 associations, and state banks; the investments of a savings and
1-26 loan association; and the organization and regulation of state
1-27 savings banks; providing penalties.
1-28 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-29 ARTICLE 1. MERGER, REORGANIZATION, OR CONVERSION;
1-30 INVESTMENTS OF SAVINGS AND LOAN ASSOCIATIONS
1-31 SECTION 1.01. Section E, Article 5, Chapter III, The Texas
1-32 Banking Code (Article 342-305, Vernon's Texas Civil Statutes), is
1-33 amended to read as follows:
1-34 E. The provisions of the Administrative Procedure and Texas
1-35 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)
1-36 governing contested cases do not apply to charter applications
1-37 filed for the purpose of assuming the assets and liabilities of any
1-38 bank, state or federal savings bank, or state or federal savings
1-39 and loan association deemed by the Banking Commissioner to be in an
1-40 unsafe condition.
1-41 SECTION 1.02. Article 8, Chapter III, The Texas Banking Code
1-42 (Article 342-308, Vernon's Texas Civil Statutes), is amended to
1-43 read as follows:
1-44 Art. 8. MERGER--TRUST POWERS. Any two or more state banks,
1-45 or if national banks are hereafter authorized by the laws of the
1-46 United States to participate in such a merger, any one or more
1-47 state banks and any one or more national banks domiciled in this
1-48 State, or any state bank and any state or federal savings and loan
1-49 association or state or federal savings bank authorized by the laws
1-50 of this state or the United States to participate in a merger, may,
1-51 with the approval of the Banking Commissioner and the written
1-52 consent of the owners of record of two-thirds of the capital of
1-53 each of said institutions <banks>, be merged. Said merging
1-54 institutions <banks> shall file with the Banking Commissioner:
1-55 (1) A statement of the plan of merger approved by the
1-56 board of directors of each merging institution <bank>, by a
1-57 majority vote of the qualified directors.
1-58 (2) Certificate of merger stating the facts required
1-59 by Article 4 of this chapter and executed and acknowledged by a
1-60 majority of the qualified directors of each merging institution
1-61 <bank>.
1-62 The Banking Commissioner shall thereupon investigate the
1-63 condition of the merging institutions <banks> and if the
1-64 Commissioner <he> finds that the state bank which will result from
1-65 the merger (hereafter called the "resulting bank") will be solvent
1-66 and its capital unimpaired; that it will have adequate capital
1-67 structure; that such merger does not violate the anti-trust laws of
1-68 this state; and that the resulting bank has in all respects
2-1 complied with the laws of this State relative to the incorporation
2-2 of State banks, the Commissioner <he> may approve such merger, and,
2-3 if the Commissioner <he> so approves, the Commissioner <he> shall
2-4 deliver to the resulting bank a certified copy of the certificate
2-5 of merger, which certificate shall constitute the charter and
2-6 articles of association of the resulting bank. The resulting bank
2-7 shall be deemed a continuation in entity and identity of each of
2-8 the institutions <banks> involved in the merger; shall be subject
2-9 to all the liabilities, obligations, duties and relations of each
2-10 merging institution <bank>; and shall without the necessity of any
2-11 conveyance, assignment or transfer become the owner of all of the
2-12 assets of every kind and character formerly belonging to the
2-13 merging institutions <banks>; further, provided, that if any
2-14 merging institution <bank> shall at the time of the merger be
2-15 acting as trustee, guardian, executor, administrator, or in any
2-16 other fiduciary capacity, the resulting bank shall, without the
2-17 necessity of any judicial action or action by the creator of such
2-18 trust, continue such office, trust or fiduciary relationship and
2-19 shall perform all of the duties and obligations and exercise all of
2-20 the powers and authority connected with or incidental to such
2-21 fiduciary relationship in the same manner as though the resulting
2-22 bank had been originally named or designated as such fiduciary.
2-23 The naming or designating by a testator, or the creator of a
2-24 living trust, of any one of the merging institutions <banks> to act
2-25 as trustee, guardian, executor or in any other fiduciary capacity
2-26 shall be considered the naming or designating of the bank resulting
2-27 from the merger.
2-28 A stockholder may dissent from the merger by following the
2-29 procedure provided by Article 5.12, Texas Business Corporation Act.
2-30 That procedure applies to a merger under this article, as if the
2-31 state bank were a corporation organized under the Texas Business
2-32 Corporation Act.
2-33 SECTION 1.03. Article 9, Chapter III, The Texas Banking Code
2-34 (Article 342-309, Vernon's Texas Civil Statutes), is amended to
2-35 read as follows:
2-36 Art. 9. REORGANIZATION--INCORPORATION TO TAKE OVER BUSINESS
2-37 OF OTHER BANKS OR STATE OR FEDERAL SAVINGS BANKS OR SAVINGS AND
2-38 LOAN ASSOCIATIONS--TRUST POWERS. A state bank may be incorporated
2-39 to take over the business of any incorporated bank or banks, state
2-40 or national, or of any state or federal savings bank or state or
2-41 federal savings and loan association, as a step in the
2-42 reorganization of such institution <bank> or institutions <banks>,
2-43 (which institution <bank> or institutions <banks>, whether one or
2-44 more, will be hereafter referred to as the "reorganizing
2-45 institution") <"reorganizing bank")>, and shall, subject to the
2-46 provisions of this article, be authorized to purchase assets from
2-47 the reorganizing institution <bank> and as consideration therefor,
2-48 assume all liabilities, known or unknown, of the reorganizing
2-49 institution <bank>, other than its liability to stockholders as
2-50 such.
2-51 Persons desiring to incorporate a state bank under the
2-52 provisions of this article shall proceed in the manner provided in
2-53 Article 5 of this Chapter, and in addition, shall file with the
2-54 Banking Commissioner:
2-55 (1) The proposed contract whereby the state bank is to
2-56 purchase the assets from and assume the liabilities of the
2-57 reorganizing institution <bank>, as above mentioned.
2-58 (2) Contracts, if any, whereby the proposed state bank
2-59 is to purchase for cash the whole or any part of the right of any
2-60 or all of the stockholders of the reorganizing institution <bank>
2-61 to receive liquidating dividends upon liquidation of the
2-62 reorganizing institution <bank>, which contracts shall expressly
2-63 provide that they shall be binding and effective only in event the
2-64 reorganizing institution <bank> is placed in voluntary liquidation
2-65 within ten (10) days of the granting of the application for the
2-66 charter applied for. Such contracts shall be executed on behalf of
2-67 the proposed bank by the persons applying for the charter.
2-68 If the Banking Commissioner, after investigation, determines
2-69 that the proposed bank, if incorporated, will, after its capital
2-70 has been paid in full and all contracts above mentioned finally
3-1 consummated, be solvent, its capital adequate and unimpaired, that
3-2 such reorganization is to the best interest of the reorganizing
3-3 institution <bank>, its depositors, creditors and stockholders and
3-4 the public in general, and that upon incorporation such bank will
3-5 have in all other respects complied with the law, the Commissioner
3-6 <he> shall recommend to the State Banking Board that the charter be
3-7 granted.
3-8 If the State Banking Board concurs in the findings of the
3-9 Banking Commissioner, it shall grant the application, and the
3-10 Banking Commissioner shall deliver a certified copy of the articles
3-11 of association in the manner provided in Article 5 of this chapter.
3-12 Provided, however, that the Banking Commissioner shall not deliver
3-13 a certificate of authority until the contracts above mentioned have
3-14 been fully consummated, and the requirements of Article 7 of this
3-15 chapter have been met. The state bank so incorporated shall be
3-16 deemed a reorganization of the reorganizing institution <bank>, and
3-17 a continuation of such institution <bank> in entity and identity,
3-18 subject to all of its liabilities, obligations, duties and
3-19 relations, save and except its liability to stockholders as such,
3-20 and shall pay and perform each and every obligation, duty and
3-21 liability of the reorganizing institution <bank> in exactly the
3-22 same manner as the reorganizing institution <bank> was obligated to
3-23 do; further provided that if the reorganizing institution <bank>
3-24 was at the time of incorporation of the new state bank, named or
3-25 acting as guardian, trustee, executor, administrator or in any
3-26 other fiduciary capacity, such state bank shall, without the
3-27 necessity of any judicial action, or action by the creator of such
3-28 trust, continue the trusteeship or other fiduciary relation and
3-29 perform all of the duties and obligations of the reorganizing
3-30 institution <bank> and exercise all the powers and authority
3-31 relative thereto; and neither the reorganization of such
3-32 institution <bank>, nor any liquidation of such institution <bank>
3-33 in connection therewith, shall be deemed a resignation or refusal
3-34 to act. The naming or designating by a testator or the creator of
3-35 a living trust of the reorganizing institution <bank> to act as
3-36 trustee, guardian, executor, or in any other fiduciary capacity
3-37 shall be considered the naming or designating of the bank resulting
3-38 from the reorganization.
3-39 The new state bank shall give notice of its assumption of the
3-40 liabilities of the reorganizing institution <bank> by publishing
3-41 notice thereof once each week for a period of two (2) weeks in some
3-42 newspaper of general circulation published in the county of its
3-43 domicile, or in event no such newspaper is published in said
3-44 county, then in a newspaper of general circulation published in an
3-45 adjacent county. The first notice shall be published within ten
3-46 (10) days after the delivery of the certificate of authority to
3-47 such bank.
3-48 SECTION 1.04. Article 10, Chapter III, The Texas Banking
3-49 Code (Article 342-310, Vernon's Texas Civil Statutes), is amended
3-50 to read as follows:
3-51 Art. 10. PURCHASE OF ASSETS OF ANOTHER BANK OR STATE OR
3-52 FEDERAL SAVINGS BANK OR SAVINGS AND LOAN ASSOCIATION--DISBURSING
3-53 AGENT. Any state bank may, with the consent of the Banking
3-54 Commissioner, purchase the whole or any part of the assets of any
3-55 other state bank or of any national bank domiciled in this State,
3-56 or of a state or federal savings bank or state or federal savings
3-57 and loan association, and may hold the purchase price and any
3-58 additional funds delivered to it by the selling institution <bank>
3-59 in trust for or as a deposit to the credit of the selling
3-60 institution <bank>. The purchasing bank may act as agent of the
3-61 selling institution <bank> in disbursing the funds so held in trust
3-62 or on deposit by paying the depositors and creditors of the selling
3-63 institution <bank>, provided that if the purchasing bank acts under
3-64 written contract of agency which specifically names each depositor
3-65 and creditor and the amount to be paid each, and if such agency is
3-66 confined to the purely ministerial act of paying such depositors
3-67 and creditors the amounts due them as determined by the selling
3-68 institution <bank> and reflected in the contract of agency and
3-69 involves no discretionary duties or authority other than the
3-70 identification of the depositors and creditors named, and if such
4-1 contract is approved by the Banking Commissioner, then the
4-2 purchasing bank may rely upon such contract of agency and the
4-3 instructions included therein, and shall not be in any way liable
4-4 or responsible for any error made by the selling institution <bank>
4-5 in determining its liabilities, the depositors and creditors to
4-6 whom such liabilities are due, or the amounts due such depositors
4-7 and creditors; nor liable or in any way responsible for any
4-8 preference which may result from the payments made pursuant to such
4-9 contract of agency and the instructions included therein. Further
4-10 provided that, in event the selling institution <bank> should, at
4-11 any time after such sale of assets, be closed and come into the
4-12 hands of the Banking Commissioner or<, if a national bank> into the
4-13 hands of a receiver, then the purchasing bank shall pay to the
4-14 Banking Commissioner as statutory liquidator or to the receiver of
4-15 such state or national institution <bank> the balance of the funds
4-16 held by it in trust or on deposit for the selling institution
4-17 <bank>, not theretofore paid to the depositors and creditors of the
4-18 selling institution <bank>, and shall thereupon stand discharged of
4-19 any and all liabilities, obligations or responsibilities to the
4-20 selling institution <bank>, its receiver, the Banking Commissioner
4-21 as its statutory liquidator, or to the depositors, creditors or
4-22 stockholders thereof. Provided further that payment to any
4-23 depositor or creditor of the selling institution <bank> of the
4-24 amount to be paid him under the terms of the contract of agency may
4-25 be effected by the purchasing bank opening an account in the name
4-26 of such depositor or creditor, crediting such account with the
4-27 amount to be paid the depositor or creditor under the terms of such
4-28 agency contract, and mailing a duplicate deposit ticket evidencing
4-29 such credit to such depositor or creditor at his address as
4-30 reflected by the records of the selling institution <bank>, or
4-31 delivering it to him personally, and the relation of debtor to
4-32 creditor shall thereupon arise between the purchasing bank and such
4-33 depositors and creditors to the extent and only to the extent of
4-34 the credit reflected by such deposit tickets. Further provided,
4-35 that if any such depositor or creditor checks upon the credit so
4-36 created, or if he does not within sixty (60) days of the mailing or
4-37 the personal delivery of such deposit ticket protest the
4-38 transaction and demand payment from the selling institution <bank>,
4-39 he shall be deemed to have ratified the transaction and to the
4-40 extent of the credit so created to have accepted the obligation of
4-41 the purchasing bank as reflected by said deposit ticket in
4-42 satisfaction of the obligation of the selling institution <bank>,
4-43 and the obligation of the selling institution <bank> to the extent
4-44 of such credit shall be deemed paid and satisfied within the
4-45 meaning of this article.
4-46 SECTION 1.05. Article 13, Chapter III, The Texas Banking
4-47 Code (Article 342-313, Vernon's Texas Civil Statutes), is amended
4-48 to read as follows:
4-49 Art. 13. MERGER, REORGANIZATION, OR CONVERSION OF STATE BANK
4-50 INTO NATIONAL BANK OR STATE OR FEDERAL SAVINGS BANK OR SAVINGS
4-51 AND LOAN ASSOCIATION. The owners of record of two-thirds of the
4-52 capital of any solvent state bank may, by vote or written consent,
4-53 authorize its officers and directors to take such action as may be
4-54 necessary under the laws of the United States or the state laws
4-55 governing savings and loan associations and savings banks to merge,
4-56 reorganize, or convert it into a national bank, state or federal
4-57 savings bank, or state or federal savings and loan association,
4-58 provided, however, that the state bank shall not cease to be a
4-59 state bank subject to the supervision of the Banking Commissioner
4-60 until (1) the Banking Commissioner has been given written notice of
4-61 the intention to merge, reorganize, or convert for at least thirty
4-62 (30) days, (2) such bank has published notice thereof at least once
4-63 a week for four (4) weeks in a newspaper of general circulation
4-64 published in the county of its domicile, or, if no such newspaper
4-65 is published in the county, in an adjacent county, (3) the bank has
4-66 filed with the Banking Commissioner a transcript of the merger,
4-67 reorganization, or conversion proceedings, sworn to by a majority
4-68 of the qualified directors and a publisher's certificate showing
4-69 publication of the notice above provided, and (4) such bank has
4-70 received a certificate of authority to do business as a national
5-1 bank, state or federal savings bank, or state or federal savings
5-2 and loan association.
5-3 SECTION 1.06. Article 13a, Chapter III, The Texas Banking
5-4 Code (Article 342-313a, Vernon's Texas Civil Statutes), is amended
5-5 to read as follows:
5-6 Art. 13a. CONVERSION OF NATIONAL BANK OR STATE OR FEDERAL
5-7 SAVINGS BANK OR SAVINGS AND LOAN ASSOCIATION INTO STATE BANK. A
5-8 national bank, state or federal savings bank, or state or federal
5-9 savings and loan association <or association> located in this state
5-10 which follows the procedures prescribed by the laws of the United
5-11 States or this state to convert into a state bank, shall be granted
5-12 a certificate of incorporation in the state when the State Banking
5-13 Board finds that the institution <bank> meets the standards as to
5-14 location of office, capital structure and business experience of
5-15 officers and directors for the incorporation of a state bank. In
5-16 considering the application for conversion from a national bank,
5-17 state or federal savings bank, or state or federal savings and loan
5-18 association into a state bank the Board shall consider and
5-19 determine that the new bank meets with all the requirements of a
5-20 new state bank applicant. The conversion is governed by this
5-21 Article and not by Article 9 of this chapter. Included also in the
5-22 application of a national bank for conversion and to be considered
5-23 along with the other information submitted shall be the terms of
5-24 the transition from a national bank into a state bank which shall
5-25 also show that the provisions of Public Law 706 of the 81st
5-26 Congress of the United States have been fully satisfied. <Such
5-27 conversion shall be governed by the provisions of this Article and
5-28 shall not be governed by Article 9, now codified as Article
5-29 342-309, Vernon's Texas Civil Statutes.>
5-30 SECTION 1.07. Chapter V, The Texas Banking Code (Article
5-31 342-501 et seq., Vernon's Texas Civil Statutes), is amended by
5-32 adding Article 14 to read as follows:
5-33 Art. 14. HOME MORTGAGE REQUIREMENTS FOR RESULTING
5-34 INSTITUTION. (a) In this article:
5-35 (1) "Financial institution" means a state or federal
5-36 bank, a state or federal savings bank, or a state or federal
5-37 savings and loan association.
5-38 (2) "Home mortgage" means an interest-bearing loan, or
5-39 a participation in an interest-bearing loan, that is:
5-40 (A) made to purchase, improve, or construct a
5-41 home;
5-42 (B) evidenced by a promissory note; and
5-43 (C) secured by a mortgage, mortgage deed, deed
5-44 of trust, or other instrument that constitutes a lien on the home.
5-45 (3) "Resulting institution" means the financial
5-46 institution that carries on in this state the business of a
5-47 financial institution after a merger with or a reorganization,
5-48 conversion, consolidation, or acquisition of another financial
5-49 institution.
5-50 (b) The percentage of home mortgage loans held in the loan
5-51 portfolio of a resulting institution may not be less than the
5-52 percentage of home mortgage loans held in the loan portfolio of the
5-53 financial institution involved in the merger, reorganization,
5-54 conversion, consolidation, or acquisition that, on the 30th day
5-55 before the date of the merger, reorganization, conversion,
5-56 consolidation, or acquisition, has the greatest percentage of home
5-57 mortgage loans in its loan portfolio.
5-58 (c) The percentage of home mortgage loans held in a
5-59 financial institution's loan portfolio is computed by dividing the
5-60 total principal amount of the financial institution's outstanding
5-61 home mortgage loans by the total principal amount of all of the
5-62 financial institution's outstanding loans.
5-63 (d) This article applies to all financial institutions to
5-64 the extent permitted by federal law and by Article XVI, Section
5-65 16(c), of the Texas Constitution.
5-66 SECTION 1.08. Section 4, Article 12, Chapter IX, The Texas
5-67 Banking Code (Article 342-912, Vernon's Texas Civil Statutes), is
5-68 amended to read as follows:
5-69 Sec. 4. APPLICATION AND FILINGS BY OUT-OF-STATE BANK HOLDING
5-70 COMPANY SEEKING ACQUISITION. An out-of-state bank holding company
6-1 that seeks to take an action specified in Section 1 of this article
6-2 for which a copy of the application must be filed with the banking
6-3 commissioner shall also file with the banking commissioner, when it
6-4 delivers the application:
6-5 (1) evidence that the out-of-state bank holding
6-6 company is authorized to take the action under Article 16 of this
6-7 chapter;
6-8 (2) evidence that the out-of-state bank holding
6-9 company and each state bank, national bank in this state, and bank
6-10 holding company being acquired will, after the acquisition, comply
6-11 with applicable capital adequacy guidelines, and that the
6-12 consolidated equity capital condition of these banks in this state
6-13 during the first three years after being acquired will be
6-14 maintained at least at the level existing immediately prior to the
6-15 acquisition less the consolidated net loss of these banks, if any;
6-16 (3) agreements, subject to any contrary provision of
6-17 applicable federal law, that while the out-of-state bank holding
6-18 company directly or indirectly owns or controls any national bank
6-19 in this state,<:>
6-20 <(A)> a majority of the directors of each
6-21 national bank shall be residents of the State of Texas, except that
6-22 directors who are employees or officers or spouses of employees or
6-23 officers of the bank, out-of-state bank holding company, or an
6-24 affiliate of the bank or out-of-state bank holding company may not
6-25 be counted as residents of the State of Texas for the purpose of
6-26 this subdivision <paragraph>; and
6-27 <(B) the out-of-state bank holding company will
6-28 not directly or indirectly own or control:>
6-29 <(i) an institution located in this state,
6-30 the deposits of which are insured by the Federal Deposit Insurance
6-31 Corporation or any successor performing similar functions, unless
6-32 the institution is a bank as defined by Section 2, Bank Holding
6-33 Company Act of 1956 (12 U.S.C. Sec. 1841); or>
6-34 <(ii) an institution located in this
6-35 state, the deposits of which are insured by the Federal Savings and
6-36 Loan Insurance Corporation or any successor performing similar
6-37 functions; and>
6-38 (4) an agreement to provide such additional
6-39 information as may be required by rules promulgated by the banking
6-40 commissioner.
6-41 SECTION 1.09. Sections 3 and 4, Article 16, Chapter IX, The
6-42 Texas Banking Code (Article 342-916, Vernon's Texas Civil
6-43 Statutes), are amended to read as follows:
6-44 Sec. 3. <The authority granted by Section 1 of this article
6-45 is not available to an out-of-state bank holding company that
6-46 directly or indirectly owns or controls:>
6-47 <(1) an institution located in this state, the
6-48 deposits of which are insured by the Federal Deposit Insurance
6-49 Corporation or any successor performing similar functions, unless
6-50 such institution is a bank as defined by Section 2, Bank Holding
6-51 Company Act of 1956 (12 U.S.C. Sec. 1841); or>
6-52 <(2) an institution located in this state, the
6-53 deposits of which are insured by the Federal Savings and Loan
6-54 Insurance Corporation or any successor performing similar
6-55 functions.>
6-56 <Sec. 4.> The authority granted in Section 1 of this article
6-57 is not available to an out-of-state bank holding company if after
6-58 the transaction the aggregate deposits of the state banks and
6-59 national banks domiciled in this state owned or controlled,
6-60 directly or indirectly, by the out-of-state bank holding company
6-61 would exceed 25 percent of the total deposits of all state banks
6-62 and national banks in this state as reported in the most recently
6-63 available reports of condition or similar reports filed with state
6-64 or federal authorities. For purposes of this section, the term
6-65 "deposit" has the meaning assigned by Section 2(3), Federal Deposit
6-66 Insurance Act (12 U.S.C. Sec. 1813).
6-67 SECTION 1.10. Section 10.02, Texas Savings and Loan Act
6-68 (Article 852a, Vernon's Texas Civil Statutes), is amended to read
6-69 as follows:
6-70 Sec. 10.02. CONVERSION INTO STATE CHARTERED ASSOCIATION.
7-1 Any Federal association or state or national bank may convert
7-2 itself into an association under this Act upon a majority vote of
7-3 the members, shareholders, or stockholders of such Federal
7-4 association or state or national bank cast at an annual meeting or
7-5 any special meeting called to consider such action. Copies of the
7-6 minutes of the proceedings of such meeting of members,
7-7 shareholders, or stockholders, verified by affidavit of the
7-8 secretary or an assistant secretary, shall be filed in the office
7-9 of the Commissioner and with the Office of Thrift Supervision or
7-10 its successor <mailed to the Federal Home Loan Bank Board,
7-11 Washington, D.C.,> within ten (10) days after such meeting. Such
7-12 verified copies of the proceedings of the meeting when so filed
7-13 shall be presumptive evidence of the holding and action of such
7-14 meeting. At the meeting at which conversion is voted upon, the
7-15 members, shareholders, or stockholders shall also vote upon the
7-16 directors who shall be the directors of the state-chartered
7-17 association after conversion takes effect. Such directors then
7-18 shall execute two (2) copies of the application for certificate of
7-19 incorporation provided in this Act. The Commissioner shall, upon
7-20 receipt of such application, cause the converting institution
7-21 <association> to be examined and if the Commissioner <he> finds
7-22 that it is in sound condition, approve the conversion and insert in
7-23 the certificate of incorporation, at the end of the paragraph
7-24 preceding the testimonium clause, the following: "This association
7-25 is incorporated by conversion from _____ (a Federal savings and
7-26 loan association, state bank, or national bank, as applicable)."
7-27 Each of the directors chosen for the new association shall sign and
7-28 acknowledge the application for certificate of incorporation as
7-29 subscribers thereto and the proposed bylaws as incorporators of the
7-30 new association. The provisions of this Act shall, so far as
7-31 applicable, apply to such conversion. The state-chartered
7-32 association shall be a continuation of the corporate entity of the
7-33 converting Federal association or state or national bank and
7-34 continue to have all of its property and rights.
7-35 SECTION 1.11. Chapter 10, Texas Savings and Loan Act
7-36 (Article 852a, Vernon's Texas Civil Statutes), is amended by adding
7-37 Section 10.021 to read as follows:
7-38 Sec. 10.021. CONVERSION INTO OTHER FINANCIAL INSTITUTION.
7-39 (a) An association subject to this Act may convert itself into a
7-40 state or national bank or state or federal savings bank on
7-41 application to the commissioner.
7-42 (b) A conversion under this section may be initiated by the
7-43 adoption of a resolution declaring that the association is to be
7-44 converted. The resolution must be adopted by a majority vote of
7-45 the members or shareholders of the association entitled to vote at
7-46 an annual or special meeting called to consider the conversion. A
7-47 copy of the minutes of the proceedings of the meeting, verified by
7-48 an affidavit of the secretary or an assistant secretary, shall be
7-49 filed in the office of the commissioner not later than the 10th day
7-50 after the date of the meeting. A sworn and filed copy of the
7-51 proceedings of the meeting is presumptive evidence of the meeting
7-52 and action taken.
7-53 (c) An application for conversion shall be approved by the
7-54 commissioner if the commissioner determines that the association is
7-55 in good standing. For purposes of this subsection, an association
7-56 is in good standing if the association has paid all fees,
7-57 assessments, and money due and payable to the Savings and Loan
7-58 Department of Texas.
7-59 (d) A copy of the charter issued to the new financial
7-60 institution by the appropriate financial institution regulatory
7-61 agency or a certificate showing the organization of the new
7-62 institution as a financial institution, certified by the secretary
7-63 or assistant secretary of the appropriate financial institution
7-64 regulatory agency, shall be filed with the commissioner. Failure
7-65 to file the charter or certificate with the commissioner does not
7-66 affect the validity of the conversion.
7-67 (e) Following the approval of the application for conversion
7-68 by the commissioner and on the granting of a charter by the
7-69 appropriate financial institution regulatory agency, the
7-70 institution receiving the new charter ceases to be an association
8-1 incorporated under this Act and is no longer subject to the
8-2 supervision and control of the commissioner, as provided by this
8-3 Act.
8-4 (f) On the conversion of an association into another
8-5 financial institution, the corporate existence of the association
8-6 does not terminate, but the new financial institution is a
8-7 continuation of the converting association. All property of the
8-8 converting association, including its rights, titles, and interests
8-9 in and to all property, whether real, personal, or mixed, and
8-10 things in action, and every right, privilege, interest, and asset
8-11 of any value or benefit then existing, or pertaining to it, or
8-12 which would inure to it, immediately by operation of law and
8-13 without any conveyance or transfer and without any further act or
8-14 deed remains and vests in and continues to be the property of the
8-15 financial institution into which the association has converted.
8-16 The new financial institution has, holds, and enjoys those
8-17 properties, rights, privileges, interests, and assets in its own
8-18 right as fully and to the same extent as they were possessed, held,
8-19 and enjoyed by the converting association. The new financial
8-20 institution at the time the conversion takes effect has and
8-21 succeeds to all the rights, obligations, and relations of the
8-22 converting association. A pending action or other judicial
8-23 proceeding to which the association is a party is not abated or
8-24 discontinued by reason of the conversion but may be prosecuted to
8-25 final judgment, order, or decree in the same manner as if the
8-26 conversion into the new financial institution had not been made.
8-27 The new financial institution may continue a pending action in its
8-28 corporate name as the new financial institution, and a judgment,
8-29 order, or decree may be rendered for or against it that might have
8-30 been rendered for or against the converting association.
8-31 SECTION 1.12. Section 10.03, Texas Savings and Loan Act
8-32 (Article 852a, Vernon's Texas Civil Statutes), is amended to read
8-33 as follows:
8-34 Sec. 10.03. REORGANIZATION, MERGER, AND CONSOLIDATION.
8-35 (a) Pursuant to a plan adopted by the board of directors and
8-36 approved by the Commissioner, and subject to the provisions of
8-37 Chapter 9 of this Act, an association shall have power to
8-38 reorganize or to merge or consolidate with another association,
8-39 <or> Federal association, foreign association, state or national
8-40 bank, or state or federal savings bank; provided, that the plan of
8-41 such reorganization, merger or consolidation shall be approved by a
8-42 majority of the total vote the members or shareholders are entitled
8-43 to cast. Approval may be voted at either an annual meeting or at a
8-44 special meeting called to consider such action. A shareholder of a
8-45 capital stock association has the same dissenter's rights as a
8-46 shareholder of a domestic corporation under the Texas Business
8-47 Corporation Act. In all cases the corporate continuity of the
8-48 resulting corporation shall possess the same incidents as that of
8-49 an entity <association> which has converted in accordance with this
8-50 Act. The home office of the association in the proposed merger
8-51 possessing the largest assets shall be designated as the home
8-52 office of the surviving entity <association>, unless otherwise
8-53 approved by the Commissioner.
8-54 (b) Upon being presented with a plan of reorganization,
8-55 merger, or consolidation, the Commissioner shall give public notice
8-56 of the proposed reorganization, merger, or consolidation in the
8-57 county or counties in which the association or associations
8-58 participating in the proposed plan have offices and give any
8-59 interested party an opportunity to appear, present evidence, and be
8-60 heard for or against the proposed plan. The hearing shall be held
8-61 before a hearing officer designated by the Commissioner. If a
8-62 protest is not received on or before the date of hearing, the
8-63 hearing may be dispensed with by the Commissioner or hearing
8-64 officer. The provisions of the Administrative Procedure and Texas
8-65 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)
8-66 applicable to a contested case apply to the hearing, except that
8-67 the notice and hearing provisions of that Act and of this section
8-68 do not apply to an application under this section if the
8-69 Commissioner has designated the merger to be a supervisory merger,
8-70 under rules adopted by the Finance Commission, and in that event,
9-1 the application and all information relating to the application is
9-2 confidential and privileged from public disclosure.
9-3 (c) The Commissioner shall issue an order denying the
9-4 proposed plan if the Commissioner finds that:
9-5 (1) the reorganization, merger, or consolidation would
9-6 substantially lessen competition or be in restraint of trade and
9-7 would result in a monopoly or be in furtherance of a combination or
9-8 conspiracy to monopolize or attempt to monopolize the savings and
9-9 loan industry in any part of the state, unless the anticompetitive
9-10 effects of the proposed reorganization, consolidation, or merger
9-11 are clearly outweighed in the public interest by the probable
9-12 effect of the reorganization, merger, or consolidation in meeting
9-13 the convenience and needs of the community to be served;
9-14 (2) in a merger or consolidation, the financial
9-15 condition of either entity <association> would jeopardize the
9-16 financial stability of any <the other> association that is a party
9-17 to the plan;
9-18 (3) the proposed plan is not in the best interest of
9-19 any association <the associations> that is a party <are parties> to
9-20 the plan;
9-21 (4) the experience, ability, standing, competence,
9-22 trustworthiness, or integrity of the management of the entities
9-23 <associations> proposing the plan is such that the reorganization,
9-24 merger, or consolidation would not be in the best interest of the
9-25 associations that are parties to the plan;
9-26 (5) after reorganization, merger, or consolidation the
9-27 surviving entity <association> would not be solvent, have adequate
9-28 capital structure, or be in compliance with the laws of this state;
9-29 (6) the entities <associations> proposing the plan
9-30 have not furnished all of the information pertinent to the
9-31 application reasonably requested by the Commissioner; or
9-32 (7) the entities <associations> proposing the plan are
9-33 not acting in good faith.
9-34 SECTION 1.13. The Texas Savings and Loan Act (Article 852a,
9-35 Vernon's Texas Civil Statutes) is amended by adding Sections 5.07
9-36 and 5.08 to read as follows:
9-37 Sec. 5.07. INVESTMENT WITHIN ASSOCIATION'S LOCAL SERVICE
9-38 AREA. (a) Each association shall maintain in its portfolio at
9-39 least 15 percent of its local service area deposits in the
9-40 following categories of assets and investments:
9-41 (1) first and second lien residential mortgage loans
9-42 or foreclosed residential mortgage loans originated from within the
9-43 association's local service area;
9-44 (2) home improvement loans;
9-45 (3) interim residential construction loans;
9-46 (4) mortgage-backed securities secured by loans from
9-47 within the association's local service area; and
9-48 (5) loans for community reinvestment purposes.
9-49 (b) The commissioner shall define an applicant's local
9-50 service area at the time of its incorporation or upon application
9-51 within 180 days of the effective date of this legislation. Unless
9-52 otherwise agreed to by the commissioner and the applicant, the
9-53 applicant may rely on this definition for the duration of the
9-54 applicant's corporate existence as an association.
9-55 (c) The commissioner and the finance commission shall adopt
9-56 rules to implement this section. The rules shall define the
9-57 categories of loans and investments described in Subsection (a) of
9-58 this section. The commissioner may grant certain limited-term
9-59 waivers from the requirements of Subsection (a) of this section if
9-60 quality loans in the categories described in that subsection are
9-61 not available from within the association's local service area.
9-62 Sec. 5.08. CONVERSION APPLICATION PROCESS. An application
9-63 to convert an institution to a state savings bank shall be
9-64 processed pursuant to the Texas Savings Bank Act.
9-65 ARTICLE 2. TEXAS SAVINGS BANK ACT AND CONFORMING AMENDMENTS
9-66 SECTION 2.01. The Texas Savings Bank Act is enacted to read
9-67 as follows:
9-68 CHAPTER 1. GENERAL PROVISIONS
9-69 Sec. 1.01. SHORT TITLE. This Act may be cited as the "Texas
9-70 Savings Bank Act."
10-1 Sec. 1.02. PURPOSE. The purpose of this Act is to
10-2 facilitate the delivery of credit for home ownership and family and
10-3 community purposes, increase the savings base of the state, and
10-4 provide local control of the means of finance and the accumulation
10-5 of capital through the state chartering of depository institutions
10-6 known as savings banks, and to provide savings bank regulation that
10-7 is readily responsive to changes in local economic conditions.
10-8 Sec. 1.03. DEFINITIONS. In this Act:
10-9 (1) "Administrative procedure act" means the
10-10 Administrative Procedure and Texas Register Act (Article 6252-13a,
10-11 Vernon's Texas Civil Statutes).
10-12 (2) "Appropriate banking agency"
10-13 (A) means:
10-14 (i) with respect to a Texas-chartered
10-15 savings bank, the Savings and Loan Department of Texas;
10-16 (ii) with respect to a federal savings
10-17 bank, the Office of Thrift Supervision;
10-18 (iii) with respect to a Texas-chartered
10-19 savings and loan association, the Savings and Loan Department of
10-20 Texas;
10-21 (iv) with respect to a federal savings and
10-22 loan association, the Office of Thrift Supervision;
10-23 (v) with respect to a Texas-chartered
10-24 bank, The Banking Department of Texas; and
10-25 (vi) with respect to a national bank, the
10-26 Office of the Comptroller of the Currency; and
10-27 (B) includes:
10-28 (i) in all cases where a state bank is a
10-29 member of the Federal Reserve System, the board of governors of the
10-30 Federal Reserve System;
10-31 (ii) in all cases where required by the
10-32 Federal Deposit Insurance Act (12 U.S.C. Section 1811 et seq.), the
10-33 Federal Deposit Insurance Corporation; and
10-34 (iii) in all cases, the successors of the
10-35 state and federal agencies specified in this subdivision.
10-36 (3) "Capital stock" means, with respect to a capital
10-37 stock savings bank, the units into which the proprietary interest
10-38 in the savings bank is divided.
10-39 (4) "Capital stock savings bank" means a savings bank
10-40 authorized to issue capital stock.
10-41 (5) "Commissioner" means the Savings and Loan
10-42 Commissioner.
10-43 (6) "Company" means a corporation, partnership, trust,
10-44 joint-stock company, association, unincorporated organization, or
10-45 other legal entity, or a combination of any of those entities
10-46 acting in concert.
10-47 (7) "Control" means the possession of the power to
10-48 direct or cause the direction of the management and policies of a
10-49 savings bank by either direct or indirect means. An individual or
10-50 company is deemed to have control if, individually or acting in
10-51 concert with others, the individual or company directly or
10-52 indirectly owns, controls, holds with the power to vote, or holds
10-53 proxies representing 25 percent or more of the voting stock or
10-54 voting rights of a savings bank.
10-55 (8) "Deposit account" means a savings account,
10-56 certificate of deposit, withdrawable deposit, demand deposit
10-57 account, checking account, or any other appropriate term referring
10-58 to the amount of money a savings bank owes to an account holder as
10-59 a result of the deposit of funds in the savings bank.
10-60 (9) "Deposit liability" means the aggregate amount of
10-61 money owed to deposit account holders of a savings bank at any one
10-62 particular time, as shown by the books of the savings bank and
10-63 after applying any legal or contractual reductions.
10-64 (10) "Domestic savings bank" means a savings bank
10-65 organized under the laws of this state and subject to this Act.
10-66 (11) "Earnings on account" means either interest
10-67 contractually payable or dividends declared payable to holders of
10-68 deposit accounts in a savings bank.
10-69 (12) "Federal Deposit Insurance Corporation" includes
10-70 its successor or successors.
11-1 (13) "Federal savings bank" means a savings bank
11-2 incorporated under the laws of the United States whose principal
11-3 business office is located in this state.
11-4 (14) "Finance commission" means The Finance Commission
11-5 of Texas.
11-6 (15) "Financial institution" means a state or federal
11-7 savings bank, a state or federal savings and loan association, or a
11-8 state or national bank.
11-9 (16) "Foreign savings bank" means a savings bank whose
11-10 principal office is located outside this state and that has been
11-11 organized under the laws of a state or territory of the United
11-12 States other than this state or under the laws of the United
11-13 States.
11-14 (17) "Holding company" means any company that directly
11-15 or indirectly controls a savings bank or controls any other company
11-16 that is a savings bank holding company.
11-17 (18) "Loss reserves" means the aggregate amount of the
11-18 reserves allocated by a savings bank for the sole purpose of
11-19 absorbing losses.
11-20 (19) "Member" means, with respect to a mutual savings
11-21 bank, a person holding an account with the savings bank, assuming
11-22 or obligated on a loan in which the savings bank has an interest,
11-23 or owning property that secures a loan in which the savings bank
11-24 has an interest.
11-25 (20) "Mutual savings bank" means a savings bank not
11-26 authorized to issue capital stock.
11-27 (21) "Regulatory capital" means a common stockholders'
11-28 equity, including retained earnings, noncumulative perpetual
11-29 preferred stock and related earnings, minority interests in the
11-30 equity accounts of fully consolidated subsidiaries, and other
11-31 elements as established by the rules of the commissioner and the
11-32 finance commission.
11-33 (22) "Savings bank" means an institution organized
11-34 under or subject to this Act.
11-35 (23) "Stockholder" means the owner of one or more
11-36 shares of a savings bank's capital stock.
11-37 (24) "Subsidiary" means a company that is controlled
11-38 by a savings bank or by a company that is controlled, directly or
11-39 indirectly, by a savings bank. For purposes of this subdivision, a
11-40 savings bank is considered to control a company if the savings bank
11-41 directly or indirectly or acting in concert with one or more other
11-42 individuals or entities or through one or more subsidiaries:
11-43 (A) owns, controls, or holds with the power to
11-44 vote, or holds proxies representing, more than 25 percent of the
11-45 voting stock or voting rights of the company;
11-46 (B) controls in any manner the election of a
11-47 majority of the directors of the company; or
11-48 (C) is a general partner in or has contributed
11-49 more than 25 percent of the equity capital of the company.
11-50 (25) "Surplus" means the aggregate amount of the
11-51 undistributed earnings of a savings bank held as undivided profits
11-52 or unallocated reserves for general corporate purposes and any
11-53 paid-in surplus held by the savings bank.
11-54 (26) "Surviving financial institution" means the
11-55 entity that is the result of a merger or consolidation of a foreign
11-56 savings bank and a domestic savings bank or of a merger or
11-57 consolidation of a savings bank and another financial institution.
11-58 (27) "Unpursued cause of action" means an existing
11-59 claim belonging to a savings bank on which a suit or other
11-60 effective action has not been filed or taken by or on behalf of the
11-61 savings bank before the expiration of six months after the cause of
11-62 action arose, involving:
11-63 (A) a claim for monetary damages or recovery of
11-64 property;
11-65 (B) a claim for equitable relief;
11-66 (C) a cause of action for breach of contract or
11-67 for enforcement of a contract; or
11-68 (D) a claim on a fidelity bond.
11-69 (28) "Unsafe and unsound practices" means, with
11-70 respect to the operation of a savings bank, an action or inaction
12-1 that is likely to cause insolvency or substantial dissipation of
12-2 assets or earnings or to otherwise reduce the ability of the
12-3 savings bank to timely satisfy withdrawal requests of deposit
12-4 account holders.
12-5 (29) "Withdrawal value of deposit account" means the
12-6 net amount of money, after the application of any legal or
12-7 contractual reduction, that may be withdrawn at any particular time
12-8 by an account holder from a deposit account.
12-9 Sec. 1.04. EFFECT OF HEADINGS. The division of this Act
12-10 into chapters and sections and the captions of chapters and
12-11 sections are for convenience and have no legal effect in construing
12-12 the provisions of this Act.
12-13 CHAPTER 2. INCORPORATION AND ORGANIZATION
12-14 Sec. 2.01. APPLICATION OF LAWS RELATING TO GENERAL BUSINESS
12-15 CORPORATIONS. The Texas Business Corporation Act, the Texas
12-16 Miscellaneous Corporation Laws Act (Article 1302-1.01 et seq.,
12-17 Vernon's Texas Civil Statutes), and other law relating to general
12-18 business corporations are applicable to a savings bank to the
12-19 extent not inconsistent with this Act or the proper business of a
12-20 savings bank.
12-21 Sec. 2.02. FEDERAL INSURANCE OF DEPOSIT ACCOUNTS REQUIRED.
12-22 A savings bank must obtain and maintain federal insurance of
12-23 deposit accounts through an insurance corporation created by an Act
12-24 of the United States Congress.
12-25 Sec. 2.03. STATUS AS INTERNAL REVENUE SERVICE THRIFT
12-26 INSTITUTION. A savings bank must qualify for and maintain the
12-27 asset test of Section 7701(a)(19) of the Internal Revenue Code of
12-28 1986 (26 U.S.C. Section 7701(a)(19)).
12-29 Sec. 2.04. INCORPORATION AND INITIAL CAPITAL. A savings
12-30 bank may be organized on the application of five or more adult
12-31 residents of this state. The minimum initial capital of a savings
12-32 bank shall be fixed by rules adopted by the commissioner and the
12-33 finance commission, but the amount may not be less than the amount
12-34 required to obtain insurance of deposit accounts by the Federal
12-35 Deposit Insurance Corporation or the amount required of national
12-36 banks, whichever is greater. The initial capital shall be paid in
12-37 cash before the savings bank may begin business.
12-38 Sec. 2.05. CONTENTS OF APPLICATION. (a) An application to
12-39 incorporate a savings bank must be in a form specified by the
12-40 commissioner, signed by each incorporator, and submitted to the
12-41 commissioner with the filing fee. An application consists of:
12-42 (1) two copies of the proposed articles of
12-43 incorporation setting forth the name of the savings bank, the site
12-44 of the principal office, and the names and addresses of the initial
12-45 directors;
12-46 (2) two copies of the bylaws under which the savings
12-47 bank proposes to operate;
12-48 (3) statements, exhibits, maps, and other data
12-49 sufficiently detailed and comprehensive to enable the commissioner
12-50 to make findings under Section 2.11 of this Act;
12-51 (4) other information relating to the proposed savings
12-52 bank and its operation required by the rules of the commissioner
12-53 and the finance commission; and
12-54 (5) financial information about the applicants,
12-55 incorporators, directors, or stockholders required by the rules of
12-56 the commissioner and the finance commission.
12-57 (b) Financial information submitted under Subsection (a) of
12-58 this section is confidential and not subject to public disclosure
12-59 unless the commissioner finds that the disclosure is necessary and
12-60 in the public interest.
12-61 (c) If an application is to incorporate a capital stock
12-62 savings bank, the articles of incorporation must set out:
12-63 (1) the aggregate number of shares of common stock
12-64 that the savings bank may issue;
12-65 (2) the par value of each share or a statement that
12-66 the shares are without par value;
12-67 (3) a statement of whether the savings bank may issue
12-68 preferred stock;
12-69 (4) the amount of stock that has been subscribed and
12-70 will be paid for before the savings bank begins business; and
13-1 (5) a separate statement of the name and address of
13-2 each subscriber, the amount subscribed by each subscriber, and the
13-3 amount of paid-in surplus with which the savings bank will begin
13-4 business.
13-5 (d) If an application is to incorporate a mutual savings
13-6 bank, the articles of incorporation must include a statement of the
13-7 amount of deposit liability of the savings bank and the amount of
13-8 the expense fund with which the savings bank will begin business.
13-9 (e) The bylaws of the proposed savings bank must provide for
13-10 the voting rights of the members, if a mutual savings bank, or the
13-11 stockholders, if a capital stock savings bank.
13-12 (f) The articles of incorporation and statements of fact
13-13 submitted to the commissioner in connection with an application
13-14 must be subscribed and sworn to before an officer authorized to
13-15 administer oaths.
13-16 Sec. 2.06. MANAGING OFFICER. An applicant is not required
13-17 to specify the name and qualifications of the proposed managing
13-18 officer of the proposed savings bank at a hearing concerning the
13-19 granting of the application or in a public record. This
13-20 information may be presented to the commissioner at any time, but a
13-21 savings bank may not begin business unless it first presents to the
13-22 commissioner the name and qualifications of its proposed managing
13-23 officer and that managing officer is approved as qualified by the
13-24 commissioner.
13-25 Sec. 2.07. COMMON STOCK. (a) Before approving an
13-26 application, the commissioner shall require that a capital stock
13-27 savings bank have an aggregate amount of capital in the form of
13-28 stock and paid-in surplus as specified by the rules of the
13-29 commissioner and of the finance commission. Paid-in surplus may be
13-30 used instead of earnings to pay organizational and operating
13-31 expenses and earnings on deposit accounts and to meet any loss
13-32 reserve requirements. If the application is not approved or if the
13-33 proposed savings bank does not begin business, the stock
13-34 subscriptions for capital stock, less any lawful expenditures,
13-35 shall be returned pro rata to the subscribers.
13-36 (b) A savings bank may not purchase, directly or indirectly,
13-37 any of its own shares of common stock after the stock is issued.
13-38 Common stock may not be retired or redeemed until all liabilities
13-39 of the savings bank have been satisfied in full, including all
13-40 amounts due to holders of deposit accounts, unless prior written
13-41 permission is obtained from the commissioner and the retirement or
13-42 redemption is authorized by a majority vote of the savings bank's
13-43 stockholders at an annual meeting or a special meeting called for
13-44 that purpose. The basis of the retirement or redemption must be
13-45 first approved by the commissioner and consent must be obtained in
13-46 writing from the Federal Deposit Insurance Corporation and filed
13-47 with the commissioner. Preferred stock may be retired or redeemed
13-48 in the manner provided by the articles of incorporation or a
13-49 resolution of the board of directors of the savings bank
13-50 establishing the rights and preferences relating to the stock.
13-51 Both common and preferred stock must be fully paid for in cash in
13-52 advance of issuance. A savings bank may not make a loan against
13-53 the shares of its outstanding common or preferred stock.
13-54 Sec. 2.08. PREFERRED STOCK. (a) If the articles of
13-55 incorporation permit, shares of preferred stock may be divided into
13-56 and issued in series. Each series must be clearly designated to
13-57 distinguish its shares from the shares of other series or classes.
13-58 All or part of a series and variations in the relative rights and
13-59 preferences between different series may be fixed and determined by
13-60 the articles of incorporation, but all shares of the same class
13-61 must be identical except for the following rights and preferences:
13-62 (1) the rate of dividend;
13-63 (2) the price, terms, and conditions at which shares
13-64 may be redeemed;
13-65 (3) the amount payable on shares in the event of
13-66 involuntary liquidation;
13-67 (4) the amount payable on shares in the event of
13-68 voluntary liquidation;
13-69 (5) a sinking fund provision for the redemption or
13-70 purchase of shares;
14-1 (6) the terms and conditions of conversion of shares
14-2 that may be converted; and
14-3 (7) voting rights.
14-4 (b) If the articles of incorporation permit, the board of
14-5 directors by resolution may divide classes of preferred stock into
14-6 series and, within the limitations provided by this chapter and the
14-7 articles of incorporation, may determine the relative rights and
14-8 preferences of the shares of the series. Before the shares may be
14-9 issued, a copy of the resolution shall be submitted to the
14-10 commissioner. If the resolution conforms to this Act, the
14-11 commissioner shall file it in the commissioner's office. A
14-12 resolution filed by the commissioner is considered to be an
14-13 amendment to the savings bank's articles of incorporation.
14-14 (c) The extent to which preferred stock may be included as
14-15 regulatory capital of a savings bank is subject to the rules
14-16 adopted by the commissioner and the finance commission.
14-17 Sec. 2.09. EXPENSE FUND REQUIREMENTS FOR PROPOSED MUTUAL
14-18 SAVINGS BANK. Before approving the articles of incorporation of a
14-19 mutual savings bank, the commissioner shall require the savings
14-20 bank to have subscriptions for an aggregate amount of deposit
14-21 accounts and an expense fund in an aggregate amount established by
14-22 rule of the commissioner and the finance commission as necessary
14-23 for the successful operation of a mutual savings bank. The expense
14-24 of organizing a savings bank, its operating expenses, and earnings
14-25 on accounts declared and paid or credited to its deposit account
14-26 holders may be paid out of the expense fund until the savings
14-27 bank's earnings are sufficient to pay those amounts. The amounts
14-28 contributed to the expense fund do not constitute a liability of
14-29 the savings bank except as provided by this chapter. The
14-30 contributions may be repaid pro rata to the contributors from the
14-31 net earnings of a savings bank after provision for required loss
14-32 reserve allocations and payment or credit of earnings declared on
14-33 accounts. If a savings bank is liquidated before contributions to
14-34 the expense fund are repaid, any contributions to the expense fund
14-35 remaining unspent after the payment of expenses of liquidation,
14-36 creditors, and the withdrawal value of deposit accounts shall be
14-37 paid to the contributors pro rata. The books of a savings bank
14-38 must reflect the expense fund. Contributors to an expense fund
14-39 shall be paid dividends on the amounts contributed to the same
14-40 extent a deposit account is paid dividends, and for this purpose
14-41 the contributions are considered deposit accounts of the savings
14-42 bank.
14-43 Sec. 2.10. HEARING ON APPLICATION TO INCORPORATE. (a) When
14-44 a complete application to incorporate as defined by rules adopted
14-45 by the commissioner and the finance commission is filed, the
14-46 commissioner shall issue public notice of the application and shall
14-47 give any interested party an opportunity to appear, present
14-48 evidence, and be heard for or against the application. A hearing
14-49 officer designated by the commissioner shall hold the hearing.
14-50 (b) The hearing officer shall file with the commissioner a
14-51 report on the hearing containing findings of fact on each condition
14-52 set out by Section 2.11 of this Act and the evidence on which those
14-53 findings are based.
14-54 Sec. 2.11. APPROVAL OR DENIAL OF APPLICATION TO INCORPORATE.
14-55 (a) The commissioner may not approve an application to incorporate
14-56 unless:
14-57 (1) the prerequisites to incorporation required by
14-58 this chapter have been satisfied;
14-59 (2) the character, responsibility, and general fitness
14-60 of the persons named in the articles of incorporation command
14-61 confidence and warrant belief that the business of the proposed
14-62 savings bank will be honestly and efficiently conducted in
14-63 accordance with the intent and purpose of this Act and that the
14-64 proposed savings bank will have qualified full-time management;
14-65 (3) there is a public need for the proposed savings
14-66 bank and the volume of business in the community in which the
14-67 proposed savings bank will conduct its business indicates that a
14-68 profitable operation is probable; and
14-69 (4) the operation of the proposed savings bank will
14-70 not unduly harm any existing savings bank or state or federal
15-1 savings and loan association.
15-2 (b) If the commissioner makes each finding under Subsection
15-3 (a) of this section, the commissioner shall enter an order
15-4 approving the application and stating the findings required by
15-5 Subsection (a) of this section, issue under official seal a
15-6 certificate of incorporation, and deliver a copy of the approved
15-7 articles of incorporation and bylaws to the incorporators. The
15-8 commissioner shall retain a copy of the articles of incorporation
15-9 and bylaws as a permanent file. On delivery of the certificate to
15-10 the incorporators, the savings bank is a corporate body with
15-11 perpetual existence unless terminated by law and may exercise the
15-12 powers of a savings bank beginning on the date the commissioner
15-13 certifies receipt of satisfactory proof that the required amount of
15-14 capital was received by the savings bank, free of encumbrance.
15-15 (c) If the commissioner is unable to make all findings
15-16 required under Subsection (a) of this section, the commissioner
15-17 shall enter a written order denying the application and stating the
15-18 grounds for the denial. A copy of the order shall be delivered to
15-19 the designated representative of the incorporators by certified
15-20 mail.
15-21 Sec. 2.12. DISSOLUTION OF SAVINGS BANK FOR FAILURE TO BEGIN
15-22 BUSINESS. A savings bank shall begin business not later than the
15-23 first anniversary of the date of the approval of its application.
15-24 The incorporators may request from the commissioner an extension of
15-25 the deadline. If good cause is shown, the commissioner may grant a
15-26 reasonable extension of the deadline. Failure to begin business as
15-27 required by this Act is a ground for rescission of a savings bank's
15-28 charter by the commissioner.
15-29 Sec. 2.13. CORPORATE NAME. The name of a savings bank must
15-30 include the words "State Savings Bank" or the abbreviation "SSB."
15-31 These words or the abbreviation must be preceded by an appropriate
15-32 descriptive word or words approved by the commissioner. The
15-33 commissioner may not approve the incorporation of a savings bank
15-34 having the same name as another financial institution authorized to
15-35 do business in this state under this Act, the Texas Savings and
15-36 Loan Act (Article 852a, Vernon's Texas Civil Statutes), or The
15-37 Texas Banking Code (Article 342-101 et seq., Vernon's Texas Civil
15-38 Statutes) or a name so nearly resembling the name of another
15-39 financial institution as to be calculated to deceive unless the
15-40 savings bank is formed by the reincorporation, reorganization, or
15-41 consolidation of the other financial institution or on the sale of
15-42 the property or franchise of the other savings bank. A person or
15-43 company, either domestic or foreign, other than a state or federal
15-44 savings bank, may not do business under a name or title that
15-45 contains the words "savings bank," that indicates or reasonably
15-46 implies that the business is the character or kind of business
15-47 carried on or transacted by a savings bank, or that is calculated
15-48 to lead any person to believe that its business is that of a
15-49 savings bank. On application by the commissioner or any savings
15-50 bank, a court of competent jurisdiction may issue an injunction to
15-51 restrain a person or company from violating this section.
15-52 Sec. 2.14. ESTABLISHMENT OF ADDITIONAL OFFICES; CHANGE OF
15-53 OFFICE LOCATION OR NAME. Without the prior approval of the
15-54 commissioner given in accordance with the rules of the commissioner
15-55 and the finance commission, a savings bank may not establish an
15-56 office other than the principal office stated in its articles of
15-57 incorporation, move an office from its immediate vicinity, or
15-58 change its name. The commissioner may permit a savings bank to
15-59 establish additional offices within this state or any other state
15-60 or territory of the United States in accordance with the rules of
15-61 the commissioner and the finance commission. If requested, the
15-62 commissioner shall give a person who might be affected by the
15-63 establishment of additional offices or the change of office
15-64 location or name an opportunity to be heard under Section 12.08 of
15-65 this Act.
15-66 CHAPTER 3. CORPORATE CHANGES
15-67 Sec. 3.01. CONVERSION INTO STATE-CHARTERED SAVINGS BANK.
15-68 (a) A financial institution may be converted into a savings bank
15-69 under this Act on a majority vote of the members or stockholders of
15-70 the financial institution cast at an annual meeting or a special
16-1 meeting called to consider the action. Copies of the minutes of
16-2 the proceedings of the meeting of members or stockholders, verified
16-3 by affidavit of the secretary or an assistant secretary, must be
16-4 submitted to the commissioner and mailed to the appropriate banking
16-5 agency within 10 days after the date of the meeting. A sworn copy
16-6 of the proceedings of the meeting is presumptive evidence of the
16-7 holding and action of the meeting after its filing with the
16-8 commissioner. At a meeting to vote on a conversion to a domestic
16-9 savings bank, the members or stockholders shall also vote on the
16-10 directors of the savings bank. The proposed directors shall
16-11 execute two copies of an application for certificate of
16-12 incorporation as provided in Chapter 2 of this Act. Each proposed
16-13 director shall sign and acknowledge the application for certificate
16-14 of incorporation as a subscriber to the savings bank and shall sign
16-15 and acknowledge the proposed bylaws as an incorporator of the
16-16 savings bank.
16-17 (b) The commissioner on receipt of the application and
16-18 verified copy of the minutes shall conduct an examination of the
16-19 financial institution seeking conversion. Following the
16-20 examination, the commissioner shall approve the conversion without
16-21 a hearing if the commissioner determines that the converting
16-22 financial institution is in sound condition and meets all
16-23 standards, conditions, and requirements of Chapter 2 of this Act or
16-24 relevant rules adopted by the commissioner and the finance
16-25 commission. On approval of the conversion, the incorporators shall
16-26 insert a paragraph preceding the testimonium clause in the
16-27 certificate of incorporation stating that the savings bank is
16-28 incorporated by conversion from another financial institution.
16-29 (c) An applicant is entitled to a hearing under the
16-30 administrative procedure act if the commissioner denies an
16-31 application to convert and a written request for a hearing is
16-32 delivered to the commissioner within 10 days after the date of
16-33 denial. A hearing officer designated by the commissioner shall
16-34 hold the hearing. Within 30 days after the date the hearing is
16-35 completed, the commissioner shall enter a final order either
16-36 approving or denying the application. An applicant has the right
16-37 to appeal a final order to a district court of Travis County with
16-38 the commissioner named as defendant. The commissioner is not
16-39 required to file an appeal bond in any cause arising under this
16-40 section. Filing an appeal under this section does not stay an
16-41 order of the commissioner.
16-42 (d) On the conversion of a financial institution into a
16-43 savings bank, the corporate existence of the financial institution
16-44 does not terminate, but the new savings bank is a continuation of
16-45 the entity of the converting financial institution. All property
16-46 of the converting financial institution, including its rights,
16-47 titles, and interests in and to all property of whatever kind,
16-48 whether real, personal, or mixed, and things in action, and every
16-49 right, privilege, interest, and asset of any conceivable value or
16-50 benefit then existing, or pertaining to the financial institution,
16-51 or which would inure to it, immediately by operation of law and
16-52 without any conveyance or transfer and without any further act or
16-53 deed remains and vests in and continues to be the property of the
16-54 savings bank into which the financial institution converted. The
16-55 new savings bank has, holds, and enjoys those properties, rights,
16-56 privileges, interests, and assets in its own right as fully and to
16-57 the same extent as they were possessed, held, and enjoyed by the
16-58 converting financial institution. The new savings bank as of the
16-59 time the conversion takes effect has and succeeds to all the
16-60 rights, obligations, and relations of the converting financial
16-61 institution. The new savings bank shall file a copy of the order
16-62 of conversion in all counties in which the converting financial
16-63 institution owns real property. All pending actions and other
16-64 judicial proceedings to which the financial institution is a party
16-65 are not abated or discontinued by reason of the conversion, but may
16-66 be prosecuted to final judgment, order, or decree in the same
16-67 manner as if the conversion into the new savings bank did not
16-68 occur. The new savings bank may continue any pending action in its
16-69 corporate name as the new savings bank, and any judgment, order, or
16-70 decree may be rendered for or against it that might have been
17-1 rendered for or against the converting financial institution
17-2 previously involved in the judicial proceedings.
17-3 Sec. 3.02. CONVERSION INTO FINANCIAL INSTITUTION. (a) The
17-4 finance commission shall adopt rules establishing the conditions
17-5 under which a savings bank subject to this Act may be converted
17-6 into another financial institution. The rules must ensure that a
17-7 proposed conversion does not cause undue harm to the public
17-8 interest or to any other existing financial institution.
17-9 (b) A conversion by a savings bank may be initiated by the
17-10 adoption of a resolution by a majority vote of the members or
17-11 stockholders of a savings bank entitled to vote at an annual
17-12 meeting or special meeting called to consider the conversion. The
17-13 resolution must declare that the savings bank shall be converted.
17-14 A copy of the minutes of the proceedings of the meeting of the
17-15 stockholders or members, verified by affidavit of the secretary or
17-16 an assistant secretary, must be filed in the office of the
17-17 commissioner within 10 days after the date of the meeting. A sworn
17-18 copy of the proceedings of the meeting is presumptive evidence of
17-19 the holding and action of the meeting after its filing with the
17-20 commissioner.
17-21 (c) Within 10 days after the date of receipt of an
17-22 application to convert and a copy of the minutes, the commissioner
17-23 shall either consent to the conversion by written order or set a
17-24 hearing to consider whether the proposed conversion complies with
17-25 the conditions established by the finance commission. The hearing
17-26 must be held within 25 days after the date of the filing of the
17-27 conversion application unless a later date is agreed to by the
17-28 savings bank and the commissioner. The commissioner or a hearing
17-29 officer designated by the commissioner shall conduct the hearing as
17-30 a contested case in compliance with the administrative procedure
17-31 act, except that a proposal for decision may not be made and a
17-32 final decision or order must be rendered by the commissioner within
17-33 15 days after the date of the close of the hearing. If the
17-34 commissioner denies an application to convert, the administrative
17-35 procedure act governs a motion for rehearing and available judicial
17-36 review.
17-37 (d) If the commissioner consents to the conversion, the
17-38 savings bank, within three months after the date of the
17-39 commissioner's written order, shall consummate the conversion in
17-40 the manner prescribed and authorized by the applicable laws of this
17-41 state or the United States. A copy of the charter issued to the
17-42 new financial institution by the appropriate banking agency or the
17-43 certificate showing the organization of the new financial
17-44 institution, certified by the secretary or assistant secretary of
17-45 the appropriate banking agency, must be filed with the
17-46 commissioner. Failure to file the charter or certificate with the
17-47 commissioner does not affect the validity of the conversion.
17-48 (e) On the grant of a charter by the appropriate banking
17-49 agency, the savings bank receiving the new charter ceases existence
17-50 as a savings bank incorporated under this Act and is not subject to
17-51 the supervision and control of the commissioner under this Act.
17-52 (f) On the conversion of a savings bank into another
17-53 financial institution, the corporate existence of the savings bank
17-54 does not terminate, but the new financial institution is a
17-55 continuation of the entity of the converting savings bank. The new
17-56 financial institution retains all property, rights, and obligations
17-57 of the converting savings bank and is subject to the provisions of
17-58 Subsection (d) of Section 3.01 of this Act as if it were a new
17-59 savings bank under that section to the extent the provisions can be
17-60 made applicable to the new financial institution.
17-61 Sec. 3.03. REORGANIZATION, MERGER, AND CONSOLIDATION.
17-62 (a) Under a plan adopted by the board of directors and approved by
17-63 the commissioner and subject to Chapter 11 of this Act and Article
17-64 XVI, Section 16, of the Texas Constitution, a savings bank may
17-65 reorganize, merge, or consolidate with another financial
17-66 institution if the plan of reorganization, merger, or consolidation
17-67 is approved by a majority of the total votes that the members or
17-68 stockholders are entitled to cast. Approval may be voted at either
17-69 an annual meeting or at a special meeting called to consider the
17-70 action. A stockholder of a capital stock savings bank has the same
18-1 dissenter's rights as a stockholder of a domestic corporation under
18-2 the Texas Business Corporation Act. In all cases the corporate
18-3 continuity of the resulting corporation possesses the same property
18-4 rights and obligations as those of a savings bank that has
18-5 converted in accordance with this Act. The home office of the
18-6 financial institution in the proposed merger possessing the largest
18-7 assets shall be designated as the home office of the surviving
18-8 financial institution unless a different home office is approved by
18-9 the commissioner.
18-10 (b) On receiving a plan of reorganization, merger, or
18-11 consolidation, the commissioner shall give public notice of the
18-12 proposed reorganization, merger, or consolidation in the county or
18-13 counties in which the financial institutions participating in the
18-14 proposed plan have offices and shall give any interested party an
18-15 opportunity to appear, present evidence, and be heard for or
18-16 against the proposed plan. A hearing officer designated by the
18-17 commissioner shall hold the hearing. If a protest is not received
18-18 on or before the date of hearing, the commissioner or hearing
18-19 officer may dispense with the hearing. The provisions of the
18-20 administrative procedure act applicable to a contested case apply
18-21 to the hearing, except that the notice and hearing provisions of
18-22 that Act and of this section do not apply to an application under
18-23 this section if the commissioner has designated the merger to be a
18-24 supervisory merger under the rules adopted by the finance
18-25 commission, and in that event, the application and all information
18-26 relating to the application is confidential and privileged from
18-27 public disclosure.
18-28 (c) The commissioner shall issue an order denying the
18-29 proposed plan if:
18-30 (1) the reorganization, merger, or consolidation would
18-31 substantially lessen competition or be in restraint of trade and
18-32 would result in a monopoly or be in furtherance of a combination or
18-33 conspiracy to monopolize or attempt to monopolize the financial
18-34 industry in any part of the state, unless the anticompetitive
18-35 effects of the proposed reorganization, merger, or consolidation
18-36 are clearly outweighed in the public interest by the probable
18-37 effect of the reorganization, merger, or consolidation in meeting
18-38 the convenience and needs of the community to be served;
18-39 (2) the proposed plan is not in the best interest of
18-40 the financial institutions that are parties to the plan;
18-41 (3) the experience, ability, standing, competence,
18-42 trustworthiness, or integrity of the management of the financial
18-43 institutions proposing the plan is such that the reorganization,
18-44 merger, or consolidation would not be in the best interest of the
18-45 financial institutions that are parties to the plan;
18-46 (4) after reorganization, merger, or consolidation the
18-47 surviving financial institution would not:
18-48 (A) be solvent;
18-49 (B) have adequate capital structure; or
18-50 (C) be in compliance with the laws of this
18-51 state;
18-52 (5) the financial institutions proposing the plan have
18-53 not furnished all of the information pertinent to the application
18-54 reasonably requested by the commissioner; or
18-55 (6) the financial institutions proposing the plan are
18-56 not acting in good faith.
18-57 (d) If the surviving financial institution is an entity
18-58 other than a savings bank, the commissioner may accept the
18-59 procedures and decision of the appropriate banking agency having
18-60 jurisdiction over the surviving financial institution in addition
18-61 to or in lieu of the requirements of this section.
18-62 Sec. 3.04. MERGER OF SUBSIDIARY CORPORATION INTO SAVINGS
18-63 BANK. (a) One or more corporations organized under the law of
18-64 this state may merge into a savings bank that owns all of the
18-65 corporations' capital stock under a plan of merger adopted by
18-66 majority votes of the boards of directors of the savings bank and
18-67 each corporation.
18-68 (b) The original and a copy of the articles of merger must
18-69 be submitted to the secretary of state and the commissioner. The
18-70 articles of merger must be executed by the president or
19-1 vice-president and a secretary or assistant secretary of the
19-2 savings bank and each corporation and must include:
19-3 (1) the names of the savings bank and each
19-4 corporation;
19-5 (2) a copy of the resolutions of the savings bank and
19-6 each corporation adopting the plan of merger;
19-7 (3) a statement of the number of shares of each class
19-8 issued or authorized by each corporation;
19-9 (4) a statement that all capital stock of each
19-10 corporation is owned by the savings bank; and
19-11 (5) a statement incorporating the provisions of
19-12 Subsection (f) of this section.
19-13 (c) For a merger to be effective, it must be approved by
19-14 both the secretary of state and the commissioner. If the secretary
19-15 of state determines that the articles of merger comply with
19-16 applicable law and that all fees and franchise taxes due from the
19-17 corporation have been paid, the secretary of state shall approve
19-18 the articles of merger as provided by Subsection (d) of this
19-19 section. If the commissioner determines that the articles of
19-20 merger comply with applicable law and that the merger is in the
19-21 best interest of the savings bank, the commissioner shall approve
19-22 the articles of merger as provided by Subsection (d) of this
19-23 section.
19-24 (d) On approval of the articles of merger, the commissioner
19-25 and the secretary of state shall each:
19-26 (1) endorse "filed" and the date of the approval on
19-27 the original and a copy of the articles of merger;
19-28 (2) file the original and a copy of the articles of
19-29 merger in the records of the commissioner's office or the secretary
19-30 of state's office, as appropriate; and
19-31 (3) issue and deliver to the savings bank a
19-32 certificate of merger, attaching a copy of the articles of merger.
19-33 (e) A merger takes effect when the latter of the required
19-34 certificates of merger is issued.
19-35 (f) After a merger, the merged corporation ceases to exist
19-36 as a separate entity, and only the savings bank survives. The
19-37 savings bank assumes the rights and obligations of the corporation
19-38 and owns the property of the corporation. The articles of
19-39 incorporation of the savings bank are considered amended to the
19-40 extent that a change is stated in the plan of merger.
19-41 (g) Section 3.03 of this Act does not apply to a merger
19-42 under this section.
19-43 Sec. 3.05. VOLUNTARY LIQUIDATION. At an annual meeting or a
19-44 special meeting called for that purpose, a savings bank by majority
19-45 vote of its members or stockholders may resolve to liquidate and
19-46 dissolve the savings bank. Before a liquidation resolution may
19-47 take effect, a copy of the resolution, certified by the president
19-48 and secretary of the savings bank, together with an itemized
19-49 statement of the savings bank's assets and liabilities sworn to by
19-50 a majority of its board of directors, must be filed with and
19-51 approved by the commissioner. After the commissioner's approval of
19-52 the resolution, the savings bank may not accept any additional
19-53 deposit accounts or additions to deposit accounts or make any
19-54 additional loans, and all its income and receipts in excess of
19-55 actual expenses of liquidation of the savings bank must be applied
19-56 to the discharge of its liabilities. The board of directors of the
19-57 savings bank, under the supervision of the commissioner and in
19-58 accordance with a plan of liquidation approved by the commissioner,
19-59 shall then liquidate the affairs of the savings bank and reduce its
19-60 assets to cash for the purpose of paying, satisfying, and
19-61 discharging all existing liabilities and obligations of the savings
19-62 bank, including the full withdrawal value of all deposit accounts,
19-63 with the balance remaining, if any, to be distributed to the
19-64 members or stockholders of record on the date of adoption by the
19-65 savings bank of the resolution to liquidate, according to their
19-66 liquidation rights. All expenses incurred by the commissioner or
19-67 any of the commissioner's representatives during the course of
19-68 liquidation shall be paid from the assets of the savings bank. On
19-69 completion of liquidation, the board of directors shall file with
19-70 the commissioner a final report and accounting of the liquidation.
20-1 An approval of the report by the commissioner operates as a
20-2 complete and final discharge of the board of directors and each
20-3 member in connection with the liquidation of the savings bank.
20-4 Sec. 3.06. INTERIM CHARTER. (a) For the purposes of this
20-5 section:
20-6 (1) "Reorganizing institution" means a financial
20-7 institution the commissioner considers to be in an unsafe
20-8 condition.
20-9 (2) "Merged institution" means an existing financial
20-10 institution that is merged into an acquiring savings bank.
20-11 (b) Application may be made to the commissioner to
20-12 incorporate a savings bank for the purpose of purchasing the
20-13 assets, assuming the liabilities other than liability to
20-14 stockholders, and continuing the business of a reorganizing
20-15 institution or for the purpose of acquiring by merger a merged
20-16 institution.
20-17 (c) An application must include information required by the
20-18 commissioner or by a rule of the commissioner and the finance
20-19 commission. The capitalization of the savings bank must be in an
20-20 amount determined by the commissioner as sufficient to carry out
20-21 the purposes for which incorporation is requested.
20-22 (d) The administrative procedure act does not apply to an
20-23 application to reorganize or merge a financial institution the
20-24 commissioner considers to be in an unsafe condition. The
20-25 application and all information relating to the application are
20-26 confidential and privileged from public disclosure.
20-27 (e) If the commissioner finds that the business of a
20-28 reorganizing or merged institution can be effectively continued
20-29 under the proposed articles of incorporation and that the proposed
20-30 reorganization or merger is in the best interest of the savers,
20-31 depositors, creditors, and stockholders, if any, of the
20-32 reorganizing institution or the merged institution and the public
20-33 in general, the commissioner shall state those findings in writing
20-34 and issue a certificate of incorporation. On issuance of the
20-35 certificate, the savings bank is a corporate body and a
20-36 continuation of the reorganizing or merged institution, subject to
20-37 all the reorganizing or merged institution's liabilities,
20-38 obligations, duties, and relations. The savings bank may exercise
20-39 the powers of a savings bank under the laws of this state.
20-40 (f) In the case of an acquisition merger, a stockholder of a
20-41 capital stock financial institution has the same dissenter's rights
20-42 that a stockholder in a domestic business corporation has under the
20-43 Texas Business Corporation Act.
20-44 (g) Subsection (c) of Section 3.03 of this Act does not
20-45 apply to an application under this section if the commissioner
20-46 considers the institution to be reorganized or merged to be in an
20-47 unsafe condition, and the commissioner may approve the
20-48 reorganization or merger if the commissioner finds from the
20-49 application and all information submitted with it that the proposed
20-50 reorganization or merger is in the best interest of the savers,
20-51 depositors, creditors, and stockholders, if any, of the
20-52 reorganizing or merged institution and the public.
20-53 Sec. 3.07. CHANGE OF CONTROL. (a) A change in the control
20-54 of a savings bank may not occur unless an application for approval
20-55 of the change of control is filed with and approved by the
20-56 commissioner.
20-57 (b) The application must be on a form prescribed by the
20-58 commissioner and must be made under oath. Except to the extent
20-59 expressly waived by the commissioner, the application must contain:
20-60 (1) the identity, personal and corporate history, as
20-61 applicable, business background and experience, and financial
20-62 condition of each person or company by whom or on whose behalf the
20-63 acquisition is to be made, including a description of the
20-64 managerial resources and future prospects of each acquiring party
20-65 and a description of any material pending legal or administrative
20-66 proceedings to which the applicant is a party;
20-67 (2) the terms and conditions of any proposed
20-68 acquisition and the manner in which the acquisition is to be made;
20-69 (3) the identity, source, and amount of the funds or
20-70 other consideration used or to be used in making the acquisition,
21-1 and if any part of those funds or other consideration was or is to
21-2 be borrowed or otherwise obtained for the purpose of making the
21-3 acquisition, a description of the transaction, the names of the
21-4 parties, and arrangements, agreements, or understandings with those
21-5 parties;
21-6 (4) any plans or proposals that an acquiring party
21-7 making the acquisition may have to liquidate the savings bank, sell
21-8 its assets, merge it with any company, or make any other major
21-9 changes in its business, corporate structure, or management;
21-10 (5) the terms and conditions of any offer, invitation
21-11 agreement, or arrangement under which any voting security of the
21-12 savings bank will be acquired and any contract affecting that
21-13 security or its financing after it is acquired;
21-14 (6) information establishing that the requirements
21-15 under Subsection (d) of this section are satisfied; and
21-16 (7) other information that the commissioner:
21-17 (A) by rule requires; or
21-18 (B) orders to be included in a particular
21-19 application.
21-20 (c) The applicant shall pay a filing fee when the applicant
21-21 files an application. A proposal to acquire voting securities of
21-22 a savings bank subject to this section may be made by an
21-23 individual, two or more individuals acting in concert, any type of
21-24 partnership, corporation, syndicate, trust, or any other
21-25 organization, or any combination of those individuals or entities.
21-26 The information required by the commissioner may be required of
21-27 each member of the group, as directed by the commissioner. Notice
21-28 of the application, its date of filing, and the identity of all
21-29 parties to the application shall be submitted to the Texas Register
21-30 by the commissioner on receipt of the application for publication
21-31 in the next issue of the Texas Register following the date the
21-32 information is received. Information obtained by the commissioner
21-33 under this section, other than published information, is
21-34 confidential and may not be disclosed by the commissioner or any
21-35 officer or employee of the Savings and Loan Department of Texas,
21-36 except nothing in this section prohibits the commissioner from
21-37 disclosing, on request, the identity of the actual or beneficial
21-38 owner of any savings bank chartered under this Act. The
21-39 commissioner, in the commissioner's discretion and if the
21-40 commissioner deems it necessary or proper in the enforcement of the
21-41 laws of any state or the United States and in the best interest of
21-42 the public, may also divulge information to any appropriate banking
21-43 agency or any appropriate governmental department, agency, or
21-44 instrumentality of this state, another state, or the United States.
21-45 (d) The commissioner, subject to Subsections (e) and (f) of
21-46 this section, shall issue an order denying an application unless
21-47 the commissioner determines that the applicant has established
21-48 that:
21-49 (1) the acquisition would not:
21-50 (A) substantially lessen competition;
21-51 (B) in any manner be in restraint of trade that
21-52 would result in a monopoly; and
21-53 (C) be in furtherance of a combination or
21-54 conspiracy to monopolize or attempt to monopolize the financial
21-55 industry in any part of the state;
21-56 (2) the financial condition of any acquiring party
21-57 does not jeopardize the financial stability of the savings bank
21-58 being acquired;
21-59 (3) plans or proposals to liquidate or sell the
21-60 savings bank or its assets, if any, are in the best interest of the
21-61 savings bank;
21-62 (4) the experience, ability, standing, competence,
21-63 trustworthiness, or integrity of the applicant is such that the
21-64 acquisition would be in the best interest of the savings bank; and
21-65 (5) the savings bank would be solvent, have adequate
21-66 capital structure, and be in compliance with the laws of this state
21-67 after the acquisition.
21-68 (e) Notwithstanding Subdivision (1) of Subsection (d) of
21-69 this section, the commissioner is not required to deny an
21-70 application if the commissioner determines that:
22-1 (1) the anticompetitive effects of the proposed
22-2 acquisition are clearly outweighed in the public interest by the
22-3 probable effect of the acquisition in meeting the convenience and
22-4 needs of the community to be served; and
22-5 (2) the proposed acquisition is not in violation of
22-6 any law of this state or the United States.
22-7 (f) The commissioner shall issue an order denying an
22-8 application if the commissioner determines that the applicant:
22-9 (1) has failed to furnish all information pertinent to
22-10 the application reasonably requested by the commissioner; or
22-11 (2) is not acting in good faith.
22-12 (g) When the commissioner determines that an application for
22-13 approval of change of control is complete, the commissioner shall
22-14 issue public notice of the application and shall give any
22-15 interested party an opportunity to appear, present evidence, and be
22-16 heard for or against the application. A hearing officer designated
22-17 by the commissioner shall hold the hearing. A hearing is not
22-18 required if no party provides written notice to the commissioner,
22-19 within 10 days of the date of publication of the notice of
22-20 application, of intention to appear and present evidence at the
22-21 hearing and if the commissioner finds that the application complies
22-22 with all statutory requirements for approval within 30 days after
22-23 the date of the completion of a hearing, the commissioner shall
22-24 enter a final order either approving or denying the application.
22-25 An applicant may appeal a final order to a district court of Travis
22-26 County with the commissioner as defendant. Either party to the
22-27 action may appeal from the district court of Travis County to the
22-28 appellate court having jurisdiction of the cause. The appeal is at
22-29 once returnable to the appellate court having jurisdiction of the
22-30 cause, and that action has precedence in that appellate court over
22-31 all causes of a different character pending in that court. The
22-32 commissioner is not required to give any appeal bond in any cause
22-33 arising under this section. Filing an appeal under this section
22-34 does not stay an order of the commissioner.
22-35 (h) This section does not apply to a conversion,
22-36 reorganization, merger, consolidation, or voluntary liquidation
22-37 under this chapter.
22-38 (i) This section does not excuse or diminish the notice
22-39 provisions required elsewhere in this Act.
22-40 (j) This section may not be construed to prevent the
22-41 commissioner from investigating, commenting on, or seeking to
22-42 enjoin or set aside any transfer of voting securities of a savings
22-43 bank, whether or not the transfer is subject to this section, if
22-44 the commissioner deems the transfer to be against the public
22-45 interest.
22-46 (k) If it appears to the commissioner that a person
22-47 committed or is about to commit a violation of this section or a
22-48 rule or order of the commissioner adopted under this section, the
22-49 attorney general on behalf of the commissioner may apply to a
22-50 district court of Travis County for an order prohibiting the
22-51 violation and for other equitable relief as the case may require.
22-52 (l) A person commits an offense if the person wilfully and
22-53 knowingly makes a materially false or misleading statement to the
22-54 commissioner with respect to the information required by this
22-55 section. An offense under this subsection is a Class A
22-56 misdemeanor. This subsection is cumulative of other remedies
22-57 contained in this section.
22-58 (m) When it appears a change in control may have occurred
22-59 without prior approval, the commissioner may call a hearing to
22-60 determine whether there was in fact a change in control, whether
22-61 unauthorized persons or corporations having no apparent ownership
22-62 interest in the savings bank, acting alone or in concert with
22-63 others, effectively have indirect controlling or dominating
22-64 influence over the management or policies of a savings bank, and
22-65 whether an order requiring divestiture of unapproved or indirect
22-66 control or other appropriate supervisory order should be issued.
22-67 CHAPTER 4. SUPERVISION AND REGULATION
22-68 Sec. 4.01. REGULATORY AUTHORITY. The Savings and Loan
22-69 Department of Texas and the commissioner shall regulate savings
22-70 banks and subsidiary corporations of savings banks operating under
23-1 this Act and shall enforce this Act.
23-2 Sec. 4.02. ANNUAL INDEPENDENT AUDIT REQUIRED. Each savings
23-3 bank shall obtain within 90 days after the date of the close of
23-4 each of its fiscal years an audit by an independent accounting firm
23-5 that is a member of the American Institute of Certified Public
23-6 Accountants or its successor. Copies of the audit together with
23-7 all correspondence reasonably related to the audit shall be
23-8 provided to the commissioner. The commissioner and the finance
23-9 commission may adopt rules as necessary to implement this section.
23-10 Sec. 4.03. INTEREST IN SAVINGS BANKS PROHIBITED.
23-11 (a) Neither a savings bank nor a director, officer, employee, or
23-12 representative of a savings bank may grant or give a loan or
23-13 gratuity, directly or indirectly, to the commissioner, an employee
23-14 of the Savings and Loan Department of Texas, or a spouse of the
23-15 commissioner or an employee.
23-16 (b) The commissioner or an employee of the Savings and Loan
23-17 Department of Texas may not:
23-18 (1) hold an office or position in any domestic savings
23-19 bank or exercise any right to vote on any domestic savings bank
23-20 matter by reason of being a member or stockholder of the savings
23-21 bank;
23-22 (2) hold an interest, directly or indirectly, in any
23-23 domestic savings bank; or
23-24 (3) undertake any indebtedness as a borrower, directly
23-25 or indirectly, or endorser, surety, or guarantor or sell or
23-26 otherwise dispose of any loan or investment to any domestic savings
23-27 bank.
23-28 (c) Notwithstanding Subsection (b) of this section, the
23-29 commissioner or an employee of the Savings and Loan Department of
23-30 Texas may hold a deposit account at a savings bank and receive
23-31 earnings on the account.
23-32 (d) If the commissioner or an employee of the Savings and
23-33 Loan Department of Texas has any prohibited, direct or indirect
23-34 right or interest in a domestic savings bank at the time of the
23-35 individual's appointment or employment, the commissioner or
23-36 employee shall dispose of the right or interest within 60 days
23-37 after the date of appointment or employment. If the commissioner
23-38 or an employee of the Savings and Loan Department of Texas is
23-39 indebted as a borrower, directly or indirectly, or is an endorser,
23-40 surety, or guarantor on a note to a domestic savings bank at the
23-41 time of appointment or employment, the commissioner or employee may
23-42 continue in that capacity until that debt is paid.
23-43 (e) If a loan or other note of the commissioner or an
23-44 employee of the Savings and Loan Department of Texas is acquired by
23-45 a savings bank, the commissioner or employee may continue as a
23-46 borrower, endorser, surety, or guarantor of the loan or note until
23-47 the loan or note is paid.
23-48 Sec. 4.04. RULES. The commissioner and the finance
23-49 commission may adopt rules not inconsistent with this Act necessary
23-50 for the supervision and regulation of savings banks and for the
23-51 protection of the public investing in savings banks, including but
23-52 not limited to rules on:
23-53 (1) the minimum amounts of capital required to
23-54 incorporate and operate as a savings bank, but not less than the
23-55 amounts required of corresponding national banks;
23-56 (2) the fees and procedures for processing, hearing,
23-57 and deciding applications filed with the commissioner or the
23-58 Savings and Loan Department of Texas under this Act;
23-59 (3) the books and records that a savings bank shall
23-60 keep and the location at which the books and records shall be
23-61 maintained;
23-62 (4) the accounting principles and practices that a
23-63 savings bank shall observe;
23-64 (5) the conditions under which records may be copied
23-65 or reproduced for permanent storage before the originals are
23-66 destroyed;
23-67 (6) the form, content, and time of publication of
23-68 statements of condition and the form and content of annual reports
23-69 and other reports that are to be prepared and published or filed by
23-70 a savings bank;
24-1 (7) the manner by which assets, liabilities, and
24-2 transactions in general are to be described on the books of a
24-3 savings bank, so that each entry will be an accurate description of
24-4 the subject matter of the entry;
24-5 (8) the conditions under which the commissioner may
24-6 require assets to be charged off or reserves established by
24-7 transfer from surplus or paid-in capital due to depreciation or
24-8 overstatement of value;
24-9 (9) the powers of a savings bank to make loans and
24-10 investments, containing provisions reasonably necessary to ensure
24-11 that loans made by a savings bank are consistent with sound lending
24-12 practices and that the savings bank's investment will promote the
24-13 purposes of this Act, including provisions governing:
24-14 (A) the type of loans and the conditions under
24-15 which a savings bank may originate, make, or sell loans;
24-16 (B) the conditions under which a savings bank
24-17 may purchase or participate in loans made by other lenders;
24-18 (C) the conditions for the servicing of loans
24-19 for other lenders;
24-20 (D) the conditions under which a savings bank
24-21 may lend money on the security of loans made by others;
24-22 (E) the conditions under which a savings bank
24-23 may pledge loans held by it as collateral for borrowings by the
24-24 savings bank;
24-25 (F) the conditions under which savings banks may
24-26 invest in securities and debt instruments;
24-27 (G) the documentation that a savings bank must
24-28 have in its files at the time of funding or purchase of a loan, an
24-29 investment, or a participation in a loan;
24-30 (H) the form and content of statements of
24-31 expenses and fees and other charges that are paid by borrowers or
24-32 that borrowers are obligated to pay;
24-33 (I) title information that must be maintained;
24-34 (J) borrower's insurance coverage of property
24-35 securing loans;
24-36 (K) appraisal reports;
24-37 (L) financial statements of borrowers;
24-38 (M) the fees or other compensation that may be
24-39 paid to an officer, director, employee, affiliated person,
24-40 consultant, or any third party in connection with the procuring of
24-41 any loan for a savings bank;
24-42 (N) the conditions under which the savings bank
24-43 may advance funds to pay taxes, assessments, insurance premiums,
24-44 and other similar charges for the protection of its interest in
24-45 property securing its loans;
24-46 (O) the terms and conditions under which a
24-47 savings bank may acquire and deal in real property;
24-48 (P) the valuation on a savings bank's books of
24-49 real property held by it;
24-50 (Q) the terms and conditions governing the
24-51 investment by a savings bank in subsidiary corporations, the powers
24-52 that may be exercised by subsidiaries, and the activities that may
24-53 be engaged in by subsidiaries; and
24-54 (R) other matters considered necessary to
24-55 administer properly each type of transaction;
24-56 (10) change of control of a savings bank;
24-57 (11) conduct, management, and operation of savings
24-58 banks;
24-59 (12) withdrawable accounts, bonuses, plans, and
24-60 contracts for savings programs;
24-61 (13) mergers, consolidations, reorganizations,
24-62 conversions, and liquidations;
24-63 (14) establishment of additional offices and change of
24-64 office location or name;
24-65 (15) holding companies, including requirements for
24-66 registration and periodic reporting of a holding company with the
24-67 commissioner and transactions between a holding company, any
24-68 affiliate of a holding company, or a savings bank; and
24-69 (16) limitations on loans to one borrower, but not
24-70 less restrictive limitations than those imposed on a savings
25-1 association under Subsection (u) of Section 5 of the Home Owners'
25-2 Loan Act of 1933 (12 U.S.C. Section 1464(u)).
25-3 Sec. 4.05. PROHIBITED TRANSACTIONS. A savings bank or
25-4 subsidiary corporation of a savings bank may not engage in any
25-5 transaction in violation of a rule adopted under this Act.
25-6 Sec. 4.06. EXAMINATIONS. (a) The commissioner shall
25-7 periodically examine the affairs of each savings bank and its
25-8 subsidiaries and the transactions of any holding company related to
25-9 the holding company's savings bank subsidiaries.
25-10 (b) The commissioner, a deputy commissioner, or an examiner
25-11 or auditor of the commissioner shall have free access to all books
25-12 and records of a savings bank, subsidiary corporation, or holding
25-13 company and to books and records relating to a savings bank's
25-14 business kept by an officer, agent, or employee of a savings bank,
25-15 subsidiary corporation, or holding company. The commissioner,
25-16 deputy commissioner, examiner, or auditor may subpoena witnesses
25-17 and administer oaths or affirmations in examination of the
25-18 directors, officers, agents, or employees of a savings bank,
25-19 subsidiary corporation, or holding company or any other person in
25-20 relation to the savings bank's affairs, transactions, and condition
25-21 and may require and compel by subpoena the production of records,
25-22 books, papers, contracts, or other documents. On a witness's
25-23 failure to obey a subpoena or refusal to appear or answer in
25-24 connection with an examination, the commissioner may apply to a
25-25 district court of Travis County for an order requiring obedience of
25-26 the subpoena or testimony of the witness. The court shall issue
25-27 the order if it finds that good cause exists for issuing the
25-28 subpoena or taking the testimony. Failure to obey a court order
25-29 may be punished as contempt of court.
25-30 (c) An examination may be performed in conjunction with an
25-31 examination by the Federal Deposit Insurance Corporation or any
25-32 other federal depository institutions regulatory agency having
25-33 jurisdiction over a savings bank. The commissioner may accept an
25-34 examination made by an appropriate banking agency in lieu of an
25-35 examination under this section.
25-36 (d) The commissioner, at the savings bank's cost, may
25-37 perform an extra or additional examination or audit or devote
25-38 extraordinary attention to the affairs of a savings bank if the
25-39 commissioner determines the conditions of the savings bank justify
25-40 the examination, audit, or extraordinary attention.
25-41 (e) Promptly on completion of a report, a copy of the
25-42 examination or audit report shall be furnished to the savings bank
25-43 examined or audited.
25-44 Sec. 4.07. FEES. The commissioner and the finance
25-45 commission, acting under the rulemaking power delegated by Article
25-46 5, Chapter II, The Texas Banking Code (Article 342-205, Vernon's
25-47 Texas Civil Statutes), and Section 4.04 of this Act, shall
25-48 establish the amount of the fees to be charged by the commissioner
25-49 for supervision and examination of savings banks, for filing an
25-50 application or other documents, for conducting a hearing, and for
25-51 other services performed by the commissioner and the commission's
25-52 office and the time and manner of payment of the fees. Fees
25-53 collected by the commissioner shall be deposited and used in
25-54 accordance with Section (h), Article 5, Chapter II, The Texas
25-55 Banking Code (Article 342-205, Vernon's Texas Civil Statutes).
25-56 Sec. 4.08. CONFIDENTIALITY. The commissioner and any
25-57 examiner, supervisor, conservator, liquidator, inspector, deputy,
25-58 assistant clerk, or other employee of the Savings and Loan
25-59 Department of Texas appointed or acting under this Act shall keep
25-60 confidential any facts or information regarding a savings bank
25-61 obtained in the course of an examination or by reason of the
25-62 individual's official position, unless the public duty of the
25-63 person requires otherwise. A person who violates this section or
25-64 wilfully makes a false official report on the condition of a
25-65 savings bank shall be removed from office or further employment
25-66 with the Savings and Loan Department of Texas. A report of an
25-67 examination made to the commissioner is confidential and not for
25-68 public record or inspection, except that the commissioner for good
25-69 reason may make the report public. This section does not prevent
25-70 the proper exchange of information relating to savings banks and
26-1 the business of savings banks with the representatives of
26-2 regulatory authorities of other states or to any other department,
26-3 agency, or instrumentality of this state, another state, or the
26-4 United States if the commissioner determines the disclosure
26-5 necessary or proper for the enforcement of the laws of this state,
26-6 another state, or the United States. Unless otherwise provided by
26-7 this Act, this section does not apply to facts, information, or
26-8 reports of investigations obtained or made by the commissioner or
26-9 the commissioner's staff in connection with an application for
26-10 charter or a hearing held by the commissioner under this Act, and
26-11 those facts, information, or reports may be included in the record
26-12 of the appropriate hearing. The commissioner shall report promptly
26-13 to the finance commission when a supervisory order is issued under
26-14 Chapter 5 of this Act. The commissioner shall furnish information
26-15 about a savings bank or person as the finance commission may
26-16 require in executive session, and all information discussed in the
26-17 executive session is confidential.
26-18 Sec. 4.09. ANNUAL STATEMENTS AND REPORTS. Each savings bank
26-19 shall prepare and publish in January of each year in a newspaper of
26-20 general circulation in the county in which the home office of the
26-21 savings bank is located a statement of its financial condition as
26-22 of the last business day of December of the preceding year. The
26-23 statement must be in the form prescribed or approved by the
26-24 commissioner. On or before the last day of January in each year, a
26-25 savings bank shall make a written report to the commissioner, on a
26-26 form to be prescribed and furnished by the commissioner, of its
26-27 affairs and operations, including a complete statement of its
26-28 financial condition with a statement of income and expenses since
26-29 its last annual report under this section. The president,
26-30 vice-president, or secretary of the savings bank shall sign the
26-31 report. Each savings bank shall also make other reports as the
26-32 commissioner may require from time to time in the form and filed on
26-33 the dates as the commissioner prescribes and signed in the same
26-34 manner as the annual report.
26-35 CHAPTER 5. ENFORCEMENT
26-36 Sec. 5.01. GROUNDS FOR SUPERVISORY INTERVENTION. The
26-37 commissioner may intervene in the affairs of a savings bank if:
26-38 (1) the savings bank, a director, officer, agent, or
26-39 other person participating in the conduct of the affairs of the
26-40 savings bank, a subsidiary of the savings bank, or a holding
26-41 company of the savings bank:
26-42 (A) is engaging in, has engaged in, or is about
26-43 to engage in an unsafe and unsound practice in conducting the
26-44 affairs of the savings bank;
26-45 (B) is engaging in, has engaged in, or is about
26-46 to engage in a violation of the articles of incorporation or bylaws
26-47 of the savings bank;
26-48 (C) is engaging in, has engaged in, or is about
26-49 to engage in a violation of any law, rule, or supervisory order
26-50 applicable to the savings bank or a violation of any condition that
26-51 the commissioner or the finance commission has imposed on the
26-52 savings bank by written order, directive, or agreement; or
26-53 (D) has filed materially false or misleading
26-54 information in a filing required under Section 3.07 of this Act;
26-55 (2) a director, officer, employee, agent, or other
26-56 person participating in the conduct of the affairs of the savings
26-57 bank, a subsidiary of the savings bank, or a holding company of the
26-58 savings bank committed or is about to commit:
26-59 (A) a fraudulent or criminal act in the conduct
26-60 of the savings bank, subsidiary, or holding company's affairs that
26-61 may cause the savings bank or subsidiary to become insolvent or be
26-62 in danger of insolvency or another act that threatens immediate or
26-63 irreparable harm to the general public or the savings bank, its
26-64 deposit account holders or creditors, or the subsidiary;
26-65 (B) a breach of fiduciary duty causing or
26-66 probably causing the savings bank or subsidiary to suffer
26-67 substantial financial losses or other damages, or a breach of
26-68 fiduciary duty that would seriously prejudice the interest of the
26-69 holders of deposit accounts or other security issued by the savings
26-70 bank;
27-1 (C) a breach of an order or instruction of the
27-2 commissioner or a conservator or supervisor in charge of the
27-3 savings bank's affairs;
27-4 (D) a refusal to submit to interrogation under
27-5 oath by the commissioner or the commissioner's agent with respect
27-6 to the affairs of the savings bank; or
27-7 (E) a material alteration, concealment, removal,
27-8 or falsification of books or records of the savings bank, a
27-9 subsidiary, or a holding company;
27-10 (3) the savings bank is insolvent, in imminent danger
27-11 of insolvency, or engaged in or is about to engage in making loans
27-12 or investments and the market value of the investments or the value
27-13 of the security for the loans is materially overstated; or
27-14 (4) the savings bank failed to maintain proper books
27-15 and records from which the true financial condition of the savings
27-16 bank or the state of its affairs can be determined or refused to
27-17 authorize and direct a person having possession of the savings
27-18 bank's or a subsidiary's books, papers, records, or accounts to
27-19 permit the commissioner or a duly authorized representative of the
27-20 commissioner to inspect or examine them.
27-21 Sec. 5.02. TYPES OF SUPERVISORY ORDER; SERVICE;
27-22 CONFIDENTIALITY. (a) If the commissioner has reasonable cause to
27-23 believe that one or more grounds for intervention under Section
27-24 5.01 of this Act exist or are imminent, the commissioner may issue
27-25 without notice and hearing one or more of the following types of
27-26 temporary supervisory orders as necessary to correct and eliminate
27-27 the grounds for supervisory action:
27-28 (1) an order to cease and desist from continuing a
27-29 particular action, an order to take affirmative action, or both;
27-30 (2) a removal or prohibition order suspending or
27-31 prohibiting a director, officer, employee, agent, or any other
27-32 person participating in the affairs of the savings bank from
27-33 further participation in the conduct of the affairs of the savings
27-34 bank or another savings bank subject to this Act;
27-35 (3) an order requiring divestiture of control of a
27-36 savings bank obtained under Section 3.07 of this Act;
27-37 (4) an order requiring the forfeiture and payment of a
27-38 civil penalty in an amount of not more than $25,000 by a director,
27-39 officer, employee, agent, or other person participating in the
27-40 affairs of the savings bank or another savings bank subject to this
27-41 Act; or
27-42 (5) an order placing the affairs of the savings bank
27-43 under the control of a conservator designated in the order, who may
27-44 take possession and control of the books, records, assets,
27-45 liabilities, and business of the savings bank and manage it under
27-46 the direction of the commissioner.
27-47 (b) A temporary supervisory order issued by the commissioner
27-48 takes effect when issued and must reasonably detail the facts
27-49 constituting the grounds for the order.
27-50 (c) Service of a temporary supervisory order may be made by
27-51 certified or registered mail or by personal delivery by an agent of
27-52 the commissioner. Service on a savings bank is completed on
27-53 receipt of the order by an officer or director of the savings bank.
27-54 (d) A temporary or final supervisory order and all notices,
27-55 correspondence, or other records relating to the order are
27-56 confidential and may not be revealed to the public, except for good
27-57 reason as determined by the commissioner, in a hearing or judicial
27-58 proceeding under Section 5.03 or 5.04 of this Act, or to assert a
27-59 defense under Subsection (g) of Section 5.05 of this Act. However,
27-60 the commissioner may disclose the information to a department,
27-61 agency, or instrumentality of this state, another state, or the
27-62 United States if the commissioner determines that the disclosure is
27-63 necessary or proper for the enforcement of the laws of this state,
27-64 another state, or the United States.
27-65 Sec. 5.03. HEARING ON TEMPORARY SUPERVISORY ORDER. (a) A
27-66 temporary supervisory order becomes final and unappealable on the
27-67 15th day after the date on which it is issued unless the savings
27-68 bank or a party affected by the order requests before that date a
27-69 hearing before the commissioner on the issue of whether the order
27-70 should be vacated, made permanent, or modified. The commissioner
28-1 shall set the matter for hearing at the offices of the Savings and
28-2 Loan Department of Texas. The date for the hearing may not be
28-3 earlier than the 10th day or later than the 30th day after the date
28-4 of the request.
28-5 (b) The hearing shall be conducted as a contested case under
28-6 the administrative procedure act. The commissioner may enter a
28-7 final order that vacates the temporary order or makes it permanent
28-8 in its original or a modified form consistent with the facts found
28-9 by the commissioner. A final order shall be entered by the
28-10 commissioner not later than the 15th day after the date of the
28-11 completion of the hearing.
28-12 (c) A temporary order may not be stayed pending a hearing
28-13 unless the commissioner orders a stay, and a final order may not be
28-14 stayed pending judicial review unless the reviewing court orders a
28-15 stay for good cause.
28-16 Sec. 5.04. ENFORCEMENT OF SUPERVISORY ORDER. (a) If the
28-17 savings bank or any person designated in an order violates or is
28-18 about to violate the order, the commissioner may apply for
28-19 injunctive relief in a district court in Travis County. A bond is
28-20 not required of the commissioner with respect to injunctive relief
28-21 granted.
28-22 (b) If a savings bank or a person designated in a final
28-23 order fails to comply with or otherwise violates the order, the
28-24 commissioner may, after giving notice, assess a civil penalty
28-25 against the savings bank, the designated person, or both in an
28-26 amount not to exceed $1,000 each for each day of the violation.
28-27 The savings bank may not reimburse or indemnify a person for all or
28-28 any part of the civil penalty. In addition to any other remedy
28-29 provided by law, the commissioner may institute a suit for
28-30 injunctive relief and for collection of the civil penalty in a
28-31 district court in Travis County. A bond is not required of the
28-32 commissioner with respect to injunctive relief granted.
28-33 Sec. 5.05. PLACING SAVINGS BANK UNDER CONSERVATOR.
28-34 (a) Before or at a hearing on an order placing a savings bank
28-35 under a conservator, the board of directors of the savings bank may
28-36 present to the commissioner a plan to continue the operation of the
28-37 savings bank in a manner that will correct or eliminate the grounds
28-38 for the order. If the commissioner approves the plan or a
28-39 modification of the plan, the commissioner shall vacate the order
28-40 and place the savings bank under conservatorship conditioned on the
28-41 approved plan's implementation and diligent prosecution.
28-42 (b) If no plan for continuing operations of the savings bank
28-43 is approved by the commissioner, the conservator shall continue to
28-44 manage the affairs of the savings bank under the direction and
28-45 supervision of the commissioner unless the order is otherwise
28-46 modified or vacated by subsequent order of the commissioner or as a
28-47 result of judicial review.
28-48 (c) The conservator and any deputy or assistant conservator
28-49 appointed by the commissioner, on behalf of and under the
28-50 supervision and direction of the commissioner, shall take charge of
28-51 the books, records, property, assets, liabilities, and business of
28-52 the savings bank and shall conduct the business and affairs of the
28-53 savings bank. The conservator shall remove the causes and
28-54 conditions that necessitated the conservatorship. The conservator
28-55 shall make reports to the commissioner as the commissioner
28-56 requires. The conservator shall preserve, protect, and recover the
28-57 assets or property of the savings bank, including claims or causes
28-58 of action belonging to or that may be asserted by the savings bank.
28-59 The conservator may deal with that property in the capacity of
28-60 conservator and may file, prosecute, or defend against a suit by or
28-61 against the savings bank if the conservator considers that action
28-62 necessary to protect the interested party or property affected by
28-63 the suit.
28-64 (d) During the conservatorship, an officer, director,
28-65 shareholder, employee, agent, or other person participating in the
28-66 conduct of the affairs of the savings bank shall act according to
28-67 the instructions of the conservator and shall exercise only the
28-68 authority that the conservator expressly grants.
28-69 (e) The commissioner shall determine the cost incident to
28-70 the conservatorship, and that cost shall be paid out of the assets
29-1 of the savings bank as the commissioner directs.
29-2 (f) Suit filed against a savings bank or its conservator
29-3 while a conservatorship order is in effect must be brought in a
29-4 court of competent jurisdiction in Travis County. The conservator
29-5 may file suit in a court of competent jurisdiction in Travis County
29-6 against any person for the purpose of preserving, protecting, or
29-7 recovering assets or property of the savings bank, including a
29-8 claim or cause of action belonging to or that may be asserted by
29-9 the savings bank.
29-10 (g) During the period of conservatorship or supervisory
29-11 control under Section 5.06 of this Act, a savings bank's promise or
29-12 agreement to make a loan of money that is not otherwise
29-13 unenforceable under Chapter 26, Business & Commerce Code, and is
29-14 made before the order imposing conservatorship or supervisory
29-15 control is not enforceable against the savings bank unless the
29-16 promise or agreement or a memorandum of the promise or agreement
29-17 is:
29-18 (1) in writing setting forth the material terms of the
29-19 loan and its repayment;
29-20 (2) signed by a duly authorized officer or employee of
29-21 the savings bank and the person to whom the promise or agreement
29-22 was made; and
29-23 (3) approved by the board of directors of the savings
29-24 bank.
29-25 (h) The conservator shall serve for the period necessary to
29-26 accomplish the purposes of the conservatorship. If the savings
29-27 bank is rehabilitated to the satisfaction of the commissioner, it
29-28 shall be returned to the management of the board of directors under
29-29 terms that are reasonable and necessary to prevent recurrence of
29-30 the conditions creating the need for conservatorship.
29-31 (i) During a conservatorship, the commissioner may impose
29-32 limitations on withdrawals of deposit accounts from a savings bank
29-33 on a determination that the interest of deposit account holders and
29-34 creditors of the savings bank are best protected by the
29-35 limitations. The commissioner shall issue an order detailing the
29-36 limitations imposed and containing a statement in reasonable detail
29-37 of the facts constituting the grounds for the imposition of the
29-38 limitations. The limiting order becomes effective on the service
29-39 of the order on the conservator. Service may be made by certified
29-40 or registered mail or by personal delivery by an agent of the
29-41 commissioner and is complete on receipt by the conservator.
29-42 Immediately on receipt of the limiting order, a conservator shall
29-43 place a copy of the order at the main entrance of the savings bank
29-44 and deposit account withdrawals in violation of the order may not
29-45 be permitted after its posting. The limiting order becomes final
29-46 and unappealable on the 15th day after the date on which it is
29-47 posted in accordance with this section unless at least 20 percent
29-48 of the total number of deposit account holders affected by the
29-49 order request before that date a hearing before the commissioner on
29-50 the issue of whether the order should be vacated, made permanent,
29-51 or modified. The commissioner shall set the matter for hearing in
29-52 the offices of the Savings and Loan Department of Texas. The date
29-53 for the hearing may not be earlier than the 10th day or later than
29-54 the 30th day after the date of the request. The hearing shall be
29-55 conducted as a contested case under the administrative procedure
29-56 act. The commissioner may issue a final order that vacates the
29-57 limiting order or makes it permanent in its original or modified
29-58 form consistent with the facts found by the commissioner. A
29-59 limiting order may not be stayed pending a hearing unless the
29-60 commissioner orders a stay, and a final order may not be stayed
29-61 pending judicial review unless the reviewing court orders a stay
29-62 for good cause.
29-63 Sec. 5.06. VOLUNTARY SUBMISSION TO SUPERVISORY CONTROL. The
29-64 board of directors of a savings bank may consent to the
29-65 commissioner's placing the savings bank under supervisory control.
29-66 The commissioner may appoint a supervisor and one or more deputy
29-67 supervisors who have the powers of a conservator under Section 5.05
29-68 of this Act and other powers established by agreement between the
29-69 commissioner and the board of directors. The supervisory control
29-70 continues until the problems giving rise to the supervisory control
30-1 are corrected. The costs of the supervisory control shall be fixed
30-2 by the commissioner and paid by the savings bank.
30-3 Sec. 5.07. LIQUIDATION BY COMMISSIONER'S ORDER. (a) If it
30-4 appears doubtful to the commissioner that a savings bank subject to
30-5 a conservatorship order can be successfully rehabilitated, the
30-6 commissioner may close the savings bank under Section 5.09 of this
30-7 Act or may set a hearing to determine whether the savings bank
30-8 should be liquidated. Notice of any hearing shall be given not
30-9 later than the 10th day before the hearing date by certified mail
30-10 to the officers and directors of the savings bank and by
30-11 publication in a newspaper of general circulation in the county in
30-12 which the principal office of the savings bank is located.
30-13 (b) If the commissioner closes a savings bank under Section
30-14 5.09 of this Act or finds after a hearing under Subsection (a) of
30-15 this section that the savings bank cannot be rehabilitated and that
30-16 it is in the public interest and the best interest of the deposit
30-17 account holders and creditors of the savings bank that it be closed
30-18 and its assets liquidated, the commissioner may issue an order of
30-19 liquidation appointing a liquidating agent and dissolving the
30-20 savings bank. The corporate existence of the savings bank
30-21 continues for three years after the date the order of liquidation
30-22 is issued for the purpose of adjusting and settling claims not
30-23 disposed of during the liquidation. If necessary, the commissioner
30-24 may appoint a special liquidating agent for that purpose at the
30-25 completion of the liquidation.
30-26 (c) Under the supervision of the commissioner, the
30-27 liquidating agent shall:
30-28 (1) receive and take possession of the books, records,
30-29 assets, and property of the savings bank in liquidation;
30-30 (2) sell, enforce collection of, and liquidate the
30-31 assets and property of the savings bank in liquidation;
30-32 (3) sue in the name of the liquidating agent or in the
30-33 name of the savings bank in liquidation;
30-34 (4) defend actions brought against the liquidating
30-35 agent or the savings bank in liquidation;
30-36 (5) receive, examine, and pass on claims against the
30-37 savings bank in liquidation, including claims of depositors;
30-38 (6) make distribution and payment to creditors,
30-39 deposit account holders, stockholders, and members as their
30-40 interests may appear;
30-41 (7) execute documents and papers and take other
30-42 actions that the liquidating agent considers necessary or desirable
30-43 to the liquidation; and
30-44 (8) give notice to creditors and deposit account
30-45 holders directing them to present and prove their claims, by
30-46 publishing the notice once a week for three successive weeks in a
30-47 newspaper of general circulation in each county in which the
30-48 savings bank in liquidation maintained an office or branch for the
30-49 transaction of business on the date it ceased unrestricted
30-50 operations.
30-51 (d) The notice under Subdivision (8) of Subsection (c) of
30-52 this section must require all depositors and creditors to file
30-53 written proofs of claim at the address designated in the notice.
30-54 Within 30 days after the date of the first publication of the
30-55 notice, the liquidating agent shall mail a similar notice to each
30-56 depositor and creditor shown on the books of the savings bank at
30-57 the address reflected on the savings bank's books.
30-58 (e) Under supervision of the commissioner, the liquidating
30-59 agent shall from time to time make a ratable liquidation dividend
30-60 on claims that have been proved to the satisfaction of the
30-61 liquidating agent or adjusted in a court of competent jurisdiction
30-62 and, after the assets of the savings bank have been liquidated,
30-63 shall make further liquidation dividends on claims previously
30-64 proved or adjusted. For this purpose the statement of an amount
30-65 due to a claimant shown on the books and records of the savings
30-66 bank may be accepted instead of a formal proof of claim on behalf
30-67 of the claimant. A final dividend may not be paid before the
30-68 beginning of the 19th month after the date of the first publication
30-69 of notice as prescribed in this section. All claims filed after
30-70 the declaration and payment of any dividend before the expiration
31-1 of the 18 months qualify, if approved, to participate in dividends
31-2 previously paid before any additional dividend is declared. Claims
31-3 that are presented after the 18th month do not qualify to
31-4 participate in any dividend or distribution of assets until after
31-5 full payment of all approved claims presented during the period.
31-6 (f) A deposit account holder, creditor, or other person
31-7 asserting any claim of any character against a savings bank in the
31-8 process of liquidation under this section must present, before the
31-9 beginning of the 19th month after the date of the first publication
31-10 of notice provided in this section, the claim in writing to the
31-11 commissioner or the liquidating agent, at the address that has been
31-12 designated in the notice provided in this section. A claim must
31-13 state the facts supporting the claim, set out any right of priority
31-14 of payment or other specific rights asserted by the claimant, and
31-15 be signed and sworn to by the claimant.
31-16 (g) Within three months after the date of the receipt of a
31-17 claim against a savings bank in liquidation, unless the time is
31-18 extended by written agreement with the claimant, the liquidating
31-19 agent shall approve or reject the claim in whole or in part. If
31-20 the liquidating agent approves a claim or any part of the claim,
31-21 the liquidating agent shall classify the claim and enter it and the
31-22 action on the claim in a claim register. If the liquidating agent
31-23 rejects a claim in whole or in part or denies any right of priority
31-24 of payment or any other right asserted by the claimant, the
31-25 liquidating agent shall notify the claimant of the action by
31-26 registered mail.
31-27 (h) Within three months after the date of mailing of notice
31-28 by the liquidating agent as provided by the preceding subsection, a
31-29 claimant may sue on the claim in a district court of Travis County.
31-30 If the claimant does not sue, the action of the liquidating agent
31-31 is final on the expiration of that period. The trial of a suit is
31-32 de novo as if originally filed in that court and is subject to the
31-33 rules of procedure and appeal applicable to civil cases.
31-34 (i) On liquidation of a savings bank, claims for payment
31-35 have the same priority that similar claims would have on the
31-36 liquidation of a federal savings bank under federal law.
31-37 (j) At any time after the expiration of 18 months after the
31-38 date of the first publication notice specified in this section and
31-39 after the liquidating agent liquidates all assets of the savings
31-40 bank capable of liquidation or realizes sufficient funds from the
31-41 liquidation to pay the costs of liquidation and all claims filed
31-42 and established and to leave funds available for the payment of all
31-43 nonclaiming deposit account holders and creditors, the liquidating
31-44 agent shall declare and pay a final dividend. The liquidating
31-45 agent shall deposit all unclaimed dividends and all funds available
31-46 for nonclaiming deposit account holders and creditors in one or
31-47 more state-chartered financial institutions for the benefit of the
31-48 deposit account holders and creditors entitled to those dividends
31-49 or funds. The liquidating agent shall pay a deposit account holder
31-50 or creditor, on demand, any amount held for the benefit of the
31-51 deposit account holder or creditor. If the liquidating agent is in
31-52 doubt as to the identity of a claimant or a claimant's right to the
31-53 amount held, the liquidating agent shall reject the claim and
31-54 notify the claimant by registered mail. Within three months after
31-55 the date of the mailing of the notice, the claimant may bring suit
31-56 against the liquidating agent in a district court of Travis County
31-57 to recover the funds. The suit is in the nature of an action in
31-58 rem and governed by the rules of procedure and appeal applicable to
31-59 civil cases. The judgment in the suit is binding on all persons
31-60 interested in the dividends or funds. If a suit is not filed
31-61 within the time prescribed, the liquidating agent's rejection of
31-62 the claim is final. After paying a final dividend and performing
31-63 each act necessary or proper for the benefit of the deposit account
31-64 holders and creditors in connection with the liquidation of the
31-65 assets of a savings bank, the liquidating agent shall file with the
31-66 commissioner a final report of the liquidation.
31-67 (k) The commissioner shall determine the cost incident to
31-68 the liquidation, and that cost shall be paid out of the assets of
31-69 the savings bank as the commissioner directs.
31-70 (l) The provisions of the administrative procedure act
32-1 relating to a contested hearing apply to any hearing called by the
32-2 commissioner under this section.
32-3 Sec. 5.08. COMPLETION OF LIQUIDATION. The commissioner may
32-4 remove a liquidating agent and appoint another agent with or
32-5 without cause. If a liquidating agent resigns, dies, or becomes
32-6 unable to serve for any reason, the commissioner shall promptly
32-7 appoint another agent. When a liquidation is complete, the
32-8 liquidating agent shall certify that fact to the commissioner, and
32-9 the commissioner shall issue an order closing the liquidation.
32-10 After a closing order, the commissioner and the liquidating agent
32-11 are released and discharged from any further duty, obligation, or
32-12 liability in connection with the administration of the affairs of
32-13 the savings bank, and a person does not have and may not maintain
32-14 any claim, suit, or action against the commissioner or the
32-15 liquidating agent, individually or in their official capacities,
32-16 except a suit to recover unclaimed deposits as provided in this
32-17 section.
32-18 Sec. 5.09. CLOSING OF SAVINGS BANK BY COMMISSIONER OR
32-19 DIRECTORS. (a) Notwithstanding any other provision of this
32-20 chapter, the commissioner or the commissioner's authorized
32-21 representative may close a savings bank if, after an examination,
32-22 the commissioner determines that:
32-23 (1) the interests of the deposit account holders and
32-24 creditors of the savings bank are jeopardized because of the
32-25 savings bank's insolvency or imminent insolvency or a substantial
32-26 dissipation of assets or earnings of the savings bank due to a
32-27 violation of law or rules or an unsafe or unsound practice; and
32-28 (2) closing the savings bank and liquidating its
32-29 assets is in the best interest of the deposit account holders and
32-30 creditors.
32-31 (b) On closing a savings bank under this section, the
32-32 commissioner may liquidate the savings bank as provided by this
32-33 chapter or may tender the assets and all affairs of the savings
32-34 bank to the Federal Deposit Insurance Corporation and appoint the
32-35 Federal Deposit Insurance Corporation as receiver or liquidating
32-36 agent to act in accordance with this chapter or federal law. If
32-37 the Federal Deposit Insurance Corporation accepts the tender and
32-38 appointment, it may act without bond or other security as to the
32-39 appointment and, without court supervision, may exercise all
32-40 rights, powers, and privileges provided by the laws of this state
32-41 to a receiver or liquidating agent, as applicable, and any
32-42 applicable right, power, or privilege available under federal law.
32-43 On acceptance of the appointment, the possession of and title to
32-44 all the assets, business, and property of the savings bank pass to
32-45 the Federal Deposit Insurance Corporation without the execution of
32-46 instruments of conveyance, assignment, transfer, or endorsement.
32-47 If the Federal Deposit Insurance Corporation pays the insured
32-48 deposit liabilities of a savings bank that was closed or is being
32-49 liquidated under this chapter, whether or not the Federal Deposit
32-50 Insurance Corporation has become receiver or liquidating agent, the
32-51 Federal Deposit Insurance Corporation is subrogated, to the extent
32-52 of the payment, to all rights that the owners of the deposit
32-53 accounts have against the savings bank.
32-54 (c) Not later than the second day, excluding legal holidays,
32-55 after the day that the commissioner closes a savings bank under
32-56 this section, the savings bank, acting by resolution of its board
32-57 of directors, may sue in a district court of Travis County to
32-58 prohibit the commissioner from taking further action under this
32-59 section. The court may restrain the commissioner from taking
32-60 further action until a hearing on the merits. If the court
32-61 restrains the commissioner, it shall instruct the commissioner to
32-62 hold the assets and affairs of the savings bank in the
32-63 commissioner's possession until disposition of the suit. On
32-64 receipt of that instruction, the commissioner shall refrain from
32-65 taking further action, except the commissioner, with the approval
32-66 of the district judge, may take action as necessary or proper to
32-67 prevent loss or depreciation in the value of the assets. The court
32-68 as soon as possible shall hear the suit on its merits and shall
32-69 enter a judgment prohibiting or refusing to prohibit the
32-70 commissioner from proceeding under this section. This judgment may
33-1 be appealed as in other civil cases, but the commissioner,
33-2 regardless of the judgment entered by the trial court or any
33-3 supersedeas bond filed, retains possession of the assets of the
33-4 savings bank until final disposition on appeal.
33-5 (d) A board of directors may, by resolution and with the
33-6 consent of the commissioner, close a savings bank and tender its
33-7 assets and all its affairs to the commissioner for disposition as
33-8 authorized by this section.
33-9 CHAPTER 6. CORPORATE ADMINISTRATION
33-10 Sec. 6.01. BOARD OF DIRECTORS. (a) The business of a
33-11 savings bank shall be directed by a board of directors of not fewer
33-12 than five or more than 21 members elected by majority vote at each
33-13 annual meeting of the members or stockholders. A savings bank
33-14 authorized to issue capital stock may provide in its bylaws that
33-15 all or at least a majority of its board of directors must be
33-16 stockholders.
33-17 (b) The number of directors may be changed, within the
33-18 prescribed limits, by resolution adopted at any annual meeting of
33-19 members or stockholders or any special meeting called for that
33-20 purpose.
33-21 Sec. 6.02. ORGANIZATIONAL MEETINGS. Within 30 days after
33-22 the date on which the corporate existence of a savings bank begins,
33-23 the initial board of directors shall hold an organizational meeting
33-24 and, under the provisions of this Act and the bylaws, shall elect
33-25 officers and take other action as appropriate in connection with
33-26 beginning the transaction of business by the savings bank. The
33-27 commissioner on good cause shown may extend by order the time
33-28 within which the organizational meeting is to be held.
33-29 Sec. 6.03. QUALIFICATION OF DIRECTORS; VACANCIES. (a) A
33-30 person may not be a member of the board of directors of a savings
33-31 bank if the person:
33-32 (1) is not a citizen of the United States;
33-33 (2) is not at least 18 years of age;
33-34 (3) has been adjudicated bankrupt or convicted of a
33-35 criminal offense involving dishonesty or breach of trust, unless
33-36 given prior written approval to be a member of the board by the
33-37 commissioner;
33-38 (4) has a final judgment entered against the person
33-39 for a sum of money that has remained unsatisfied or unsecured for
33-40 more than six months after the date of the judgment's entry, unless
33-41 the commissioner gives the person prior written approval to be a
33-42 member of the board or unless the judgment was satisfied of record
33-43 more than one year before the date of the election; or
33-44 (5) is a director, officer, or employee of another
33-45 savings bank, unless given the prior written approval to be a
33-46 member of the board by the commissioner.
33-47 (b) The bylaws of a savings bank may prescribe other
33-48 qualifications for directors.
33-49 (c) A vacancy on the board of directors is filled by a
33-50 majority vote of the remaining directors, though less than a
33-51 quorum, by electing a director to serve until the next annual
33-52 meeting of members or stockholders. If a vacancy on the board of
33-53 directors occurs from any cause, the remaining directors may
33-54 continue direction of the savings bank until the vacancy is filled.
33-55 Sec. 6.04. OFFICERS. The officers of a savings bank consist
33-56 of a president, one or more vice-presidents, a secretary, and other
33-57 officers as prescribed by the bylaws. The officers are elected by
33-58 a majority vote of the board of directors. The managing officer
33-59 must be a member of the board of directors.
33-60 Sec. 6.05. INDEMNITY BONDS OF DIRECTORS, OFFICERS, AND
33-61 EMPLOYEES. Each savings bank shall maintain on file with the
33-62 commissioner an effective blanket indemnity bond with an adequate
33-63 corporate surety protecting the savings bank from loss by or
33-64 through any fraud, dishonesty, forgery or alteration, larceny,
33-65 theft, embezzlement, robbery, burglary, holdup, wrongful or
33-66 unlawful abstraction, misappropriation, or any other dishonest or
33-67 criminal action or omission by any officer or employee of the
33-68 savings bank or any director of the savings bank when performing
33-69 the duty of an officer or employee. A savings bank that employs
33-70 collection agents that for any reason are not covered by a bond as
34-1 required shall provide for the bonding of each collection agent in
34-2 an amount equal to at least twice the average monthly collection of
34-3 the agent. The agents shall make settlement with the savings bank
34-4 at least monthly. Bond coverage is not required of an agent that
34-5 is a financial institution insured by the Federal Deposit Insurance
34-6 Corporation. The amounts and form of bonds and the sufficiency of
34-7 the surety on the bonds must be approved by the board of directors
34-8 and the commissioner. Each bond must provide that a cancellation
34-9 of the bond either by the surety or the insured does not become
34-10 effective until the 30th day after the date on which written notice
34-11 is given to the commissioner unless the commissioner gives prior
34-12 approval to an earlier date.
34-13 Sec. 6.06. MEETINGS OF STOCKHOLDERS OR MEMBERS; VOTING
34-14 RIGHTS; PROXIES. The members or stockholders of a savings bank
34-15 shall hold an annual meeting at the time fixed in the bylaws of the
34-16 savings bank. Special meetings may be called as provided in the
34-17 bylaws. The voting rights of a person who is entitled to vote at
34-18 an annual or special meeting of the savings bank shall be the same
34-19 as those of a shareholder in a domestic business corporation under
34-20 the Texas Business Corporation Act. The bylaws must provide the
34-21 manner of computing the number of votes that a member or
34-22 stockholder is entitled to cast. For a capital stock savings bank,
34-23 the bylaws may provide that only holders of capital stock may vote.
34-24 Voting may be in person or by proxy. A proxy must be in writing
34-25 and signed by the member or stockholder or a duly authorized
34-26 attorney in fact and be filed with the secretary. Unless otherwise
34-27 specified in the proxy, a proxy continues in force from year to
34-28 year until a revocation in writing is delivered to the secretary or
34-29 until superseded by a subsequent proxy. The bylaws of a savings
34-30 bank must specify the quorum requirements and other voting
34-31 requirements for conducting business at membership meetings.
34-32 Sec. 6.07. ACCESS TO BOOKS AND RECORDS. (a) Each borrower
34-33 or deposit account holder of a savings bank has the right to
34-34 inspect the books and records of the savings bank that relate to
34-35 the borrower's or deposit account holder's loan or account. Except
34-36 for the borrower's or deposit account holder's right of inspection,
34-37 the right of inspection and examination of the books and records of
34-38 a savings bank is limited to the commissioner and the
34-39 commissioner's duly authorized representatives under Section 4.06
34-40 of this Act, persons authorized to act for the savings bank, and an
34-41 authorized agent of a governmental agency that has insured the
34-42 deposit accounts of the savings bank. In a judicial proceeding,
34-43 the court may order the production of books, records, and files;
34-44 however, the books, records, and files of a savings bank are not
34-45 admissible as evidence in any proceeding concerning the validity of
34-46 a tax assessment or the collection of delinquent taxes, penalties,
34-47 and interest, unless a stockholder or deposit account holder is a
34-48 proper party to the proceeding, in which event the books, files,
34-49 and records pertaining to the account of the party are admissible,
34-50 or unless the savings bank is a proper party to the proceeding, in
34-51 which event any book, file, or record material to the proceeding is
34-52 admissible. A person is not entitled to a partial or complete list
34-53 of the names of stockholders of a stock savings bank or the members
34-54 of a mutual savings bank unless expressly permitted by the board of
34-55 directors.
34-56 (b) Each stockholder of a capital stock savings bank has the
34-57 same rights to examine the relevant books and records of a savings
34-58 bank as a shareholder of a business corporation under the Texas
34-59 Business Corporation Act.
34-60 Sec. 6.08. AMENDMENT OF ARTICLES OF INCORPORATION OR BYLAWS.
34-61 A savings bank, by resolution adopted by a majority vote of those
34-62 entitled to vote attending an annual meeting or a special meeting
34-63 called for that purpose, may amend its articles of incorporation or
34-64 bylaws in a manner not inconsistent with this Act. An amendment
34-65 may not take effect before it is filed with and approved by the
34-66 commissioner.
34-67 Sec. 6.09. CONFLICTS OF INTEREST. (a) Except as the
34-68 commissioner and the finance commission may provide by rule, a
34-69 director or officer may not:
34-70 (1) receive directly or indirectly any commission on
35-1 or benefit from a loan made by the savings bank;
35-2 (2) pay for services rendered to a borrower from the
35-3 savings bank in connection with a loan;
35-4 (3) direct or require a borrower on a mortgage to
35-5 negotiate an insurance policy on the mortgage property through any
35-6 particular insurance company, attempt to divert to a particular
35-7 insurance broker the business of borrowers from the savings bank,
35-8 or refuse to accept an insurance policy on the mortgaged property
35-9 because it was not negotiated through a particular insurance
35-10 broker;
35-11 (4) become an endorser, surety, or guarantor or in any
35-12 manner an obligor for a loan made by the savings bank;
35-13 (5) borrow or use, individually or as agent or partner
35-14 of another, directly or indirectly, funds of the savings bank;
35-15 (6) become the owner of real property on which the
35-16 savings bank holds a mortgage unless the loan is fully secured by:
35-17 (A) a first-lien mortgage on property that is to
35-18 be occupied as the director's or officer's primary residence and
35-19 that is specifically approved in writing by the board of directors;
35-20 or
35-21 (B) a deposit maintained by the officer or
35-22 director with the savings bank; or
35-23 (7) engage in any other activity prohibited by a rule
35-24 of the commissioner and the finance commission.
35-25 (b) Except as the commissioner and the finance commission
35-26 may provide by rule, a savings bank may not make a loan to a
35-27 corporation in which a director or officer holds stock, options, or
35-28 warrants to purchase stock in the amount of five percent or more of
35-29 the outstanding stock or in which the director and the other
35-30 directors of the savings bank hold in the aggregate stock, options,
35-31 or warrants to purchase stock of five percent or more of the
35-32 outstanding stock. A deposit with a banking corporation is a loan
35-33 within the meaning of this section.
35-34 (c) This section does not prohibit a savings bank from:
35-35 (1) making a loan to a religious corporation, club, or
35-36 other membership corporation of which one or more directors or
35-37 officers are members, but in which they have no financial interest;
35-38 (2) making a loan to or purchasing guaranteed
35-39 mortgages from a stock corporation, if a director does not own more
35-40 than 15 percent of the capital stock of the corporation and the
35-41 total amount of the capital stock of the corporation owned by all
35-42 directors of the savings bank is less than 25 percent.
35-43 CHAPTER 7. POWERS
35-44 Sec. 7.01. GENERAL CORPORATE POWERS. Each savings bank has
35-45 the powers authorized by this Act and other rights, privileges, and
35-46 powers as may be incidental to or reasonably necessary for the
35-47 accomplishment of the objects and purposes of the savings bank.
35-48 Subject to the prior approval of the commissioner, a savings bank
35-49 may engage in business as a savings bank in any state or territory
35-50 of the United States to the extent permitted by the laws of that
35-51 state or territory, either directly or through ownership of another
35-52 savings bank incorporated under the laws of another state.
35-53 Sec. 7.02. POWER TO BORROW. A savings bank may borrow and
35-54 give security, subject to the rules adopted by the commissioner and
35-55 the finance commission. In addition, at any time through action of
35-56 its board of directors a savings bank may issue capital notes,
35-57 debentures, or other capital obligations as are authorized under
35-58 the rules adopted by the commissioner and the finance commission.
35-59 Sec. 7.03. FISCAL AGENT. A savings bank may act as fiscal
35-60 agent of the United States and, when so designated by the secretary
35-61 of the treasury, shall perform under regulations as the secretary
35-62 may require and may act as agent for any instrumentality of the
35-63 United States and as agent of this state or any state governmental
35-64 subdivision or instrumentality.
35-65 Sec. 7.04. POWER TO ACT UNDER FEDERAL RETIREMENT PLANS. A
35-66 savings bank and a federal savings bank, if its charter and
35-67 applicable federal rules permit, may exercise all powers necessary
35-68 to qualify as a trustee or custodian for retirement plans permitted
35-69 or recognized by federal law and may invest funds held in that
35-70 capacity in the accounts of the institution if the trust or
36-1 custodial retirement plan does not prohibit the investment.
36-2 Sec. 7.05. INVESTMENT IN BANKING PREMISES. A savings bank
36-3 may invest in real estate, buildings, and related facilities,
36-4 including parking, and in leasehold improvements for rented
36-5 facilities for use by the savings bank as its banking premises.
36-6 Sec. 7.06. LIMITATION ON LOANS TO ONE BORROWER. A savings
36-7 bank may not make loans to any one borrower to a greater extent
36-8 than:
36-9 (1) a savings association is permitted under
36-10 Subsection (u) of Section 5 of the Home Owners' Loan Act of 1933
36-11 (12 U.S.C. Section 1464(u)); or
36-12 (2) permitted by rule adopted under Subdivision (16)
36-13 of Section 4.04 of this Act.
36-14 Sec. 7.07. INVESTMENTS IN EQUITY SECURITIES. (a) A savings
36-15 bank or a subsidiary may not invest in stock or equity securities
36-16 unless the securities qualify as investment grade securities under
36-17 rules adopted by the commissioner and the finance commission.
36-18 Additionally, a savings bank may not invest in stock or equity
36-19 securities unless the securities are eligible investments for a
36-20 federal savings and loan association.
36-21 (b) The limitations of Subsection (a) do not apply to equity
36-22 securities:
36-23 (1) issued by any United States government-sponsored
36-24 corporation including the Federal National Mortgage Association,
36-25 the Federal Home Loan Mortgage Corporation, and the Student Loan
36-26 Marketing Association; or
36-27 (2) issued by a service corporation, an operating
36-28 subsidiary, or a finance subsidiary of the savings bank.
36-29 (c) The commissioner and the finance commission may adopt
36-30 rules necessary to implement this section, including eligible
36-31 investment criteria, investment diversification, and resource
36-32 management requirements.
36-33 Sec. 7.08. TRUST POWERS. A savings bank may exercise trust
36-34 powers in compliance with state law, subject to the prior written
36-35 approval of the commissioner. The commissioner's approval must be
36-36 based on findings that the applicant's savings bank is in
36-37 compliance with its regulatory capital requirements, is well
36-38 managed, and exhibits earnings, resources, and managerial talent
36-39 adequate to maintain a trust department.
36-40 Sec. 7.09. COMMERCIAL LOANS. Subject to the rules of the
36-41 commissioner and the finance commission, a savings bank may lend
36-42 and invest not more than 15 percent of its total assets in
36-43 commercial loans. A commercial loan is a non-real-estate loan for
36-44 business, commercial, corporate, or agricultural purposes.
36-45 Sec. 7.10. SUBSIDIARIES. (a) With the prior consent of the
36-46 commissioner and subject to the rules of the commissioner and the
36-47 finance commission, a savings bank may invest in subsidiary
36-48 corporations created under general corporate law for corporate
36-49 organizations.
36-50 (b) A savings bank may not make any investment in a
36-51 subsidiary corporation if its aggregate investments in subsidiaries
36-52 would exceed 10 percent of its total assets.
36-53 (c) The subsidiary corporation is subject to regulation and
36-54 examination by the commissioner, and the subsidiary corporation
36-55 shall pay the cost of the regulation and examination.
36-56 (d) The commissioner and the finance commission shall adopt
36-57 rules on permitted activities of a subsidiary corporation.
36-58 Sec. 7.11. PARITY. Subject to the limitations and
36-59 restrictions prescribed by rule of the commissioner and the finance
36-60 commission, a savings bank may make a loan or investment or engage
36-61 in an activity permitted under state law for banks or savings and
36-62 loan associations or under the laws of the United States for
36-63 federal savings and loan associations, savings banks, or national
36-64 banks with principal offices located in this state.
36-65 Sec. 7.12. LOAN EXPENSES. (a) Subject to Subsection (b) of
36-66 this section, a savings bank may require borrowers to pay all
36-67 reasonable expenses incurred in connection with the making,
36-68 closing, disbursing, extending, readjusting, or renewing of loans.
36-69 Those expenses may be collected by the savings bank from the
36-70 borrower and retained by the savings bank or paid to a person
37-1 rendering services for which a charge has been made, including an
37-2 officer, director, or employee of the savings bank rendering the
37-3 service, or the payments may be paid directly by the borrower to
37-4 the person rendering the service. Expenses under this section are
37-5 not a part of the interest or compensation charged by the savings
37-6 bank for the loan of money. A savings bank may charge penalties
37-7 for prepayment or late payments. Unless otherwise agreed in
37-8 writing, prepayment of the principal shall be applied to the final
37-9 installment of the note or other obligation until that installment
37-10 is fully paid, and further prepayments shall be applied to
37-11 installments in the inverse order of their maturity.
37-12 (b) A savings bank may charge a borrower the reasonable
37-13 value of services rendered in connection with the making of a
37-14 consumer loan, and only expenses necessary and proper for the
37-15 protection of the lender and actually incurred in connection with
37-16 the making of the loan may be charged.
37-17 Sec. 7.13. ADVANCES TO PAY TAXES OR OTHER CHARGES. (a) A
37-18 savings bank may pay taxes, assessments, insurance premiums, and
37-19 other similar charges for the protection of the savings bank's
37-20 interests in property securing the savings bank's real estate
37-21 loans. Those payments are advances and may be carried on the
37-22 savings bank's books as an asset of the savings bank for which the
37-23 savings bank may charge and collect interest, or the payments may
37-24 be added to the unpaid balance of the loan to which they apply as
37-25 of the first day of the month in which the payments are made. The
37-26 payments constitute a valid lien against the real estate securing
37-27 the loan for which they are made.
37-28 (b) A savings bank may require a borrower to pay monthly in
37-29 advance, in addition to interest and principal, an amount equal to
37-30 one-twelfth of the estimated annual taxes, assessments, insurance
37-31 premiums, and other charges on the real estate securing a loan, to
37-32 enable the savings bank to pay the charges as they become due. The
37-33 amount of the monthly payment may be increased or decreased as
37-34 necessary to meet the charges. A savings bank may carry the
37-35 payments in trust in an account or may credit them to the
37-36 indebtedness and advance the money for charges as they come due. A
37-37 savings bank shall keep a record of the status of taxes,
37-38 assessments, insurance premiums, and other charges on all real
37-39 estate securing its loans and on all real and personal property
37-40 owned by the savings bank.
37-41 Sec. 7.14. RIGHT TO ACT TO AVOID LOSS. This Act does not
37-42 deny a savings bank the right to invest its funds, operate a
37-43 business, manage or deal in property, or take any other action over
37-44 whatever period may be reasonably necessary to avoid loss on a loan
37-45 or investment made or an obligation created in good faith in the
37-46 usual course of business of the savings bank, as authorized by this
37-47 Act and rules adopted under this Act. This Act does not prohibit a
37-48 savings bank from developing or building on land acquired by it
37-49 under this section or from completing the construction of a
37-50 building under a construction loan contract in which the borrower
37-51 has failed to comply with the terms of the contract.
37-52 Sec. 7.15. GENERAL POWERS. A savings bank has the powers
37-53 specifically conferred by this Act, including the following general
37-54 corporate powers:
37-55 (1) to sue and be sued, complain, and defend in its
37-56 corporate name;
37-57 (2) to adopt and operate reasonable bonus plans,
37-58 profit-sharing plans, stock bonus plans, stock option plans,
37-59 pension plans, and similar incentive plans for its directors,
37-60 officers, and employees, subject to any limitations contained in
37-61 this Act or rules adopted under this Act;
37-62 (3) to make reasonable donations for the public
37-63 welfare or for charitable, scientific, religious, or educational
37-64 purposes;
37-65 (4) to pledge its assets to secure deposits of public
37-66 money of the United States, when required by the United States,
37-67 including revenue and funds the deposit of which is subject to
37-68 control or regulation of the United States or any of its officers,
37-69 agents, or employees;
37-70 (5) to pledge its assets to secure deposits of public
38-1 money of any state or any political corporation or subdivision of
38-2 any state;
38-3 (6) to become a member of or deal with any corporation
38-4 or agency of the United States or this state, to the extent that
38-5 the corporation or agency assists in furthering or facilitating
38-6 savings banks' purposes or powers, and to that end to purchase
38-7 stock or securities of the corporation or agency or deposit money
38-8 with the corporation or agency, and to comply with any other
38-9 conditions of membership credit;
38-10 (7) to acquire and hold membership in a Federal Home
38-11 Loan Bank or the Federal Reserve System;
38-12 (8) to hold title to assets of any kind and to
38-13 administer those assets as necessary if their acquisition occurred
38-14 as a result of the collection or liquidation of loans, investments,
38-15 or discounts;
38-16 (9) to receive and repay deposits and accounts of all
38-17 types in keeping with this Act and the rules of the commissioner
38-18 and the finance commission; and
38-19 (10) to lend and invest its money as authorized by
38-20 this Act and by the rules of the commissioner and the finance
38-21 commission.
38-22 Sec. 7.16. INVESTMENT WITHIN SAVINGS BANK'S LOCAL SERVICE
38-23 AREA. (a) Each savings bank shall maintain in its portfolio at
38-24 least 15 percent of its local service area deposits in the
38-25 following categories of assets and investments:
38-26 (1) first and second lien residential mortgage loans
38-27 or foreclosed residential mortgage loans originated from within the
38-28 savings bank's local service area;
38-29 (2) home improvement loans;
38-30 (3) interim residential construction loans;
38-31 (4) mortgage-backed securities secured by loans from
38-32 within the savings bank's local service area; and
38-33 (5) loans for community reinvestment purposes.
38-34 (b) The commissioner shall define an applicant's local
38-35 service area at the time of its application for incorporation as or
38-36 conversion to a savings bank. Unless otherwise agreed to by the
38-37 commissioner and the applicant, the applicant may rely on this
38-38 definition for the duration of the applicant's corporate existence
38-39 as a savings bank.
38-40 (c) The commissioner and the finance commission shall adopt
38-41 rules to implement this section. The rules shall define the
38-42 categories of loans and investments described in Subsection (a) of
38-43 this section. The commissioner, in accordance with rules adopted
38-44 under this subsection, may grant certain limited-term waivers from
38-45 the requirements of Subsection (a) of this section if quality loans
38-46 in the categories described in that subsection are not available
38-47 from within the savings bank's local service area.
38-48 CHAPTER 8. OPERATIONS
38-49 Sec. 8.01. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Each
38-50 savings bank shall maintain its books and records according to
38-51 generally accepted accounting principles and according to rules
38-52 adopted by the commissioner and the finance commission.
38-53 Sec. 8.02. LIQUIDITY. Unless approved in advance by the
38-54 commissioner, a savings bank shall maintain a minimum of 10 percent
38-55 of its assets in cash, balances in a federal reserve bank or passed
38-56 through a federal home loan bank or another depository institution
38-57 to a federal reserve bank under the Federal Reserve Act (12 U.S.C.
38-58 Section 221 et seq.), or other readily marketable investments,
38-59 including unencumbered federal government sponsored enterprises
38-60 securities, as allowed by rules adopted by the commissioner and the
38-61 finance commission.
38-62 Sec. 8.03. REGULATORY CAPITAL. A savings bank shall
38-63 maintain regulatory capital in the amount prescribed by rules of
38-64 the commissioner and the finance commission. The amount may not be
38-65 less than the amount of regulatory capital required for a
38-66 corresponding national bank.
38-67 Sec. 8.04. COMPUTATION OF NET INCOME. A savings bank shall
38-68 close its books at the times that its bylaws provide for the
38-69 purpose of determining the gross income of the savings bank for the
38-70 period since the date of the last closing of its books. The net
39-1 income for the period is the amount of the gross income minus the
39-2 amount of the expenses of operating the savings bank for the
39-3 period.
39-4 Sec. 8.05. EARNINGS ON ACCOUNTS. A savings bank may
39-5 contract to pay interest on deposit accounts or may pay earnings on
39-6 deposit accounts in the form of dividends declared by the board of
39-7 directors. Earnings in the form of interest or dividends shall be
39-8 computed and paid according to rules adopted by the commissioner
39-9 and the finance commission.
39-10 Sec. 8.06. DIVIDENDS ON CAPITAL STOCK. The board of
39-11 directors of a capital stock savings bank may declare and pay
39-12 dividends out of current or retained income in cash or additional
39-13 stock to the holders of record of the stock outstanding on the date
39-14 the dividends are declared.
39-15 Sec. 8.07. USE OF SURPLUS ACCOUNTS AND EXPENSE FUND
39-16 CONTRIBUTIONS. A savings bank, at a closing date, may use all or
39-17 part of a surplus account, whether earned or paid-in, or expense
39-18 fund contributions on its books to meet expenses of operating the
39-19 savings bank for the period just closed, required transfers to loss
39-20 reserves, or the payment or credit of earnings on deposit accounts.
39-21 CHAPTER 9. DEPOSIT ACCOUNTS
39-22 Sec. 9.01. DEPOSITS. A savings bank may receive deposits of
39-23 funds subject to withdrawals or to be paid on checks of the deposit
39-24 account holder. Those deposits must be payable on demand, without
39-25 notice, unless the contract of deposit expressly provides
39-26 otherwise.
39-27 Sec. 9.02. NO LIMITATION ON DEPOSIT ACCOUNTS. There is no
39-28 limit on the number and value of deposit accounts that a savings
39-29 bank may accept unless limits are fixed by its board of directors.
39-30 Sec. 9.03. WHO MAY OPEN A DEPOSIT ACCOUNT. Investments in
39-31 deposit accounts may be made with cash only and may be made by any
39-32 person, in the person's own right or in a trust or other fiduciary
39-33 capacity, and by any partnership, association, corporation,
39-34 political subdivision, or public and governmental unit or entity.
39-35 Sec. 9.04. CONTRACTS. Each holder of a deposit account
39-36 shall execute a contract setting forth any special terms and
39-37 provisions applicable to the account and the conditions on which
39-38 withdrawals may be made. The contract may not be inconsistent with
39-39 this Act. The contract shall be held by the savings bank as part
39-40 of its records pertaining to the deposit account. The contract in
39-41 respect to deposit accounts of political subdivisions and public
39-42 and governmental units or entities shall provide that the holder of
39-43 the deposit account may not become a member of the savings bank.
39-44 Sec. 9.05. TRANSFER OF DEPOSIT ACCOUNTS. Deposit accounts
39-45 are transferable on the books of the savings bank only on
39-46 presentation of evidence of transfer satisfactory to the savings
39-47 bank, accompanied by proper application for transfer by the
39-48 transferee. The transferee shall accept the deposit account
39-49 subject to the terms and conditions of the contract, the bylaws of
39-50 the savings bank, and the provisions of its charter. A savings
39-51 bank may treat the holder of record of a deposit account as the
39-52 owner of the account for all purposes without being affected by any
39-53 notice to the contrary, unless the savings bank acknowledges in
39-54 writing a pledge of the deposit account.
39-55 Sec. 9.06. DEPOSIT ACCOUNTS OF MINORS. A savings bank and
39-56 any federal savings bank may accept a deposit account from a minor
39-57 as the sole and absolute owner of the deposit account and may pay
39-58 withdrawals, accept pledges to the savings bank, and act in any
39-59 manner with respect to the deposit account on the order of the
39-60 minor. A payment or delivery of rights to a minor or a receipt or
39-61 acquittance signed by a minor who holds a deposit account is a
39-62 valid and sufficient release and discharge of the institution for
39-63 any payment so made or delivery of rights to the minor. The
39-64 receipt, acquittance, pledge, or other action required by the
39-65 institution to be taken by the minor is binding on the minor as if
39-66 the minor were of full age and legal capacity, except that if a
39-67 parent or guardian of the minor desires that the minor not have
39-68 authority to pledge, hypothecate, control, transfer, or make
39-69 withdrawals from the deposit account, that fact may be made known
39-70 to the savings bank in writing by the parent or guardian, in which
40-1 event the right of the minor to pledge, hypothecate, control,
40-2 transfer, or make withdrawals from the deposit account during the
40-3 minority of the minor may not be executed by the minor except with
40-4 the joinder of the parent or guardian. In the event of the death
40-5 of the minor, the receipt or acquittance of a parent or guardian of
40-6 the minor is a valid and sufficient discharge of the institution
40-7 for any sum or sums not exceeding in the aggregate $1,000.
40-8 Sec. 9.07. APPLICABILITY OF PROBATE CODE. The applicable
40-9 provisions of Chapter XI, Texas Probate Code, govern deposit
40-10 accounts held in a savings bank.
40-11 Sec. 9.08. PLEDGE TO SAVINGS BANKS OF JOINT DEPOSIT
40-12 ACCOUNTS. The pledge or hypothecation to a savings bank or federal
40-13 savings bank of all or part of a deposit account issued in the
40-14 names of two or more persons, signed by a person on whose signature
40-15 withdrawals may be made from the deposit account, is, unless the
40-16 terms of the deposit account provide specifically to the contrary,
40-17 a valid pledge and transfer to the institution of that part of the
40-18 deposit account pledged or hypothecated and does not operate to
40-19 sever or terminate the joint and survivorship ownership of all or
40-20 any part of the deposit account.
40-21 Sec. 9.09. DEPOSIT ACCOUNTS OF FIDUCIARIES. A savings bank
40-22 or a federal savings bank doing business in this state may accept
40-23 deposit accounts in the name of an administrator, executor,
40-24 custodian, guardian, trustee, or other fiduciary for a named
40-25 beneficiary, and the fiduciary may vote as a member as if the
40-26 membership were held absolutely and may open and make additions to
40-27 and withdraw from the deposit account in whole or in part. Except
40-28 as otherwise provided by law, a payment to a fiduciary or a receipt
40-29 or acquittance signed by a fiduciary to whom any payment is made is
40-30 a valid and sufficient release and discharge of an institution for
40-31 the payment so made. If a person holding a deposit account in a
40-32 fiduciary capacity dies and the probate court does not give to the
40-33 savings bank written notice of the revocation or termination of the
40-34 fiduciary relationship or of any other disposition of the
40-35 beneficial estate, the withdrawal value of the deposit account and
40-36 earnings on the deposit account or other rights relating to the
40-37 deposit account, at the option of the institution, may be paid or
40-38 delivered in whole or in part to the beneficiaries, and the savings
40-39 bank has no further liability for the deposit account.
40-40 Sec. 9.10. TRUST ACCOUNTS WHERE TRUST INSTRUMENT NOT
40-41 DISCLOSED. If a deposit account is opened by a person claiming to
40-42 be a trustee for another and notice of the existence and terms of a
40-43 legal and valid trust other than a written claim against the
40-44 deposit account is not provided to the savings bank, withdrawals
40-45 from the deposit account may be made on the signature of the person
40-46 claiming to be the trustee, and in the event of the death of the
40-47 trustee, the withdrawal value of the deposit account or any part of
40-48 the deposit account, together with earnings on the deposit account,
40-49 may be paid to the person for whom the deposit account was stated
40-50 to have been opened, and the savings bank has no further liability
40-51 for the deposit account.
40-52 Sec. 9.11. POWERS OF ATTORNEY ON DEPOSIT ACCOUNTS. A
40-53 savings bank doing business in this state may continue to recognize
40-54 the authority of an attorney in fact authorized in writing to
40-55 manage or to make withdrawals either in whole or in part from the
40-56 deposit account of a member until it receives written notice or is
40-57 on actual notice of the revocation of the authority. For the
40-58 purposes of this section, written notice of the death or
40-59 adjudication of incompetency of a member constitutes written notice
40-60 of revocation of the authority of the attorney.
40-61 Sec. 9.12. DEPOSIT ACCOUNTS AS LEGAL INVESTMENTS. All
40-62 administrators, executors, guardians, trustees, and other
40-63 fiduciaries; counties, municipalities, and all other political
40-64 subdivisions or instrumentalities of this state; business and
40-65 nonprofit corporations; charitable or educational corporations or
40-66 associations; and banks, savings and loan associations, credit
40-67 unions, and all other financial institutions may invest funds held
40-68 by them in deposit accounts of a savings bank doing business in
40-69 this state. An investment made by an insurance company is eligible
40-70 for tax reducing purposes under Articles 4.10 and 4.11, Insurance
41-1 Code. An investment by a school district of any of its funds in
41-2 accounts that are insured by the Federal Deposit Insurance
41-3 Corporation meets the requirements of Sections 20.42 and 23.79,
41-4 Education Code.
41-5 Sec. 9.13. REDEMPTION OF DEPOSIT ACCOUNTS. If funds are on
41-6 hand for the purpose and no contractual prohibition exists, a
41-7 savings bank may redeem, in a manner determined by the board of
41-8 directors, all or any part of any of its deposit accounts by giving
41-9 30 days' notice by certified mail addressed to each affected
41-10 deposit account holder at the holder's last address as recorded on
41-11 the books of the savings bank. Redemption of deposit accounts must
41-12 be done on a nondiscriminatory basis. A savings bank may not
41-13 redeem deposit accounts if the savings bank is subject to
41-14 conservatorship or a supervisory control action under Chapter 5 of
41-15 this Act, unless directed to do so by the commissioner. The
41-16 redemption price of a deposit account redeemed shall be the
41-17 account's withdrawal value. If notice of redemption has been given
41-18 and on or before the redemption date the funds necessary for the
41-19 redemption have been set aside to be and continue to be available
41-20 for redemption, earnings on the deposit accounts called for
41-21 redemption cease to accrue beginning on the date specified as the
41-22 redemption date, and all rights with respect to the deposit
41-23 accounts other than the right of the deposit account holder of
41-24 record to receive the redemption price terminate on the redemption
41-25 date.
41-26 Sec. 9.14. LIEN ON DEPOSIT ACCOUNTS. A savings bank or a
41-27 federal savings bank doing business in this state has a lien,
41-28 without further agreement or pledge, on all deposit accounts owned
41-29 by any account holder to whom or on whose behalf the savings bank
41-30 has made an advance of money by loan or otherwise. On default in
41-31 the repayment or satisfaction of the account holder's obligation,
41-32 the savings bank, without notice to or consent of the account
41-33 holder, may cancel on its books all or any part of the deposit
41-34 account owned by the account holder and apply the value of the
41-35 deposit account in payment on account of the obligation. A savings
41-36 bank may by written instrument waive its lien in whole or in part
41-37 on any deposit account. A savings bank may take a pledge of
41-38 deposit accounts of the savings bank owned by an account holder
41-39 other than the borrower as additional security for a loan secured
41-40 by a deposit account, real estate, or both.
41-41 Sec. 9.15. METHOD OF PAYING EARNINGS ON DEPOSIT ACCOUNT.
41-42 Dividends or interest shall be credited to a deposit account on the
41-43 books of the savings bank unless a deposit account holder requests
41-44 and the savings bank agrees to pay dividends or interest on the
41-45 deposit account in cash. Dividends payable in cash may be paid by
41-46 check or bank draft.
41-47 CHAPTER 10. HOLDING COMPANIES
41-48 Sec. 10.01. REGISTRATION. A holding company shall register
41-49 with the commissioner on forms prescribed by the commissioner
41-50 within 90 days after the date of becoming a holding company. The
41-51 forms must include information, under oath or otherwise, on the
41-52 financial condition, ownership, operations, management, and
41-53 intercompany relations of the holding company and its subsidiaries
41-54 and on related matters the commissioner finds necessary and
41-55 appropriate. On application, the commissioner may extend the time
41-56 within which a holding company shall register and file the required
41-57 information.
41-58 Sec. 10.02. REPORTS. Each holding company and each
41-59 subsidiary of a holding company, other than a savings bank, shall
41-60 file with the commissioner reports required by the commissioner.
41-61 The reports must be made under oath and must be in the form and for
41-62 the periods prescribed by the commissioner. Each report must
41-63 contain information concerning the operations of the holding
41-64 company and its subsidiaries as the commissioner may require.
41-65 Sec. 10.03. BOOKS AND RECORDS. Each holding company shall
41-66 maintain books and records as may be prescribed by the
41-67 commissioner.
41-68 Sec. 10.04. EXAMINATIONS. Each holding company and each
41-69 subsidiary of a holding company is subject to examinations as the
41-70 commissioner may prescribe. The holding company shall pay the cost
42-1 of an examination. The confidentiality provisions of Section 4.08
42-2 of this Act apply to this section. The commissioner may furnish
42-3 examination and other reports to any appropriate governmental
42-4 department, agency, or instrumentality of this state, another
42-5 state, or the United States. For purposes of this section, the
42-6 commissioner, to the extent deemed feasible, may use reports filed
42-7 with or examinations made by appropriate federal agencies or
42-8 regulatory authorities of other states.
42-9 Sec. 10.05. AGENT FOR SERVICE OF PROCESS. The commissioner
42-10 may require a holding company or a person, other than a
42-11 corporation, connected with a holding company to execute and file a
42-12 prescribed form of irrevocable appointment of agent for service of
42-13 process.
42-14 Sec. 10.06. RELEASE FROM REGISTRATION. The commissioner at
42-15 any time, on the commissioner's own motion or on application, may
42-16 release a registered holding company from a registration made by
42-17 the company if the commissioner determines that the company no
42-18 longer controls a savings bank.
42-19 Sec. 10.07. TRANSACTIONS WITH AFFILIATES. Transactions
42-20 between a subsidiary savings bank of a holding company and any
42-21 affiliate of the savings bank subsidiary are subject to rules
42-22 adopted by the commissioner and the finance commission.
42-23 Sec. 10.08. RULES. The commissioner and the finance
42-24 commission shall adopt rules providing for registration and
42-25 reporting of holding companies, setting limitations on the
42-26 activities and investments of holding companies, and providing for
42-27 other matters as may be appropriate under this chapter.
42-28 CHAPTER 11. FOREIGN FINANCIAL INSTITUTIONS
42-29 Sec. 11.01. LIMITATION ON RIGHT TO DO BUSINESS AS A SAVINGS
42-30 BANK. (a) A person, firm, company, association, fiduciary,
42-31 partnership, or corporation by whatever name called may not do
42-32 business as a savings bank in this state or maintain an office in
42-33 this state for the purpose of doing business in this state unless
42-34 it is:
42-35 (1) a domestic savings bank;
42-36 (2) a federal savings bank;
42-37 (3) a foreign savings bank that is a surviving
42-38 financial institution holding a certificate of authority issued
42-39 under Section 11.07 of this Act; or
42-40 (4) a foreign savings bank that was a foreign savings
42-41 and loan association holding a certificate of authority issued
42-42 pursuant to Section 61 of Senate Bill No. 111, Chapter 61, Acts of
42-43 the 41st Legislature, 2nd Called Session, 1929.
42-44 (b) The prohibition in this section does not apply to any
42-45 activity that does not constitute transacting business in this
42-46 state under Section B, Article 8.01, Texas Business Corporation
42-47 Act.
42-48 Sec. 11.02. RENEWAL OF OUTSTANDING CERTIFICATES. A foreign
42-49 savings bank holding a certificate of authority under Section 11.07
42-50 of this Act may renew the certificate from year to year by the
42-51 payment of a renewal fee in January of each year in an amount set
42-52 annually by resolution of the finance commission. The savings bank
42-53 shall pay the same examination charges paid by a domestic savings
42-54 bank under Section 4.07 of this Act, together with all traveling
42-55 expenses of the examination, except that if the examination fee is
42-56 inadequate to defray all expenses of the examination, the savings
42-57 bank shall pay the additional cost. Examinations may not be made
42-58 more than once a year.
42-59 Sec. 11.03. CONTRACTS DEEMED MADE IN THIS STATE. A contract
42-60 made by any foreign savings bank with any citizen of this state is
42-61 a Texas contract and shall be construed by the courts of this state
42-62 according to the laws of this state.
42-63 Sec. 11.04. RIGHTS, PRIVILEGES, AND OBLIGATIONS OF FOREIGN
42-64 SAVINGS BANKS WITH CERTIFICATES OF AUTHORITY. (a) A foreign
42-65 savings bank operating under a certificate of authority under
42-66 Section 11.07 of this Act has the rights and privileges of a
42-67 savings bank created under this Act, and its deposit accounts are
42-68 eligible for investment to the same extent as those of a domestic
42-69 savings bank. This Act and rules adopted under this Act are
42-70 applicable to a foreign savings bank with respect to its operations
43-1 in this state and may be enforced by the commissioner. A foreign
43-2 savings bank may not be considered a savings bank organized under
43-3 the laws of this state.
43-4 (b) The commissioner, in exercising the supervisory and
43-5 regulatory authority granted under Chapters 4 and 5 of this Act,
43-6 may enter into cooperative agreements with regulatory authorities
43-7 of other states to facilitate the regulation of foreign savings
43-8 banks doing business in this state and may accept reports of
43-9 examinations and other records from those regulatory authorities in
43-10 lieu of conducting examinations outside this state.
43-11 (c) A foreign savings bank operating in this state as
43-12 authorized by this chapter may not exercise any powers, perform any
43-13 functions, or offer any services that a domestic savings bank could
43-14 not exercise, perform, or offer.
43-15 Sec. 11.05. POWER OF COMMISSIONER TO REVOKE CERTIFICATE.
43-16 The commissioner may issue an order against a foreign savings bank
43-17 holding a certificate of authority to do business in this state in
43-18 the same manner as against a domestic savings bank under Chapter 5
43-19 of this Act. On failure or refusal of a foreign savings bank to
43-20 comply with a final order of the commissioner, the commissioner may
43-21 revoke a certificate of authority held by the savings bank. On
43-22 revocation of the certificate of authority of a foreign savings
43-23 bank, an agent of the savings bank may not transact business in
43-24 this state, except to receive payments to apply on loan contracts
43-25 then in effect and to pay withdrawal requests.
43-26 Sec. 11.06. FEDERAL SAVINGS BANKS. A federal savings bank
43-27 is not a foreign corporation or foreign savings bank. Unless
43-28 federal laws or regulations provide otherwise, a federal savings
43-29 bank and the members of a federal savings bank have all of the
43-30 rights, powers, privileges, benefits, immunities, and exemptions
43-31 that are provided by this Act and other laws of this state relating
43-32 to a savings bank or its members. This provision is in addition to
43-33 and supplemental to any provision of this Act which by specific
43-34 reference is applicable to a federal savings bank and its members.
43-35 Sec. 11.07. MERGER OR CONSOLIDATION OF FOREIGN AND DOMESTIC
43-36 SAVINGS BANKS. (a) A domestic savings bank may merge or
43-37 consolidate with a foreign savings bank under a plan adopted by the
43-38 board of directors of both savings banks and approved by the
43-39 commissioner. The plan of merger or consolidation must be approved
43-40 by a majority of the total vote that the members or stockholders of
43-41 the domestic savings bank are entitled to cast. Approval may be
43-42 voted at either an annual meeting or at a special meeting called to
43-43 consider that action. A stockholder of a domestic savings bank
43-44 that is a capital stock association has the same dissenter's rights
43-45 as a shareholder of a domestic corporation under the Texas Business
43-46 Corporation Act.
43-47 (b) If presented with a plan of merger or consolidation of a
43-48 foreign savings bank and a domestic savings bank, the commissioner
43-49 shall give public notice of the proposed merger or consolidation in
43-50 each county in which the domestic savings bank has an office and
43-51 shall give any interested party an opportunity to appear, present
43-52 evidence, and be heard for or against the proposed plan. A hearing
43-53 officer designated by the commissioner shall hold the hearing. If
43-54 a protest is not received on or before the date of hearing, the
43-55 hearing may be dispensed with by the commissioner or hearing
43-56 officer. The provisions of the administrative procedure act
43-57 applicable to a contested case do not apply to an application if
43-58 the domestic savings bank is considered by the commissioner to be
43-59 in an unsafe condition, and in that event, the application and all
43-60 information related to the application are confidential and
43-61 privileged from public disclosure.
43-62 (c) The commissioner shall issue an order denying the
43-63 proposed plan if the commissioner finds that any of the conditions
43-64 of Subsection (c) of Section 3.03 of this Act exist. In addition,
43-65 if the surviving savings bank is the foreign savings bank, the
43-66 commissioner shall deny the application if:
43-67 (1) the laws of the state in which the foreign savings
43-68 bank has its principal place of business do not permit savings
43-69 banks of that state to merge or consolidate with a domestic savings
43-70 bank if the surviving savings bank is the domestic savings bank; or
44-1 (2) the foreign savings bank is controlled by a
44-2 holding company that has its principal place of business in a state
44-3 the laws of which do not permit savings banks of that state to
44-4 merge or consolidate with a domestic savings bank if the surviving
44-5 savings bank is the domestic savings bank.
44-6 (d) If a surviving savings bank is a foreign savings bank,
44-7 the commissioner may enforce any conditions, restrictions, and
44-8 requirements on the surviving savings bank that could have been
44-9 enforced by the state in which the foreign savings bank has its
44-10 principal place of business with respect to a merger or
44-11 consolidation in that state in which the surviving savings bank is
44-12 a domestic savings bank.
44-13 (e) If the commissioner approves a proposed plan of merger
44-14 or consolidation, the commissioner shall issue an order approving
44-15 the merger or consolidation. If the surviving savings bank is the
44-16 foreign savings bank, the commissioner shall issue and deliver to
44-17 the surviving savings bank a certificate of authority to do
44-18 business as a savings bank within this state for a period that
44-19 expires January 31 of the next calendar year. If the surviving
44-20 savings bank is the domestic savings bank, it shall continue to
44-21 operate under the terms of its charter and the laws and rules
44-22 applicable to a domestic savings bank.
44-23 CHAPTER 12. MISCELLANEOUS PROVISIONS
44-24 Sec. 12.01. EXEMPTION FROM SECURITIES LAWS. Deposit
44-25 accounts, certificates, and other evidences of interest in the
44-26 deposit liability of savings banks subject to this Act and of
44-27 federal savings banks are not securities for any purpose under The
44-28 Securities Act (Article 581-1 et seq., Vernon's Texas Civil
44-29 Statutes), and securities of those savings banks other than
44-30 interest in the deposit liability of the savings banks are not
44-31 subject to the registration requirements of that Act. A person
44-32 whose principal occupation is as an officer of a savings bank is
44-33 exempt from the registration and licensing provisions of The
44-34 Securities Act with respect to the person's participation in a sale
44-35 or other transaction involving securities of the savings bank of
44-36 which the person is an officer.
44-37 Sec. 12.02. ACKNOWLEDGMENTS BY MEMBERS AND EMPLOYEES. A
44-38 public officer qualified to take acknowledgments or proofs of
44-39 written instruments is not disqualified from taking the
44-40 acknowledgments or proofs of any instrument in writing in which a
44-41 savings bank or federal savings bank is interested by reason of the
44-42 officer's membership in or stockholding in or employment by the
44-43 savings bank.
44-44 Sec. 12.03. CLOSING PLACES OF BUSINESS. A savings bank may
44-45 close its place of business at any time the board of directors of
44-46 the savings bank determines to do so.
44-47 Sec. 12.04. SAVINGS BANKS PROHIBITED FROM ISSUING STOCK OR
44-48 SHARES NOT AUTHORIZED BY THIS ACT. A savings bank may not issue
44-49 any form of stock, share, account, or investment certificate except
44-50 as permitted by this Act.
44-51 Sec. 12.05. AD VALOREM TAXATION OF PROPERTY OF SAVINGS
44-52 BANKS. A domestic or federal savings bank doing business in this
44-53 state shall render for ad valorem taxation all of its real estate
44-54 as other real estate is rendered. Personal property of a domestic
44-55 or federal savings bank is valued as other personal property is
44-56 valued for assessment in this state and shall be rendered by the
44-57 savings bank to the appropriate assessing unit or units in the
44-58 following manner:
44-59 (1) furniture, fixtures, equipment, and automobiles
44-60 shall be rendered where the property is located in the same manner
44-61 as other similar property; and
44-62 (2) the remainder of the personal property of a
44-63 savings bank shall be rendered as a whole in the city and county
44-64 where its principal office is located at the value remaining after
44-65 deducting from the total value of the savings bank's entire assets
44-66 the following:
44-67 (A) all debts of every kind and character owed
44-68 by the savings bank;
44-69 (B) all tax-free securities owned by the savings
44-70 bank;
45-1 (C) the loss reserves and surplus of the savings
45-2 bank;
45-3 (D) the deposit liability of the savings bank;
45-4 and
45-5 (E) the appraised value of its furniture,
45-6 fixtures, and real estate.
45-7 Sec. 12.06. STATE TAXATION OF SAVINGS BANKS. A domestic or
45-8 federal savings bank doing business in this state shall be taxed by
45-9 the state in the same manner and to the same extent as a
45-10 corresponding savings and loan association.
45-11 Sec. 12.07. INITIATION OF RULEMAKING BY SAVINGS BANKS. If
45-12 20 percent or more of the savings banks subject to this Act
45-13 petition the commissioner in writing requesting the adoption,
45-14 amendment, or repeal of a rule, the commissioner shall initiate
45-15 rulemaking proceedings under Subsection (e), Article 5, Chapter II,
45-16 The Texas Banking Code (Article 342-205, Vernon's Texas Civil
45-17 Statutes).
45-18 Sec. 12.08. HEARING PROCEDURES. (a) Notice of a hearing
45-19 held under an order issued under Chapter 5 of this Act shall be
45-20 given to all parties affected by the order. Notice of other
45-21 hearings held under this Act shall be given to all domestic and
45-22 federal savings banks in the county where the subject matter of the
45-23 hearing is or will be situated.
45-24 (b) Opportunity shall be afforded any interested party to
45-25 respond and present evidence and argument on all issues involved in
45-26 a hearing held under this Act.
45-27 (c) On the written request of any interested party, the
45-28 commissioner shall keep a formal record of the proceedings of a
45-29 hearing held under this Act.
45-30 (d) A decision or order adverse to a party who appeared and
45-31 participated in a hearing must be in writing and include findings
45-32 of fact and conclusions of law, separately stated, on all issues
45-33 material to the decision reached. Findings of fact, if set forth
45-34 in statutory language, must be accompanied by a concise and
45-35 explicit statement of the underlying facts supporting the findings.
45-36 (e) A decision or order entered after hearing is final and
45-37 appealable on the 15th day after the date the decision or order is
45-38 entered unless a motion for rehearing is filed by a party within
45-39 that period, and if the motion for rehearing is overruled, the
45-40 decision or order is appealable after the date the order overruling
45-41 the motion is entered.
45-42 (f) Parties to a hearing shall be notified promptly either
45-43 personally or by mail of any decision, order, or other action taken
45-44 in respect to the subject matter of the hearing.
45-45 Sec. 12.09. JUDICIAL REVIEW. The administrative procedure
45-46 act governs judicial review of an act, order, ruling, or decision
45-47 of the commissioner or a rule adopted under this Act.
45-48 Sec. 12.10. PENALTY FOR FAILING TO COMPLY WITH LAW. The
45-49 commissioner may require a savings bank that knowingly violates or
45-50 fails to comply with this Act or a rule adopted under this Act to
45-51 pay not more than $1,000 a day to the Savings and Loan Department
45-52 of Texas for each day of the violation or failure after lawful
45-53 notice of the delinquency by the commissioner. The attorney
45-54 general may file suit for the collection of the penalty on
45-55 certification by the commissioner of the failure or refusal of the
45-56 savings bank to remit the assessed penalty.
45-57 Sec. 12.11. APPLICABILITY OF CHAPTER 4, BUSINESS & COMMERCE
45-58 CODE. A savings bank is subject to and has the benefit of Chapter
45-59 4, Business & Commerce Code, with respect to all items paid,
45-60 collected, settled, negotiated, or otherwise handled for customers
45-61 of the savings bank.
45-62 Sec. 12.12. APPLICABILITY OF OTHER LAW. (a) Except as
45-63 provided in Subsection (b) of this section, a reference in statutes
45-64 of this state, including Title 79, Revised Statutes (Article
45-65 5069-1.01 et seq., Vernon's Texas Civil Statutes), the Government
45-66 Code, and the Local Government Code or in a rule adopted under the
45-67 statutes to a "savings and loan association," "savings and loan,"
45-68 or "association" in the context of a savings and loan association
45-69 is also a reference to a savings bank, as defined in this Act.
45-70 (b) Subsection (a) of this section does not apply to this
46-1 Act, the Texas Savings and Loan Act (Article 852a, Vernon's Texas
46-2 Civil Statutes), The Texas Banking Code (Article 342-101 et seq.,
46-3 Vernon's Texas Civil Statutes), or the Penal Code.
46-4 Sec. 12.13. EMERGENCY CLOSING OF A SAVINGS BANK. (a) If
46-5 the officers of a savings bank determine that an emergency that
46-6 affects or may affect the savings bank's officers or operations
46-7 exists or is impending, the officers, in the reasonable and proper
46-8 exercise of their discretion, may determine to not conduct the
46-9 involved operations or open the savings bank's offices on any
46-10 business or banking day or, if the savings bank is open, to close
46-11 the offices or suspend and close the involved operations during the
46-12 continuation of the emergency. The office or operations closed may
46-13 remain closed until the officers determine the emergency has ended
46-14 and for additional time reasonably required to reopen. However, an
46-15 office or operations may not remain closed for more than 48
46-16 consecutive hours, excluding other legal holidays, without the
46-17 approval of the commissioner. A savings bank closing an office or
46-18 operations under this section shall give the commissioner prompt
46-19 notice of its action as conditions permit and by any means
46-20 available.
46-21 (b) In this section, "emergency" means a condition or
46-22 occurrence that physically interferes with the conducting of normal
46-23 business at the offices of a savings bank or of particular savings
46-24 bank operations or that poses an imminent or existing threat to the
46-25 safety or security of persons, property, or both. In addition to
46-26 other causes, an emergency may arise as a result of:
46-27 (1) fire, flood, earthquake, hurricane, tornado, wind,
46-28 rain, or snowstorm;
46-29 (2) labor dispute and strike;
46-30 (3) power failure;
46-31 (4) transportation failure;
46-32 (5) interruption of communication facilities;
46-33 (6) shortage of fuel, housing, food, transportation,
46-34 or labor;
46-35 (7) robbery or burglary;
46-36 (8) actual or threatened enemy attack;
46-37 (9) epidemic or other catastrophe;
46-38 (10) riot or other civil commotion; or
46-39 (11) any other actual or threatened acts of
46-40 lawlessness or violence.
46-41 (c) A day on which a savings bank or one or more of its
46-42 operations is closed during all or part of its normal business
46-43 hours under this section is considered to be a legal holiday for
46-44 the savings bank to the extent it suspends operations. Liability
46-45 or loss of rights does not arise on the part of a savings bank or a
46-46 director, officer, or employee of the savings bank from a closing
46-47 authorized by this section.
46-48 (d) A provision of this section is in addition to and not in
46-49 substitution for or in limitation of any other provision of this
46-50 Act or other law of this state or the United States authorizing the
46-51 closing of a savings bank or excusing the delay by a savings bank
46-52 in the performance of its duties and obligations because of
46-53 emergencies or conditions beyond the savings bank's control or
46-54 otherwise.
46-55 Sec. 12.14. AUTHORIZATION OF DERIVATIVE SUITS. (a) The
46-56 commissioner may bring a derivative suit in the right of a savings
46-57 bank based on an unpursued cause of action if:
46-58 (1) the commissioner determines the savings bank has
46-59 an unpursued cause of action and that suit on that cause should be
46-60 brought to protect the interest of the savings bank, the
46-61 stockholders, members, or creditors of the savings bank or the
46-62 public interest; and
46-63 (2) the savings bank has not brought suit on the cause
46-64 before the 30th day after the date on which the commissioner gives
46-65 notice to the savings bank that the suit should be brought.
46-66 (b) Venue of a derivative suit, unless venue is mandatory,
46-67 is in a district court of Travis County.
46-68 (c) The commissioner may employ legal counsel to bring and
46-69 prosecute a derivative suit. The commissioner may pay counsel from
46-70 funds appropriated for the operation of the Savings and Loan
47-1 Department of Texas or may require the savings bank for which the
47-2 suit is brought to pay the counsel directly or to reimburse the
47-3 Savings and Loan Department of Texas for the payment. An amount
47-4 equal to the amount of the proceeds of a judgment on the suit, less
47-5 unreimbursed costs and expenses, including attorney fees incurred
47-6 by the Savings and Loan Department of Texas in prosecuting the
47-7 suit, shall be paid to the savings bank.
47-8 Sec. 12.15. LIABILITIES OF COMMISSIONER AND OTHERS; DEFENSE
47-9 BY ATTORNEY GENERAL. The commissioner, a member of the finance
47-10 commission, a deputy commissioner, an examiner, or any other
47-11 officer or employee of the Savings and Loan Department of Texas is
47-12 not personally liable for damages arising from the person's
47-13 official acts or omissions unless the acts or omissions are corrupt
47-14 or malicious. The attorney general shall defend an action brought
47-15 against such a person by reason of the person's official acts or
47-16 omissions, regardless of whether at the time of the initiation of
47-17 the action the defendant is an officer or employee of the Savings
47-18 and Loan Department of Texas.
47-19 SECTION 2.02. Article 2, Chapter I, The Texas Banking Code
47-20 (Article 342-102, Vernon's Texas Civil Statutes), is amended by
47-21 amending Subdivisions (12) and (13) and adding Subdivisions (26)
47-22 and (27) to read as follows:
47-23 (12) "State Savings and Loan Association" or "State
47-24 Association"--Any savings and loan association <or savings bank>
47-25 heretofore or hereafter organized under the laws of this State.
47-26 (13) "Federal Savings and Loan Association"--Any
47-27 savings and loan association <or savings bank> heretofore or
47-28 hereafter organized under the laws of the United States of America.
47-29 (26) "State Savings Bank"--Any savings bank organized
47-30 under or subject to the Texas Savings Bank Act, Section 1, Senate
47-31 Bill No. 396, Acts of the 73rd Legislature, Regular Session, 1993.
47-32 (27) "Federal Savings Bank"--Any savings bank
47-33 organized under the laws of the United States of America.
47-34 SECTION 2.03. Article 3, Chapter I, The Texas Banking Code
47-35 (Article 342-103, Vernon's Texas Civil Statutes), is amended to
47-36 read as follows:
47-37 Art. 3. Finance Commission--General Powers. A. There is
47-38 hereby established and created The Finance Commission of Texas
47-39 which shall consist of nine (9) members. The Finance Commission
47-40 shall:
47-41 (1) adopt rules and determine general policies for the
47-42 regulation of state banks, state associations, state savings banks,
47-43 and the consumer credit industry in the state;
47-44 (2) consult and advise the Banking Commissioner,
47-45 Savings and Loan Commissioner, and Consumer Credit Commissioner on
47-46 the implementation and enforcement of the rules and policies
47-47 adopted by the Finance Commission; and
47-48 (3) carry out other duties, powers, and authority as
47-49 may be conferred by law.
47-50 B. The Finance Commission shall make a thorough and
47-51 intensive study of the Texas banking, savings and loan, savings
47-52 bank, and consumer credit statutes, respectively, with a view to so
47-53 strengthening said statutes as to attain and maintain the maximum
47-54 degree of protection to depositors, stockholders, shareholders, and
47-55 consumers, and shall report every two (2) years to the Legislature
47-56 by filing with the Clerks of the Senate and the House of
47-57 Representatives the results of its study, together with its
47-58 recommendations.
47-59 SECTION 2.04. Section 2, Article 4, Chapter I, The Texas
47-60 Banking Code (Article 342-104, Vernon's Texas Civil Statutes), is
47-61 amended to read as follows:
47-62 2. Two (2) members of the Finance Commission shall be
47-63 savings <and loan> executives. For the purposes of this article
47-64 <section> a savings <and loan> executive is a person who:
47-65 (i) has had five (5) years or more executive
47-66 experience in the seven (7) years next preceding the person's
47-67 appointment in a State or Federal Savings and Loan Association, a
47-68 state savings bank, or a federal savings bank in a capacity not
47-69 lower than cashier;<,> and
47-70 (ii) <who> at the time of the person's appointment is
48-1 an officer in a State association or a state savings bank.
48-2 SECTION 2.05. Section 4, Article 4, Chapter I, The Texas
48-3 Banking Code (Article 342-104, Vernon's Texas Civil Statutes), is
48-4 amended to read as follows:
48-5 4. The members of the Finance Commission who are not banking
48-6 executives or savings <and loan> executives shall be selected by
48-7 the Governor on the basis of recognized business ability. Those
48-8 members may not be banking executives, savings <and loan>
48-9 executives, or controlling shareholders in a bank, <or> savings and
48-10 loan association, or state savings bank. At least one of those
48-11 members must be a certified public accountant.
48-12 SECTION 2.06. Article 14, Chapter I, The Texas Banking Code
48-13 (Article 342-114, Vernon's Texas Civil Statutes), is amended to
48-14 read as follows:
48-15 Art. 14. SAVINGS AND LOAN/SAVINGS BANK RULES AND
48-16 REGULATIONS--LOANS AND INVESTMENTS--ADVISORY POWERS. The Finance
48-17 Commission, through resolutions, may promulgate general rules and
48-18 regulations not inconsistent with the Constitution and Statutes of
48-19 this State, and from time to time amend the same, which rules and
48-20 regulations shall be applicable alike to all State associations and
48-21 state savings banks, and may authorize State associations and state
48-22 savings banks to invest their funds in any manner and to the same
48-23 extent which said association or state savings banks could invest
48-24 such funds under existing or any future law, rule or regulation
48-25 were they organized and operating as a Federal Savings and Loan
48-26 Association or Federal savings bank under the laws of the United
48-27 States, provided, however, that this authority shall not be
48-28 construed in any wise to confer authority to abridge, or diminish
48-29 or limit any rights or powers specifically given to State
48-30 associations or state savings banks by the statutory laws of this
48-31 State. In addition to such powers as may be conferred upon the
48-32 Finance Commission by this Act, <or by> the Savings and Loan Act of
48-33 Texas, or the Texas Savings Bank Act, as amended, the Finance
48-34 Commission shall have the following duties:
48-35 (a) When in the judgment of the Finance Commission,
48-36 protection of investors in State associations or state savings
48-37 banks requires additional regulations or limitations, to promulgate
48-38 such additional rules and regulations as will in its judgment
48-39 prevent State associations or state savings banks from
48-40 concentrating an excessive or unreasonable portion of their
48-41 resources in any particular type or character of loan or security
48-42 authorized by the Texas Savings and Loan Act or the Texas Savings
48-43 Bank Act.
48-44 (b) When in the judgment of the Finance Commission,
48-45 establishment of standards or changes in existing standards for
48-46 investment are necessary, to establish standards through rules and
48-47 regulations for investments by State associations or state savings
48-48 banks, which standards may also establish a limit in the amount
48-49 which State associations or state savings banks may invest in any
48-50 particular type or character of investment to an amount or
48-51 percentage based upon assets or net worth.
48-52 (c) To advise with the Savings and Loan Commissioner as to
48-53 the forms to be prescribed for the filing of the annual statements
48-54 with the Savings and Loan Department and the forms to be prescribed
48-55 for the publication of the annual financial statements by State
48-56 associations and state savings banks.
48-57 (d) To confer with the Savings and Loan Commissioner, the
48-58 Chairman of the Federal Deposit Insurance Corporation, and the
48-59 District Director of the Office of Thrift Supervision <and with the
48-60 President of the regional Federal Home Loan Bank of the district in
48-61 which State associations are members> on general and special
48-62 business and economic conditions affecting State associations and
48-63 state savings banks.
48-64 (e) To request information and to make recommendations with
48-65 respect to matters within the jurisdiction of the Savings and Loan
48-66 Commissioner as relating to the savings and loan and savings bank
48-67 business, including recommendations as to legislation affecting
48-68 such institutions, providing, that no information regarding the
48-69 financial condition of any State savings and loan association or
48-70 state savings bank obtained through examination or otherwise shall
49-1 be divulged to any member of the Finance Commission, nor shall any
49-2 member of the Finance Commission be given access to the files and
49-3 records of the Department appertaining thereto; provided, further,
49-4 however, that the Commissioner may disclose to the Finance
49-5 Commission any file or record pertinent to any hearing or matter
49-6 pending before the Finance Commission.
49-7 SECTION 2.07. Sections (a), (b), (c), (d), (g), (h), (i),
49-8 and (k), Article 5, Chapter II, The Texas Banking Code (Article
49-9 342-205, Vernon's Texas Civil Statutes), are amended to read as
49-10 follows:
49-11 (a) By and with the advice and consent of the Senate, the
49-12 Finance Commission of Texas, by at least five (5) affirmative
49-13 votes, shall elect a Savings and Loan Commissioner who shall serve
49-14 at the pleasure of the Finance Commission and who shall be an
49-15 employee of said Commission and subject to its orders and
49-16 direction. The Savings and Loan Commissioner shall have had not
49-17 less than seven (7) years experience in the executive management of
49-18 a savings and loan association or savings bank or in savings and
49-19 loan or savings bank supervision. The Savings and Loan
49-20 Commissioner shall receive such compensation as is fixed by the
49-21 Finance Commission. The compensation shall be paid from funds of
49-22 the Savings and Loan Department.
49-23 (b) The Savings and Loan Commissioner, subject to the
49-24 approval of the Finance Commission, shall appoint one or more
49-25 Deputy Savings and Loan Commissioners, one of which shall have the
49-26 same qualifications required of the Savings and Loan Commissioner
49-27 and shall be designated by the Savings and Loan Commissioner to be
49-28 vested with all of the powers and perform all of the duties of the
49-29 Savings and Loan Commissioner during the absence or inability of
49-30 the Savings and Loan Commissioner. The Savings and Loan
49-31 Commissioner may also appoint a Hearing Officer or Officers to
49-32 conduct such investigations or public hearings as may be required
49-33 by law of the Savings and Loan Commissioner. The Hearing Officer
49-34 or Officers shall be vested for the purpose of such investigations
49-35 or public hearings with the power and authority as the Savings and
49-36 Loan Commissioner would have if he were personally conducting such
49-37 investigation or public hearing, provided that the Hearing Officer
49-38 or Officers shall not be authorized to make any order upon the
49-39 final subject matter of such investigation or hearing; and
49-40 provided, further, that the record of any investigation or public
49-41 hearing conducted before the Hearing Officer may be considered by
49-42 the Savings and Loan Commissioner in the same manner and to the
49-43 same extent as evidence that is adduced before him personally in
49-44 any such proceeding. The Savings and Loan Commissioner shall also
49-45 appoint Savings and Loan and Savings Bank Examiners. Each Deputy
49-46 Savings and Loan Commissioner, the Savings and Loan and Savings
49-47 Bank Examiners, each Hearing Officer, and all other officers and
49-48 employees of the Savings and Loan Department shall receive such
49-49 compensation as is fixed by the Finance Commission which shall be
49-50 paid from the funds of the Savings and Loan Department.
49-51 (c) The Savings and Loan Commissioner, each Deputy Savings
49-52 and Loan Commissioner, each Hearing Officer, each Savings and Loan
49-53 and Savings Bank Examiner, and every other officer and employee of
49-54 the Savings and Loan Department specified by the Finance
49-55 Commission, shall, before entering upon the duties of his office,
49-56 take an oath of office and make a fidelity bond in the sum of Ten
49-57 Thousand Dollars ($10,000) payable to the Governor of the State of
49-58 Texas, and his successors in office, in individual, schedule or
49-59 blanket form, executed by a surety appearing upon the list of
49-60 approved sureties acceptable to the United States Government. Each
49-61 bond required under this Article shall be in the form approved by
49-62 the Finance Commission. The premiums for such bonds shall be paid
49-63 out of the funds of the Savings and Loan Department.
49-64 (d) Upon the appointment and qualification of a Savings and
49-65 Loan Commissioner under this Act such Savings and Loan Commissioner
49-66 shall in person or by and through the Deputy Savings and Loan
49-67 Commissioner, Savings and Loan and Savings Bank Examiners, or other
49-68 officers of the Savings and Loan Department, supervise and
49-69 regulate, in accordance with the rules and regulations promulgated
49-70 by the Savings and Loan Commissioner together with the Finance
50-1 Commission, all savings and loan associations and state savings
50-2 banks doing business in this State (except Federal Savings and Loan
50-3 Associations or Federal Savings Banks organized and existing under
50-4 Federal Law).
50-5 (g) The Savings and Loan Commissioner shall attend each
50-6 meeting of the Finance Commission at which matters relating to
50-7 savings and loan associations or savings banks will be considered,
50-8 but he shall not vote.
50-9 (h) The Savings and Loan Commissioner and the Finance
50-10 Commission shall establish reasonable and necessary fees for the
50-11 administration of the Texas Savings and Loan Act (Article 852a,
50-12 Vernon's Texas Civil Statutes) and the Texas Savings Bank Act and
50-13 support of the Finance Commission as provided by Article 11C,
50-14 Chapter I, of this Code. The Savings and Loan Commissioner shall
50-15 collect all fees, penalties, charges and revenues required to be
50-16 paid by savings and loan associations and savings banks and shall
50-17 from time to time as directed by the Finance Commission submit to
50-18 such Commission a full and complete report of the receipts and
50-19 expenditures of the Savings and Loan Department, and the Finance
50-20 Commission may from time to time examine the financial records of
50-21 the Savings and Loan Department or cause them to be examined. In
50-22 addition, the financial transactions of the Savings and Loan
50-23 Department are subject to audit by the state auditor in accordance
50-24 with Chapter 321, Government Code, and the actual costs of such
50-25 audits shall be paid to the State Auditor from the funds of the
50-26 Savings and Loan Department. Notwithstanding anything to the
50-27 contrary contained in any other law of this State, beginning
50-28 September 1, 1985, all sums of money paid to the Savings and Loan
50-29 Department from all sources shall be deposited in the State
50-30 Treasury to the credit of a special fund to be known as the Savings
50-31 and Loan Department Expense Fund and may be used only for the
50-32 expenses incurred by the Savings and Loan Department and Finance
50-33 Commission. All expenses incurred by the Savings and Loan
50-34 Department shall be paid only from such fund. The Finance
50-35 Commission shall promulgate and adopt such rules and regulations as
50-36 may be necessary to coordinate the operation of the Savings and
50-37 Loan Department with the operation of the Banking Department and
50-38 the Office of Consumer Credit Commissioner.
50-39 (i) Insofar as the provisions of this Section may conflict
50-40 with any other provisions of The Texas Banking Code of 1943, as
50-41 amended, or Senate Bill No. 111, Acts 1929, 41st Legislature, page
50-42 100, Chapter 61, as amended, or the Texas Savings and Loan Act of
50-43 1963, Chapter 113, Acts 58th Legislature, 1963, page 269, et seq.,
50-44 or the Texas Savings Bank Act, as amended, the provisions of this
50-45 Act shall control; except that the terms "Savings and Loan," and
50-46 "Savings and Loan Association," as used herein, are intended to and
50-47 shall have the same meaning as the terms "Building and Loan" and
50-48 "Building and Loan Association" as used in said Statutes.
50-49 (k) An officer or employee of the Savings and Loan
50-50 Department may not be an officer, employee, or paid consultant of a
50-51 trade association in the savings and loan industry or the savings
50-52 bank industry.
50-53 SECTION 2.08. Section 3, Article 9, Chapter VI, The Texas
50-54 Banking Code (Article 342-609, Vernon's Texas Civil Statutes), is
50-55 amended to read as follows:
50-56 Sec. 3. In this article, "financial institution" means a
50-57 state or national bank, <or> state or federal savings and loan
50-58 association, or state or federal savings bank maintaining an
50-59 office, branch, or agency office in this state or otherwise engaged
50-60 in the business of lending money or extending credit in this state.
50-61 SECTION 2.09. Section 4, Article 5, Chapter VII, The Texas
50-62 Banking Code (Article 342-705, Vernon's Texas Civil Statutes), is
50-63 amended to read as follows:
50-64 Sec. 4. In this article "financial institution" means a
50-65 state or national bank, <or> state or federal savings and loan
50-66 association, or state or federal savings bank maintaining an
50-67 office, branch, or agency office in this state or otherwise engaged
50-68 in the business of lending money or extending credit in this state.
50-69 SECTION 2.10. Subsection (a), Section 5, Article 5, Chapter
50-70 VII, The Texas Banking Code (Article 342-705, Vernon's Texas Civil
51-1 Statutes), is amended to read as follows:
51-2 (a) This article does not restrict or apply to amendment of
51-3 a depository contract, addition of a new term or provision to a
51-4 depository contract, or disclosure or production of deposits or of
51-5 records of accounts and other financial institution <bank> records
51-6 if the amendment, addition, or disclosure is made under or in
51-7 substantial compliance with applicable federal law, including
51-8 regulations. This article does not restrict or apply to the use or
51-9 disclosure by a financial institution <bank> of information or
51-10 records pertaining to deposits, accounts, or financial institution
51-11 <bank> transactions if the use or disclosure is made in good faith
51-12 in the usual course of the financial business of the financial
51-13 institution <bank>, is made by the financial institution <bank> in
51-14 the course of the litigation affecting its interests, or is made
51-15 with express or implied consent of the depositor or customer. This
51-16 article does not apply to the investigation or prosecution of
51-17 criminal offenses.
51-18 SECTION 2.11. Subsection (a), Section 32.71, Penal Code, is
51-19 amended to read as follows:
51-20 (a) An officer, director, member of any committee, clerk, or
51-21 agent of any savings and loan association or savings bank in this
51-22 state commits an offense if the person embezzles, abstracts, or
51-23 misapplies money, funds, or credits of the association or savings
51-24 bank, issues or puts into circulation any warrant or other order
51-25 without proper authority, issues, assigns, transfers, cancels, or
51-26 delivers up any note, bond, draft, mortgage, judgment, decree, or
51-27 other written instrument belonging to the association or savings
51-28 bank, certifies to or makes a false entry in any book, report, or
51-29 statement of or to the association or savings bank, with intent to
51-30 deceive, injure, or defraud the association or savings bank or a
51-31 member of the association or savings bank for the purpose of
51-32 inducing any person to become a member of the association or
51-33 savings bank or to deceive anyone appointed to examine the affairs
51-34 of the association or savings bank.
51-35 SECTION 2.12. Subsection (a), Section 32.72, Penal Code, is
51-36 amended to read as follows:
51-37 (a) Any person commits an offense if the person for the
51-38 purpose of influencing the actions of an association or savings
51-39 bank or its employees, agents, or representatives or for the
51-40 purpose of influencing the actions of The Finance Commission of
51-41 Texas, the savings and loan commissioner, or employees, agents, or
51-42 representatives of the Savings and Loan Department of Texas,
51-43 knowingly:
51-44 (1) removes, mutilates, destroys, or conceals a paper,
51-45 book, or record of a savings and loan association or savings bank
51-46 or of the savings and loan commissioner or the Savings and Loan
51-47 Department of Texas for the purpose of concealing a fact or
51-48 suppressing evidence;
51-49 (2) makes, passes, alters, or publishes a false,
51-50 counterfeit, or forged instrument, paper, document, statement, or
51-51 report to a savings and loan association or savings bank or to the
51-52 savings and loan commissioner or the Savings and Loan Department of
51-53 Texas; or
51-54 (3) substantially overvalues land, property, security,
51-55 an asset, or income in connection with a transaction with a savings
51-56 and loan association or savings bank without substantiation,
51-57 justification, or supporting documentation generally accepted by
51-58 appraisal standards.
51-59 ARTICLE 3. EMERGENCY
51-60 SECTION 3.01. The importance of this legislation and the
51-61 crowded condition of the calendars in both houses create an
51-62 emergency and an imperative public necessity that the
51-63 constitutional rule requiring bills to be read on three several
51-64 days in each house be suspended, and this rule is hereby suspended,
51-65 and that this Act take effect and be in force from and after its
51-66 passage, and it is so enacted.
51-67 * * * * *
51-68 Austin,
51-69 Texas
51-70 May 25, 1993
52-1 Hon. Bob Bullock
52-2 President of the Senate
52-3 Sir:
52-4 We, your Committee on Economic Development to which was referred
52-5 H.B. No. 1790, have had the same under consideration, and I am
52-6 instructed to report it back to the Senate with the recommendation
52-7 that it do not pass, but that the Committee Substitute adopted in
52-8 lieu thereof do pass and be printed.
52-9 Parker,
52-10 Chairman
52-11 * * * * *
52-12 WITNESSES
52-13 No witnesses appeared on H.B. No. 1790.