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