S.B. No. 396
AN ACT
1-1 relating to the organization and regulation of state savings banks;
1-2 providing penalties.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. The Texas Savings Bank Act is enacted to read as
1-5 follows:
1-6 CHAPTER 1. GENERAL PROVISIONS
1-7 Sec. 1.01. SHORT TITLE. This Act may be cited as the "Texas
1-8 Savings Bank Act."
1-9 Sec. 1.02. PURPOSE. The purpose of this Act is to
1-10 facilitate the delivery of credit for home ownership and family and
1-11 community purposes, increase the savings base of the state, and
1-12 provide local control of the means of finance and the accumulation
1-13 of capital through the state chartering of depository institutions
1-14 known as savings banks, and to provide savings bank regulation that
1-15 is readily responsive to changes in local economic conditions.
1-16 Sec. 1.03. DEFINITIONS. In this Act:
1-17 (1) "Administrative procedure act" means the
1-18 Administrative Procedure and Texas Register Act (Article 6252-13a,
1-19 Vernon's Texas Civil Statutes).
1-20 (2) "Appropriate banking agency"
1-21 (A) means:
1-22 (i) with respect to a Texas-chartered
1-23 savings bank, the Savings and Loan Department of Texas;
1-24 (ii) with respect to a federal savings
2-1 bank, the Office of Thrift Supervision;
2-2 (iii) with respect to a Texas-chartered
2-3 savings and loan association, the Savings and Loan Department of
2-4 Texas;
2-5 (iv) with respect to a federal savings and
2-6 loan association, the Office of Thrift Supervision;
2-7 (v) with respect to a Texas-chartered
2-8 bank, The Banking Department of Texas; and
2-9 (vi) with respect to a national bank, the
2-10 Office of the Comptroller of the Currency; and
2-11 (B) includes:
2-12 (i) in all cases where a state bank is a
2-13 member of the Federal Reserve System, the board of governors of the
2-14 Federal Reserve System;
2-15 (ii) in all cases where required by the
2-16 Federal Deposit Insurance Act (12 U.S.C. Section 1811 et seq.), the
2-17 Federal Deposit Insurance Corporation; and
2-18 (iii) in all cases, the successors of the
2-19 state and federal agencies specified in this subdivision.
2-20 (3) "Capital stock" means, with respect to a capital
2-21 stock savings bank, the units into which the proprietary interest
2-22 in the savings bank is divided.
2-23 (4) "Capital stock savings bank" means a savings bank
2-24 authorized to issue capital stock.
2-25 (5) "Commissioner" means the Savings and Loan
2-26 Commissioner.
2-27 (6) "Company" means a corporation, partnership, trust,
3-1 joint-stock company, association, unincorporated organization, or
3-2 other legal entity, or a combination of any of those entities
3-3 acting in concert.
3-4 (7) "Control" means the possession of the power to
3-5 direct or cause the direction of the management and policies of a
3-6 savings bank by either direct or indirect means. An individual or
3-7 company is deemed to have control if, individually or acting in
3-8 concert with others, the individual or company directly or
3-9 indirectly owns, controls, holds with the power to vote, or holds
3-10 proxies representing 25 percent or more of the voting stock or
3-11 voting rights of a savings bank.
3-12 (8) "Deposit account" means a savings account,
3-13 certificate of deposit, withdrawable deposit, demand deposit
3-14 account, checking account, or any other appropriate term referring
3-15 to the amount of money a savings bank owes to an account holder as
3-16 a result of the deposit of funds in the savings bank.
3-17 (9) "Deposit liability" means the aggregate amount of
3-18 money owed to deposit account holders of a savings bank at any one
3-19 particular time, as shown by the books of the savings bank and
3-20 after applying any legal or contractual reductions.
3-21 (10) "Domestic savings bank" means a savings bank
3-22 organized under the laws of this state and subject to this Act.
3-23 (11) "Earnings on account" means either interest
3-24 contractually payable or dividends declared payable to holders of
3-25 deposit accounts in a savings bank.
3-26 (12) "Federal Deposit Insurance Corporation" includes
3-27 its successor or successors.
4-1 (13) "Federal savings bank" means a savings bank
4-2 incorporated under the laws of the United States whose principal
4-3 business office is located in this state.
4-4 (14) "Finance commission" means The Finance Commission
4-5 of Texas.
4-6 (15) "Financial institution" means a state or federal
4-7 savings bank, a state or federal savings and loan association, or a
4-8 state or national bank.
4-9 (16) "Foreign savings bank" means a savings bank whose
4-10 principal office is located outside this state and that has been
4-11 organized under the laws of a state or territory of the United
4-12 States other than this state or under the laws of the United
4-13 States.
4-14 (17) "Holding company" means any company that directly
4-15 or indirectly controls a savings bank or controls any other company
4-16 that is a savings bank holding company.
4-17 (18) "Loss reserves" means the aggregate amount of the
4-18 reserves allocated by a savings bank for the sole purpose of
4-19 absorbing losses.
4-20 (19) "Member" means, with respect to a mutual savings
4-21 bank, a person holding an account with the savings bank, assuming
4-22 or obligated on a loan in which the savings bank has an interest,
4-23 or owning property that secures a loan in which the savings bank
4-24 has an interest.
4-25 (20) "Mutual savings bank" means a savings bank not
4-26 authorized to issue capital stock.
4-27 (21) "Regulatory capital" means a common stockholders'
5-1 equity, including retained earnings, noncumulative perpetual
5-2 preferred stock and related earnings, minority interests in the
5-3 equity accounts of fully consolidated subsidiaries, and other
5-4 elements as established by the rules of the commissioner and the
5-5 finance commission.
5-6 (22) "Savings bank" means an institution organized
5-7 under or subject to this Act.
5-8 (23) "Stockholder" means the owner of one or more
5-9 shares of a savings bank's capital stock.
5-10 (24) "Subsidiary" means a company that is controlled
5-11 by a savings bank or by a company that is controlled, directly or
5-12 indirectly, by a savings bank. For purposes of this subdivision, a
5-13 savings bank is considered to control a company if the savings bank
5-14 directly or indirectly or acting in concert with one or more other
5-15 individuals or entities or through one or more subsidiaries:
5-16 (A) owns, controls, or holds with the power to
5-17 vote, or holds proxies representing, more than 25 percent of the
5-18 voting stock or voting rights of the company;
5-19 (B) controls in any manner the election of a
5-20 majority of the directors of the company; or
5-21 (C) is a general partner in or has contributed
5-22 more than 25 percent of the equity capital of the company.
5-23 (25) "Surplus" means the aggregate amount of the
5-24 undistributed earnings of a savings bank held as undivided profits
5-25 or unallocated reserves for general corporate purposes and any
5-26 paid-in surplus held by the savings bank.
5-27 (26) "Surviving financial institution" means the
6-1 entity that is the result of a merger or consolidation of a foreign
6-2 savings bank and a domestic savings bank or of a merger or
6-3 consolidation of a savings bank and another financial institution.
6-4 (27) "Unpursued cause of action" means an existing
6-5 claim belonging to a savings bank on which a suit or other
6-6 effective action has not been filed or taken by or on behalf of the
6-7 savings bank before the expiration of six months after the cause of
6-8 action arose, involving:
6-9 (A) a claim for monetary damages or recovery of
6-10 property;
6-11 (B) a claim for equitable relief;
6-12 (C) a cause of action for breach of contract or
6-13 for enforcement of a contract; or
6-14 (D) a claim on a fidelity bond.
6-15 (28) "Unsafe and unsound practices" means, with
6-16 respect to the operation of a savings bank, an action or inaction
6-17 that is likely to cause insolvency or substantial dissipation of
6-18 assets or earnings or to otherwise reduce the ability of the
6-19 savings bank to timely satisfy withdrawal requests of deposit
6-20 account holders.
6-21 (29) "Withdrawal value of deposit account" means the
6-22 net amount of money, after the application of any legal or
6-23 contractual reduction, that may be withdrawn at any particular time
6-24 by an account holder from a deposit account.
6-25 Sec. 1.04. EFFECT OF HEADINGS. The division of this Act
6-26 into chapters and sections and the captions of chapters and
6-27 sections are for convenience and have no legal effect in construing
7-1 the provisions of this Act.
7-2 CHAPTER 2. INCORPORATION AND ORGANIZATION
7-3 Sec. 2.01. APPLICATION OF LAWS RELATING TO GENERAL BUSINESS
7-4 CORPORATIONS. The Texas Business Corporation Act, the Texas
7-5 Miscellaneous Corporation Laws Act (Article 1302-1.01 et seq.,
7-6 Vernon's Texas Civil Statutes), and other law relating to general
7-7 business corporations are applicable to a savings bank to the
7-8 extent not inconsistent with this Act or the proper business of a
7-9 savings bank.
7-10 Sec. 2.02. FEDERAL INSURANCE OF DEPOSIT ACCOUNTS REQUIRED.
7-11 A savings bank must obtain and maintain federal insurance of
7-12 deposit accounts through an insurance corporation created by an Act
7-13 of the United States Congress.
7-14 Sec. 2.03. STATUS AS INTERNAL REVENUE SERVICE THRIFT
7-15 INSTITUTION. A savings bank must qualify for and maintain the
7-16 asset test of Section 7701(a)(19) of the Internal Revenue Code of
7-17 1986 (26 U.S.C. Section 7701(a)(19)).
7-18 Sec. 2.04. INCORPORATION AND INITIAL CAPITAL. A savings
7-19 bank may be organized on the application of five or more adult
7-20 residents of this state. The minimum initial capital of a savings
7-21 bank shall be fixed by rules adopted by the commissioner and the
7-22 finance commission, but the amount may not be less than the amount
7-23 required to obtain insurance of deposit accounts by the Federal
7-24 Deposit Insurance Corporation or the amount required of national
7-25 banks, whichever is greater. The initial capital shall be paid in
7-26 cash before the savings bank may begin business.
7-27 Sec. 2.05. CONTENTS OF APPLICATION. (a) An application to
8-1 incorporate a savings bank must be in a form specified by the
8-2 commissioner, signed by each incorporator, and submitted to the
8-3 commissioner with the filing fee. An application consists of:
8-4 (1) two copies of the proposed articles of
8-5 incorporation setting forth the name of the savings bank, the site
8-6 of the principal office, and the names and addresses of the initial
8-7 directors;
8-8 (2) two copies of the bylaws under which the savings
8-9 bank proposes to operate;
8-10 (3) statements, exhibits, maps, and other data
8-11 sufficiently detailed and comprehensive to enable the commissioner
8-12 to make findings under Section 2.11 of this Act;
8-13 (4) other information relating to the proposed savings
8-14 bank and its operation required by the rules of the commissioner
8-15 and the finance commission; and
8-16 (5) financial information about the applicants,
8-17 incorporators, directors, or stockholders required by the rules of
8-18 the commissioner and the finance commission.
8-19 (b) Financial information submitted under Subsection (a) of
8-20 this section is confidential and not subject to public disclosure
8-21 unless the commissioner finds that the disclosure is necessary and
8-22 in the public interest.
8-23 (c) If an application is to incorporate a capital stock
8-24 savings bank, the articles of incorporation must set out:
8-25 (1) the aggregate number of shares of common stock
8-26 that the savings bank may issue;
8-27 (2) the par value of each share or a statement that
9-1 the shares are without par value;
9-2 (3) a statement of whether the savings bank may issue
9-3 preferred stock;
9-4 (4) the amount of stock that has been subscribed and
9-5 will be paid for before the savings bank begins business; and
9-6 (5) a separate statement of the name and address of
9-7 each subscriber, the amount subscribed by each subscriber, and the
9-8 amount of paid-in surplus with which the savings bank will begin
9-9 business.
9-10 (d) If an application is to incorporate a mutual savings
9-11 bank, the articles of incorporation must include a statement of the
9-12 amount of deposit liability of the savings bank and the amount of
9-13 the expense fund with which the savings bank will begin business.
9-14 (e) The bylaws of the proposed savings bank must provide for
9-15 the voting rights of the members, if a mutual savings bank, or the
9-16 stockholders, if a capital stock savings bank.
9-17 (f) The articles of incorporation and statements of fact
9-18 submitted to the commissioner in connection with an application
9-19 must be subscribed and sworn to before an officer authorized to
9-20 administer oaths.
9-21 Sec. 2.06. MANAGING OFFICER. An applicant is not required
9-22 to specify the name and qualifications of the proposed managing
9-23 officer of the proposed savings bank at a hearing concerning the
9-24 granting of the application or in a public record. This
9-25 information may be presented to the commissioner at any time, but a
9-26 savings bank may not begin business unless it first presents to the
9-27 commissioner the name and qualifications of its proposed managing
10-1 officer and that managing officer is approved as qualified by the
10-2 commissioner.
10-3 Sec. 2.07. COMMON STOCK. (a) Before approving an
10-4 application, the commissioner shall require that a capital stock
10-5 savings bank have an aggregate amount of capital in the form of
10-6 stock and paid-in surplus as specified by the rules of the
10-7 commissioner and of the finance commission. Paid-in surplus may be
10-8 used instead of earnings to pay organizational and operating
10-9 expenses and earnings on deposit accounts and to meet any loss
10-10 reserve requirements. If the application is not approved or if the
10-11 proposed savings bank does not begin business, the stock
10-12 subscriptions for capital stock, less any lawful expenditures,
10-13 shall be returned pro rata to the subscribers.
10-14 (b) A savings bank may not purchase, directly or indirectly,
10-15 any of its own shares of common stock after the stock is issued.
10-16 Common stock may not be retired or redeemed until all liabilities
10-17 of the savings bank have been satisfied in full, including all
10-18 amounts due to holders of deposit accounts, unless prior written
10-19 permission is obtained from the commissioner and the retirement or
10-20 redemption is authorized by a majority vote of the savings bank's
10-21 stockholders at an annual meeting or a special meeting called for
10-22 that purpose. The basis of the retirement or redemption must be
10-23 first approved by the commissioner and consent must be obtained in
10-24 writing from the Federal Deposit Insurance Corporation and filed
10-25 with the commissioner. Preferred stock may be retired or redeemed
10-26 in the manner provided by the articles of incorporation or a
10-27 resolution of the board of directors of the savings bank
11-1 establishing the rights and preferences relating to the stock.
11-2 Both common and preferred stock must be fully paid for in cash in
11-3 advance of issuance. A savings bank may not make a loan against
11-4 the shares of its outstanding common or preferred stock.
11-5 Sec. 2.08. PREFERRED STOCK. (a) If the articles of
11-6 incorporation permit, shares of preferred stock may be divided into
11-7 and issued in series. Each series must be clearly designated to
11-8 distinguish its shares from the shares of other series or classes.
11-9 All or part of a series and variations in the relative rights and
11-10 preferences between different series may be fixed and determined by
11-11 the articles of incorporation, but all shares of the same class
11-12 must be identical except for the following rights and preferences:
11-13 (1) the rate of dividend;
11-14 (2) the price, terms, and conditions at which shares
11-15 may be redeemed;
11-16 (3) the amount payable on shares in the event of
11-17 involuntary liquidation;
11-18 (4) the amount payable on shares in the event of
11-19 voluntary liquidation;
11-20 (5) a sinking fund provision for the redemption or
11-21 purchase of shares;
11-22 (6) the terms and conditions of conversion of shares
11-23 that may be converted; and
11-24 (7) voting rights.
11-25 (b) If the articles of incorporation permit, the board of
11-26 directors by resolution may divide classes of preferred stock into
11-27 series and, within the limitations provided by this chapter and the
12-1 articles of incorporation, may determine the relative rights and
12-2 preferences of the shares of the series. Before the shares may be
12-3 issued, a copy of the resolution shall be submitted to the
12-4 commissioner. If the resolution conforms to this Act, the
12-5 commissioner shall file it in the commissioner's office. A
12-6 resolution filed by the commissioner is considered to be an
12-7 amendment to the savings bank's articles of incorporation.
12-8 (c) The extent to which preferred stock may be included as
12-9 regulatory capital of a savings bank is subject to the rules
12-10 adopted by the commissioner and the finance commission.
12-11 Sec. 2.09. EXPENSE FUND REQUIREMENTS FOR PROPOSED MUTUAL
12-12 SAVINGS BANK. Before approving the articles of incorporation of a
12-13 mutual savings bank, the commissioner shall require the savings
12-14 bank to have subscriptions for an aggregate amount of deposit
12-15 accounts and an expense fund in an aggregate amount established by
12-16 rule of the commissioner and the finance commission as necessary
12-17 for the successful operation of a mutual savings bank. The expense
12-18 of organizing a savings bank, its operating expenses, and earnings
12-19 on accounts declared and paid or credited to its deposit account
12-20 holders may be paid out of the expense fund until the savings
12-21 bank's earnings are sufficient to pay those amounts. The amounts
12-22 contributed to the expense fund do not constitute a liability of
12-23 the savings bank except as provided by this chapter. The
12-24 contributions may be repaid pro rata to the contributors from the
12-25 net earnings of a savings bank after provision for required loss
12-26 reserve allocations and payment or credit of earnings declared on
12-27 accounts. If a savings bank is liquidated before contributions to
13-1 the expense fund are repaid, any contributions to the expense fund
13-2 remaining unspent after the payment of expenses of liquidation,
13-3 creditors, and the withdrawal value of deposit accounts shall be
13-4 paid to the contributors pro rata. The books of a savings bank
13-5 must reflect the expense fund. Contributors to an expense fund
13-6 shall be paid dividends on the amounts contributed to the same
13-7 extent a deposit account is paid dividends, and for this purpose
13-8 the contributions are considered deposit accounts of the savings
13-9 bank.
13-10 Sec. 2.10. HEARING ON APPLICATION TO INCORPORATE. (a) When
13-11 a complete application to incorporate as defined by rules adopted
13-12 by the commissioner and the finance commission is filed, the
13-13 commissioner shall issue public notice of the application and shall
13-14 give any interested party an opportunity to appear, present
13-15 evidence, and be heard for or against the application. A hearing
13-16 officer designated by the commissioner shall hold the hearing.
13-17 (b) The hearing officer shall file with the commissioner a
13-18 report on the hearing containing findings of fact on each condition
13-19 set out by Section 2.11 of this Act and the evidence on which those
13-20 findings are based.
13-21 Sec. 2.11. APPROVAL OR DENIAL OF APPLICATION TO INCORPORATE.
13-22 (a) The commissioner may not approve an application to incorporate
13-23 unless:
13-24 (1) the prerequisites to incorporation required by
13-25 this chapter have been satisfied;
13-26 (2) the character, responsibility, and general fitness
13-27 of the persons named in the articles of incorporation command
14-1 confidence and warrant belief that the business of the proposed
14-2 savings bank will be honestly and efficiently conducted in
14-3 accordance with the intent and purpose of this Act and that the
14-4 proposed savings bank will have qualified full-time management;
14-5 (3) there is a public need for the proposed savings
14-6 bank and the volume of business in the community in which the
14-7 proposed savings bank will conduct its business indicates that a
14-8 profitable operation is probable; and
14-9 (4) the operation of the proposed savings bank will
14-10 not unduly harm any existing savings bank or state or federal
14-11 savings and loan association.
14-12 (b) If the commissioner makes each finding under Subsection
14-13 (a) of this section, the commissioner shall enter an order
14-14 approving the application and stating the findings required by
14-15 Subsection (a) of this section, issue under official seal a
14-16 certificate of incorporation, and deliver a copy of the approved
14-17 articles of incorporation and bylaws to the incorporators. The
14-18 commissioner shall retain a copy of the articles of incorporation
14-19 and bylaws as a permanent file. On delivery of the certificate to
14-20 the incorporators, the savings bank is a corporate body with
14-21 perpetual existence unless terminated by law and may exercise the
14-22 powers of a savings bank beginning on the date the commissioner
14-23 certifies receipt of satisfactory proof that the required amount of
14-24 capital was received by the savings bank, free of encumbrance.
14-25 (c) If the commissioner is unable to make all findings
14-26 required under Subsection (a) of this section, the commissioner
14-27 shall enter a written order denying the application and stating the
15-1 grounds for the denial. A copy of the order shall be delivered to
15-2 the designated representative of the incorporators by certified
15-3 mail.
15-4 Sec. 2.12. DISSOLUTION OF SAVINGS BANK FOR FAILURE TO BEGIN
15-5 BUSINESS. A savings bank shall begin business not later than the
15-6 first anniversary of the date of the approval of its application.
15-7 The incorporators may request from the commissioner an extension of
15-8 the deadline. If good cause is shown, the commissioner may grant a
15-9 reasonable extension of the deadline. Failure to begin business as
15-10 required by this Act is a ground for rescission of a savings bank's
15-11 charter by the commissioner.
15-12 Sec. 2.13. CORPORATE NAME. The name of a savings bank must
15-13 include the words "State Savings Bank" or the abbreviation "SSB."
15-14 These words or the abbreviation must be preceded by an appropriate
15-15 descriptive word or words approved by the commissioner. The
15-16 commissioner may not approve the incorporation of a savings bank
15-17 having the same name as another financial institution authorized to
15-18 do business in this state under this Act, the Texas Savings and
15-19 Loan Act (Article 852a, Vernon's Texas Civil Statutes), or The
15-20 Texas Banking Code (Article 342-101 et seq., Vernon's Texas Civil
15-21 Statutes) or a name so nearly resembling the name of another
15-22 financial institution as to be calculated to deceive unless the
15-23 savings bank is formed by the reincorporation, reorganization, or
15-24 consolidation of the other financial institution or on the sale of
15-25 the property or franchise of the other savings bank. A person or
15-26 company, either domestic or foreign, other than a state or federal
15-27 savings bank, may not do business under a name or title that
16-1 contains the words "savings bank," that indicates or reasonably
16-2 implies that the business is the character or kind of business
16-3 carried on or transacted by a savings bank, or that is calculated
16-4 to lead any person to believe that its business is that of a
16-5 savings bank. On application by the commissioner or any savings
16-6 bank, a court of competent jurisdiction may issue an injunction to
16-7 restrain a person or company from violating this section.
16-8 Sec. 2.14. ESTABLISHMENT OF ADDITIONAL OFFICES; CHANGE OF
16-9 OFFICE LOCATION OR NAME. Without the prior approval of the
16-10 commissioner given in accordance with the rules of the commissioner
16-11 and the finance commission, a savings bank may not establish an
16-12 office other than the principal office stated in its articles of
16-13 incorporation, move an office from its immediate vicinity, or
16-14 change its name. The commissioner may permit a savings bank to
16-15 establish additional offices within this state or any other state
16-16 or territory of the United States in accordance with the rules of
16-17 the commissioner and the finance commission. If requested, the
16-18 commissioner shall give a person who might be affected by the
16-19 establishment of additional offices or the change of office
16-20 location or name an opportunity to be heard under Section 12.08 of
16-21 this Act.
16-22 CHAPTER 3. CORPORATE CHANGES
16-23 Sec. 3.01. CONVERSION INTO STATE-CHARTERED SAVINGS BANK.
16-24 (a) A financial institution may be converted into a savings bank
16-25 under this Act on a majority vote of the members or stockholders of
16-26 the financial institution cast at an annual meeting or a special
16-27 meeting called to consider the action. Copies of the minutes of
17-1 the proceedings of the meeting of members or stockholders, verified
17-2 by affidavit of the secretary or an assistant secretary, must be
17-3 submitted to the commissioner and mailed to the appropriate banking
17-4 agency within 10 days after the date of the meeting. A sworn copy
17-5 of the proceedings of the meeting is presumptive evidence of the
17-6 holding and action of the meeting after its filing with the
17-7 commissioner. At a meeting to vote on a conversion to a domestic
17-8 savings bank, the members or stockholders shall also vote on the
17-9 directors of the savings bank. The proposed directors shall
17-10 execute two copies of an application for certificate of
17-11 incorporation as provided in Chapter 2 of this Act. Each proposed
17-12 director shall sign and acknowledge the application for certificate
17-13 of incorporation as a subscriber to the savings bank and shall sign
17-14 and acknowledge the proposed bylaws as an incorporator of the
17-15 savings bank.
17-16 (b) The commissioner on receipt of the application and
17-17 verified copy of the minutes shall conduct an examination of the
17-18 financial institution seeking conversion. Following the
17-19 examination, the commissioner shall approve the conversion without
17-20 a hearing if the commissioner determines that the converting
17-21 financial institution is in sound condition and meets all
17-22 standards, conditions, and requirements of Chapter 2 of this Act or
17-23 relevant rules adopted by the commissioner and the finance
17-24 commission. On approval of the conversion, the incorporators shall
17-25 insert a paragraph preceding the testimonium clause in the
17-26 certificate of incorporation stating that the savings bank is
17-27 incorporated by conversion from another financial institution.
18-1 (c) An applicant is entitled to a hearing under the
18-2 administrative procedure act if the commissioner denies an
18-3 application to convert and a written request for a hearing is
18-4 delivered to the commissioner within 10 days after the date of
18-5 denial. A hearing officer designated by the commissioner shall
18-6 hold the hearing. Within 30 days after the date the hearing is
18-7 completed, the commissioner shall enter a final order either
18-8 approving or denying the application. An applicant has the right
18-9 to appeal a final order to a district court of Travis County with
18-10 the commissioner named as defendant. The commissioner is not
18-11 required to file an appeal bond in any cause arising under this
18-12 section. Filing an appeal under this section does not stay an
18-13 order of the commissioner.
18-14 (d) On the conversion of a financial institution into a
18-15 savings bank, the corporate existence of the financial institution
18-16 does not terminate, but the new savings bank is a continuation of
18-17 the entity of the converting financial institution. All property
18-18 of the converting financial institution, including its rights,
18-19 titles, and interests in and to all property of whatever kind,
18-20 whether real, personal, or mixed, and things in action, and every
18-21 right, privilege, interest, and asset of any conceivable value or
18-22 benefit then existing, or pertaining to the financial institution,
18-23 or which would inure to it, immediately by operation of law and
18-24 without any conveyance or transfer and without any further act or
18-25 deed remains and vests in and continues to be the property of the
18-26 savings bank into which the financial institution converted. The
18-27 new savings bank has, holds, and enjoys those properties, rights,
19-1 privileges, interests, and assets in its own right as fully and to
19-2 the same extent as they were possessed, held, and enjoyed by the
19-3 converting financial institution. The new savings bank as of the
19-4 time the conversion takes effect has and succeeds to all the
19-5 rights, obligations, and relations of the converting financial
19-6 institution. The new savings bank shall file a copy of the order
19-7 of conversion in all counties in which the converting financial
19-8 institution owns real property. All pending actions and other
19-9 judicial proceedings to which the financial institution is a party
19-10 are not abated or discontinued by reason of the conversion, but may
19-11 be prosecuted to final judgment, order, or decree in the same
19-12 manner as if the conversion into the new savings bank did not
19-13 occur. The new savings bank may continue any pending action in its
19-14 corporate name as the new savings bank, and any judgment, order, or
19-15 decree may be rendered for or against it that might have been
19-16 rendered for or against the converting financial institution
19-17 previously involved in the judicial proceedings.
19-18 Sec. 3.02. CONVERSION INTO FINANCIAL INSTITUTION. (a) The
19-19 finance commission shall adopt rules establishing the conditions
19-20 under which a savings bank subject to this Act may be converted
19-21 into another financial institution. The rules must ensure that a
19-22 proposed conversion does not cause undue harm to the public
19-23 interest or to any other existing financial institution.
19-24 (b) A conversion by a savings bank may be initiated by the
19-25 adoption of a resolution by a majority vote of the members or
19-26 stockholders of a savings bank entitled to vote at an annual
19-27 meeting or special meeting called to consider the conversion. The
20-1 resolution must declare that the savings bank shall be converted.
20-2 A copy of the minutes of the proceedings of the meeting of the
20-3 stockholders or members, verified by affidavit of the secretary or
20-4 an assistant secretary, must be filed in the office of the
20-5 commissioner within 10 days after the date of the meeting. A sworn
20-6 copy of the proceedings of the meeting is presumptive evidence of
20-7 the holding and action of the meeting after its filing with the
20-8 commissioner.
20-9 (c) Within 10 days after the date of receipt of an
20-10 application to convert and a copy of the minutes, the commissioner
20-11 shall either consent to the conversion by written order or set a
20-12 hearing to consider whether the proposed conversion complies with
20-13 the conditions established by the finance commission. The hearing
20-14 must be held within 25 days after the date of the filing of the
20-15 conversion application unless a later date is agreed to by the
20-16 savings bank and the commissioner. The commissioner or a hearing
20-17 officer designated by the commissioner shall conduct the hearing as
20-18 a contested case in compliance with the administrative procedure
20-19 act, except that a proposal for decision may not be made and a
20-20 final decision or order must be rendered by the commissioner within
20-21 15 days after the date of the close of the hearing. If the
20-22 commissioner denies an application to convert, the administrative
20-23 procedure act governs a motion for rehearing and available judicial
20-24 review.
20-25 (d) If the commissioner consents to the conversion, the
20-26 savings bank, within three months after the date of the
20-27 commissioner's written order, shall consummate the conversion in
21-1 the manner prescribed and authorized by the applicable laws of this
21-2 state or the United States. A copy of the charter issued to the
21-3 new financial institution by the appropriate banking agency or the
21-4 certificate showing the organization of the new financial
21-5 institution, certified by the secretary or assistant secretary of
21-6 the appropriate banking agency, must be filed with the
21-7 commissioner. Failure to file the charter or certificate with the
21-8 commissioner does not affect the validity of the conversion.
21-9 (e) On the grant of a charter by the appropriate banking
21-10 agency, the savings bank receiving the new charter ceases existence
21-11 as a savings bank incorporated under this Act and is not subject to
21-12 the supervision and control of the commissioner under this Act.
21-13 (f) On the conversion of a savings bank into another
21-14 financial institution, the corporate existence of the savings bank
21-15 does not terminate, but the new financial institution is a
21-16 continuation of the entity of the converting savings bank. The new
21-17 financial institution retains all property, rights, and obligations
21-18 of the converting savings bank and is subject to the provisions of
21-19 Subsection (d) of Section 3.01 of this Act as if it were a new
21-20 savings bank under that section to the extent the provisions can be
21-21 made applicable to the new financial institution.
21-22 Sec. 3.03. REORGANIZATION, MERGER, AND CONSOLIDATION.
21-23 (a) Under a plan adopted by the board of directors and approved by
21-24 the commissioner and subject to Chapter 11 of this Act and Article
21-25 XVI, Section 16, of the Texas Constitution, a savings bank may
21-26 reorganize, merge, or consolidate with another financial
21-27 institution if the plan of reorganization, merger, or consolidation
22-1 is approved by a majority of the total votes that the members or
22-2 stockholders are entitled to cast. Approval may be voted at either
22-3 an annual meeting or at a special meeting called to consider the
22-4 action. A stockholder of a capital stock savings bank has the same
22-5 dissenter's rights as a stockholder of a domestic corporation under
22-6 the Texas Business Corporation Act. In all cases the corporate
22-7 continuity of the resulting corporation possesses the same property
22-8 rights and obligations as those of a savings bank that has
22-9 converted in accordance with this Act. The home office of the
22-10 financial institution in the proposed merger possessing the largest
22-11 assets shall be designated as the home office of the surviving
22-12 financial institution unless a different home office is approved by
22-13 the commissioner.
22-14 (b) On receiving a plan of reorganization, merger, or
22-15 consolidation, the commissioner shall give public notice of the
22-16 proposed reorganization, merger, or consolidation in the county or
22-17 counties in which the financial institutions participating in the
22-18 proposed plan have offices and shall give any interested party an
22-19 opportunity to appear, present evidence, and be heard for or
22-20 against the proposed plan. A hearing officer designated by the
22-21 commissioner shall hold the hearing. If a protest is not received
22-22 on or before the date of hearing, the commissioner or hearing
22-23 officer may dispense with the hearing. The provisions of the
22-24 administrative procedure act applicable to a contested case apply
22-25 to the hearing, except that the notice and hearing provisions of
22-26 that Act and of this section do not apply to an application under
22-27 this section if the commissioner has designated the merger to be a
23-1 supervisory merger under the rules adopted by the finance
23-2 commission, and in that event, the application and all information
23-3 relating to the application is confidential and privileged from
23-4 public disclosure.
23-5 (c) The commissioner shall issue an order denying the
23-6 proposed plan if:
23-7 (1) the reorganization, merger, or consolidation would
23-8 substantially lessen competition or be in restraint of trade and
23-9 would result in a monopoly or be in furtherance of a combination or
23-10 conspiracy to monopolize or attempt to monopolize the financial
23-11 industry in any part of the state, unless the anticompetitive
23-12 effects of the proposed reorganization, merger, or consolidation
23-13 are clearly outweighed in the public interest by the probable
23-14 effect of the reorganization, merger, or consolidation in meeting
23-15 the convenience and needs of the community to be served;
23-16 (2) the proposed plan is not in the best interest of
23-17 the financial institutions that are parties to the plan;
23-18 (3) the experience, ability, standing, competence,
23-19 trustworthiness, or integrity of the management of the financial
23-20 institutions proposing the plan is such that the reorganization,
23-21 merger, or consolidation would not be in the best interest of the
23-22 financial institutions that are parties to the plan;
23-23 (4) after reorganization, merger, or consolidation the
23-24 surviving financial institution would not:
23-25 (A) be solvent;
23-26 (B) have adequate capital structure; or
23-27 (C) be in compliance with the laws of this
24-1 state;
24-2 (5) the financial institutions proposing the plan have
24-3 not furnished all of the information pertinent to the application
24-4 reasonably requested by the commissioner; or
24-5 (6) the financial institutions proposing the plan are
24-6 not acting in good faith.
24-7 (d) If the surviving financial institution is an entity
24-8 other than a savings bank, the commissioner may accept the
24-9 procedures and decision of the appropriate banking agency having
24-10 jurisdiction over the surviving financial institution in addition
24-11 to or in lieu of the requirements of this section.
24-12 Sec. 3.04. MERGER OF SUBSIDIARY CORPORATION INTO SAVINGS
24-13 BANK. (a) One or more corporations organized under the law of
24-14 this state may merge into a savings bank that owns all of the
24-15 corporations' capital stock under a plan of merger adopted by
24-16 majority votes of the boards of directors of the savings bank and
24-17 each corporation.
24-18 (b) The original and a copy of the articles of merger must
24-19 be submitted to the secretary of state and the commissioner. The
24-20 articles of merger must be executed by the president or
24-21 vice-president and a secretary or assistant secretary of the
24-22 savings bank and each corporation and must include:
24-23 (1) the names of the savings bank and each
24-24 corporation;
24-25 (2) a copy of the resolutions of the savings bank and
24-26 each corporation adopting the plan of merger;
24-27 (3) a statement of the number of shares of each class
25-1 issued or authorized by each corporation;
25-2 (4) a statement that all capital stock of each
25-3 corporation is owned by the savings bank; and
25-4 (5) a statement incorporating the provisions of
25-5 Subsection (f) of this section.
25-6 (c) For a merger to be effective, it must be approved by
25-7 both the secretary of state and the commissioner. If the secretary
25-8 of state determines that the articles of merger comply with
25-9 applicable law and that all fees and franchise taxes due from the
25-10 corporation have been paid, the secretary of state shall approve
25-11 the articles of merger as provided by Subsection (d) of this
25-12 section. If the commissioner determines that the articles of
25-13 merger comply with applicable law and that the merger is in the
25-14 best interest of the savings bank, the commissioner shall approve
25-15 the articles of merger as provided by Subsection (d) of this
25-16 section.
25-17 (d) On approval of the articles of merger, the commissioner
25-18 and the secretary of state shall each:
25-19 (1) endorse "filed" and the date of the approval on
25-20 the original and a copy of the articles of merger;
25-21 (2) file the original and a copy of the articles of
25-22 merger in the records of the commissioner's office or the secretary
25-23 of state's office, as appropriate; and
25-24 (3) issue and deliver to the savings bank a
25-25 certificate of merger, attaching a copy of the articles of merger.
25-26 (e) A merger takes effect when the latter of the required
25-27 certificates of merger is issued.
26-1 (f) After a merger, the merged corporation ceases to exist
26-2 as a separate entity, and only the savings bank survives. The
26-3 savings bank assumes the rights and obligations of the corporation
26-4 and owns the property of the corporation. The articles of
26-5 incorporation of the savings bank are considered amended to the
26-6 extent that a change is stated in the plan of merger.
26-7 (g) Section 3.03 of this Act does not apply to a merger
26-8 under this section.
26-9 Sec. 3.05. VOLUNTARY LIQUIDATION. At an annual meeting or a
26-10 special meeting called for that purpose, a savings bank by majority
26-11 vote of its members or stockholders may resolve to liquidate and
26-12 dissolve the savings bank. Before a liquidation resolution may
26-13 take effect, a copy of the resolution, certified by the president
26-14 and secretary of the savings bank, together with an itemized
26-15 statement of the savings bank's assets and liabilities sworn to by
26-16 a majority of its board of directors, must be filed with and
26-17 approved by the commissioner. After the commissioner's approval of
26-18 the resolution, the savings bank may not accept any additional
26-19 deposit accounts or additions to deposit accounts or make any
26-20 additional loans, and all its income and receipts in excess of
26-21 actual expenses of liquidation of the savings bank must be applied
26-22 to the discharge of its liabilities. The board of directors of the
26-23 savings bank, under the supervision of the commissioner and in
26-24 accordance with a plan of liquidation approved by the commissioner,
26-25 shall then liquidate the affairs of the savings bank and reduce its
26-26 assets to cash for the purpose of paying, satisfying, and
26-27 discharging all existing liabilities and obligations of the savings
27-1 bank, including the full withdrawal value of all deposit accounts,
27-2 with the balance remaining, if any, to be distributed to the
27-3 members or stockholders of record on the date of adoption by the
27-4 savings bank of the resolution to liquidate, according to their
27-5 liquidation rights. All expenses incurred by the commissioner or
27-6 any of the commissioner's representatives during the course of
27-7 liquidation shall be paid from the assets of the savings bank. On
27-8 completion of liquidation, the board of directors shall file with
27-9 the commissioner a final report and accounting of the liquidation.
27-10 An approval of the report by the commissioner operates as a
27-11 complete and final discharge of the board of directors and each
27-12 member in connection with the liquidation of the savings bank.
27-13 Sec. 3.06. INTERIM CHARTER. (a) For the purposes of this
27-14 section:
27-15 (1) "Reorganizing institution" means a financial
27-16 institution the commissioner considers to be in an unsafe
27-17 condition.
27-18 (2) "Merged institution" means an existing financial
27-19 institution that is merged into an acquiring savings bank.
27-20 (b) Application may be made to the commissioner to
27-21 incorporate a savings bank for the purpose of purchasing the
27-22 assets, assuming the liabilities other than liability to
27-23 stockholders, and continuing the business of a reorganizing
27-24 institution or for the purpose of acquiring by merger a merged
27-25 institution.
27-26 (c) An application must include information required by the
27-27 commissioner or by a rule of the commissioner and the finance
28-1 commission. The capitalization of the savings bank must be in an
28-2 amount determined by the commissioner as sufficient to carry out
28-3 the purposes for which incorporation is requested.
28-4 (d) The administrative procedure act does not apply to an
28-5 application to reorganize or merge a financial institution the
28-6 commissioner considers to be in an unsafe condition. The
28-7 application and all information relating to the application are
28-8 confidential and privileged from public disclosure.
28-9 (e) If the commissioner finds that the business of a
28-10 reorganizing or merged institution can be effectively continued
28-11 under the proposed articles of incorporation and that the proposed
28-12 reorganization or merger is in the best interest of the savers,
28-13 depositors, creditors, and stockholders, if any, of the
28-14 reorganizing institution or the merged institution and the public
28-15 in general, the commissioner shall state those findings in writing
28-16 and issue a certificate of incorporation. On issuance of the
28-17 certificate, the savings bank is a corporate body and a
28-18 continuation of the reorganizing or merged institution, subject to
28-19 all the reorganizing or merged institution's liabilities,
28-20 obligations, duties, and relations. The savings bank may exercise
28-21 the powers of a savings bank under the laws of this state.
28-22 (f) In the case of an acquisition merger, a stockholder of a
28-23 capital stock financial institution has the same dissenter's rights
28-24 that a stockholder in a domestic business corporation has under the
28-25 Texas Business Corporation Act.
28-26 (g) Subsection (c) of Section 3.03 of this Act does not
28-27 apply to an application under this section if the commissioner
29-1 considers the institution to be reorganized or merged to be in an
29-2 unsafe condition, and the commissioner may approve the
29-3 reorganization or merger if the commissioner finds from the
29-4 application and all information submitted with it that the proposed
29-5 reorganization or merger is in the best interest of the savers,
29-6 depositors, creditors, and stockholders, if any, of the
29-7 reorganizing or merged institution and the public.
29-8 Sec. 3.07. CHANGE OF CONTROL. (a) A change in the control
29-9 of a savings bank may not occur unless an application for approval
29-10 of the change of control is filed with and approved by the
29-11 commissioner.
29-12 (b) The application must be on a form prescribed by the
29-13 commissioner and must be made under oath. Except to the extent
29-14 expressly waived by the commissioner, the application must contain:
29-15 (1) the identity, personal and corporate history, as
29-16 applicable, business background and experience, and financial
29-17 condition of each person or company by whom or on whose behalf the
29-18 acquisition is to be made, including a description of the
29-19 managerial resources and future prospects of each acquiring party
29-20 and a description of any material pending legal or administrative
29-21 proceedings to which the applicant is a party;
29-22 (2) the terms and conditions of any proposed
29-23 acquisition and the manner in which the acquisition is to be made;
29-24 (3) the identity, source, and amount of the funds or
29-25 other consideration used or to be used in making the acquisition,
29-26 and if any part of those funds or other consideration was or is to
29-27 be borrowed or otherwise obtained for the purpose of making the
30-1 acquisition, a description of the transaction, the names of the
30-2 parties, and arrangements, agreements, or understandings with those
30-3 parties;
30-4 (4) any plans or proposals that an acquiring party
30-5 making the acquisition may have to liquidate the savings bank, sell
30-6 its assets, merge it with any company, or make any other major
30-7 changes in its business, corporate structure, or management;
30-8 (5) the terms and conditions of any offer, invitation
30-9 agreement, or arrangement under which any voting security of the
30-10 savings bank will be acquired and any contract affecting that
30-11 security or its financing after it is acquired;
30-12 (6) information establishing that the requirements
30-13 under Subsection (d) of this section are satisfied; and
30-14 (7) other information that the commissioner:
30-15 (A) by rule requires; or
30-16 (B) orders to be included in a particular
30-17 application.
30-18 (c) The applicant shall pay a filing fee when the applicant
30-19 files an application. A proposal to acquire voting securities of
30-20 a savings bank subject to this section may be made by an
30-21 individual, two or more individuals acting in concert, any type of
30-22 partnership, corporation, syndicate, trust, or any other
30-23 organization, or any combination of those individuals or entities.
30-24 The information required by the commissioner may be required of
30-25 each member of the group, as directed by the commissioner. Notice
30-26 of the application, its date of filing, and the identity of all
30-27 parties to the application shall be submitted to the Texas Register
31-1 by the commissioner on receipt of the application for publication
31-2 in the next issue of the Texas Register following the date the
31-3 information is received. Information obtained by the commissioner
31-4 under this section, other than published information, is
31-5 confidential and may not be disclosed by the commissioner or any
31-6 officer or employee of the Savings and Loan Department of Texas,
31-7 except nothing in this section prohibits the commissioner from
31-8 disclosing, on request, the identity of the actual or beneficial
31-9 owner of any savings bank chartered under this Act. The
31-10 commissioner, in the commissioner's discretion and if the
31-11 commissioner deems it necessary or proper in the enforcement of the
31-12 laws of any state or the United States and in the best interest of
31-13 the public, may also divulge information to any appropriate banking
31-14 agency or any appropriate governmental department, agency, or
31-15 instrumentality of this state, another state, or the United States.
31-16 (d) The commissioner, subject to Subsections (e) and (f) of
31-17 this section, shall issue an order denying an application unless
31-18 the commissioner determines that the applicant has established
31-19 that:
31-20 (1) the acquisition would not:
31-21 (A) substantially lessen competition;
31-22 (B) in any manner be in restraint of trade that
31-23 would result in a monopoly; and
31-24 (C) be in furtherance of a combination or
31-25 conspiracy to monopolize or attempt to monopolize the financial
31-26 industry in any part of the state;
31-27 (2) the financial condition of any acquiring party
32-1 does not jeopardize the financial stability of the savings bank
32-2 being acquired;
32-3 (3) plans or proposals to liquidate or sell the
32-4 savings bank or its assets, if any, are in the best interest of the
32-5 savings bank;
32-6 (4) the experience, ability, standing, competence,
32-7 trustworthiness, or integrity of the applicant is such that the
32-8 acquisition would be in the best interest of the savings bank; and
32-9 (5) the savings bank would be solvent, have adequate
32-10 capital structure, and be in compliance with the laws of this state
32-11 after the acquisition.
32-12 (e) Notwithstanding Subdivision (1) of Subsection (d) of
32-13 this section, the commissioner is not required to deny an
32-14 application if the commissioner determines that:
32-15 (1) the anticompetitive effects of the proposed
32-16 acquisition are clearly outweighed in the public interest by the
32-17 probable effect of the acquisition in meeting the convenience and
32-18 needs of the community to be served; and
32-19 (2) the proposed acquisition is not in violation of
32-20 any law of this state or the United States.
32-21 (f) The commissioner shall issue an order denying an
32-22 application if the commissioner determines that the applicant:
32-23 (1) has failed to furnish all information pertinent to
32-24 the application reasonably requested by the commissioner; or
32-25 (2) is not acting in good faith.
32-26 (g) When the commissioner determines that an application for
32-27 approval of change of control is complete, the commissioner shall
33-1 issue public notice of the application and shall give any
33-2 interested party an opportunity to appear, present evidence, and be
33-3 heard for or against the application. A hearing officer designated
33-4 by the commissioner shall hold the hearing. A hearing is not
33-5 required if no party provides written notice to the commissioner,
33-6 within 10 days of the date of publication of the notice of
33-7 application, of intention to appear and present evidence at the
33-8 hearing and if the commissioner finds that the application complies
33-9 with all statutory requirements for approval within 30 days after
33-10 the date of the completion of a hearing, the commissioner shall
33-11 enter a final order either approving or denying the application.
33-12 An applicant may appeal a final order to a district court of Travis
33-13 County with the commissioner as defendant. Either party to the
33-14 action may appeal from the district court of Travis County to the
33-15 appellate court having jurisdiction of the cause. The appeal is at
33-16 once returnable to the appellate court having jurisdiction of the
33-17 cause, and that action has precedence in that appellate court over
33-18 all causes of a different character pending in that court. The
33-19 commissioner is not required to give any appeal bond in any cause
33-20 arising under this section. Filing an appeal under this section
33-21 does not stay an order of the commissioner.
33-22 (h) This section does not apply to a conversion,
33-23 reorganization, merger, consolidation, or voluntary liquidation
33-24 under this chapter.
33-25 (i) This section does not excuse or diminish the notice
33-26 provisions required elsewhere in this Act.
33-27 (j) This section may not be construed to prevent the
34-1 commissioner from investigating, commenting on, or seeking to
34-2 enjoin or set aside any transfer of voting securities of a savings
34-3 bank, whether or not the transfer is subject to this section, if
34-4 the commissioner deems the transfer to be against the public
34-5 interest.
34-6 (k) If it appears to the commissioner that a person
34-7 committed or is about to commit a violation of this section or a
34-8 rule or order of the commissioner adopted under this section, the
34-9 attorney general on behalf of the commissioner may apply to a
34-10 district court of Travis County for an order prohibiting the
34-11 violation and for other equitable relief as the case may require.
34-12 (l) A person commits an offense if the person wilfully and
34-13 knowingly makes a materially false or misleading statement to the
34-14 commissioner with respect to the information required by this
34-15 section. An offense under this subsection is a Class A
34-16 misdemeanor. This subsection is cumulative of other remedies
34-17 contained in this section.
34-18 (m) When it appears a change in control may have occurred
34-19 without prior approval, the commissioner may call a hearing to
34-20 determine whether there was in fact a change in control, whether
34-21 unauthorized persons or corporations having no apparent ownership
34-22 interest in the savings bank, acting alone or in concert with
34-23 others, effectively have indirect controlling or dominating
34-24 influence over the management or policies of a savings bank, and
34-25 whether an order requiring divestiture of unapproved or indirect
34-26 control or other appropriate supervisory order should be issued.
34-27 CHAPTER 4. SUPERVISION AND REGULATION
35-1 Sec. 4.01. REGULATORY AUTHORITY. The Savings and Loan
35-2 Department of Texas and the commissioner shall regulate savings
35-3 banks and subsidiary corporations of savings banks operating under
35-4 this Act and shall enforce this Act.
35-5 Sec. 4.02. ANNUAL INDEPENDENT AUDIT REQUIRED. Each savings
35-6 bank shall obtain within 90 days after the date of the close of
35-7 each of its fiscal years an audit by an independent accounting firm
35-8 that is a member of the American Institute of Certified Public
35-9 Accountants or its successor. Copies of the audit together with
35-10 all correspondence reasonably related to the audit shall be
35-11 provided to the commissioner. The commissioner and the finance
35-12 commission may adopt rules as necessary to implement this section.
35-13 Sec. 4.03. INTEREST IN SAVINGS BANKS PROHIBITED.
35-14 (a) Neither a savings bank nor a director, officer, employee, or
35-15 representative of a savings bank may grant or give a loan or
35-16 gratuity, directly or indirectly, to the commissioner, an employee
35-17 of the Savings and Loan Department of Texas, or a spouse of the
35-18 commissioner or an employee.
35-19 (b) The commissioner or an employee of the Savings and Loan
35-20 Department of Texas may not:
35-21 (1) hold an office or position in any domestic savings
35-22 bank or exercise any right to vote on any domestic savings bank
35-23 matter by reason of being a member or stockholder of the savings
35-24 bank;
35-25 (2) hold an interest, directly or indirectly, in any
35-26 domestic savings bank; or
35-27 (3) undertake any indebtedness as a borrower, directly
36-1 or indirectly, or endorser, surety, or guarantor or sell or
36-2 otherwise dispose of any loan or investment to any domestic savings
36-3 bank.
36-4 (c) Notwithstanding Subsection (b) of this section, the
36-5 commissioner or an employee of the Savings and Loan Department of
36-6 Texas may hold a deposit account at a savings bank and receive
36-7 earnings on the account.
36-8 (d) If the commissioner or an employee of the Savings and
36-9 Loan Department of Texas has any prohibited, direct or indirect
36-10 right or interest in a domestic savings bank at the time of the
36-11 individual's appointment or employment, the commissioner or
36-12 employee shall dispose of the right or interest within 60 days
36-13 after the date of appointment or employment. If the commissioner
36-14 or an employee of the Savings and Loan Department of Texas is
36-15 indebted as a borrower, directly or indirectly, or is an endorser,
36-16 surety, or guarantor on a note to a domestic savings bank at the
36-17 time of appointment or employment, the commissioner or employee may
36-18 continue in that capacity until that debt is paid.
36-19 (e) If a loan or other note of the commissioner or an
36-20 employee of the Savings and Loan Department of Texas is acquired by
36-21 a savings bank, the commissioner or employee may continue as a
36-22 borrower, endorser, surety, or guarantor of the loan or note until
36-23 the loan or note is paid.
36-24 Sec. 4.04. RULES. The commissioner and the finance
36-25 commission may adopt rules not inconsistent with this Act necessary
36-26 for the supervision and regulation of savings banks and for the
36-27 protection of the public investing in savings banks, including but
37-1 not limited to rules on:
37-2 (1) the minimum amounts of capital required to
37-3 incorporate and operate as a savings bank, but not less than the
37-4 amounts required of corresponding national banks;
37-5 (2) the fees and procedures for processing, hearing,
37-6 and deciding applications filed with the commissioner or the
37-7 Savings and Loan Department of Texas under this Act;
37-8 (3) the books and records that a savings bank shall
37-9 keep and the location at which the books and records shall be
37-10 maintained;
37-11 (4) the accounting principles and practices that a
37-12 savings bank shall observe;
37-13 (5) the conditions under which records may be copied
37-14 or reproduced for permanent storage before the originals are
37-15 destroyed;
37-16 (6) the form, content, and time of publication of
37-17 statements of condition and the form and content of annual reports
37-18 and other reports that are to be prepared and published or filed by
37-19 a savings bank;
37-20 (7) the manner by which assets, liabilities, and
37-21 transactions in general are to be described on the books of a
37-22 savings bank, so that each entry will be an accurate description of
37-23 the subject matter of the entry;
37-24 (8) the conditions under which the commissioner may
37-25 require assets to be charged off or reserves established by
37-26 transfer from surplus or paid-in capital due to depreciation or
37-27 overstatement of value;
38-1 (9) the powers of a savings bank to make loans and
38-2 investments, containing provisions reasonably necessary to ensure
38-3 that loans made by a savings bank are consistent with sound lending
38-4 practices and that the savings bank's investment will promote the
38-5 purposes of this Act, including provisions governing:
38-6 (A) the type of loans and the conditions under
38-7 which a savings bank may originate, make, or sell loans;
38-8 (B) the conditions under which a savings bank
38-9 may purchase or participate in loans made by other lenders;
38-10 (C) the conditions for the servicing of loans
38-11 for other lenders;
38-12 (D) the conditions under which a savings bank
38-13 may lend money on the security of loans made by others;
38-14 (E) the conditions under which a savings bank
38-15 may pledge loans held by it as collateral for borrowings by the
38-16 savings bank;
38-17 (F) the conditions under which savings banks may
38-18 invest in securities and debt instruments;
38-19 (G) the documentation that a savings bank must
38-20 have in its files at the time of funding or purchase of a loan, an
38-21 investment, or a participation in a loan;
38-22 (H) the form and content of statements of
38-23 expenses and fees and other charges that are paid by borrowers or
38-24 that borrowers are obligated to pay;
38-25 (I) title information that must be maintained;
38-26 (J) borrower's insurance coverage of property
38-27 securing loans;
39-1 (K) appraisal reports;
39-2 (L) financial statements of borrowers;
39-3 (M) the fees or other compensation that may be
39-4 paid to an officer, director, employee, affiliated person,
39-5 consultant, or any third party in connection with the procuring of
39-6 any loan for a savings bank;
39-7 (N) the conditions under which the savings bank
39-8 may advance funds to pay taxes, assessments, insurance premiums,
39-9 and other similar charges for the protection of its interest in
39-10 property securing its loans;
39-11 (O) the terms and conditions under which a
39-12 savings bank may acquire and deal in real property;
39-13 (P) the valuation on a savings bank's books of
39-14 real property held by it;
39-15 (Q) the terms and conditions governing the
39-16 investment by a savings bank in subsidiary corporations, the powers
39-17 that may be exercised by subsidiaries, and the activities that may
39-18 be engaged in by subsidiaries; and
39-19 (R) other matters considered necessary to
39-20 administer properly each type of transaction;
39-21 (10) change of control of a savings bank;
39-22 (11) conduct, management, and operation of savings
39-23 banks;
39-24 (12) withdrawable accounts, bonuses, plans, and
39-25 contracts for savings programs;
39-26 (13) mergers, consolidations, reorganizations,
39-27 conversions, and liquidations;
40-1 (14) establishment of additional offices and change of
40-2 office location or name;
40-3 (15) holding companies, including requirements for
40-4 registration and periodic reporting of a holding company with the
40-5 commissioner and transactions between a holding company, any
40-6 affiliate of a holding company, or a savings bank; and
40-7 (16) limitations on loans to one borrower, but not
40-8 less restrictive limitations than those imposed on a savings
40-9 association under Subsection (u) of Section 5 of the Home Owners'
40-10 Loan Act of 1933 (12 U.S.C. Section 1464(u)).
40-11 Sec. 4.05. PROHIBITED TRANSACTIONS. A savings bank or
40-12 subsidiary corporation of a savings bank may not engage in any
40-13 transaction in violation of a rule adopted under this Act.
40-14 Sec. 4.06. EXAMINATIONS. (a) The commissioner shall
40-15 periodically examine the affairs of each savings bank and its
40-16 subsidiaries and the transactions of any holding company related to
40-17 the holding company's savings bank subsidiaries.
40-18 (b) The commissioner, a deputy commissioner, or an examiner
40-19 or auditor of the commissioner shall have free access to all books
40-20 and records of a savings bank, subsidiary corporation, or holding
40-21 company and to books and records relating to a savings bank's
40-22 business kept by an officer, agent, or employee of a savings bank,
40-23 subsidiary corporation, or holding company. The commissioner,
40-24 deputy commissioner, examiner, or auditor may subpoena witnesses
40-25 and administer oaths or affirmations in examination of the
40-26 directors, officers, agents, or employees of a savings bank,
40-27 subsidiary corporation, or holding company or any other person in
41-1 relation to the savings bank's affairs, transactions, and condition
41-2 and may require and compel by subpoena the production of records,
41-3 books, papers, contracts, or other documents. On a witness's
41-4 failure to obey a subpoena or refusal to appear or answer in
41-5 connection with an examination, the commissioner may apply to a
41-6 district court of Travis County for an order requiring obedience of
41-7 the subpoena or testimony of the witness. The court shall issue
41-8 the order if it finds that good cause exists for issuing the
41-9 subpoena or taking the testimony. Failure to obey a court order
41-10 may be punished as contempt of court.
41-11 (c) An examination may be performed in conjunction with an
41-12 examination by the Federal Deposit Insurance Corporation or any
41-13 other federal depository institutions regulatory agency having
41-14 jurisdiction over a savings bank. The commissioner may accept an
41-15 examination made by an appropriate banking agency in lieu of an
41-16 examination under this section.
41-17 (d) The commissioner, at the savings bank's cost, may
41-18 perform an extra or additional examination or audit or devote
41-19 extraordinary attention to the affairs of a savings bank if the
41-20 commissioner determines the conditions of the savings bank justify
41-21 the examination, audit, or extraordinary attention.
41-22 (e) Promptly on completion of a report, a copy of the
41-23 examination or audit report shall be furnished to the savings bank
41-24 examined or audited.
41-25 Sec. 4.07. FEES. The commissioner and the finance
41-26 commission, acting under the rulemaking power delegated by Article
41-27 5, Chapter II, The Texas Banking Code (Article 342-205, Vernon's
42-1 Texas Civil Statutes), and Section 4.04 of this Act, shall
42-2 establish the amount of the fees to be charged by the commissioner
42-3 for supervision and examination of savings banks, for filing an
42-4 application or other documents, for conducting a hearing, and for
42-5 other services performed by the commissioner and the commission's
42-6 office and the time and manner of payment of the fees. Fees
42-7 collected by the commissioner shall be deposited and used in
42-8 accordance with Section (h), Article 5, Chapter II, The Texas
42-9 Banking Code (Article 342-205, Vernon's Texas Civil Statutes).
42-10 Sec. 4.08. CONFIDENTIALITY. The commissioner and any
42-11 examiner, supervisor, conservator, liquidator, inspector, deputy,
42-12 assistant clerk, or other employee of the Savings and Loan
42-13 Department of Texas appointed or acting under this Act shall keep
42-14 confidential any facts or information regarding a savings bank
42-15 obtained in the course of an examination or by reason of the
42-16 individual's official position, unless the public duty of the
42-17 person requires otherwise. A person who violates this section or
42-18 wilfully makes a false official report on the condition of a
42-19 savings bank shall be removed from office or further employment
42-20 with the Savings and Loan Department of Texas. A report of an
42-21 examination made to the commissioner is confidential and not for
42-22 public record or inspection, except that the commissioner for good
42-23 reason may make the report public. This section does not prevent
42-24 the proper exchange of information relating to savings banks and
42-25 the business of savings banks with the representatives of
42-26 regulatory authorities of other states or to any other department,
42-27 agency, or instrumentality of this state, another state, or the
43-1 United States if the commissioner determines the disclosure
43-2 necessary or proper for the enforcement of the laws of this state,
43-3 another state, or the United States. Unless otherwise provided by
43-4 this Act, this section does not apply to facts, information, or
43-5 reports of investigations obtained or made by the commissioner or
43-6 the commissioner's staff in connection with an application for
43-7 charter or a hearing held by the commissioner under this Act, and
43-8 those facts, information, or reports may be included in the record
43-9 of the appropriate hearing. The commissioner shall report promptly
43-10 to the finance commission when a supervisory order is issued under
43-11 Chapter 5 of this Act. The commissioner shall furnish information
43-12 about a savings bank or person as the finance commission may
43-13 require in executive session, and all information discussed in the
43-14 executive session is confidential.
43-15 Sec. 4.09. ANNUAL STATEMENTS AND REPORTS. Each savings bank
43-16 shall prepare and publish in January of each year in a newspaper of
43-17 general circulation in the county in which the home office of the
43-18 savings bank is located a statement of its financial condition as
43-19 of the last business day of December of the preceding year. The
43-20 statement must be in the form prescribed or approved by the
43-21 commissioner. On or before the last day of January in each year, a
43-22 savings bank shall make a written report to the commissioner, on a
43-23 form to be prescribed and furnished by the commissioner, of its
43-24 affairs and operations, including a complete statement of its
43-25 financial condition with a statement of income and expenses since
43-26 its last annual report under this section. The president,
43-27 vice-president, or secretary of the savings bank shall sign the
44-1 report. Each savings bank shall also make other reports as the
44-2 commissioner may require from time to time in the form and filed on
44-3 the dates as the commissioner prescribes and signed in the same
44-4 manner as the annual report.
44-5 CHAPTER 5. ENFORCEMENT
44-6 Sec. 5.01. GROUNDS FOR SUPERVISORY INTERVENTION. The
44-7 commissioner may intervene in the affairs of a savings bank if:
44-8 (1) the savings bank, a director, officer, agent, or
44-9 other person participating in the conduct of the affairs of the
44-10 savings bank, a subsidiary of the savings bank, or a holding
44-11 company of the savings bank:
44-12 (A) is engaging in, has engaged in, or is about
44-13 to engage in an unsafe and unsound practice in conducting the
44-14 affairs of the savings bank;
44-15 (B) is engaging in, has engaged in, or is about
44-16 to engage in a violation of the articles of incorporation or bylaws
44-17 of the savings bank;
44-18 (C) is engaging in, has engaged in, or is about
44-19 to engage in a violation of any law, rule, or supervisory order
44-20 applicable to the savings bank or a violation of any condition that
44-21 the commissioner or the finance commission has imposed on the
44-22 savings bank by written order, directive, or agreement; or
44-23 (D) has filed materially false or misleading
44-24 information in a filing required under Section 3.07 of this Act;
44-25 (2) a director, officer, employee, agent, or other
44-26 person participating in the conduct of the affairs of the savings
44-27 bank, a subsidiary of the savings bank, or a holding company of the
45-1 savings bank committed or is about to commit:
45-2 (A) a fraudulent or criminal act in the conduct
45-3 of the savings bank, subsidiary, or holding company's affairs that
45-4 may cause the savings bank or subsidiary to become insolvent or be
45-5 in danger of insolvency or another act that threatens immediate or
45-6 irreparable harm to the general public or the savings bank, its
45-7 deposit account holders or creditors, or the subsidiary;
45-8 (B) a breach of fiduciary duty causing or
45-9 probably causing the savings bank or subsidiary to suffer
45-10 substantial financial losses or other damages, or a breach of
45-11 fiduciary duty that would seriously prejudice the interest of the
45-12 holders of deposit accounts or other security issued by the savings
45-13 bank;
45-14 (C) a breach of an order or instruction of the
45-15 commissioner or a conservator or supervisor in charge of the
45-16 savings bank's affairs;
45-17 (D) a refusal to submit to interrogation under
45-18 oath by the commissioner or the commissioner's agent with respect
45-19 to the affairs of the savings bank; or
45-20 (E) a material alteration, concealment, removal,
45-21 or falsification of books or records of the savings bank, a
45-22 subsidiary, or a holding company;
45-23 (3) the savings bank is insolvent, in imminent danger
45-24 of insolvency, or engaged in or is about to engage in making loans
45-25 or investments and the market value of the investments or the value
45-26 of the security for the loans is materially overstated; or
45-27 (4) the savings bank failed to maintain proper books
46-1 and records from which the true financial condition of the savings
46-2 bank or the state of its affairs can be determined or refused to
46-3 authorize and direct a person having possession of the savings
46-4 bank's or a subsidiary's books, papers, records, or accounts to
46-5 permit the commissioner or a duly authorized representative of the
46-6 commissioner to inspect or examine them.
46-7 Sec. 5.02. TYPES OF SUPERVISORY ORDER; SERVICE;
46-8 CONFIDENTIALITY. (a) If the commissioner has reasonable cause to
46-9 believe that one or more grounds for intervention under Section
46-10 5.01 of this Act exist or are imminent, the commissioner may issue
46-11 without notice and hearing one or more of the following types of
46-12 temporary supervisory orders as necessary to correct and eliminate
46-13 the grounds for supervisory action:
46-14 (1) an order to cease and desist from continuing a
46-15 particular action, an order to take affirmative action, or both;
46-16 (2) a removal or prohibition order suspending or
46-17 prohibiting a director, officer, employee, agent, or any other
46-18 person participating in the affairs of the savings bank from
46-19 further participation in the conduct of the affairs of the savings
46-20 bank or another savings bank subject to this Act;
46-21 (3) an order requiring divestiture of control of a
46-22 savings bank obtained under Section 3.07 of this Act;
46-23 (4) an order requiring the forfeiture and payment of a
46-24 civil penalty in an amount of not more than $25,000 by a director,
46-25 officer, employee, agent, or other person participating in the
46-26 affairs of the savings bank or another savings bank subject to this
46-27 Act; or
47-1 (5) an order placing the affairs of the savings bank
47-2 under the control of a conservator designated in the order, who may
47-3 take possession and control of the books, records, assets,
47-4 liabilities, and business of the savings bank and manage it under
47-5 the direction of the commissioner.
47-6 (b) A temporary supervisory order issued by the commissioner
47-7 takes effect when issued and must reasonably detail the facts
47-8 constituting the grounds for the order.
47-9 (c) Service of a temporary supervisory order may be made by
47-10 certified or registered mail or by personal delivery by an agent of
47-11 the commissioner. Service on a savings bank is completed on
47-12 receipt of the order by an officer or director of the savings bank.
47-13 (d) A temporary or final supervisory order and all notices,
47-14 correspondence, or other records relating to the order are
47-15 confidential and may not be revealed to the public, except for good
47-16 reason as determined by the commissioner, in a hearing or judicial
47-17 proceeding under Section 5.03 or 5.04 of this Act, or to assert a
47-18 defense under Subsection (g) of Section 5.05 of this Act. However,
47-19 the commissioner may disclose the information to a department,
47-20 agency, or instrumentality of this state, another state, or the
47-21 United States if the commissioner determines that the disclosure is
47-22 necessary or proper for the enforcement of the laws of this state,
47-23 another state, or the United States.
47-24 Sec. 5.03. HEARING ON TEMPORARY SUPERVISORY ORDER. (a) A
47-25 temporary supervisory order becomes final and unappealable on the
47-26 15th day after the date on which it is issued unless the savings
47-27 bank or a party affected by the order requests before that date a
48-1 hearing before the commissioner on the issue of whether the order
48-2 should be vacated, made permanent, or modified. The commissioner
48-3 shall set the matter for hearing at the offices of the Savings and
48-4 Loan Department of Texas. The date for the hearing may not be
48-5 earlier than the 10th day or later than the 30th day after the date
48-6 of the request.
48-7 (b) The hearing shall be conducted as a contested case under
48-8 the administrative procedure act. The commissioner may enter a
48-9 final order that vacates the temporary order or makes it permanent
48-10 in its original or a modified form consistent with the facts found
48-11 by the commissioner. A final order shall be entered by the
48-12 commissioner not later than the 15th day after the date of the
48-13 completion of the hearing.
48-14 (c) A temporary order may not be stayed pending a hearing
48-15 unless the commissioner orders a stay, and a final order may not be
48-16 stayed pending judicial review unless the reviewing court orders a
48-17 stay for good cause.
48-18 Sec. 5.04. ENFORCEMENT OF SUPERVISORY ORDER. (a) If the
48-19 savings bank or any person designated in an order violates or is
48-20 about to violate the order, the commissioner may apply for
48-21 injunctive relief in a district court in Travis County. A bond is
48-22 not required of the commissioner with respect to injunctive relief
48-23 granted.
48-24 (b) If a savings bank or a person designated in a final
48-25 order fails to comply with or otherwise violates the order, the
48-26 commissioner may, after giving notice, assess a civil penalty
48-27 against the savings bank, the designated person, or both in an
49-1 amount not to exceed $1,000 each for each day of the violation.
49-2 The savings bank may not reimburse or indemnify a person for all or
49-3 any part of the civil penalty. In addition to any other remedy
49-4 provided by law, the commissioner may institute a suit for
49-5 injunctive relief and for collection of the civil penalty in a
49-6 district court in Travis County. A bond is not required of the
49-7 commissioner with respect to injunctive relief granted.
49-8 Sec. 5.05. PLACING SAVINGS BANK UNDER CONSERVATOR.
49-9 (a) Before or at a hearing on an order placing a savings bank
49-10 under a conservator, the board of directors of the savings bank may
49-11 present to the commissioner a plan to continue the operation of the
49-12 savings bank in a manner that will correct or eliminate the grounds
49-13 for the order. If the commissioner approves the plan or a
49-14 modification of the plan, the commissioner shall vacate the order
49-15 and place the savings bank under conservatorship conditioned on the
49-16 approved plan's implementation and diligent prosecution.
49-17 (b) If no plan for continuing operations of the savings bank
49-18 is approved by the commissioner, the conservator shall continue to
49-19 manage the affairs of the savings bank under the direction and
49-20 supervision of the commissioner unless the order is otherwise
49-21 modified or vacated by subsequent order of the commissioner or as a
49-22 result of judicial review.
49-23 (c) The conservator and any deputy or assistant conservator
49-24 appointed by the commissioner, on behalf of and under the
49-25 supervision and direction of the commissioner, shall take charge of
49-26 the books, records, property, assets, liabilities, and business of
49-27 the savings bank and shall conduct the business and affairs of the
50-1 savings bank. The conservator shall remove the causes and
50-2 conditions that necessitated the conservatorship. The conservator
50-3 shall make reports to the commissioner as the commissioner
50-4 requires. The conservator shall preserve, protect, and recover the
50-5 assets or property of the savings bank, including claims or causes
50-6 of action belonging to or that may be asserted by the savings bank.
50-7 The conservator may deal with that property in the capacity of
50-8 conservator and may file, prosecute, or defend against a suit by or
50-9 against the savings bank if the conservator considers that action
50-10 necessary to protect the interested party or property affected by
50-11 the suit.
50-12 (d) During the conservatorship, an officer, director,
50-13 shareholder, employee, agent, or other person participating in the
50-14 conduct of the affairs of the savings bank shall act according to
50-15 the instructions of the conservator and shall exercise only the
50-16 authority that the conservator expressly grants.
50-17 (e) The commissioner shall determine the cost incident to
50-18 the conservatorship, and that cost shall be paid out of the assets
50-19 of the savings bank as the commissioner directs.
50-20 (f) Suit filed against a savings bank or its conservator
50-21 while a conservatorship order is in effect must be brought in a
50-22 court of competent jurisdiction in Travis County. The conservator
50-23 may file suit in a court of competent jurisdiction in Travis County
50-24 against any person for the purpose of preserving, protecting, or
50-25 recovering assets or property of the savings bank, including a
50-26 claim or cause of action belonging to or that may be asserted by
50-27 the savings bank.
51-1 (g) During the period of conservatorship or supervisory
51-2 control under Section 5.06 of this Act, a savings bank's promise or
51-3 agreement to make a loan of money that is not otherwise
51-4 unenforceable under Chapter 26, Business & Commerce Code, and is
51-5 made before the order imposing conservatorship or supervisory
51-6 control is not enforceable against the savings bank unless the
51-7 promise or agreement or a memorandum of the promise or agreement
51-8 is:
51-9 (1) in writing setting forth the material terms of the
51-10 loan and its repayment;
51-11 (2) signed by a duly authorized officer or employee of
51-12 the savings bank and the person to whom the promise or agreement
51-13 was made; and
51-14 (3) approved by the board of directors of the savings
51-15 bank.
51-16 (h) The conservator shall serve for the period necessary to
51-17 accomplish the purposes of the conservatorship. If the savings
51-18 bank is rehabilitated to the satisfaction of the commissioner, it
51-19 shall be returned to the management of the board of directors under
51-20 terms that are reasonable and necessary to prevent recurrence of
51-21 the conditions creating the need for conservatorship.
51-22 (i) During a conservatorship, the commissioner may impose
51-23 limitations on withdrawals of deposit accounts from a savings bank
51-24 on a determination that the interest of deposit account holders and
51-25 creditors of the savings bank are best protected by the
51-26 limitations. The commissioner shall issue an order detailing the
51-27 limitations imposed and containing a statement in reasonable detail
52-1 of the facts constituting the grounds for the imposition of the
52-2 limitations. The limiting order becomes effective on the service
52-3 of the order on the conservator. Service may be made by certified
52-4 or registered mail or by personal delivery by an agent of the
52-5 commissioner and is complete on receipt by the conservator.
52-6 Immediately on receipt of the limiting order, a conservator shall
52-7 place a copy of the order at the main entrance of the savings bank
52-8 and deposit account withdrawals in violation of the order may not
52-9 be permitted after its posting. The limiting order becomes final
52-10 and unappealable on the 15th day after the date on which it is
52-11 posted in accordance with this section unless at least 20 percent
52-12 of the total number of deposit account holders affected by the
52-13 order request before that date a hearing before the commissioner on
52-14 the issue of whether the order should be vacated, made permanent,
52-15 or modified. The commissioner shall set the matter for hearing in
52-16 the offices of the Savings and Loan Department of Texas. The date
52-17 for the hearing may not be earlier than the 10th day or later than
52-18 the 30th day after the date of the request. The hearing shall be
52-19 conducted as a contested case under the administrative procedure
52-20 act. The commissioner may issue a final order that vacates the
52-21 limiting order or makes it permanent in its original or modified
52-22 form consistent with the facts found by the commissioner. A
52-23 limiting order may not be stayed pending a hearing unless the
52-24 commissioner orders a stay, and a final order may not be stayed
52-25 pending judicial review unless the reviewing court orders a stay
52-26 for good cause.
52-27 Sec. 5.06. VOLUNTARY SUBMISSION TO SUPERVISORY CONTROL. The
53-1 board of directors of a savings bank may consent to the
53-2 commissioner's placing the savings bank under supervisory control.
53-3 The commissioner may appoint a supervisor and one or more deputy
53-4 supervisors who have the powers of a conservator under Section 5.05
53-5 of this Act and other powers established by agreement between the
53-6 commissioner and the board of directors. The supervisory control
53-7 continues until the problems giving rise to the supervisory control
53-8 are corrected. The costs of the supervisory control shall be fixed
53-9 by the commissioner and paid by the savings bank.
53-10 Sec. 5.07. LIQUIDATION BY COMMISSIONER'S ORDER. (a) If it
53-11 appears doubtful to the commissioner that a savings bank subject to
53-12 a conservatorship order can be successfully rehabilitated, the
53-13 commissioner may close the savings bank under Section 5.09 of this
53-14 Act or may set a hearing to determine whether the savings bank
53-15 should be liquidated. Notice of any hearing shall be given not
53-16 later than the 10th day before the hearing date by certified mail
53-17 to the officers and directors of the savings bank and by
53-18 publication in a newspaper of general circulation in the county in
53-19 which the principal office of the savings bank is located.
53-20 (b) If the commissioner closes a savings bank under Section
53-21 5.09 of this Act or finds after a hearing under Subsection (a) of
53-22 this section that the savings bank cannot be rehabilitated and that
53-23 it is in the public interest and the best interest of the deposit
53-24 account holders and creditors of the savings bank that it be closed
53-25 and its assets liquidated, the commissioner may issue an order of
53-26 liquidation appointing a liquidating agent and dissolving the
53-27 savings bank. The corporate existence of the savings bank
54-1 continues for three years after the date the order of liquidation
54-2 is issued for the purpose of adjusting and settling claims not
54-3 disposed of during the liquidation. If necessary, the commissioner
54-4 may appoint a special liquidating agent for that purpose at the
54-5 completion of the liquidation.
54-6 (c) Under the supervision of the commissioner, the
54-7 liquidating agent shall:
54-8 (1) receive and take possession of the books, records,
54-9 assets, and property of the savings bank in liquidation;
54-10 (2) sell, enforce collection of, and liquidate the
54-11 assets and property of the savings bank in liquidation;
54-12 (3) sue in the name of the liquidating agent or in the
54-13 name of the savings bank in liquidation;
54-14 (4) defend actions brought against the liquidating
54-15 agent or the savings bank in liquidation;
54-16 (5) receive, examine, and pass on claims against the
54-17 savings bank in liquidation, including claims of depositors;
54-18 (6) make distribution and payment to creditors,
54-19 deposit account holders, stockholders, and members as their
54-20 interests may appear;
54-21 (7) execute documents and papers and take other
54-22 actions that the liquidating agent considers necessary or desirable
54-23 to the liquidation; and
54-24 (8) give notice to creditors and deposit account
54-25 holders directing them to present and prove their claims, by
54-26 publishing the notice once a week for three successive weeks in a
54-27 newspaper of general circulation in each county in which the
55-1 savings bank in liquidation maintained an office or branch for the
55-2 transaction of business on the date it ceased unrestricted
55-3 operations.
55-4 (d) The notice under Subdivision (8) of Subsection (c) of
55-5 this section must require all depositors and creditors to file
55-6 written proofs of claim at the address designated in the notice.
55-7 Within 30 days after the date of the first publication of the
55-8 notice, the liquidating agent shall mail a similar notice to each
55-9 depositor and creditor shown on the books of the savings bank at
55-10 the address reflected on the savings bank's books.
55-11 (e) Under supervision of the commissioner, the liquidating
55-12 agent shall from time to time make a ratable liquidation dividend
55-13 on claims that have been proved to the satisfaction of the
55-14 liquidating agent or adjusted in a court of competent jurisdiction
55-15 and, after the assets of the savings bank have been liquidated,
55-16 shall make further liquidation dividends on claims previously
55-17 proved or adjusted. For this purpose the statement of an amount
55-18 due to a claimant shown on the books and records of the savings
55-19 bank may be accepted instead of a formal proof of claim on behalf
55-20 of the claimant. A final dividend may not be paid before the
55-21 beginning of the 19th month after the date of the first publication
55-22 of notice as prescribed in this section. All claims filed after
55-23 the declaration and payment of any dividend before the expiration
55-24 of the 18 months qualify, if approved, to participate in dividends
55-25 previously paid before any additional dividend is declared. Claims
55-26 that are presented after the 18th month do not qualify to
55-27 participate in any dividend or distribution of assets until after
56-1 full payment of all approved claims presented during the period.
56-2 (f) A deposit account holder, creditor, or other person
56-3 asserting any claim of any character against a savings bank in the
56-4 process of liquidation under this section must present, before the
56-5 beginning of the 19th month after the date of the first publication
56-6 of notice provided in this section, the claim in writing to the
56-7 commissioner or the liquidating agent, at the address that has been
56-8 designated in the notice provided in this section. A claim must
56-9 state the facts supporting the claim, set out any right of priority
56-10 of payment or other specific rights asserted by the claimant, and
56-11 be signed and sworn to by the claimant.
56-12 (g) Within three months after the date of the receipt of a
56-13 claim against a savings bank in liquidation, unless the time is
56-14 extended by written agreement with the claimant, the liquidating
56-15 agent shall approve or reject the claim in whole or in part. If
56-16 the liquidating agent approves a claim or any part of the claim,
56-17 the liquidating agent shall classify the claim and enter it and the
56-18 action on the claim in a claim register. If the liquidating agent
56-19 rejects a claim in whole or in part or denies any right of priority
56-20 of payment or any other right asserted by the claimant, the
56-21 liquidating agent shall notify the claimant of the action by
56-22 registered mail.
56-23 (h) Within three months after the date of mailing of notice
56-24 by the liquidating agent as provided by the preceding subsection, a
56-25 claimant may sue on the claim in a district court of Travis County.
56-26 If the claimant does not sue, the action of the liquidating agent
56-27 is final on the expiration of that period. The trial of a suit is
57-1 de novo as if originally filed in that court and is subject to the
57-2 rules of procedure and appeal applicable to civil cases.
57-3 (i) On liquidation of a savings bank, claims for payment
57-4 have the same priority that similar claims would have on the
57-5 liquidation of a federal savings bank under federal law.
57-6 (j) At any time after the expiration of 18 months after the
57-7 date of the first publication notice specified in this section and
57-8 after the liquidating agent liquidates all assets of the savings
57-9 bank capable of liquidation or realizes sufficient funds from the
57-10 liquidation to pay the costs of liquidation and all claims filed
57-11 and established and to leave funds available for the payment of all
57-12 nonclaiming deposit account holders and creditors, the liquidating
57-13 agent shall declare and pay a final dividend. The liquidating
57-14 agent shall deposit all unclaimed dividends and all funds available
57-15 for nonclaiming deposit account holders and creditors in one or
57-16 more state-chartered financial institutions for the benefit of the
57-17 deposit account holders and creditors entitled to those dividends
57-18 or funds. The liquidating agent shall pay a deposit account holder
57-19 or creditor, on demand, any amount held for the benefit of the
57-20 deposit account holder or creditor. If the liquidating agent is in
57-21 doubt as to the identity of a claimant or a claimant's right to the
57-22 amount held, the liquidating agent shall reject the claim and
57-23 notify the claimant by registered mail. Within three months after
57-24 the date of the mailing of the notice, the claimant may bring suit
57-25 against the liquidating agent in a district court of Travis County
57-26 to recover the funds. The suit is in the nature of an action in
57-27 rem and governed by the rules of procedure and appeal applicable to
58-1 civil cases. The judgment in the suit is binding on all persons
58-2 interested in the dividends or funds. If a suit is not filed
58-3 within the time prescribed, the liquidating agent's rejection of
58-4 the claim is final. After paying a final dividend and performing
58-5 each act necessary or proper for the benefit of the deposit account
58-6 holders and creditors in connection with the liquidation of the
58-7 assets of a savings bank, the liquidating agent shall file with the
58-8 commissioner a final report of the liquidation.
58-9 (k) The commissioner shall determine the cost incident to
58-10 the liquidation, and that cost shall be paid out of the assets of
58-11 the savings bank as the commissioner directs.
58-12 (l) The provisions of the administrative procedure act
58-13 relating to a contested hearing apply to any hearing called by the
58-14 commissioner under this section.
58-15 Sec. 5.08. COMPLETION OF LIQUIDATION. The commissioner may
58-16 remove a liquidating agent and appoint another agent with or
58-17 without cause. If a liquidating agent resigns, dies, or becomes
58-18 unable to serve for any reason, the commissioner shall promptly
58-19 appoint another agent. When a liquidation is complete, the
58-20 liquidating agent shall certify that fact to the commissioner, and
58-21 the commissioner shall issue an order closing the liquidation.
58-22 After a closing order, the commissioner and the liquidating agent
58-23 are released and discharged from any further duty, obligation, or
58-24 liability in connection with the administration of the affairs of
58-25 the savings bank, and a person does not have and may not maintain
58-26 any claim, suit, or action against the commissioner or the
58-27 liquidating agent, individually or in their official capacities,
59-1 except a suit to recover unclaimed deposits as provided in this
59-2 section.
59-3 Sec. 5.09. CLOSING OF SAVINGS BANK BY COMMISSIONER OR
59-4 DIRECTORS. (a) Notwithstanding any other provision of this
59-5 chapter, the commissioner or the commissioner's authorized
59-6 representative may close a savings bank if, after an examination,
59-7 the commissioner determines that:
59-8 (1) the interests of the deposit account holders and
59-9 creditors of the savings bank are jeopardized because of the
59-10 savings bank's insolvency or imminent insolvency or a substantial
59-11 dissipation of assets or earnings of the savings bank due to a
59-12 violation of law or rules or an unsafe or unsound practice; and
59-13 (2) closing the savings bank and liquidating its
59-14 assets is in the best interest of the deposit account holders and
59-15 creditors.
59-16 (b) On closing a savings bank under this section, the
59-17 commissioner may liquidate the savings bank as provided by this
59-18 chapter or may tender the assets and all affairs of the savings
59-19 bank to the Federal Deposit Insurance Corporation and appoint the
59-20 Federal Deposit Insurance Corporation as receiver or liquidating
59-21 agent to act in accordance with this chapter or federal law. If
59-22 the Federal Deposit Insurance Corporation accepts the tender and
59-23 appointment, it may act without bond or other security as to the
59-24 appointment and, without court supervision, may exercise all
59-25 rights, powers, and privileges provided by the laws of this state
59-26 to a receiver or liquidating agent, as applicable, and any
59-27 applicable right, power, or privilege available under federal law.
60-1 On acceptance of the appointment, the possession of and title to
60-2 all the assets, business, and property of the savings bank pass to
60-3 the Federal Deposit Insurance Corporation without the execution of
60-4 instruments of conveyance, assignment, transfer, or endorsement.
60-5 If the Federal Deposit Insurance Corporation pays the insured
60-6 deposit liabilities of a savings bank that was closed or is being
60-7 liquidated under this chapter, whether or not the Federal Deposit
60-8 Insurance Corporation has become receiver or liquidating agent, the
60-9 Federal Deposit Insurance Corporation is subrogated, to the extent
60-10 of the payment, to all rights that the owners of the deposit
60-11 accounts have against the savings bank.
60-12 (c) Not later than the second day, excluding legal holidays,
60-13 after the day that the commissioner closes a savings bank under
60-14 this section, the savings bank, acting by resolution of its board
60-15 of directors, may sue in a district court of Travis County to
60-16 prohibit the commissioner from taking further action under this
60-17 section. The court may restrain the commissioner from taking
60-18 further action until a hearing on the merits. If the court
60-19 restrains the commissioner, it shall instruct the commissioner to
60-20 hold the assets and affairs of the savings bank in the
60-21 commissioner's possession until disposition of the suit. On
60-22 receipt of that instruction, the commissioner shall refrain from
60-23 taking further action, except the commissioner, with the approval
60-24 of the district judge, may take action as necessary or proper to
60-25 prevent loss or depreciation in the value of the assets. The court
60-26 as soon as possible shall hear the suit on its merits and shall
60-27 enter a judgment prohibiting or refusing to prohibit the
61-1 commissioner from proceeding under this section. This judgment may
61-2 be appealed as in other civil cases, but the commissioner,
61-3 regardless of the judgment entered by the trial court or any
61-4 supersedeas bond filed, retains possession of the assets of the
61-5 savings bank until final disposition on appeal.
61-6 (d) A board of directors may, by resolution and with the
61-7 consent of the commissioner, close a savings bank and tender its
61-8 assets and all its affairs to the commissioner for disposition as
61-9 authorized by this section.
61-10 CHAPTER 6. CORPORATE ADMINISTRATION
61-11 Sec. 6.01. BOARD OF DIRECTORS. (a) The business of a
61-12 savings bank shall be directed by a board of directors of not fewer
61-13 than five or more than 21 members elected by majority vote at each
61-14 annual meeting of the members or stockholders. A savings bank
61-15 authorized to issue capital stock may provide in its bylaws that
61-16 all or at least a majority of its board of directors must be
61-17 stockholders.
61-18 (b) The number of directors may be changed, within the
61-19 prescribed limits, by resolution adopted at any annual meeting of
61-20 members or stockholders or any special meeting called for that
61-21 purpose.
61-22 Sec. 6.02. ORGANIZATIONAL MEETINGS. Within 30 days after
61-23 the date on which the corporate existence of a savings bank begins,
61-24 the initial board of directors shall hold an organizational meeting
61-25 and, under the provisions of this Act and the bylaws, shall elect
61-26 officers and take other action as appropriate in connection with
61-27 beginning the transaction of business by the savings bank. The
62-1 commissioner on good cause shown may extend by order the time
62-2 within which the organizational meeting is to be held.
62-3 Sec. 6.03. QUALIFICATION OF DIRECTORS; VACANCIES. (a) A
62-4 person may not be a member of the board of directors of a savings
62-5 bank if the person:
62-6 (1) is not a citizen of the United States;
62-7 (2) is not at least 18 years of age;
62-8 (3) has been adjudicated bankrupt or convicted of a
62-9 criminal offense involving dishonesty or breach of trust, unless
62-10 given prior written approval to be a member of the board by the
62-11 commissioner;
62-12 (4) has a final judgment entered against the person
62-13 for a sum of money that has remained unsatisfied or unsecured for
62-14 more than six months after the date of the judgment's entry, unless
62-15 the commissioner gives the person prior written approval to be a
62-16 member of the board or unless the judgment was satisfied of record
62-17 more than one year before the date of the election; or
62-18 (5) is a director, officer, or employee of another
62-19 savings bank, unless given the prior written approval to be a
62-20 member of the board by the commissioner.
62-21 (b) The bylaws of a savings bank may prescribe other
62-22 qualifications for directors.
62-23 (c) A vacancy on the board of directors is filled by a
62-24 majority vote of the remaining directors, though less than a
62-25 quorum, by electing a director to serve until the next annual
62-26 meeting of members or stockholders. If a vacancy on the board of
62-27 directors occurs from any cause, the remaining directors may
63-1 continue direction of the savings bank until the vacancy is filled.
63-2 Sec. 6.04. OFFICERS. The officers of a savings bank consist
63-3 of a president, one or more vice-presidents, a secretary, and other
63-4 officers as prescribed by the bylaws. The officers are elected by
63-5 a majority vote of the board of directors. The managing officer
63-6 must be a member of the board of directors.
63-7 Sec. 6.05. INDEMNITY BONDS OF DIRECTORS, OFFICERS, AND
63-8 EMPLOYEES. Each savings bank shall maintain on file with the
63-9 commissioner an effective blanket indemnity bond with an adequate
63-10 corporate surety protecting the savings bank from loss by or
63-11 through any fraud, dishonesty, forgery or alteration, larceny,
63-12 theft, embezzlement, robbery, burglary, holdup, wrongful or
63-13 unlawful abstraction, misappropriation, or any other dishonest or
63-14 criminal action or omission by any officer or employee of the
63-15 savings bank or any director of the savings bank when performing
63-16 the duty of an officer or employee. A savings bank that employs
63-17 collection agents that for any reason are not covered by a bond as
63-18 required shall provide for the bonding of each collection agent in
63-19 an amount equal to at least twice the average monthly collection of
63-20 the agent. The agents shall make settlement with the savings bank
63-21 at least monthly. Bond coverage is not required of an agent that
63-22 is a financial institution insured by the Federal Deposit Insurance
63-23 Corporation. The amounts and form of bonds and the sufficiency of
63-24 the surety on the bonds must be approved by the board of directors
63-25 and the commissioner. Each bond must provide that a cancellation
63-26 of the bond either by the surety or the insured does not become
63-27 effective until the 30th day after the date on which written notice
64-1 is given to the commissioner unless the commissioner gives prior
64-2 approval to an earlier date.
64-3 Sec. 6.06. MEETINGS OF STOCKHOLDERS OR MEMBERS; VOTING
64-4 RIGHTS; PROXIES. The members or stockholders of a savings bank
64-5 shall hold an annual meeting at the time fixed in the bylaws of the
64-6 savings bank. Special meetings may be called as provided in the
64-7 bylaws. The voting rights of a person who is entitled to vote at
64-8 an annual or special meeting of the savings bank shall be the same
64-9 as those of a shareholder in a domestic business corporation under
64-10 the Texas Business Corporation Act. The bylaws must provide the
64-11 manner of computing the number of votes that a member or
64-12 stockholder is entitled to cast. For a capital stock savings bank,
64-13 the bylaws may provide that only holders of capital stock may vote.
64-14 Voting may be in person or by proxy. A proxy must be in writing
64-15 and signed by the member or stockholder or a duly authorized
64-16 attorney in fact and be filed with the secretary. Unless otherwise
64-17 specified in the proxy, a proxy continues in force from year to
64-18 year until a revocation in writing is delivered to the secretary or
64-19 until superseded by a subsequent proxy. The bylaws of a savings
64-20 bank must specify the quorum requirements and other voting
64-21 requirements for conducting business at membership meetings.
64-22 Sec. 6.07. ACCESS TO BOOKS AND RECORDS. (a) Each borrower
64-23 or deposit account holder of a savings bank has the right to
64-24 inspect the books and records of the savings bank that relate to
64-25 the borrower's or deposit account holder's loan or account. Except
64-26 for the borrower's or deposit account holder's right of inspection,
64-27 the right of inspection and examination of the books and records of
65-1 a savings bank is limited to the commissioner and the
65-2 commissioner's duly authorized representatives under Section 4.06
65-3 of this Act, persons authorized to act for the savings bank, and an
65-4 authorized agent of a governmental agency that has insured the
65-5 deposit accounts of the savings bank. In a judicial proceeding,
65-6 the court may order the production of books, records, and files;
65-7 however, the books, records, and files of a savings bank are not
65-8 admissible as evidence in any proceeding concerning the validity of
65-9 a tax assessment or the collection of delinquent taxes, penalties,
65-10 and interest, unless a stockholder or deposit account holder is a
65-11 proper party to the proceeding, in which event the books, files,
65-12 and records pertaining to the account of the party are admissible,
65-13 or unless the savings bank is a proper party to the proceeding, in
65-14 which event any book, file, or record material to the proceeding is
65-15 admissible. A person is not entitled to a partial or complete list
65-16 of the names of stockholders of a stock savings bank or the members
65-17 of a mutual savings bank unless expressly permitted by the board of
65-18 directors.
65-19 (b) Each stockholder of a capital stock savings bank has the
65-20 same rights to examine the relevant books and records of a savings
65-21 bank as a shareholder of a business corporation under the Texas
65-22 Business Corporation Act.
65-23 Sec. 6.08. AMENDMENT OF ARTICLES OF INCORPORATION OR BYLAWS.
65-24 A savings bank, by resolution adopted by a majority vote of those
65-25 entitled to vote attending an annual meeting or a special meeting
65-26 called for that purpose, may amend its articles of incorporation or
65-27 bylaws in a manner not inconsistent with this Act. An amendment
66-1 may not take effect before it is filed with and approved by the
66-2 commissioner.
66-3 Sec. 6.09. CONFLICTS OF INTEREST. (a) Except as the
66-4 commissioner and the finance commission may provide by rule, a
66-5 director or officer may not:
66-6 (1) receive directly or indirectly any commission on
66-7 or benefit from a loan made by the savings bank;
66-8 (2) pay for services rendered to a borrower from the
66-9 savings bank in connection with a loan;
66-10 (3) direct or require a borrower on a mortgage to
66-11 negotiate an insurance policy on the mortgage property through any
66-12 particular insurance company, attempt to divert to a particular
66-13 insurance broker the business of borrowers from the savings bank,
66-14 or refuse to accept an insurance policy on the mortgaged property
66-15 because it was not negotiated through a particular insurance
66-16 broker;
66-17 (4) become an endorser, surety, or guarantor or in any
66-18 manner an obligor for a loan made by the savings bank;
66-19 (5) borrow or use, individually or as agent or partner
66-20 of another, directly or indirectly, funds of the savings bank;
66-21 (6) become the owner of real property on which the
66-22 savings bank holds a mortgage unless the loan is fully secured by:
66-23 (A) a first-lien mortgage on property that is to
66-24 be occupied as the director's or officer's primary residence and
66-25 that is specifically approved in writing by the board of directors;
66-26 or
66-27 (B) a deposit maintained by the officer or
67-1 director with the savings bank; or
67-2 (7) engage in any other activity prohibited by a rule
67-3 of the commissioner and the finance commission.
67-4 (b) Except as the commissioner and the finance commission
67-5 may provide by rule, a savings bank may not make a loan to a
67-6 corporation in which a director or officer holds stock, options, or
67-7 warrants to purchase stock in the amount of five percent or more of
67-8 the outstanding stock or in which the director and the other
67-9 directors of the savings bank hold in the aggregate stock, options,
67-10 or warrants to purchase stock of five percent or more of the
67-11 outstanding stock. A deposit with a banking corporation is a loan
67-12 within the meaning of this section.
67-13 (c) This section does not prohibit a savings bank from:
67-14 (1) making a loan to a religious corporation, club, or
67-15 other membership corporation of which one or more directors or
67-16 officers are members, but in which they have no financial interest;
67-17 (2) making a loan to or purchasing guaranteed
67-18 mortgages from a stock corporation, if a director does not own more
67-19 than 15 percent of the capital stock of the corporation and the
67-20 total amount of the capital stock of the corporation owned by all
67-21 directors of the savings bank is less than 25 percent.
67-22 CHAPTER 7. POWERS
67-23 Sec. 7.01. GENERAL CORPORATE POWERS. Each savings bank has
67-24 the powers authorized by this Act and other rights, privileges, and
67-25 powers as may be incidental to or reasonably necessary for the
67-26 accomplishment of the objects and purposes of the savings bank.
67-27 Subject to the prior approval of the commissioner, a savings bank
68-1 may engage in business as a savings bank in any state or territory
68-2 of the United States to the extent permitted by the laws of that
68-3 state or territory, either directly or through ownership of another
68-4 savings bank incorporated under the laws of another state.
68-5 Sec. 7.02. POWER TO BORROW. A savings bank may borrow and
68-6 give security, subject to the rules adopted by the commissioner and
68-7 the finance commission. In addition, at any time through action of
68-8 its board of directors a savings bank may issue capital notes,
68-9 debentures, or other capital obligations as are authorized under
68-10 the rules adopted by the commissioner and the finance commission.
68-11 Sec. 7.03. FISCAL AGENT. A savings bank may act as fiscal
68-12 agent of the United States and, when so designated by the secretary
68-13 of the treasury, shall perform under regulations as the secretary
68-14 may require and may act as agent for any instrumentality of the
68-15 United States and as agent of this state or any state governmental
68-16 subdivision or instrumentality.
68-17 Sec. 7.04. POWER TO ACT UNDER FEDERAL RETIREMENT PLANS. A
68-18 savings bank and a federal savings bank, if its charter and
68-19 applicable federal rules permit, may exercise all powers necessary
68-20 to qualify as a trustee or custodian for retirement plans permitted
68-21 or recognized by federal law and may invest funds held in that
68-22 capacity in the accounts of the institution if the trust or
68-23 custodial retirement plan does not prohibit the investment.
68-24 Sec. 7.05. INVESTMENT IN BANKING PREMISES. A savings bank
68-25 may invest in real estate, buildings, and related facilities,
68-26 including parking, and in leasehold improvements for rented
68-27 facilities for use by the savings bank as its banking premises.
69-1 Sec. 7.06. LIMITATION ON LOANS TO ONE BORROWER. A savings
69-2 bank may not make loans to any one borrower to a greater extent
69-3 than:
69-4 (1) a savings association is permitted under
69-5 Subsection (u) of Section 5 of the Home Owners' Loan Act of 1933
69-6 (12 U.S.C. Section 1464(u)); or
69-7 (2) permitted by rule adopted under Subdivision (16)
69-8 of Section 4.04 of this Act.
69-9 Sec. 7.07. INVESTMENTS IN EQUITY SECURITIES. (a) A savings
69-10 bank or a subsidiary may not invest in stock or equity securities
69-11 unless the securities qualify as investment grade securities under
69-12 rules adopted by the commissioner and the finance commission.
69-13 Additionally, a savings bank may not invest in stock or equity
69-14 securities unless the securities are eligible investments for a
69-15 federal savings and loan association.
69-16 (b) The limitations of Subsection (a) do not apply to equity
69-17 securities:
69-18 (1) issued by any United States government-sponsored
69-19 corporation including the Federal National Mortgage Association,
69-20 the Federal Home Loan Mortgage Corporation, and the Student Loan
69-21 Marketing Association; or
69-22 (2) issued by a service corporation, an operating
69-23 subsidiary, or a finance subsidiary of the savings bank.
69-24 (c) The commissioner and the finance commission may adopt
69-25 rules necessary to implement this section, including eligible
69-26 investment criteria, investment diversification, and resource
69-27 management requirements.
70-1 Sec. 7.08. TRUST POWERS. A savings bank may exercise trust
70-2 powers in compliance with state law, subject to the prior written
70-3 approval of the commissioner. The commissioner's approval must be
70-4 based on findings that the applicant's savings bank is in
70-5 compliance with its regulatory capital requirements, is well
70-6 managed, and exhibits earnings, resources, and managerial talent
70-7 adequate to maintain a trust department.
70-8 Sec. 7.09. COMMERCIAL LOANS. Subject to the rules of the
70-9 commissioner and the finance commission, a savings bank may lend
70-10 and invest not more than 15 percent of its total assets in
70-11 commercial loans. A commercial loan is a non-real-estate loan for
70-12 business, commercial, corporate, or agricultural purposes.
70-13 Sec. 7.10. SUBSIDIARIES. (a) With the prior consent of the
70-14 commissioner and subject to the rules of the commissioner and the
70-15 finance commission, a savings bank may invest in subsidiary
70-16 corporations created under general corporate law for corporate
70-17 organizations.
70-18 (b) A savings bank may not make any investment in a
70-19 subsidiary corporation if its aggregate investments in subsidiaries
70-20 would exceed 10 percent of its total assets.
70-21 (c) The subsidiary corporation is subject to regulation and
70-22 examination by the commissioner, and the subsidiary corporation
70-23 shall pay the cost of the regulation and examination.
70-24 (d) The commissioner and the finance commission shall adopt
70-25 rules on permitted activities of a subsidiary corporation.
70-26 Sec. 7.11. PARITY. Subject to the limitations and
70-27 restrictions prescribed by rule of the commissioner and the finance
71-1 commission, a savings bank may make a loan or investment or engage
71-2 in an activity permitted under state law for banks or savings and
71-3 loan associations or under the laws of the United States for
71-4 federal savings and loan associations, savings banks, or national
71-5 banks with principal offices located in this state.
71-6 Sec. 7.12. LOAN EXPENSES. (a) Subject to Subsection (b) of
71-7 this section, a savings bank may require borrowers to pay all
71-8 reasonable expenses incurred in connection with the making,
71-9 closing, disbursing, extending, readjusting, or renewing of loans.
71-10 Those expenses may be collected by the savings bank from the
71-11 borrower and retained by the savings bank or paid to a person
71-12 rendering services for which a charge has been made, including an
71-13 officer, director, or employee of the savings bank rendering the
71-14 service, or the payments may be paid directly by the borrower to
71-15 the person rendering the service. Expenses under this section are
71-16 not a part of the interest or compensation charged by the savings
71-17 bank for the loan of money. A savings bank may charge penalties
71-18 for prepayment or late payments. Unless otherwise agreed in
71-19 writing, prepayment of the principal shall be applied to the final
71-20 installment of the note or other obligation until that installment
71-21 is fully paid, and further prepayments shall be applied to
71-22 installments in the inverse order of their maturity.
71-23 (b) A savings bank may charge a borrower the reasonable
71-24 value of services rendered in connection with the making of a
71-25 consumer loan, and only expenses necessary and proper for the
71-26 protection of the lender and actually incurred in connection with
71-27 the making of the loan may be charged.
72-1 Sec. 7.13. ADVANCES TO PAY TAXES OR OTHER CHARGES. (a) A
72-2 savings bank may pay taxes, assessments, insurance premiums, and
72-3 other similar charges for the protection of the savings bank's
72-4 interests in property securing the savings bank's real estate
72-5 loans. Those payments are advances and may be carried on the
72-6 savings bank's books as an asset of the savings bank for which the
72-7 savings bank may charge and collect interest, or the payments may
72-8 be added to the unpaid balance of the loan to which they apply as
72-9 of the first day of the month in which the payments are made. The
72-10 payments constitute a valid lien against the real estate securing
72-11 the loan for which they are made.
72-12 (b) A savings bank may require a borrower to pay monthly in
72-13 advance, in addition to interest and principal, an amount equal to
72-14 one-twelfth of the estimated annual taxes, assessments, insurance
72-15 premiums, and other charges on the real estate securing a loan, to
72-16 enable the savings bank to pay the charges as they become due. The
72-17 amount of the monthly payment may be increased or decreased as
72-18 necessary to meet the charges. A savings bank may carry the
72-19 payments in trust in an account or may credit them to the
72-20 indebtedness and advance the money for charges as they come due. A
72-21 savings bank shall keep a record of the status of taxes,
72-22 assessments, insurance premiums, and other charges on all real
72-23 estate securing its loans and on all real and personal property
72-24 owned by the savings bank.
72-25 Sec. 7.14. RIGHT TO ACT TO AVOID LOSS. This Act does not
72-26 deny a savings bank the right to invest its funds, operate a
72-27 business, manage or deal in property, or take any other action over
73-1 whatever period may be reasonably necessary to avoid loss on a loan
73-2 or investment made or an obligation created in good faith in the
73-3 usual course of business of the savings bank, as authorized by this
73-4 Act and rules adopted under this Act. This Act does not prohibit a
73-5 savings bank from developing or building on land acquired by it
73-6 under this section or from completing the construction of a
73-7 building under a construction loan contract in which the borrower
73-8 has failed to comply with the terms of the contract.
73-9 Sec. 7.15. GENERAL POWERS. A savings bank has the powers
73-10 specifically conferred by this Act, including the following general
73-11 corporate powers:
73-12 (1) to sue and be sued, complain, and defend in its
73-13 corporate name;
73-14 (2) to adopt and operate reasonable bonus plans,
73-15 profit-sharing plans, stock bonus plans, stock option plans,
73-16 pension plans, and similar incentive plans for its directors,
73-17 officers, and employees, subject to any limitations contained in
73-18 this Act or rules adopted under this Act;
73-19 (3) to make reasonable donations for the public
73-20 welfare or for charitable, scientific, religious, or educational
73-21 purposes;
73-22 (4) to pledge its assets to secure deposits of public
73-23 money of the United States, when required by the United States,
73-24 including revenue and funds the deposit of which is subject to
73-25 control or regulation of the United States or any of its officers,
73-26 agents, or employees;
73-27 (5) to pledge its assets to secure deposits of public
74-1 money of any state or any political corporation or subdivision of
74-2 any state;
74-3 (6) to become a member of or deal with any corporation
74-4 or agency of the United States or this state, to the extent that
74-5 the corporation or agency assists in furthering or facilitating
74-6 savings banks' purposes or powers, and to that end to purchase
74-7 stock or securities of the corporation or agency or deposit money
74-8 with the corporation or agency, and to comply with any other
74-9 conditions of membership credit;
74-10 (7) to acquire and hold membership in a Federal Home
74-11 Loan Bank or the Federal Reserve System;
74-12 (8) to hold title to assets of any kind and to
74-13 administer those assets as necessary if their acquisition occurred
74-14 as a result of the collection or liquidation of loans, investments,
74-15 or discounts;
74-16 (9) to receive and repay deposits and accounts of all
74-17 types in keeping with this Act and the rules of the commissioner
74-18 and the finance commission; and
74-19 (10) to lend and invest its money as authorized by
74-20 this Act and by the rules of the commissioner and the finance
74-21 commission.
74-22 Sec. 7.16. INVESTMENT WITHIN SAVINGS BANK'S LOCAL SERVICE
74-23 AREA. (a) Each savings bank shall maintain in its portfolio at
74-24 least 15 percent of its local service area deposits in the
74-25 following categories of assets and investments:
74-26 (1) first and second lien residential mortgage loans
74-27 or foreclosed residential mortgage loans originated from within the
75-1 savings bank's local service area;
75-2 (2) home improvement loans;
75-3 (3) interim residential construction loans;
75-4 (4) mortgage-backed securities secured by loans from
75-5 within the savings bank's local service area; and
75-6 (5) loans for community reinvestment purposes.
75-7 (b) The commissioner shall define an applicant's local
75-8 service area at the time of its application for incorporation as or
75-9 conversion to a savings bank. Unless otherwise agreed to by the
75-10 commissioner and the applicant, the applicant may rely on this
75-11 definition for the duration of the applicant's corporate existence
75-12 as a savings bank.
75-13 (c) The commissioner and the finance commission shall adopt
75-14 rules to implement this section. The rules shall define the
75-15 categories of loans and investments described in Subsection (a) of
75-16 this section. The commissioner, in accordance with rules adopted
75-17 under this subsection, may grant certain limited-term waivers from
75-18 the requirements of Subsection (a) of this section if quality loans
75-19 in the categories described in that subsection are not available
75-20 from within the savings bank's local service area.
75-21 CHAPTER 8. OPERATIONS
75-22 Sec. 8.01. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Each
75-23 savings bank shall maintain its books and records according to
75-24 generally accepted accounting principles and according to rules
75-25 adopted by the commissioner and the finance commission.
75-26 Sec. 8.02. LIQUIDITY. Unless approved in advance by the
75-27 commissioner, a savings bank shall maintain a minimum of 10 percent
76-1 of its assets in cash, balances in a federal reserve bank or passed
76-2 through a federal home loan bank or another depository institution
76-3 to a federal reserve bank under the Federal Reserve Act (12 U.S.C.
76-4 Section 221 et seq.), or other readily marketable investments,
76-5 including unencumbered federal government sponsored enterprises
76-6 securities, as allowed by rules adopted by the commissioner and the
76-7 finance commission.
76-8 Sec. 8.03. REGULATORY CAPITAL. A savings bank shall
76-9 maintain regulatory capital in the amount prescribed by rules of
76-10 the commissioner and the finance commission. The amount may not be
76-11 less than the amount of regulatory capital required for a
76-12 corresponding national bank.
76-13 Sec. 8.04. COMPUTATION OF NET INCOME. A savings bank shall
76-14 close its books at the times that its bylaws provide for the
76-15 purpose of determining the gross income of the savings bank for the
76-16 period since the date of the last closing of its books. The net
76-17 income for the period is the amount of the gross income minus the
76-18 amount of the expenses of operating the savings bank for the
76-19 period.
76-20 Sec. 8.05. EARNINGS ON ACCOUNTS. A savings bank may
76-21 contract to pay interest on deposit accounts or may pay earnings on
76-22 deposit accounts in the form of dividends declared by the board of
76-23 directors. Earnings in the form of interest or dividends shall be
76-24 computed and paid according to rules adopted by the commissioner
76-25 and the finance commission.
76-26 Sec. 8.06. DIVIDENDS ON CAPITAL STOCK. The board of
76-27 directors of a capital stock savings bank may declare and pay
77-1 dividends out of current or retained income in cash or additional
77-2 stock to the holders of record of the stock outstanding on the date
77-3 the dividends are declared.
77-4 Sec. 8.07. USE OF SURPLUS ACCOUNTS AND EXPENSE FUND
77-5 CONTRIBUTIONS. A savings bank, at a closing date, may use all or
77-6 part of a surplus account, whether earned or paid-in, or expense
77-7 fund contributions on its books to meet expenses of operating the
77-8 savings bank for the period just closed, required transfers to loss
77-9 reserves, or the payment or credit of earnings on deposit accounts.
77-10 CHAPTER 9. DEPOSIT ACCOUNTS
77-11 Sec. 9.01. DEPOSITS. A savings bank may receive deposits of
77-12 funds subject to withdrawals or to be paid on checks of the deposit
77-13 account holder. Those deposits must be payable on demand, without
77-14 notice, unless the contract of deposit expressly provides
77-15 otherwise.
77-16 Sec. 9.02. NO LIMITATION ON DEPOSIT ACCOUNTS. There is no
77-17 limit on the number and value of deposit accounts that a savings
77-18 bank may accept unless limits are fixed by its board of directors.
77-19 Sec. 9.03. WHO MAY OPEN A DEPOSIT ACCOUNT. Investments in
77-20 deposit accounts may be made with cash only and may be made by any
77-21 person, in the person's own right or in a trust or other fiduciary
77-22 capacity, and by any partnership, association, corporation,
77-23 political subdivision, or public and governmental unit or entity.
77-24 Sec. 9.04. CONTRACTS. Each holder of a deposit account
77-25 shall execute a contract setting forth any special terms and
77-26 provisions applicable to the account and the conditions on which
77-27 withdrawals may be made. The contract may not be inconsistent with
78-1 this Act. The contract shall be held by the savings bank as part
78-2 of its records pertaining to the deposit account. The contract in
78-3 respect to deposit accounts of political subdivisions and public
78-4 and governmental units or entities shall provide that the holder of
78-5 the deposit account may not become a member of the savings bank.
78-6 Sec. 9.05. TRANSFER OF DEPOSIT ACCOUNTS. Deposit accounts
78-7 are transferable on the books of the savings bank only on
78-8 presentation of evidence of transfer satisfactory to the savings
78-9 bank, accompanied by proper application for transfer by the
78-10 transferee. The transferee shall accept the deposit account
78-11 subject to the terms and conditions of the contract, the bylaws of
78-12 the savings bank, and the provisions of its charter. A savings
78-13 bank may treat the holder of record of a deposit account as the
78-14 owner of the account for all purposes without being affected by any
78-15 notice to the contrary, unless the savings bank acknowledges in
78-16 writing a pledge of the deposit account.
78-17 Sec. 9.06. DEPOSIT ACCOUNTS OF MINORS. A savings bank and
78-18 any federal savings bank may accept a deposit account from a minor
78-19 as the sole and absolute owner of the deposit account and may pay
78-20 withdrawals, accept pledges to the savings bank, and act in any
78-21 manner with respect to the deposit account on the order of the
78-22 minor. A payment or delivery of rights to a minor or a receipt or
78-23 acquittance signed by a minor who holds a deposit account is a
78-24 valid and sufficient release and discharge of the institution for
78-25 any payment so made or delivery of rights to the minor. The
78-26 receipt, acquittance, pledge, or other action required by the
78-27 institution to be taken by the minor is binding on the minor as if
79-1 the minor were of full age and legal capacity, except that if a
79-2 parent or guardian of the minor desires that the minor not have
79-3 authority to pledge, hypothecate, control, transfer, or make
79-4 withdrawals from the deposit account, that fact may be made known
79-5 to the savings bank in writing by the parent or guardian, in which
79-6 event the right of the minor to pledge, hypothecate, control,
79-7 transfer, or make withdrawals from the deposit account during the
79-8 minority of the minor may not be executed by the minor except with
79-9 the joinder of the parent or guardian. In the event of the death
79-10 of the minor, the receipt or acquittance of a parent or guardian of
79-11 the minor is a valid and sufficient discharge of the institution
79-12 for any sum or sums not exceeding in the aggregate $1,000.
79-13 Sec. 9.07. APPLICABILITY OF PROBATE CODE. The applicable
79-14 provisions of Chapter XI, Texas Probate Code, govern deposit
79-15 accounts held in a savings bank.
79-16 Sec. 9.08. PLEDGE TO SAVINGS BANKS OF JOINT DEPOSIT
79-17 ACCOUNTS. The pledge or hypothecation to a savings bank or federal
79-18 savings bank of all or part of a deposit account issued in the
79-19 names of two or more persons, signed by a person on whose signature
79-20 withdrawals may be made from the deposit account, is, unless the
79-21 terms of the deposit account provide specifically to the contrary,
79-22 a valid pledge and transfer to the institution of that part of the
79-23 deposit account pledged or hypothecated and does not operate to
79-24 sever or terminate the joint and survivorship ownership of all or
79-25 any part of the deposit account.
79-26 Sec. 9.09. DEPOSIT ACCOUNTS OF FIDUCIARIES. A savings bank
79-27 or a federal savings bank doing business in this state may accept
80-1 deposit accounts in the name of an administrator, executor,
80-2 custodian, guardian, trustee, or other fiduciary for a named
80-3 beneficiary, and the fiduciary may vote as a member as if the
80-4 membership were held absolutely and may open and make additions to
80-5 and withdraw from the deposit account in whole or in part. Except
80-6 as otherwise provided by law, a payment to a fiduciary or a receipt
80-7 or acquittance signed by a fiduciary to whom any payment is made is
80-8 a valid and sufficient release and discharge of an institution for
80-9 the payment so made. If a person holding a deposit account in a
80-10 fiduciary capacity dies and the probate court does not give to the
80-11 savings bank written notice of the revocation or termination of the
80-12 fiduciary relationship or of any other disposition of the
80-13 beneficial estate, the withdrawal value of the deposit account and
80-14 earnings on the deposit account or other rights relating to the
80-15 deposit account, at the option of the institution, may be paid or
80-16 delivered in whole or in part to the beneficiaries, and the savings
80-17 bank has no further liability for the deposit account.
80-18 Sec. 9.10. TRUST ACCOUNTS WHERE TRUST INSTRUMENT NOT
80-19 DISCLOSED. If a deposit account is opened by a person claiming to
80-20 be a trustee for another and notice of the existence and terms of a
80-21 legal and valid trust other than a written claim against the
80-22 deposit account is not provided to the savings bank, withdrawals
80-23 from the deposit account may be made on the signature of the person
80-24 claiming to be the trustee, and in the event of the death of the
80-25 trustee, the withdrawal value of the deposit account or any part of
80-26 the deposit account, together with earnings on the deposit account,
80-27 may be paid to the person for whom the deposit account was stated
81-1 to have been opened, and the savings bank has no further liability
81-2 for the deposit account.
81-3 Sec. 9.11. POWERS OF ATTORNEY ON DEPOSIT ACCOUNTS. A
81-4 savings bank doing business in this state may continue to recognize
81-5 the authority of an attorney in fact authorized in writing to
81-6 manage or to make withdrawals either in whole or in part from the
81-7 deposit account of a member until it receives written notice or is
81-8 on actual notice of the revocation of the authority. For the
81-9 purposes of this section, written notice of the death or
81-10 adjudication of incompetency of a member constitutes written notice
81-11 of revocation of the authority of the attorney.
81-12 Sec. 9.12. DEPOSIT ACCOUNTS AS LEGAL INVESTMENTS. All
81-13 administrators, executors, guardians, trustees, and other
81-14 fiduciaries; counties, municipalities, and all other political
81-15 subdivisions or instrumentalities of this state; business and
81-16 nonprofit corporations; charitable or educational corporations or
81-17 associations; and banks, savings and loan associations, credit
81-18 unions, and all other financial institutions may invest funds held
81-19 by them in deposit accounts of a savings bank doing business in
81-20 this state. An investment made by an insurance company is eligible
81-21 for tax reducing purposes under Articles 4.10 and 4.11, Insurance
81-22 Code. An investment by a school district of any of its funds in
81-23 accounts that are insured by the Federal Deposit Insurance
81-24 Corporation meets the requirements of Sections 20.42 and 23.79,
81-25 Education Code.
81-26 Sec. 9.13. REDEMPTION OF DEPOSIT ACCOUNTS. If funds are on
81-27 hand for the purpose and no contractual prohibition exists, a
82-1 savings bank may redeem, in a manner determined by the board of
82-2 directors, all or any part of any of its deposit accounts by giving
82-3 30 days' notice by certified mail addressed to each affected
82-4 deposit account holder at the holder's last address as recorded on
82-5 the books of the savings bank. Redemption of deposit accounts must
82-6 be done on a nondiscriminatory basis. A savings bank may not
82-7 redeem deposit accounts if the savings bank is subject to
82-8 conservatorship or a supervisory control action under Chapter 5 of
82-9 this Act, unless directed to do so by the commissioner. The
82-10 redemption price of a deposit account redeemed shall be the
82-11 account's withdrawal value. If notice of redemption has been given
82-12 and on or before the redemption date the funds necessary for the
82-13 redemption have been set aside to be and continue to be available
82-14 for redemption, earnings on the deposit accounts called for
82-15 redemption cease to accrue beginning on the date specified as the
82-16 redemption date, and all rights with respect to the deposit
82-17 accounts other than the right of the deposit account holder of
82-18 record to receive the redemption price terminate on the redemption
82-19 date.
82-20 Sec. 9.14. LIEN ON DEPOSIT ACCOUNTS. A savings bank or a
82-21 federal savings bank doing business in this state has a lien,
82-22 without further agreement or pledge, on all deposit accounts owned
82-23 by any account holder to whom or on whose behalf the savings bank
82-24 has made an advance of money by loan or otherwise. On default in
82-25 the repayment or satisfaction of the account holder's obligation,
82-26 the savings bank, without notice to or consent of the account
82-27 holder, may cancel on its books all or any part of the deposit
83-1 account owned by the account holder and apply the value of the
83-2 deposit account in payment on account of the obligation. A savings
83-3 bank may by written instrument waive its lien in whole or in part
83-4 on any deposit account. A savings bank may take a pledge of
83-5 deposit accounts of the savings bank owned by an account holder
83-6 other than the borrower as additional security for a loan secured
83-7 by a deposit account, real estate, or both.
83-8 Sec. 9.15. METHOD OF PAYING EARNINGS ON DEPOSIT ACCOUNT.
83-9 Dividends or interest shall be credited to a deposit account on the
83-10 books of the savings bank unless a deposit account holder requests
83-11 and the savings bank agrees to pay dividends or interest on the
83-12 deposit account in cash. Dividends payable in cash may be paid by
83-13 check or bank draft.
83-14 CHAPTER 10. HOLDING COMPANIES
83-15 Sec. 10.01. REGISTRATION. A holding company shall register
83-16 with the commissioner on forms prescribed by the commissioner
83-17 within 90 days after the date of becoming a holding company. The
83-18 forms must include information, under oath or otherwise, on the
83-19 financial condition, ownership, operations, management, and
83-20 intercompany relations of the holding company and its subsidiaries
83-21 and on related matters the commissioner finds necessary and
83-22 appropriate. On application, the commissioner may extend the time
83-23 within which a holding company shall register and file the required
83-24 information.
83-25 Sec. 10.02. REPORTS. Each holding company and each
83-26 subsidiary of a holding company, other than a savings bank, shall
83-27 file with the commissioner reports required by the commissioner.
84-1 The reports must be made under oath and must be in the form and for
84-2 the periods prescribed by the commissioner. Each report must
84-3 contain information concerning the operations of the holding
84-4 company and its subsidiaries as the commissioner may require.
84-5 Sec. 10.03. BOOKS AND RECORDS. Each holding company shall
84-6 maintain books and records as may be prescribed by the
84-7 commissioner.
84-8 Sec. 10.04. EXAMINATIONS. Each holding company and each
84-9 subsidiary of a holding company is subject to examinations as the
84-10 commissioner may prescribe. The holding company shall pay the cost
84-11 of an examination. The confidentiality provisions of Section 4.08
84-12 of this Act apply to this section. The commissioner may furnish
84-13 examination and other reports to any appropriate governmental
84-14 department, agency, or instrumentality of this state, another
84-15 state, or the United States. For purposes of this section, the
84-16 commissioner, to the extent deemed feasible, may use reports filed
84-17 with or examinations made by appropriate federal agencies or
84-18 regulatory authorities of other states.
84-19 Sec. 10.05. AGENT FOR SERVICE OF PROCESS. The commissioner
84-20 may require a holding company or a person, other than a
84-21 corporation, connected with a holding company to execute and file a
84-22 prescribed form of irrevocable appointment of agent for service of
84-23 process.
84-24 Sec. 10.06. RELEASE FROM REGISTRATION. The commissioner at
84-25 any time, on the commissioner's own motion or on application, may
84-26 release a registered holding company from a registration made by
84-27 the company if the commissioner determines that the company no
85-1 longer controls a savings bank.
85-2 Sec. 10.07. TRANSACTIONS WITH AFFILIATES. Transactions
85-3 between a subsidiary savings bank of a holding company and any
85-4 affiliate of the savings bank subsidiary are subject to rules
85-5 adopted by the commissioner and the finance commission.
85-6 Sec. 10.08. RULES. The commissioner and the finance
85-7 commission shall adopt rules providing for registration and
85-8 reporting of holding companies, setting limitations on the
85-9 activities and investments of holding companies, and providing for
85-10 other matters as may be appropriate under this chapter.
85-11 CHAPTER 11. FOREIGN FINANCIAL INSTITUTIONS
85-12 Sec. 11.01. LIMITATION ON RIGHT TO DO BUSINESS AS A SAVINGS
85-13 BANK. (a) A person, firm, company, association, fiduciary,
85-14 partnership, or corporation by whatever name called may not do
85-15 business as a savings bank in this state or maintain an office in
85-16 this state for the purpose of doing business in this state unless
85-17 it is:
85-18 (1) a domestic savings bank;
85-19 (2) a federal savings bank;
85-20 (3) a foreign savings bank that is a surviving
85-21 financial institution holding a certificate of authority issued
85-22 under Section 11.07 of this Act; or
85-23 (4) a foreign savings bank that was a foreign savings
85-24 and loan association holding a certificate of authority issued
85-25 pursuant to Section 61 of Senate Bill No. 111, Chapter 61, Acts of
85-26 the 41st Legislature, 2nd Called Session, 1929.
85-27 (b) The prohibition in this section does not apply to any
86-1 activity that does not constitute transacting business in this
86-2 state under Section B, Article 8.01, Texas Business Corporation
86-3 Act.
86-4 Sec. 11.02. RENEWAL OF OUTSTANDING CERTIFICATES. A foreign
86-5 savings bank holding a certificate of authority under Section 11.07
86-6 of this Act may renew the certificate from year to year by the
86-7 payment of a renewal fee in January of each year in an amount set
86-8 annually by resolution of the finance commission. The savings bank
86-9 shall pay the same examination charges paid by a domestic savings
86-10 bank under Section 4.07 of this Act, together with all traveling
86-11 expenses of the examination, except that if the examination fee is
86-12 inadequate to defray all expenses of the examination, the savings
86-13 bank shall pay the additional cost. Examinations may not be made
86-14 more than once a year.
86-15 Sec. 11.03. CONTRACTS DEEMED MADE IN THIS STATE. A contract
86-16 made by any foreign savings bank with any citizen of this state is
86-17 a Texas contract and shall be construed by the courts of this state
86-18 according to the laws of this state.
86-19 Sec. 11.04. RIGHTS, PRIVILEGES, AND OBLIGATIONS OF FOREIGN
86-20 SAVINGS BANKS WITH CERTIFICATES OF AUTHORITY. (a) A foreign
86-21 savings bank operating under a certificate of authority under
86-22 Section 11.07 of this Act has the rights and privileges of a
86-23 savings bank created under this Act, and its deposit accounts are
86-24 eligible for investment to the same extent as those of a domestic
86-25 savings bank. This Act and rules adopted under this Act are
86-26 applicable to a foreign savings bank with respect to its operations
86-27 in this state and may be enforced by the commissioner. A foreign
87-1 savings bank may not be considered a savings bank organized under
87-2 the laws of this state.
87-3 (b) The commissioner, in exercising the supervisory and
87-4 regulatory authority granted under Chapters 4 and 5 of this Act,
87-5 may enter into cooperative agreements with regulatory authorities
87-6 of other states to facilitate the regulation of foreign savings
87-7 banks doing business in this state and may accept reports of
87-8 examinations and other records from those regulatory authorities in
87-9 lieu of conducting examinations outside this state.
87-10 (c) A foreign savings bank operating in this state as
87-11 authorized by this chapter may not exercise any powers, perform any
87-12 functions, or offer any services that a domestic savings bank could
87-13 not exercise, perform, or offer.
87-14 Sec. 11.05. POWER OF COMMISSIONER TO REVOKE CERTIFICATE.
87-15 The commissioner may issue an order against a foreign savings bank
87-16 holding a certificate of authority to do business in this state in
87-17 the same manner as against a domestic savings bank under Chapter 5
87-18 of this Act. On failure or refusal of a foreign savings bank to
87-19 comply with a final order of the commissioner, the commissioner may
87-20 revoke a certificate of authority held by the savings bank. On
87-21 revocation of the certificate of authority of a foreign savings
87-22 bank, an agent of the savings bank may not transact business in
87-23 this state, except to receive payments to apply on loan contracts
87-24 then in effect and to pay withdrawal requests.
87-25 Sec. 11.06. FEDERAL SAVINGS BANKS. A federal savings bank
87-26 is not a foreign corporation or foreign savings bank. Unless
87-27 federal laws or regulations provide otherwise, a federal savings
88-1 bank and the members of a federal savings bank have all of the
88-2 rights, powers, privileges, benefits, immunities, and exemptions
88-3 that are provided by this Act and other laws of this state relating
88-4 to a savings bank or its members. This provision is in addition to
88-5 and supplemental to any provision of this Act which by specific
88-6 reference is applicable to a federal savings bank and its members.
88-7 Sec. 11.07. MERGER OR CONSOLIDATION OF FOREIGN AND DOMESTIC
88-8 SAVINGS BANKS. (a) A domestic savings bank may merge or
88-9 consolidate with a foreign savings bank under a plan adopted by the
88-10 board of directors of both savings banks and approved by the
88-11 commissioner. The plan of merger or consolidation must be approved
88-12 by a majority of the total vote that the members or stockholders of
88-13 the domestic savings bank are entitled to cast. Approval may be
88-14 voted at either an annual meeting or at a special meeting called to
88-15 consider that action. A stockholder of a domestic savings bank
88-16 that is a capital stock association has the same dissenter's rights
88-17 as a shareholder of a domestic corporation under the Texas Business
88-18 Corporation Act.
88-19 (b) If presented with a plan of merger or consolidation of a
88-20 foreign savings bank and a domestic savings bank, the commissioner
88-21 shall give public notice of the proposed merger or consolidation in
88-22 each county in which the domestic savings bank has an office and
88-23 shall give any interested party an opportunity to appear, present
88-24 evidence, and be heard for or against the proposed plan. A hearing
88-25 officer designated by the commissioner shall hold the hearing. If
88-26 a protest is not received on or before the date of hearing, the
88-27 hearing may be dispensed with by the commissioner or hearing
89-1 officer. The provisions of the administrative procedure act
89-2 applicable to a contested case do not apply to an application if
89-3 the domestic savings bank is considered by the commissioner to be
89-4 in an unsafe condition, and in that event, the application and all
89-5 information related to the application are confidential and
89-6 privileged from public disclosure.
89-7 (c) The commissioner shall issue an order denying the
89-8 proposed plan if the commissioner finds that any of the conditions
89-9 of Subsection (c) of Section 3.03 of this Act exist. In addition,
89-10 if the surviving savings bank is the foreign savings bank, the
89-11 commissioner shall deny the application if:
89-12 (1) the laws of the state in which the foreign savings
89-13 bank has its principal place of business do not permit savings
89-14 banks of that state to merge or consolidate with a domestic savings
89-15 bank if the surviving savings bank is the domestic savings bank; or
89-16 (2) the foreign savings bank is controlled by a
89-17 holding company that has its principal place of business in a state
89-18 the laws of which do not permit savings banks of that state to
89-19 merge or consolidate with a domestic savings bank if the surviving
89-20 savings bank is the domestic savings bank.
89-21 (d) If a surviving savings bank is a foreign savings bank,
89-22 the commissioner may enforce any conditions, restrictions, and
89-23 requirements on the surviving savings bank that could have been
89-24 enforced by the state in which the foreign savings bank has its
89-25 principal place of business with respect to a merger or
89-26 consolidation in that state in which the surviving savings bank is
89-27 a domestic savings bank.
90-1 (e) If the commissioner approves a proposed plan of merger
90-2 or consolidation, the commissioner shall issue an order approving
90-3 the merger or consolidation. If the surviving savings bank is the
90-4 foreign savings bank, the commissioner shall issue and deliver to
90-5 the surviving savings bank a certificate of authority to do
90-6 business as a savings bank within this state for a period that
90-7 expires January 31 of the next calendar year. If the surviving
90-8 savings bank is the domestic savings bank, it shall continue to
90-9 operate under the terms of its charter and the laws and rules
90-10 applicable to a domestic savings bank.
90-11 CHAPTER 12. MISCELLANEOUS PROVISIONS
90-12 Sec. 12.01. EXEMPTION FROM SECURITIES LAWS. Deposit
90-13 accounts, certificates, and other evidences of interest in the
90-14 deposit liability of savings banks subject to this Act and of
90-15 federal savings banks are not securities for any purpose under The
90-16 Securities Act (Article 581-1 et seq., Vernon's Texas Civil
90-17 Statutes), and securities of those savings banks other than
90-18 interest in the deposit liability of the savings banks are not
90-19 subject to the registration requirements of that Act. A person
90-20 whose principal occupation is as an officer of a savings bank is
90-21 exempt from the registration and licensing provisions of The
90-22 Securities Act with respect to the person's participation in a sale
90-23 or other transaction involving securities of the savings bank of
90-24 which the person is an officer.
90-25 Sec. 12.02. ACKNOWLEDGMENTS BY MEMBERS AND EMPLOYEES. A
90-26 public officer qualified to take acknowledgments or proofs of
90-27 written instruments is not disqualified from taking the
91-1 acknowledgments or proofs of any instrument in writing in which a
91-2 savings bank or federal savings bank is interested by reason of the
91-3 officer's membership in or stockholding in or employment by the
91-4 savings bank.
91-5 Sec. 12.03. CLOSING PLACES OF BUSINESS. A savings bank may
91-6 close its place of business at any time the board of directors of
91-7 the savings bank determines to do so.
91-8 Sec. 12.04. SAVINGS BANKS PROHIBITED FROM ISSUING STOCK OR
91-9 SHARES NOT AUTHORIZED BY THIS ACT. A savings bank may not issue
91-10 any form of stock, share, account, or investment certificate except
91-11 as permitted by this Act.
91-12 Sec. 12.05. AD VALOREM TAXATION OF PROPERTY OF SAVINGS
91-13 BANKS. A domestic or federal savings bank doing business in this
91-14 state shall render for ad valorem taxation all of its real estate
91-15 as other real estate is rendered. Personal property of a domestic
91-16 or federal savings bank is valued as other personal property is
91-17 valued for assessment in this state and shall be rendered by the
91-18 savings bank to the appropriate assessing unit or units in the
91-19 following manner:
91-20 (1) furniture, fixtures, equipment, and automobiles
91-21 shall be rendered where the property is located in the same manner
91-22 as other similar property; and
91-23 (2) the remainder of the personal property of a
91-24 savings bank shall be rendered as a whole in the city and county
91-25 where its principal office is located at the value remaining after
91-26 deducting from the total value of the savings bank's entire assets
91-27 the following:
92-1 (A) all debts of every kind and character owed
92-2 by the savings bank;
92-3 (B) all tax-free securities owned by the savings
92-4 bank;
92-5 (C) the loss reserves and surplus of the savings
92-6 bank;
92-7 (D) the deposit liability of the savings bank;
92-8 and
92-9 (E) the appraised value of its furniture,
92-10 fixtures, and real estate.
92-11 Sec. 12.06. STATE TAXATION OF SAVINGS BANKS. A domestic or
92-12 federal savings bank doing business in this state shall be taxed by
92-13 the state in the same manner and to the same extent as a
92-14 corresponding savings and loan association.
92-15 Sec. 12.07. INITIATION OF RULEMAKING BY SAVINGS BANKS. If
92-16 20 percent or more of the savings banks subject to this Act
92-17 petition the commissioner in writing requesting the adoption,
92-18 amendment, or repeal of a rule, the commissioner shall initiate
92-19 rulemaking proceedings under Subsection (e), Article 5, Chapter II,
92-20 The Texas Banking Code (Article 342-205, Vernon's Texas Civil
92-21 Statutes).
92-22 Sec. 12.08. HEARING PROCEDURES. (a) Notice of a hearing
92-23 held under an order issued under Chapter 5 of this Act shall be
92-24 given to all parties affected by the order. Notice of other
92-25 hearings held under this Act shall be given to all domestic and
92-26 federal savings banks in the county where the subject matter of the
92-27 hearing is or will be situated.
93-1 (b) Opportunity shall be afforded any interested party to
93-2 respond and present evidence and argument on all issues involved in
93-3 a hearing held under this Act.
93-4 (c) On the written request of any interested party, the
93-5 commissioner shall keep a formal record of the proceedings of a
93-6 hearing held under this Act.
93-7 (d) A decision or order adverse to a party who appeared and
93-8 participated in a hearing must be in writing and include findings
93-9 of fact and conclusions of law, separately stated, on all issues
93-10 material to the decision reached. Findings of fact, if set forth
93-11 in statutory language, must be accompanied by a concise and
93-12 explicit statement of the underlying facts supporting the findings.
93-13 (e) A decision or order entered after hearing is final and
93-14 appealable on the 15th day after the date the decision or order is
93-15 entered unless a motion for rehearing is filed by a party within
93-16 that period, and if the motion for rehearing is overruled, the
93-17 decision or order is appealable after the date the order overruling
93-18 the motion is entered.
93-19 (f) Parties to a hearing shall be notified promptly either
93-20 personally or by mail of any decision, order, or other action taken
93-21 in respect to the subject matter of the hearing.
93-22 Sec. 12.09. JUDICIAL REVIEW. The administrative procedure
93-23 act governs judicial review of an act, order, ruling, or decision
93-24 of the commissioner or a rule adopted under this Act.
93-25 Sec. 12.10. PENALTY FOR FAILING TO COMPLY WITH LAW. The
93-26 commissioner may require a savings bank that knowingly violates or
93-27 fails to comply with this Act or a rule adopted under this Act to
94-1 pay not more than $1,000 a day to the Savings and Loan Department
94-2 of Texas for each day of the violation or failure after lawful
94-3 notice of the delinquency by the commissioner. The attorney
94-4 general may file suit for the collection of the penalty on
94-5 certification by the commissioner of the failure or refusal of the
94-6 savings bank to remit the assessed penalty.
94-7 Sec. 12.11. APPLICABILITY OF CHAPTER 4, BUSINESS & COMMERCE
94-8 CODE. A savings bank is subject to and has the benefit of Chapter
94-9 4, Business & Commerce Code, with respect to all items paid,
94-10 collected, settled, negotiated, or otherwise handled for customers
94-11 of the savings bank.
94-12 Sec. 12.12. APPLICABILITY OF OTHER LAW. (a) Except as
94-13 provided in Subsection (b) of this section, a reference in statutes
94-14 of this state, including Title 79, Revised Statutes (Article
94-15 5069-1.01 et seq., Vernon's Texas Civil Statutes), the Government
94-16 Code, and the Local Government Code or in a rule adopted under the
94-17 statutes to a "savings and loan association," "savings and loan,"
94-18 or "association" in the context of a savings and loan association
94-19 is also a reference to a savings bank, as defined in this Act.
94-20 (b) Subsection (a) of this section does not apply to this
94-21 Act, the Texas Savings and Loan Act (Article 852a, Vernon's Texas
94-22 Civil Statutes), The Texas Banking Code (Article 342-101 et seq.,
94-23 Vernon's Texas Civil Statutes), or the Penal Code.
94-24 Sec. 12.13. EMERGENCY CLOSING OF A SAVINGS BANK. (a) If
94-25 the officers of a savings bank determine that an emergency that
94-26 affects or may affect the savings bank's officers or operations
94-27 exists or is impending, the officers, in the reasonable and proper
95-1 exercise of their discretion, may determine to not conduct the
95-2 involved operations or open the savings bank's offices on any
95-3 business or banking day or, if the savings bank is open, to close
95-4 the offices or suspend and close the involved operations during the
95-5 continuation of the emergency. The office or operations closed may
95-6 remain closed until the officers determine the emergency has ended
95-7 and for additional time reasonably required to reopen. However, an
95-8 office or operations may not remain closed for more than 48
95-9 consecutive hours, excluding other legal holidays, without the
95-10 approval of the commissioner. A savings bank closing an office or
95-11 operations under this section shall give the commissioner prompt
95-12 notice of its action as conditions permit and by any means
95-13 available.
95-14 (b) In this section, "emergency" means a condition or
95-15 occurrence that physically interferes with the conducting of normal
95-16 business at the offices of a savings bank or of particular savings
95-17 bank operations or that poses an imminent or existing threat to the
95-18 safety or security of persons, property, or both. In addition to
95-19 other causes, an emergency may arise as a result of:
95-20 (1) fire, flood, earthquake, hurricane, tornado, wind,
95-21 rain, or snowstorm;
95-22 (2) labor dispute and strike;
95-23 (3) power failure;
95-24 (4) transportation failure;
95-25 (5) interruption of communication facilities;
95-26 (6) shortage of fuel, housing, food, transportation,
95-27 or labor;
96-1 (7) robbery or burglary;
96-2 (8) actual or threatened enemy attack;
96-3 (9) epidemic or other catastrophe;
96-4 (10) riot or other civil commotion; or
96-5 (11) any other actual or threatened acts of
96-6 lawlessness or violence.
96-7 (c) A day on which a savings bank or one or more of its
96-8 operations is closed during all or part of its normal business
96-9 hours under this section is considered to be a legal holiday for
96-10 the savings bank to the extent it suspends operations. Liability
96-11 or loss of rights does not arise on the part of a savings bank or a
96-12 director, officer, or employee of the savings bank from a closing
96-13 authorized by this section.
96-14 (d) A provision of this section is in addition to and not in
96-15 substitution for or in limitation of any other provision of this
96-16 Act or other law of this state or the United States authorizing the
96-17 closing of a savings bank or excusing the delay by a savings bank
96-18 in the performance of its duties and obligations because of
96-19 emergencies or conditions beyond the savings bank's control or
96-20 otherwise.
96-21 Sec. 12.14. AUTHORIZATION OF DERIVATIVE SUITS. (a) The
96-22 commissioner may bring a derivative suit in the right of a savings
96-23 bank based on an unpursued cause of action if:
96-24 (1) the commissioner determines the savings bank has
96-25 an unpursued cause of action and that suit on that cause should be
96-26 brought to protect the interest of the savings bank, the
96-27 stockholders, members, or creditors of the savings bank or the
97-1 public interest; and
97-2 (2) the savings bank has not brought suit on the cause
97-3 before the 30th day after the date on which the commissioner gives
97-4 notice to the savings bank that the suit should be brought.
97-5 (b) Venue of a derivative suit, unless venue is mandatory,
97-6 is in a district court of Travis County.
97-7 (c) The commissioner may employ legal counsel to bring and
97-8 prosecute a derivative suit. The commissioner may pay counsel from
97-9 funds appropriated for the operation of the Savings and Loan
97-10 Department of Texas or may require the savings bank for which the
97-11 suit is brought to pay the counsel directly or to reimburse the
97-12 Savings and Loan Department of Texas for the payment. An amount
97-13 equal to the amount of the proceeds of a judgment on the suit, less
97-14 unreimbursed costs and expenses, including attorney fees incurred
97-15 by the Savings and Loan Department of Texas in prosecuting the
97-16 suit, shall be paid to the savings bank.
97-17 Sec. 12.15. LIABILITIES OF COMMISSIONER AND OTHERS; DEFENSE
97-18 BY ATTORNEY GENERAL. The commissioner, a member of the finance
97-19 commission, a deputy commissioner, an examiner, or any other
97-20 officer or employee of the Savings and Loan Department of Texas is
97-21 not personally liable for damages arising from the person's
97-22 official acts or omissions unless the acts or omissions are corrupt
97-23 or malicious. The attorney general shall defend an action brought
97-24 against such a person by reason of the person's official acts or
97-25 omissions, regardless of whether at the time of the initiation of
97-26 the action the defendant is an officer or employee of the Savings
97-27 and Loan Department of Texas.
98-1 SECTION 2. Article 2, Chapter I, The Texas Banking Code
98-2 (Article 342-102, Vernon's Texas Civil Statutes), is amended by
98-3 amending Subdivisions (12) and (13) and adding Subdivisions (26)
98-4 and (27) to read as follows:
98-5 (12) "State Savings and Loan Association" or "State
98-6 Association"--Any savings and loan association <or savings bank>
98-7 heretofore or hereafter organized under the laws of this State.
98-8 (13) "Federal Savings and Loan Association"--Any
98-9 savings and loan association <or savings bank> heretofore or
98-10 hereafter organized under the laws of the United States of America.
98-11 (26) "Savings Bank"--Any savings bank organized under
98-12 or subject to the Texas Savings Bank Act, Section 1, Senate Bill
98-13 No. 396, Acts of the 73rd Legislature, Regular Session, 1993.
98-14 (27) "Federal Savings Bank"--Any savings bank
98-15 organized under the laws of the United States of America.
98-16 SECTION 3. Article 3, Chapter I, The Texas Banking Code
98-17 (Article 342-103, Vernon's Texas Civil Statutes), is amended to
98-18 read as follows:
98-19 Art. 3. Finance Commission--General Powers. A. There is
98-20 hereby established and created The Finance Commission of Texas
98-21 which shall consist of nine (9) members. The Finance Commission
98-22 shall:
98-23 (1) adopt rules and determine general policies for the
98-24 regulation of state banks, state associations, savings banks, and
98-25 the consumer credit industry in the state;
98-26 (2) consult and advise the Banking Commissioner,
98-27 Savings and Loan Commissioner, and Consumer Credit Commissioner on
99-1 the implementation and enforcement of the rules and policies
99-2 adopted by the Finance Commission; and
99-3 (3) carry out other duties, powers, and authority as
99-4 may be conferred by law.
99-5 B. The Finance Commission shall make a thorough and
99-6 intensive study of the Texas banking, savings and loan, savings
99-7 bank, and consumer credit statutes, respectively, with a view to so
99-8 strengthening said statutes as to attain and maintain the maximum
99-9 degree of protection to depositors, stockholders, shareholders, and
99-10 consumers, and shall report every two (2) years to the Legislature
99-11 by filing with the Clerks of the Senate and the House of
99-12 Representatives the results of its study, together with its
99-13 recommendations.
99-14 SECTION 4. Section 2, Article 4, Chapter I, The Texas
99-15 Banking Code (Article 342-104, Vernon's Texas Civil Statutes), is
99-16 amended to read as follows:
99-17 2. Two (2) members of the Finance Commission shall be
99-18 savings <and loan> executives. For the purposes of this article
99-19 <section> a savings <and loan> executive is a person who:
99-20 (i) has had five (5) years or more executive
99-21 experience in the seven (7) years next preceding the person's
99-22 appointment in a State or Federal Savings and Loan Association, a
99-23 savings bank, or a federal savings bank in a capacity not lower
99-24 than cashier;<,> and
99-25 (ii) <who> at the time of the person's appointment is
99-26 an officer in a State association or a savings bank.
99-27 SECTION 5. Section 4, Article 4, Chapter I, The Texas
100-1 Banking Code (Article 342-104, Vernon's Texas Civil Statutes), is
100-2 amended to read as follows:
100-3 4. The members of the Finance Commission who are not banking
100-4 executives or savings <and loan> executives shall be selected by
100-5 the Governor on the basis of recognized business ability. Those
100-6 members may not be banking executives, savings <and loan>
100-7 executives, or controlling shareholders in a bank, <or> savings and
100-8 loan association, or savings bank. At least one of those members
100-9 must be a certified public accountant.
100-10 SECTION 6. Article 14, Chapter I, The Texas Banking Code
100-11 (Article 342-114, Vernon's Texas Civil Statutes), is amended to
100-12 read as follows:
100-13 Art. 14. SAVINGS AND LOAN/SAVINGS BANK RULES AND
100-14 REGULATIONS--LOANS AND INVESTMENTS--ADVISORY POWERS. The Finance
100-15 Commission, through resolutions, may promulgate general rules and
100-16 regulations not inconsistent with the Constitution and Statutes of
100-17 this State, and from time to time amend the same, which rules and
100-18 regulations shall be applicable alike to all State associations and
100-19 savings banks, and may authorize State associations and savings
100-20 banks to invest their funds in any manner and to the same extent
100-21 which said association or savings banks could invest such funds
100-22 under existing or any future law, rule or regulation were they
100-23 organized and operating as a Federal Savings and Loan Association
100-24 or Federal savings bank under the laws of the United States,
100-25 provided, however, that this authority shall not be construed in
100-26 any wise to confer authority to abridge, or diminish or limit any
100-27 rights or powers specifically given to State associations or
101-1 savings banks by the statutory laws of this State. In addition to
101-2 such powers as may be conferred upon the Finance Commission by this
101-3 Act, <or by> the Savings and Loan Act of Texas, or the Texas
101-4 Savings Bank Act, as amended, the Finance Commission shall have the
101-5 following duties:
101-6 (a) When in the judgment of the Finance Commission,
101-7 protection of investors in State associations or savings banks
101-8 requires additional regulations or limitations, to promulgate such
101-9 additional rules and regulations as will in its judgment prevent
101-10 State associations or savings banks from concentrating an excessive
101-11 or unreasonable portion of their resources in any particular type
101-12 or character of loan or security authorized by the Texas Savings
101-13 and Loan Act or the Texas Savings Bank Act.
101-14 (b) When in the judgment of the Finance Commission,
101-15 establishment of standards or changes in existing standards for
101-16 investment are necessary, to establish standards through rules and
101-17 regulations for investments by State associations or savings banks,
101-18 which standards may also establish a limit in the amount which
101-19 State associations or savings banks may invest in any particular
101-20 type or character of investment to an amount or percentage based
101-21 upon assets or net worth.
101-22 (c) To advise with the Savings and Loan Commissioner as to
101-23 the forms to be prescribed for the filing of the annual statements
101-24 with the Savings and Loan Department and the forms to be prescribed
101-25 for the publication of the annual financial statements by State
101-26 associations and savings banks.
101-27 (d) To confer with the Savings and Loan Commissioner, the
102-1 Chairman of the Federal Deposit Insurance Corporation, and the
102-2 District Director of the Office of Thrift Supervision <and with the
102-3 President of the regional Federal Home Loan Bank of the district in
102-4 which State associations are members> on general and special
102-5 business and economic conditions affecting State associations and
102-6 savings banks.
102-7 (e) To request information and to make recommendations with
102-8 respect to matters within the jurisdiction of the Savings and Loan
102-9 Commissioner as relating to the savings and loan and savings bank
102-10 business, including recommendations as to legislation affecting
102-11 such institutions, providing, that no information regarding the
102-12 financial condition of any State savings and loan association or
102-13 savings bank obtained through examination or otherwise shall be
102-14 divulged to any member of the Finance Commission, nor shall any
102-15 member of the Finance Commission be given access to the files and
102-16 records of the Department appertaining thereto; provided, further,
102-17 however, that the Commissioner may disclose to the Finance
102-18 Commission any file or record pertinent to any hearing or matter
102-19 pending before the Finance Commission.
102-20 SECTION 7. Sections (a), (b), (c), (d), (g), (h), (i), and
102-21 (k), Article 5, Chapter II, The Texas Banking Code (Article
102-22 342-205, Vernon's Texas Civil Statutes), are amended to read as
102-23 follows:
102-24 (a) By and with the advice and consent of the Senate, the
102-25 Finance Commission of Texas, by at least five (5) affirmative
102-26 votes, shall elect a Savings and Loan Commissioner who shall serve
102-27 at the pleasure of the Finance Commission and who shall be an
103-1 employee of said Commission and subject to its orders and
103-2 direction. The Savings and Loan Commissioner shall have had not
103-3 less than seven (7) years experience in the executive management of
103-4 a savings and loan association or savings bank or in savings and
103-5 loan or savings bank supervision. The Savings and Loan
103-6 Commissioner shall receive such compensation as is fixed by the
103-7 Finance Commission. The compensation shall be paid from funds of
103-8 the Savings and Loan Department.
103-9 (b) The Savings and Loan Commissioner, subject to the
103-10 approval of the Finance Commission, shall appoint one or more
103-11 Deputy Savings and Loan Commissioners, one of which shall have the
103-12 same qualifications required of the Savings and Loan Commissioner
103-13 and shall be designated by the Savings and Loan Commissioner to be
103-14 vested with all of the powers and perform all of the duties of the
103-15 Savings and Loan Commissioner during the absence or inability of
103-16 the Savings and Loan Commissioner. The Savings and Loan
103-17 Commissioner may also appoint a Hearing Officer or Officers to
103-18 conduct such investigations or public hearings as may be required
103-19 by law of the Savings and Loan Commissioner. The Hearing Officer
103-20 or Officers shall be vested for the purpose of such investigations
103-21 or public hearings with the power and authority as the Savings and
103-22 Loan Commissioner would have if he were personally conducting such
103-23 investigation or public hearing, provided that the Hearing Officer
103-24 or Officers shall not be authorized to make any order upon the
103-25 final subject matter of such investigation or hearing; and
103-26 provided, further, that the record of any investigation or public
103-27 hearing conducted before the Hearing Officer may be considered by
104-1 the Savings and Loan Commissioner in the same manner and to the
104-2 same extent as evidence that is adduced before him personally in
104-3 any such proceeding. The Savings and Loan Commissioner shall also
104-4 appoint Savings and Loan and Savings Bank Examiners. Each Deputy
104-5 Savings and Loan Commissioner, the Savings and Loan and Savings
104-6 Bank Examiners, each Hearing Officer, and all other officers and
104-7 employees of the Savings and Loan Department shall receive such
104-8 compensation as is fixed by the Finance Commission which shall be
104-9 paid from the funds of the Savings and Loan Department.
104-10 (c) The Savings and Loan Commissioner, each Deputy Savings
104-11 and Loan Commissioner, each Hearing Officer, each Savings and Loan
104-12 and Savings Bank Examiner, and every other officer and employee of
104-13 the Savings and Loan Department specified by the Finance
104-14 Commission, shall, before entering upon the duties of his office,
104-15 take an oath of office and make a fidelity bond in the sum of Ten
104-16 Thousand Dollars ($10,000) payable to the Governor of the State of
104-17 Texas, and his successors in office, in individual, schedule or
104-18 blanket form, executed by a surety appearing upon the list of
104-19 approved sureties acceptable to the United States Government. Each
104-20 bond required under this Article shall be in the form approved by
104-21 the Finance Commission. The premiums for such bonds shall be paid
104-22 out of the funds of the Savings and Loan Department.
104-23 (d) Upon the appointment and qualification of a Savings and
104-24 Loan Commissioner under this Act such Savings and Loan Commissioner
104-25 shall in person or by and through the Deputy Savings and Loan
104-26 Commissioner, Savings and Loan and Savings Bank Examiners, or other
104-27 officers of the Savings and Loan Department, supervise and
105-1 regulate, in accordance with the rules and regulations promulgated
105-2 by the Savings and Loan Commissioner together with the Finance
105-3 Commission, all savings and loan associations and savings banks
105-4 doing business in this State (except Federal Savings and Loan
105-5 Associations or Federal Savings Banks organized and existing under
105-6 Federal Law).
105-7 (g) The Savings and Loan Commissioner shall attend each
105-8 meeting of the Finance Commission at which matters relating to
105-9 savings and loan associations or savings banks will be considered,
105-10 but he shall not vote.
105-11 (h) The Savings and Loan Commissioner and the Finance
105-12 Commission shall establish reasonable and necessary fees for the
105-13 administration of the Texas Savings and Loan Act (Article 852a,
105-14 Vernon's Texas Civil Statutes) and the Texas Savings Bank Act and
105-15 support of the Finance Commission as provided by Article 11C,
105-16 Chapter I, of this Code. The Savings and Loan Commissioner shall
105-17 collect all fees, penalties, charges and revenues required to be
105-18 paid by savings and loan associations and savings banks and shall
105-19 from time to time as directed by the Finance Commission submit to
105-20 such Commission a full and complete report of the receipts and
105-21 expenditures of the Savings and Loan Department, and the Finance
105-22 Commission may from time to time examine the financial records of
105-23 the Savings and Loan Department or cause them to be examined. In
105-24 addition, the financial transactions of the Savings and Loan
105-25 Department are subject to audit by the state auditor in accordance
105-26 with Chapter 321, Government Code, and the actual costs of such
105-27 audits shall be paid to the State Auditor from the funds of the
106-1 Savings and Loan Department. Notwithstanding anything to the
106-2 contrary contained in any other law of this State, beginning
106-3 September 1, 1985, all sums of money paid to the Savings and Loan
106-4 Department from all sources shall be deposited in the State
106-5 Treasury to the credit of a special fund to be known as the Savings
106-6 and Loan Department Expense Fund and may be used only for the
106-7 expenses incurred by the Savings and Loan Department and Finance
106-8 Commission. All expenses incurred by the Savings and Loan
106-9 Department shall be paid only from such fund. The Finance
106-10 Commission shall promulgate and adopt such rules and regulations as
106-11 may be necessary to coordinate the operation of the Savings and
106-12 Loan Department with the operation of the Banking Department and
106-13 the Office of Consumer Credit Commissioner.
106-14 (i) Insofar as the provisions of this Section may conflict
106-15 with any other provisions of The Texas Banking Code of 1943, as
106-16 amended, or Senate Bill No. 111, Acts 1929, 41st Legislature, page
106-17 100, Chapter 61, as amended, or the Texas Savings and Loan Act of
106-18 1963, Chapter 113, Acts 58th Legislature, 1963, page 269, et seq.,
106-19 or the Texas Savings Bank Act, as amended, the provisions of this
106-20 Act shall control; except that the terms "Savings and Loan," and
106-21 "Savings and Loan Association," as used herein, are intended to and
106-22 shall have the same meaning as the terms "Building and Loan" and
106-23 "Building and Loan Association" as used in said Statutes.
106-24 (k) An officer or employee of the Savings and Loan
106-25 Department may not be an officer, employee, or paid consultant of a
106-26 trade association in the savings and loan industry or the savings
106-27 bank industry.
107-1 SECTION 8. Section 3, Article 9, Chapter VI, The Texas
107-2 Banking Code (Article 342-609, Vernon's Texas Civil Statutes), is
107-3 amended to read as follows:
107-4 Sec. 3. In this article, "financial institution" means a
107-5 state or national bank, <or> state or federal savings and loan
107-6 association, or state or federal savings bank maintaining an
107-7 office, branch, or agency office in this state or otherwise engaged
107-8 in the business of lending money or extending credit in this state.
107-9 SECTION 9. Section 4, Article 5, Chapter VII, The Texas
107-10 Banking Code (Article 342-705, Vernon's Texas Civil Statutes), is
107-11 amended to read as follows:
107-12 Sec. 4. In this article "financial institution" means a
107-13 state or national bank, <or> state or federal savings and loan
107-14 association, or state or federal savings bank maintaining an
107-15 office, branch, or agency office in this state or otherwise engaged
107-16 in the business of lending money or extending credit in this state.
107-17 SECTION 10. Subsection (a), Section 5, Article 5, Chapter
107-18 VII, The Texas Banking Code (Article 342-705, Vernon's Texas Civil
107-19 Statutes), is amended to read as follows:
107-20 (a) This article does not restrict or apply to amendment of
107-21 a depository contract, addition of a new term or provision to a
107-22 depository contract, or disclosure or production of deposits or of
107-23 records of accounts and other financial institution <bank> records
107-24 if the amendment, addition, or disclosure is made under or in
107-25 substantial compliance with applicable federal law, including
107-26 regulations. This article does not restrict or apply to the use or
107-27 disclosure by a financial institution <bank> of information or
108-1 records pertaining to deposits, accounts, or financial institution
108-2 <bank> transactions if the use or disclosure is made in good faith
108-3 in the usual course of the financial business of the financial
108-4 institution <bank>, is made by the financial institution <bank> in
108-5 the course of the litigation affecting its interests, or is made
108-6 with express or implied consent of the depositor or customer. This
108-7 article does not apply to the investigation or prosecution of
108-8 criminal offenses.
108-9 SECTION 11. Subsection (a), Section 32.71, Penal Code, is
108-10 amended to read as follows:
108-11 (a) An officer, director, member of any committee, clerk, or
108-12 agent of any savings and loan association or savings bank in this
108-13 state commits an offense if the person embezzles, abstracts, or
108-14 misapplies money, funds, or credits of the association or savings
108-15 bank, issues or puts into circulation any warrant or other order
108-16 without proper authority, issues, assigns, transfers, cancels, or
108-17 delivers up any note, bond, draft, mortgage, judgment, decree, or
108-18 other written instrument belonging to the association or savings
108-19 bank, certifies to or makes a false entry in any book, report, or
108-20 statement of or to the association or savings bank, with intent to
108-21 deceive, injure, or defraud the association or savings bank or a
108-22 member of the association or savings bank for the purpose of
108-23 inducing any person to become a member of the association or
108-24 savings bank or to deceive anyone appointed to examine the affairs
108-25 of the association or savings bank.
108-26 SECTION 12. Subsection (a), Section 32.72, Penal Code, is
108-27 amended to read as follows:
109-1 (a) Any person commits an offense if the person for the
109-2 purpose of influencing the actions of an association or savings
109-3 bank or its employees, agents, or representatives or for the
109-4 purpose of influencing the actions of The Finance Commission of
109-5 Texas, the savings and loan commissioner, or employees, agents, or
109-6 representatives of the Savings and Loan Department of Texas,
109-7 knowingly:
109-8 (1) removes, mutilates, destroys, or conceals a paper,
109-9 book, or record of a savings and loan association or savings bank
109-10 or of the savings and loan commissioner or the Savings and Loan
109-11 Department of Texas for the purpose of concealing a fact or
109-12 suppressing evidence;
109-13 (2) makes, passes, alters, or publishes a false,
109-14 counterfeit, or forged instrument, paper, document, statement, or
109-15 report to a savings and loan association or savings bank or to the
109-16 savings and loan commissioner or the Savings and Loan Department of
109-17 Texas; or
109-18 (3) substantially overvalues land, property, security,
109-19 an asset, or income in connection with a transaction with a savings
109-20 and loan association or savings bank without substantiation,
109-21 justification, or supporting documentation generally accepted by
109-22 appraisal standards.
109-23 SECTION 13. The importance of this legislation and the
109-24 crowded condition of the calendars in both houses create an
109-25 emergency and an imperative public necessity that the
109-26 constitutional rule requiring bills to be read on three several
109-27 days in each house be suspended, and this rule is hereby suspended,
110-1 and that this Act take effect and be in force from and after its
110-2 passage, and it is so enacted.