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A BILL TO BE ENTITLED
|
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AN ACT
|
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relating to the application of the Business Organizations Code to |
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certain financial institutions and the regulation of those |
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institutions by the Texas Department of Banking. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 11.105, Finance Code, is amended to read |
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as follows: |
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Sec. 11.105. MATTER IN WHICH MEMBER HAS PERSONAL |
|
INTEREST. A member of the finance commission may not act or |
|
participate in the portion of a commission meeting during which the |
|
matter considered specifically relates to an entity: |
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(1) of which the member or the member's spouse is an |
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officer, director, stockholder, shareholder, [manager,
|
|
participant, participant-transferee,] or owner; or |
|
(2) in which the member or the member's spouse has |
|
another financial interest. |
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SECTION 2. Sections 31.002(a)(7), (9), (13), (29), (42), |
|
(48), (49), (57), and (58), Finance Code, are amended to read as |
|
follows: |
|
(7) "Board" means the board of directors[, managers,
|
|
or managing participants] of, or a person or group of persons acting |
|
in a comparable capacity for, a state bank or other entity. As the |
|
context requires, the term includes the board of managers of a |
|
limited banking association. |
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(9) "Capital" means: |
|
(A) the sum of: |
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(i) the par value of all shares [or
|
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participation shares] of the state bank having a par value that have |
|
been issued; |
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(ii) the consideration set by the board [in
|
|
the manner provided by the Texas Business Corporation Act] for all |
|
shares [or participation shares] of the state bank without par |
|
value that have been issued, except a part of that consideration |
|
that: |
|
(a) has been actually received; |
|
(b) is less than all of that |
|
consideration; and |
|
(c) the board, by resolution adopted |
|
not later than the 60th day after the date of issuance of those |
|
shares, has allocated to surplus with the prior approval of the |
|
banking commissioner; and |
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(iii) an amount not included in |
|
Subparagraphs (i) and (ii) that has been transferred to capital of |
|
the state bank, on the payment of a share dividend or on adoption by |
|
the board of a resolution directing that all or part of surplus be |
|
transferred to capital, minus each reduction made as permitted by |
|
law; less |
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(B) all amounts otherwise included in Paragraphs |
|
(A)(i) and (ii) that are attributable to the issuance of securities |
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by the state bank and that the banking commissioner determines, |
|
after notice and an opportunity for hearing, should be classified |
|
as debt rather than equity securities. |
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(13) "Control" means: |
|
(A) the ownership of or ability or power to vote, |
|
directly, acting through one or more other persons, or otherwise |
|
indirectly, 25 percent or more of the outstanding shares of a class |
|
of voting securities of a bank or other company; |
|
(B) the ability to control the election of a |
|
majority of the board of a bank or other company; |
|
(C) the power to exercise, directly or |
|
indirectly, a controlling influence over the management or policies |
|
of the bank or other company as determined by the banking |
|
commissioner after notice and an opportunity for hearing; or |
|
(D) the conditioning of the transfer of 25 |
|
percent or more of the outstanding shares [or participation shares] |
|
of a class of voting securities of a bank or other company on the |
|
transfer of 25 percent or more of the outstanding shares of a class |
|
of voting securities of another bank or other company. |
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(29) "Hazardous condition" means: |
|
(A) a refusal by a state bank to permit |
|
examination of its books, papers, accounts, records, or affairs by |
|
the banking commissioner; |
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(B) a circumstance or condition in which an |
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unreasonable risk of substantial loss is threatened to the |
|
depositors, creditors, or shareholders[, or participants] of a |
|
state bank, including a circumstance or condition in which a state |
|
bank: |
|
(i) has inadequate equity capital, or the |
|
adequacy of its equity capital is threatened; |
|
(ii) has concentrated an excessive or |
|
unreasonable portion of its assets in a type or character of loan or |
|
investment; |
|
(iii) violates or refuses to comply with |
|
this subtitle, another statute or rule applicable to state banks, |
|
or a final and enforceable order of the banking commissioner; |
|
(iv) is in a condition that renders the |
|
continuation of a particular business practice hazardous to the |
|
public or to its depositors and creditors; |
|
(v) conducts business in an unsafe and |
|
unsound manner; or |
|
(vi) is insolvent; or |
|
(C) a violation by a state bank of a condition of |
|
its chartering or an agreement entered into between the bank and the |
|
banking commissioner or the department. |
|
(42) "Participation agreement" means the instrument |
|
stating the agreement among the participants of a limited banking |
|
association relating to the rights and duties of the participants |
|
[and participant-transferees], including: |
|
(A) allocations of income, loss, deduction, |
|
credit, distributions, liquidation rights, redemption rights, and |
|
liabilities of participants[, priority rights of
|
|
participant-transferees to transfer participation shares, and
|
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rights of participants to purchase participation shares of
|
|
participant-transferees]; |
|
(B) procedures for elections and voting by |
|
participants; and |
|
(C) any other matter not prohibited by or |
|
inconsistent with this subtitle. |
|
(48) "Shareholder" means an owner of a share in a |
|
banking association. As the context requires, the term includes a |
|
participant. |
|
(49) "Shares" means the units into which the |
|
proprietary interests of a banking association are divided or |
|
subdivided by means of classes, series, relative rights, or |
|
preferences. As the context requires, the term includes |
|
participation shares. |
|
(57) "Undivided profits" means the part of equity |
|
capital of a state bank equal to the balance of its net profits, |
|
income, gains, and losses since the date of its formation, minus |
|
subsequent distributions to shareholders [or participants] and |
|
transfers to surplus or capital under share dividends or |
|
appropriate board resolutions. The term includes amounts allocated |
|
to undivided profits as a result of a merger. |
|
(58) "Voting security" means a share[, participation
|
|
share,] or other evidence of proprietary interest in a state bank or |
|
other company that has as an attribute the right to vote or |
|
participate in the election of the board of the state bank or other |
|
company, regardless of whether the right is limited to the election |
|
of fewer than all of the board members. The term includes a |
|
security that is convertible or exchangeable into a voting security |
|
[and a nonvoting participation share of a managing participant]. |
|
SECTION 3. Sections 31.006(a), (b), and (c), Finance Code, |
|
are amended to read as follows: |
|
(a) The provisions of the [Texas] Business Organizations |
|
Code [Corporation Act] regarding liability, defenses, and |
|
indemnification of a director, officer, agent, or employee of a |
|
corporation apply to a director, officer, agent, or employee of a |
|
depository institution in this state. Except as limited by those |
|
provisions, a disinterested director, [manager, managing
|
|
participant,] officer, or employee of a depository institution may |
|
not be held personally liable in an action seeking monetary damages |
|
arising from the conduct of the depository institution's affairs |
|
unless the damages resulted from the gross negligence or wilful or |
|
intentional misconduct of the person during the person's term of |
|
office or service with the depository institution. |
|
(b) A director, [manager, managing participant,] officer, |
|
or employee of a depository institution is disinterested with |
|
respect to a decision or transaction if: |
|
(1) the person fully discloses any interest in the |
|
decision or transaction and does not participate in the decision or |
|
transaction; or |
|
(2) the decision or transaction does not involve any |
|
of the following: |
|
(A) personal profit for the person through |
|
dealing with the depository institution or usurping an opportunity |
|
of the depository institution; |
|
(B) buying or selling an asset of the depository |
|
institution in a transaction in which the person has a direct or |
|
indirect pecuniary interest; |
|
(C) dealing with another depository institution |
|
or other person in which the person is a director, [manager,
|
|
managing participant,] officer, or employee or otherwise has a |
|
significant direct or indirect financial interest; or |
|
(D) dealing with a family member of the person. |
|
(c) A director[, manager, managing participant,] or officer |
|
who, in performing the person's duties and functions, acts in good |
|
faith and reasonably believes that reliance is warranted is |
|
entitled to rely on information, including an opinion, report, |
|
financial statement or other type of statement or financial data, |
|
decision, judgment, or performance, prepared, presented, made, or |
|
rendered by: |
|
(1) one or more directors, [managers, managing
|
|
participants,] officers, or employees of the depository |
|
institution, or of an entity under joint or common control with the |
|
depository institution, who the director[, manager, managing
|
|
participant,] or officer reasonably believes merit confidence; |
|
(2) legal counsel, a public accountant, or another |
|
person who the director[, manager, managing participant,] or |
|
officer reasonably believes merits confidence; or |
|
(3) a committee of the board of which the director[,
|
|
manager, or managing participant] is not a member. |
|
SECTION 4. Section 31.007(a), Finance Code, is amended to |
|
read as follows: |
|
(a) An officer, director, [manager, managing participant,] |
|
or employee of a bank that has its main office or a branch located in |
|
this state with fewer than 500 shareholders [or participants] or of |
|
a bank holding company with fewer than 500 shareholders [or
|
|
participants] that controls a bank that has its main office or a |
|
branch located in this state is exempt from the registration and |
|
licensing provisions of The Securities Act (Article 581-1 et seq., |
|
Vernon's Texas Civil Statutes) with respect to that person's |
|
participation in a transaction, including a sale, involving |
|
securities issued by: |
|
(1) the bank or bank holding company of which that |
|
person is an officer, director, [manager, managing participant,] or |
|
employee; |
|
(2) a bank holding company that controls the bank of |
|
which that person is an officer, director, [manager, managing
|
|
participant,] or employee; or |
|
(3) a bank controlled by the bank holding company of |
|
which that person is an officer, director, [manager, managing
|
|
participant,] or employee. |
|
SECTION 5. Section 31.105(b), Finance Code, is amended to |
|
read as follows: |
|
(b) The banking commissioner may examine a state bank more |
|
often than required by Subsection (a) as the commissioner considers |
|
necessary to: |
|
(1) safeguard the interests of depositors, creditors, |
|
and shareholders[, participants, and participant-transferees]; and |
|
(2) efficiently enforce applicable law. |
|
SECTION 6. Section 31.301(a), Finance Code, is amended to |
|
read as follows: |
|
(a) Except as expressly provided otherwise by this |
|
subtitle, Chapter 11 or 12, or a rule adopted under this subtitle, |
|
the following are confidential and may not be disclosed by the |
|
banking commissioner or an employee of the department: |
|
(1) information directly or indirectly obtained by the |
|
department in any manner, including an application or examination, |
|
concerning the financial condition or business affairs of a |
|
financial institution or a present, former, or prospective |
|
shareholder, [participant,] officer, director, [manager,] |
|
affiliate, or service provider of a financial institution, other |
|
than information in a published statement or in the public portion |
|
of a call report or profit and loss statement; and |
|
(2) all related files and records of the department. |
|
SECTION 7. Section 31.308, Finance Code, is amended to read |
|
as follows: |
|
Sec. 31.308. SHAREHOLDER INSPECTION RIGHTS. (a) |
|
Notwithstanding Section 21.218 or 101.502, Business Organizations |
|
Code [Article 2.44, Texas Business Corporation Act], a shareholder |
|
[or participant] of a state bank may not examine: |
|
(1) a report of examination or other confidential |
|
property of the department that is in the possession of the state |
|
bank; or |
|
(2) a book or record of the state bank that directly or |
|
indirectly pertains to financial or other information maintained by |
|
the bank on behalf of its customers, including a specific item in |
|
the minutes of the board or a committee of the board regarding loan |
|
review and approval or a loan delinquency report that would tend to |
|
identify the bank's customer. |
|
(b) This section does not affect a right of a shareholder |
|
[or participant] of a state bank acting in another capacity. |
|
SECTION 8. Section 32.002(a), Finance Code, is amended to |
|
read as follows: |
|
(a) The articles of association of a state bank must be |
|
signed and acknowledged by each organizer and must contain: |
|
(1) the name of the bank, subject to Subsection (b); |
|
(2) the period of the bank's duration, which may be |
|
perpetual, subject to Subsection (c); |
|
(3) the powers of the bank, which may be stated as: |
|
(A) all powers granted by law to a state bank; or |
|
(B) a list of the specific powers under Section |
|
32.001 that the bank chooses to exercise; |
|
(4) the aggregate number of shares [or participation
|
|
shares] that the bank will be authorized to issue and the number of |
|
classes of shares [or participation shares], which may be one or |
|
more; |
|
(5) if the shares [or participation shares] are to be |
|
divided into classes: |
|
(A) the designation of each class and statement |
|
of the preferences, limitations, and relative rights of the shares |
|
[or participation shares] of each class, which in the case of a |
|
limited banking association may be more fully set forth in the |
|
participation agreement; |
|
(B) the number of shares [or participation
|
|
shares] of each class; and |
|
(C) a statement of the par value of the shares [or
|
|
participation shares] of each class or that the shares [or
|
|
participation shares] are to be without par value; |
|
(6) any provision limiting or denying to shareholders |
|
[or participants] the preemptive right to acquire additional or |
|
treasury shares [or participation shares] of the bank; |
|
(7) any provision granting the right of shareholders |
|
[or participants] to cumulative voting in the election of directors |
|
[or managers]; |
|
(8) the aggregate amount of consideration to be |
|
received for all shares [or participation shares] initially issued |
|
by the bank and a statement that: |
|
(A) all authorized shares [or participation
|
|
shares] have been subscribed; and |
|
(B) all subscriptions received provide for the |
|
consideration to be fully paid in cash before issuance of the |
|
charter; |
|
(9) any provision [consistent with law that the
|
|
organizers elect to set forth in the articles of association for the
|
|
regulation of the internal affairs of the bank or] that is otherwise |
|
required by this subtitle to be set forth in the articles of |
|
association; |
|
(10) the street address of the bank's initial home |
|
office; [and] |
|
(11) [either:
|
|
[(A)] the number of directors [or managers] |
|
constituting the initial board and the names and street addresses |
|
of the persons who are to serve as directors [or managers] until the |
|
first annual meeting of shareholders [or participants] or until |
|
successor directors [or managers] have been elected and qualified; |
|
and |
|
(12) subject to Section 32.008, any provision |
|
consistent with law that the organizers elect to set forth in the |
|
articles of association for the regulation of the internal affairs |
|
of the bank, including provisions permissible under the Business |
|
Organizations Code for: |
|
(A) a for-profit corporation, in the case of a |
|
proposed banking association; or |
|
(B) a limited liability company, in the case of a |
|
proposed limited banking association [or
|
|
[(B)the statement described by Subsection (d)]. |
|
SECTION 9. Section 32.003, Finance Code, is amended to read |
|
as follows: |
|
Sec. 32.003. APPLICATION FOR STATE BANK CHARTER; STANDARDS |
|
FOR APPROVAL. (a) An application for a state bank charter must be |
|
made under oath and in the form required by the banking |
|
commissioner, who shall inquire fully into the identity and |
|
character of each proposed director, [manager,] officer, [managing
|
|
participant,] and principal shareholder [or participant]. The |
|
application must be accompanied by all charter fees and deposits |
|
required by law. |
|
(b) The banking commissioner shall grant a state bank |
|
charter only if the commissioner determines that the organizers |
|
have established that public convenience and advantage will be |
|
promoted by the establishment of the state bank. In determining |
|
whether public convenience and advantage will be promoted, the |
|
banking commissioner shall consider the convenience of the public |
|
to be served and whether: |
|
(1) the organizational and capital structure and |
|
amount of initial capitalization is adequate for the business plan; |
|
(2) the anticipated volume and nature of business |
|
indicates a reasonable probability of success and profitability |
|
based on the market sought to be served; |
|
(3) the officers and[,] directors[, managers, and
|
|
managing participants] as a group have sufficient banking |
|
experience, ability, standing, competence, trustworthiness, and |
|
integrity to justify a belief that the bank will operate in |
|
compliance with law and that success of the bank is probable; |
|
(4) each principal shareholder [or participant] has |
|
sufficient experience, ability, standing, competence, |
|
trustworthiness, and integrity to justify a belief that the bank |
|
will be free from improper or unlawful influence or interference |
|
with respect to the bank's operation in compliance with law; and |
|
(5) the organizers are acting in good faith. |
|
SECTION 10. Section 32.004(c), Finance Code, is amended to |
|
read as follows: |
|
(c) Rules adopted under this subtitle may specify the |
|
confidential or nonconfidential character of information obtained |
|
by the department under this chapter. Except as provided by |
|
Subchapter D, Chapter 31, or in rules regarding confidential |
|
information, the financial statement of a proposed officer or[,] |
|
director[, manager, or managing participant] is confidential and |
|
not subject to public disclosure. |
|
SECTION 11. Section 32.006, Finance Code, is amended to |
|
read as follows: |
|
Sec. 32.006. ISSUANCE OF CERTIFICATE OF AUTHORITY. A state |
|
bank may not engage in the business of banking until it receives a |
|
certificate of authority from the banking commissioner. The |
|
banking commissioner may not deliver the certificate of authority |
|
until the bank has: |
|
(1) received cash for the issuance of all authorized |
|
shares [or participation shares] in the full amount subscribed; |
|
(2) elected or qualified the initial officers and |
|
directors [or managers, as appropriate,] named in the application |
|
for charter or other officers and directors [or managers] approved |
|
by the banking commissioner; and |
|
(3) complied with all the other requirements of this |
|
subtitle relating to the organization of state banks. |
|
SECTION 12. Section 32.008, Finance Code, is amended to |
|
read as follows: |
|
Sec. 32.008. APPLICATION OF GENERAL CORPORATE LAW. (a) The |
|
[Texas] Business Organizations Code applies [Corporation Act and
|
|
the Texas Miscellaneous Corporation Laws Act (Article 1302-1.01 et
|
|
seq., Vernon's Texas Civil Statutes) apply] to a banking |
|
association as if it were a for-profit corporation, and [the Texas
|
|
Limited Liability Company Act (Article 1528n, Vernon's Texas Civil
|
|
Statutes) applies] to a limited banking association as if it were a |
|
limited liability company, to the extent not inconsistent with this |
|
subtitle or the proper business of a state bank, except that: |
|
(1) a reference in the Business Organizations Code |
|
[those Acts] to the secretary of state means the banking |
|
commissioner unless the context requires otherwise; and |
|
(2) the right of shareholders [or participants] to |
|
cumulative voting in the election of directors [or managers] exists |
|
only if granted by the bank's articles of association. |
|
(b) The finance commission may adopt rules to limit or |
|
refine the applicability of the laws listed by Subsection (a) or (d) |
|
to a state bank or to alter or supplement the procedures and |
|
requirements of those laws applicable to an action taken under this |
|
chapter. |
|
(c) Unless expressly authorized by this subtitle or a rule |
|
adopted under this subtitle, a state bank may not take an action |
|
authorized by a law listed by Subsection (a) or (d) regarding its |
|
corporate status, its capital structure, or a matter of corporate |
|
governance, of the type for which those laws would require a filing |
|
with the secretary of state if the bank were a business corporation, |
|
without submitting the filing to the banking commissioner and |
|
obtaining the banking commissioner's prior written approval of the |
|
action. |
|
(d) Notwithstanding Subsection (a), this subsection |
|
establishes governing law with respect to a state bank organized |
|
before January 1, 2006: |
|
(1) to the extent not inconsistent with this subtitle |
|
or the proper business of a state bank: |
|
(A) the Texas Business Corporation Act, the Texas |
|
Miscellaneous Corporation Laws Act (Article 1302-1.01 et seq., |
|
Vernon's Texas Civil Statutes), and any other law relating to |
|
general business corporations apply to a state banking association, |
|
and a reference in this subtitle to the Business Organizations Code |
|
is considered a reference to the prior law; and |
|
(B) the Texas Limited Liability Company Act |
|
(Article 1528n, Vernon's Texas Civil Statutes) and any other law |
|
relating to a limited liability company organized in Texas apply to |
|
a limited banking association, and a reference in this subtitle to |
|
the Business Organizations Code is considered a reference to the |
|
prior law; |
|
(2) the finance commission may establish rules |
|
permitting a state bank to elect to be governed by the provisions of |
|
the Business Organizations Code to the extent not inconsistent with |
|
this subtitle or the proper business of a state bank; and |
|
(3) this subsection expires January 1, 2010. |
|
SECTION 13. Sections 32.101(c) and (d), Finance Code, are |
|
amended to read as follows: |
|
(c) [A limited banking association may not amend its
|
|
articles of association to extend its period of existence for a
|
|
perpetual period or for any period of years, unless the period of
|
|
existence is expressly contingent on the events resulting in
|
|
dissolution of the limited banking association under Section
|
|
33.208.
|
|
[(d)] Amendment or restatement of the articles of |
|
association of a state bank and approval of the bank's board and |
|
shareholders [or participants] must be made or obtained as provided |
|
by the [Texas] Business Organizations Code [Corporation Act] for |
|
the amendment or restatement of a certificate of formation by a |
|
for-profit corporation [articles of incorporation] except as |
|
otherwise provided by this subtitle or rules adopted under this |
|
subtitle. The original and one copy of the articles of amendment or |
|
restated articles of association must be filed with the banking |
|
commissioner for approval. Unless the submission presents novel or |
|
unusual questions, the banking commissioner shall approve or reject |
|
the amendment or restatement not later than the 31st day after the |
|
date the banking commissioner considers the submission |
|
informationally complete and accepted for filing. The banking |
|
commissioner may require the submission of additional information |
|
as considered necessary to an informed decision to approve or |
|
reject any amendment or restatement of articles of association |
|
under this section. If the banking commissioner finds that the |
|
amendment or restatement conforms to law and any conditions imposed |
|
by the banking commissioner, and any required filing fee has been |
|
paid, the banking commissioner shall: |
|
(1) endorse the face of the original and copy of the |
|
amendment or restatement with the date of approval and the word |
|
"Approved"; |
|
(2) file the original of the amendment or restatement |
|
in the department's records; and |
|
(3) deliver a certified copy of the amendment or |
|
restatement to the bank. |
|
SECTION 14. The heading to Section 32.102, Finance Code, is |
|
amended to read as follows: |
|
Sec. 32.102. ESTABLISHING SERIES OF SHARES [OR
|
|
PARTICIPATION SHARES]. |
|
SECTION 15. Sections 32.102(a) and (b), Finance Code, are |
|
amended to read as follows: |
|
(a) If the articles of association expressly give the board |
|
of a state bank authority to establish shares [or participation
|
|
shares] in series and determine the preferences, limitations, and |
|
relative rights of each series, the board may do so only in |
|
compliance with this section and any rules adopted under this |
|
subtitle. |
|
(b) A series of shares [or participation shares] may be |
|
established in the manner provided by the [Texas] Business |
|
Organizations Code [Corporation Act] as if the state bank were a |
|
domestic entity [corporation], but the shares [or participation
|
|
shares] of the series may not be issued and sold without the prior |
|
written approval of the banking commissioner under Section 32.103. |
|
The bank shall file the original and one copy of the statement of |
|
action required by the [Texas] Business Organizations Code |
|
[Corporation Act] with the banking commissioner. |
|
SECTION 16. Sections 32.103(a) and (b), Finance Code, are |
|
amended to read as follows: |
|
(a) A state bank may not reduce or increase its outstanding |
|
capital and surplus through dividend, redemption, issuance of |
|
shares [or participation shares], or otherwise, without the prior |
|
written approval of the banking commissioner, except as permitted |
|
by this section or rules adopted under this subtitle. |
|
(b) Unless restricted by rule, prior written approval is not |
|
required for an increase in capital and surplus accomplished |
|
through: |
|
(1) issuance of shares of common stock [or their
|
|
equivalent in participation shares] for cash; |
|
(2) declaration and payment of pro rata share |
|
dividends as defined by the [Texas] Business Organizations Code |
|
[Corporation Act]; or |
|
(3) adoption by the board of a resolution directing |
|
that all or part of undivided profits be transferred to capital or |
|
surplus. |
|
SECTION 17. Sections 32.104(a) and (b), Finance Code, are |
|
amended to read as follows: |
|
(a) With the prior written approval of the banking |
|
commissioner, a state bank may at any time, through action of its |
|
board and without requiring action of its shareholders [or
|
|
participants], issue and sell its capital notes or debentures. The |
|
capital notes or debentures must be subordinate to the claims of |
|
depositors and may be subordinate to other claims, including the |
|
claims of other creditors or the shareholders [or participants]. |
|
(b) Capital notes or debentures may be convertible into |
|
shares [or participation shares] of any class or series. The |
|
issuance and sale of convertible capital notes or debentures are |
|
subject to satisfaction of preemptive rights, if any, to the extent |
|
provided by law. |
|
SECTION 18. Sections 32.301(b) and (c), Finance Code, are |
|
amended to read as follows: |
|
(b) Implementation of the merger by the parties and approval |
|
of the board, shareholders, [participants,] or owners of the |
|
parties must be made or obtained in accordance with the [Texas] |
|
Business Organizations Code [Corporation Act] as if the state bank |
|
were a domestic entity [corporation] and all other parties to the |
|
merger were foreign [corporations and other] entities, except as |
|
may be otherwise provided by applicable rules. |
|
(c) A consummated merger has the effect provided by the |
|
[Texas] Business Organizations Code [Corporation Act]. A separate |
|
application is not required to relocate the home office of a |
|
surviving state bank or to grant authority to a surviving bank to |
|
operate new branch offices that previously existed as part of a |
|
merging financial institution if the intent of the surviving bank |
|
is clearly stated as part of the plan of merger. |
|
SECTION 19. Section 32.303, Finance Code, is amended to |
|
read as follows: |
|
Sec. 32.303. RIGHTS OF DISSENTERS FROM MERGER. A |
|
shareholder[, participant, or participant-transferee] may dissent |
|
from the merger to the extent, and by following the procedure |
|
provided, by the [Texas] Business Organizations Code [Corporation
|
|
Act] or any rules adopted under this subtitle. |
|
SECTION 20. Section 32.403, Finance Code, is amended to |
|
read as follows: |
|
Sec. 32.403. LIQUIDATION OF SELLING INSTITUTION. If the |
|
selling financial institution is at any time after the sale of |
|
assets voluntarily or involuntarily closed for liquidation by a |
|
state or federal regulatory agency, the purchasing bank shall pay |
|
to the receiver of the selling institution the balance of the money |
|
held by it in trust or on deposit for the selling institution and |
|
not yet paid to the depositors and creditors of the selling |
|
institution. Without further action the purchasing bank is |
|
discharged from all responsibilities to the selling institution and |
|
to [or] the selling institution's receiver, depositors, creditors, |
|
and shareholders[, participants, or participant-transferees]. |
|
SECTION 21. Sections 32.405(a) and (c), Finance Code, are |
|
amended to read as follows: |
|
(a) The board of a state bank, with the prior written |
|
approval of the banking commissioner, may cause the bank to sell all |
|
or substantially all of its assets without shareholder [or
|
|
participant] approval if: |
|
(1) the banking commissioner finds the interests of |
|
depositors and creditors are jeopardized because of insolvency or |
|
imminent insolvency and that the sale is in their best interest; and |
|
(2) the Federal Deposit Insurance Corporation or its |
|
successor approves the transaction and agrees to provide assistance |
|
to the prospective buyer under 12 U.S.C. Section 1823(c) or a |
|
comparable law unless the deposits of the bank are not insured. |
|
(c) This section does not affect the banking commissioner's |
|
right to take action under another law. The sale by a state bank of |
|
all or substantially all of its assets with shareholder [or
|
|
participant] approval is considered a voluntary dissolution and |
|
liquidation and is governed by Subchapter B, Chapter 36. |
|
SECTION 22. Sections 32.501(b) and (c), Finance Code, are |
|
amended to read as follows: |
|
(b) The merger or conversion by the state bank must be made |
|
and approval of its board and[,] shareholders[, or participants] |
|
must be obtained in accordance with the [Texas] Business |
|
Organizations Code [Corporation Act] as if the state bank were a |
|
domestic entity [corporation] and all other parties to the |
|
transaction, if any, were foreign [corporations and other] |
|
entities, except as provided by rule. For purposes of this |
|
subsection, a conversion is considered a merger into the successor |
|
form of financial institution. |
|
(c) The state bank does not cease to be a state bank subject |
|
to the supervision of the banking commissioner unless: |
|
(1) the banking commissioner has been given written |
|
notice of the intention to merge or convert before the 31st day |
|
before the date of the proposed transaction; |
|
(2) the bank has published notice of the transaction, |
|
in the form and frequency specified by the banking commissioner, |
|
in: |
|
(A) a newspaper of general circulation published |
|
in the county of its home office or, if such a newspaper is not |
|
published in the county, in an adjacent county; and |
|
(B) other locations that the banking |
|
commissioner considers appropriate; |
|
(3) the bank has filed with the banking commissioner: |
|
(A) a copy of the application filed with the |
|
successor regulatory authority, including a copy of each contract |
|
evidencing or implementing the merger or conversion, or other |
|
documents sufficient to show compliance with applicable law; |
|
(B) a certified copy of all minutes of board |
|
meetings and shareholder [or participant] meetings at which action |
|
was taken regarding the merger or conversion; and |
|
(C) a publisher's certificate showing |
|
publication of the required notice; |
|
(4) the banking commissioner determines that: |
|
(A) all deposit and other liabilities of the |
|
state bank are fully discharged, assumed, or otherwise retained by |
|
the successor form of financial institution; |
|
(B) any conditions imposed by the banking |
|
commissioner for the protection of depositors and creditors have |
|
been met or otherwise resolved; and |
|
(C) any required filing fees have been paid; and |
|
(5) the bank has received a certificate of authority |
|
to do business as the successor financial institution. |
|
SECTION 23. Section 32.502(b), Finance Code, is amended to |
|
read as follows: |
|
(b) A financial institution applying to convert into a state |
|
bank may receive a certificate of authority to do business as a |
|
state bank if the banking commissioner finds that: |
|
(1) the financial institution is not engaging in a |
|
pattern or practice of unsafe and unsound banking practices; |
|
(2) the financial institution has adequate |
|
capitalization for a state bank to engage in business at the same |
|
locations as the financial institution is engaged in business |
|
before the conversion; |
|
(3) the financial institution can be expected to |
|
operate profitably after the conversion; |
|
(4) the officers and[,] directors[, managers, and
|
|
managing participants] of the financial institution as a group have |
|
sufficient banking experience, ability, standing, competence, |
|
trustworthiness, and integrity to justify a belief that the |
|
financial institution will operate as a state bank in compliance |
|
with law; |
|
(5) each principal shareholder [or participant] has |
|
sufficient experience, ability, standing, competence, |
|
trustworthiness, and integrity to justify a belief that the |
|
financial institution will be free from improper or unlawful |
|
influence or interference with respect to the financial |
|
institution's operation as a state bank in compliance with law; and |
|
(6) if the converting financial institution did not |
|
have general depository powers and the state bank will have those |
|
powers, the factors set forth in Section 32.003(b) are satisfied. |
|
SECTION 24. Section 33.001(b), Finance Code, is amended to |
|
read as follows: |
|
(b) For purposes of this subchapter and except as otherwise |
|
provided by rules adopted under this subtitle, the principal |
|
shareholder [or principal participant] of a state bank that |
|
directly or indirectly owns or has the power to vote a greater |
|
percentage of voting securities of the bank than any other |
|
shareholder [or participant] is considered to control the bank. |
|
SECTION 25. Section 33.101(a), Finance Code, is amended to |
|
read as follows: |
|
(a) Voting securities of a state bank held by the bank in a |
|
fiduciary capacity under a will or trust, whether registered in the |
|
bank's name or in the name of its nominee, may not be voted in the |
|
election of directors [or managers] or on a matter affecting the |
|
compensation of directors, [managers,] officers, or employees of |
|
the bank in that capacity unless: |
|
(1) under the terms of the will or trust, the manner in |
|
which the voting securities are to be voted may be determined by a |
|
donor or beneficiary of the will or trust and the donor or |
|
beneficiary makes the determination in the matter at issue; |
|
(2) the terms of the will or trust expressly direct the |
|
manner in which the securities must be voted so that discretion is |
|
not vested in the bank as fiduciary; or |
|
(3) the securities are voted solely by a cofiduciary |
|
that is not an affiliate of the bank, as if the cofiduciary were the |
|
sole fiduciary. |
|
SECTION 26. Section 33.102, Finance Code, is amended to |
|
read as follows: |
|
Sec. 33.102. BYLAWS. Each [Except as provided by Section
|
|
33.207, each] state bank shall adopt bylaws and may amend its bylaws |
|
for the purposes and according to the procedures provided by the |
|
[Texas] Business Organizations Code [Corporation Act]. |
|
SECTION 27. Section 33.103, Finance Code, is amended to |
|
read as follows: |
|
Sec. 33.103. BOARD OF DIRECTORS[, MANAGERS, OR MANAGING
|
|
PARTICIPANTS]. (a) The board of a state bank must consist of not |
|
fewer than five but not more than 25 directors, [managers, or
|
|
managing participants,] a majority of whom are residents of this |
|
state. The [Except for a limited banking association in which
|
|
management has been retained by its participants, the] principal |
|
executive officer of the bank is a member of the board. The |
|
principal executive officer acting in the capacity of a board |
|
member is the board's presiding officer unless the board elects a |
|
different presiding officer to perform the duties as designated by |
|
the board. |
|
(b) Unless the banking commissioner consents otherwise in |
|
writing, a person may not serve as director[, manager, or managing
|
|
participant] of a state bank if: |
|
(1) the bank incurs an unreimbursed loss attributable |
|
to a charged-off obligation of or holds a judgment against: |
|
(A) the person; or |
|
(B) an entity that was controlled by the person |
|
at the time of funding and at the time of default on the loan that |
|
gave rise to the judgment or charged-off obligation; |
|
(2) the person is the subject of an order described by |
|
Section 35.007(a); or |
|
(3) the person has been convicted of a felony. |
|
(c) If a state bank [other than a limited banking
|
|
association operated by managing participants] does not elect |
|
directors [or managers] before the 61st day after the date of its |
|
regular annual meeting, the banking commissioner may appoint a |
|
conservator under Chapter 35 to operate the bank and elect |
|
directors [or managers], as appropriate. If the conservator is |
|
unable to locate or elect persons willing and able to serve as |
|
directors [or managers], the banking commissioner may close the |
|
bank for liquidation. |
|
(d) A vacancy on the board that reduces the number of |
|
directors[, managers, or managing participants] to fewer than five |
|
must be filled not later than the 30th day after the date the |
|
vacancy occurs. [A limited banking association with fewer than
|
|
five managing participants shall add one or more new participants
|
|
or elect a board of managers of not fewer than five persons to
|
|
resolve the vacancy.] If the vacancy is not timely filled, the |
|
banking commissioner may appoint a conservator under Chapter 35 to |
|
operate the bank and elect a board of not fewer than five persons to |
|
resolve the vacancy. If the conservator is unable to locate or |
|
elect five persons willing and able to serve as directors [or
|
|
managers], the banking commissioner may close the bank for |
|
liquidation. |
|
(e) Before each term to which a person is elected to serve as |
|
a director [or manager] of a state bank, [or annually for a person
|
|
who is a managing participant,] the person shall submit an |
|
affidavit for filing in the minutes of the bank stating that the |
|
person, to the extent applicable: |
|
(1) accepts the position and is not disqualified from |
|
serving in the position; |
|
(2) will not violate or knowingly permit an officer, |
|
director, [manager, managing participant,] or employee of the bank |
|
to violate any law applicable to the conduct of business of the |
|
bank; and |
|
(3) will diligently perform the duties of the |
|
position. |
|
(f) The banking commissioner in the exercise of discretion |
|
may waive or reduce the residency requirements for directors set |
|
forth in Subsection (a). |
|
SECTION 28. Section 33.104, Finance Code, is amended to |
|
read as follows: |
|
Sec. 33.104. ADVISORY DIRECTOR [OR ADVISORY MANAGER]. An |
|
advisory director [or advisory manager] is not considered a |
|
director [or manager] if the advisory director [or advisory
|
|
manager]: |
|
(1) is not elected by the shareholders [or
|
|
participants] of the bank; |
|
(2) does not vote on matters before the board or a |
|
committee of the board; |
|
(3) is not counted for purposes of determining a |
|
quorum of the board or committee; and |
|
(4) provides solely general policy advice to the |
|
board. |
|
SECTION 29. Sections 33.108(a) and (b), Finance Code, are |
|
amended to read as follows: |
|
(a) An officer, director, [manager, managing participant,] |
|
employee, or shareholder[, or participant] of a state bank commits |
|
an offense if the person knowingly: |
|
(1) conceals information or a fact, or removes, |
|
destroys, or conceals a book or record of the bank for the purpose |
|
of concealing information or a fact, from the banking commissioner |
|
or an agent of the banking commissioner; or |
|
(2) removes, destroys, or conceals any book or record |
|
of the bank that is material to a pending or anticipated legal or |
|
administrative proceeding. |
|
(b) An officer, director, [manager, managing participant,] |
|
or employee of a state bank commits an offense if the person: |
|
(1) knowingly makes a false entry in a book, record, |
|
report, or statement of the bank; or |
|
(2) violates or knowingly participates in a violation |
|
of, or permits another of the bank's officers, directors, |
|
[managers, managing participants,] or employees to violate, the |
|
prohibition on lending trust funds under Section 113.052, Property |
|
Code. |
|
SECTION 30. Section 33.109, Finance Code, is amended to |
|
read as follows: |
|
Sec. 33.109. TRANSACTIONS WITH MANAGEMENT AND AFFILIATES. |
|
(a) Without the prior approval of a disinterested majority of the |
|
board recorded in the minutes or, if a disinterested majority |
|
cannot be obtained, the prior written approval of the banking |
|
commissioner, a state bank may not directly or indirectly: |
|
(1) sell or lease an asset of the bank to an officer, |
|
director, [manager, managing participant,] or principal |
|
shareholder [or participant] of the bank or of an affiliate of the |
|
bank; or |
|
(2) purchase or lease an asset in which an officer, |
|
director, [manager, managing participant,] or principal |
|
shareholder [or participant] of the bank or of an affiliate of the |
|
bank has an interest. |
|
(b) An officer or[,] director[, manager, or managing
|
|
participant] of the bank who knowingly participates in or permits a |
|
violation of this section commits an offense. An offense under this |
|
subsection is a felony of the third degree. |
|
SECTION 31. Section 33.201(a), Finance Code, is amended to |
|
read as follows: |
|
(a) A [Except as provided by Subsection (b), a] |
|
participant[, participant-transferee,] or manager of a limited |
|
banking association is not liable for a debt, obligation, or |
|
liability of the limited banking association, including a debt, |
|
obligation, or liability under a judgment, decree, or order of |
|
court. A participant[, other than a full liability participant,] |
|
or a manager of a limited banking association is not a proper party |
|
to a proceeding by or against a limited banking association unless |
|
the object of the proceeding is to enforce a participant's or |
|
manager's right against or liability to a limited banking |
|
association. |
|
SECTION 32. Sections 33.204(a) and (b), Finance Code, are |
|
amended to read as follows: |
|
(a) Management of a limited banking association is vested in |
|
[the participants in proportion to each participant's contribution
|
|
to capital, as adjusted periodically to properly reflect any
|
|
additional contribution. The articles of association may provide
|
|
that management of a limited banking association is vested in] a |
|
board of managers [to be] elected [annually] by the participants as |
|
prescribed by the bylaws. |
|
(b) A board of managers operates in substantially the same |
|
manner as, and has substantially the same rights, powers, |
|
privileges, duties, and responsibilities, as a board of directors |
|
of a banking association, and a manager must meet the |
|
qualifications for a director under Section 33.103. [Participants
|
|
of a limited banking association may not retain management and must
|
|
elect a board of managers if:
|
|
[(1) any participant is disqualified from serving as a
|
|
managing participant under Section 33.103;
|
|
[(2) the limited banking association has fewer than
|
|
five or more than 25 participants; or
|
|
[(3) any participant has been removed by the banking
|
|
commissioner under Subchapter A, Chapter 35.] |
|
SECTION 33. Section 33.206, Finance Code, is amended to |
|
read as follows: |
|
Sec. 33.206. INTEREST IN LIMITED BANKING ASSOCIATION; |
|
TRANSFERABILITY OF INTEREST. (a) The interest of a participant [or
|
|
participant-transferee] in a limited banking association is the |
|
personal property of the participant [or the
|
|
participant-transferee] and may be transferred as provided by the |
|
bylaws or the participation agreement. |
|
(b) The bylaws or the participation agreement may not |
|
require the consent of any other participant in order for a |
|
participant to transfer participation shares, including voting |
|
rights. [A transferee of a participant's interest has the status of
|
|
a participant-transferee and does not by the transfer become a
|
|
participant or obtain a right to participate in the management of
|
|
the limited banking association.
|
|
[(c) A participant-transferee is entitled to receive only
|
|
the share of profits, return of contribution, or other distributive
|
|
benefit in respect to the interest transferred to which the
|
|
participant who transferred the interest would have been entitled.
|
|
[(d) A participant-transferee may become a participant only
|
|
as provided by the bylaws or the participation agreement.
|
|
[(e) A limited banking association may add additional
|
|
participants in the same manner as participant-transferees after
|
|
payment in full of the capital contributions to the limited banking
|
|
association payable for the issuance of additional participation
|
|
interests.] |
|
SECTION 34. Section 33.208, Finance Code, is amended to |
|
read as follows: |
|
Sec. 33.208. DISSOLUTION. The bylaws or the participation |
|
agreement may not require automatic termination, dissolution, or |
|
suspension of the limited banking association on the death, |
|
disability, bankruptcy, expulsion, or withdrawal of a participant, |
|
or on the happening of any other event other than the passage of |
|
time. [(a) A limited banking association organized under this
|
|
chapter is dissolved on:
|
|
[(1) the expiration of the period fixed for the
|
|
duration of the limited banking association;
|
|
[(2) a vote to dissolve or the execution of a written
|
|
consent to dissolve by all full liability participants, if any, and
|
|
a sufficient number of other participants that, combined with all
|
|
full liability participants, hold at least two-thirds of the
|
|
participation shares in each class in the association, or a greater
|
|
fraction as provided by the articles of association;
|
|
[(3) except as provided by the articles of
|
|
association, the death, insanity, expulsion, bankruptcy,
|
|
retirement, or resignation of a participant unless a majority in
|
|
interest of all remaining participants elect in writing not later
|
|
than the 90th day after the date of the event to continue the
|
|
business of the association; or
|
|
[(4) the occurrence of an event of dissolution
|
|
specified in the articles of association.
|
|
[(b) A dissolution under this section is considered to be
|
|
the initiation of a voluntary liquidation under Subchapter B,
|
|
Chapter 36.
|
|
[(c) An event of dissolution described by Subsection (a)(3)
|
|
does not cancel or revoke a contract to which the bank is a party,
|
|
including a trust indenture or agreement or voluntary dissolution
|
|
under Subchapter B, Chapter 36, until the period for the remaining
|
|
participants to continue the business of the bank has expired
|
|
without the remaining participants having completed the necessary
|
|
action to continue the business of the bank.] |
|
SECTION 35. Section 33.211, Finance Code, is amended to |
|
read as follows: |
|
Sec. 33.211. APPLICATION OF OTHER PROVISIONS TO LIMITED |
|
BANKING ASSOCIATIONS. For purposes of the provisions of Subtitle A |
|
and this subtitle other than this subchapter, as the context |
|
requires: |
|
(1) a manager is considered to be a director and the |
|
board of managers is considered to be the board of directors; |
|
(2) [if there is not a board of managers, a participant
|
|
is considered to be a director and all of the participants are
|
|
considered to be the board of directors;
|
|
[(3)] a participant [or participant-transferee] is |
|
considered to be a shareholder; |
|
(3) [(4)] a participation share is considered to be a |
|
share [of stock]; and |
|
(4) [(5)] a distribution is considered to be a |
|
dividend. |
|
SECTION 36. Section 34.102, Finance Code, is amended to |
|
read as follows: |
|
Sec. 34.102. TRANSACTION IN BANK SHARES [OR PARTICIPATION
|
|
SHARES]. (a) A state bank may not acquire a lien by pledge or |
|
otherwise on its own shares [or participation shares], or otherwise |
|
purchase or acquire title to its own shares [or participation
|
|
shares], except: |
|
(1) as necessary to avoid or minimize a loss on a loan |
|
or investment previously made in good faith; or |
|
(2) as provided by Subsection (b). |
|
(b) With the prior written approval of the banking |
|
commissioner or as permitted by rules adopted under this subtitle, |
|
a state bank may acquire title to its own shares [or participation
|
|
shares] and hold those shares [or participation shares] as treasury |
|
stock. Treasury stock acquired under this subsection is not |
|
considered an equity investment. |
|
(c) If a state bank acquires a lien on or title to its own |
|
shares [or participation shares] under this section, the lien may |
|
not by its original terms extend for more than two years. Except |
|
with the prior written approval of the banking commissioner, the |
|
bank may not hold title to its own shares [or participation shares] |
|
for more than one year. |
|
(d) A state bank may make loans on the collateral security |
|
of securities issued by an affiliate, if the loan is subject to and |
|
in compliance with the provisions of Sections 23A and 23B, Federal |
|
Reserve Act (12 U.S.C. Sections 371c and 371c-1), as amended, |
|
applicable to nonmember insured state banks by virtue of Section |
|
18(j)(1), Federal Deposit Insurance Act (12 U.S.C. Section |
|
1828(j)(1)), as amended. |
|
SECTION 37. Sections 34.104(b) and (c), Finance Code, are |
|
amended to read as follows: |
|
(b) If the portfolio of an investment company described by |
|
Subsection (a) consists wholly of investments in which the bank |
|
could invest directly without limitation [under Section
|
|
34.101(e)], the bank may invest in the investment company without |
|
limitation. |
|
(c) The bank may invest not more than an amount equal to 15 |
|
percent of the bank's capital and certified surplus in an |
|
investment company described by Subsection (a) the portfolio of |
|
which contains an investment or obligation in which the bank could |
|
not invest directly without limitation under this chapter [that is
|
|
subject to the limitations of Section 34.101(d) or 34.201(a)]. |
|
SECTION 38. Section 34.105(c)(2), Finance Code, is amended |
|
to read as follows: |
|
(2) "Banker's bank" means a bank insured by the Federal |
|
Deposit Insurance Corporation or a bank holding company that owns |
|
or controls such an insured bank if: |
|
(A) all equity securities of the bank or bank |
|
holding company, other than director's qualifying shares or shares |
|
issued under an employee compensation plan, are owned by depository |
|
institutions or depository institution holding companies; and |
|
(B) the bank or bank holding company and all its |
|
subsidiaries are engaged exclusively in providing: |
|
(i) services to or for other depository |
|
institutions, depository institution holding companies, and the |
|
directors, [managers, managing participants,] officers, and |
|
employees of other depository institutions and depository |
|
institution holding companies; and |
|
(ii) correspondent banking services at the |
|
request of other depository institutions, depository institution |
|
holding companies, or their subsidiaries. |
|
SECTION 39. Sections 34.202(a) and (d), Finance Code, are |
|
amended to read as follows: |
|
(a) An officer, director, [manager, managing participant,] |
|
or employee of a state bank who approves or participates in the |
|
approval of a loan with actual knowledge that the loan violates |
|
Section 34.201 is jointly and severally liable to the bank for the |
|
lesser of the amount by which the loan exceeded applicable lending |
|
limits or the bank's actual loss. The person remains liable for |
|
that amount until the loan and all prior indebtedness of the |
|
borrower to the bank have been fully repaid. |
|
(d) For purposes of this section, an officer, director, |
|
[manager, managing participant,] or employee of a state bank is |
|
presumed to know the amount of the bank's lending limit under |
|
Section 34.201(a) and the amount of the borrower's aggregate |
|
outstanding indebtedness to the bank immediately before a new loan |
|
or extension of credit to that borrower. |
|
SECTION 40. Section 34.203(b), Finance Code, is amended to |
|
read as follows: |
|
(b) This section does not authorize the bank to charge its |
|
borrower for payment of fees and expenses to an officer or[,] |
|
director[, manager, or managing participant] of the bank for |
|
services rendered in the person's capacity as an officer or[,] |
|
director[, manager, or managing participant]. |
|
SECTION 41. Sections 35.002(a) and (b), Finance Code, are |
|
amended to read as follows: |
|
(a) The banking commissioner has grounds to issue a cease |
|
and desist order to an officer, employee, or director[, manager, or
|
|
managing participant] of a state bank, or the bank itself acting |
|
through an authorized person, if the banking commissioner |
|
determines from examination or other credible evidence that the |
|
bank or person directly or indirectly has: |
|
(1) violated this subtitle or another applicable law; |
|
(2) engaged in a breach of trust or other fiduciary |
|
duty; |
|
(3) refused to submit to examination or examination |
|
under oath; |
|
(4) conducted business in an unsafe or unsound manner; |
|
or |
|
(5) violated a condition of the bank's charter or an |
|
agreement between the bank or the person and the banking |
|
commissioner or the department. |
|
(b) If the banking commissioner has grounds for action under |
|
Subsection (a) and finds that an order to cease and desist from a |
|
violation appears to be necessary and in the best interest of the |
|
bank involved and its depositors, creditors, and shareholders [or
|
|
participants], the banking commissioner may serve a proposed cease |
|
and desist order on the bank and each person who committed or |
|
participated in the action. The proposed order must: |
|
(1) be delivered by personal delivery or by registered |
|
or certified mail, return receipt requested; |
|
(2) state with reasonable certainty the grounds for |
|
the proposed order; and |
|
(3) state the effective date of the order, which may |
|
not be before the 21st day after the date the proposed order is |
|
delivered or mailed. |
|
SECTION 42. Sections 35.003(a) and (b), Finance Code, are |
|
amended to read as follows: |
|
(a) The banking commissioner has grounds to remove a present |
|
or former officer, director, [manager, managing participant,] or |
|
employee of a state bank from office or employment in, or prohibit a |
|
controlling shareholder [or participant] or other person |
|
participating in the affairs of a state bank from further |
|
participation in the affairs of, a state bank if the banking |
|
commissioner determines from examination or other credible |
|
evidence that: |
|
(1) the person: |
|
(A) intentionally committed or participated in |
|
commission of an act described by Section 35.002(a) with regard to |
|
the affairs of the bank; or |
|
(B) violated a final cease and desist order |
|
issued in response to the same or a similar act; |
|
(2) because of this action by the person: |
|
(A) the bank has suffered or will probably suffer |
|
financial loss or other damage; |
|
(B) the interests of the bank's depositors have |
|
been or could be prejudiced; or |
|
(C) the person has received financial gain or |
|
other benefit by reason of the action; and |
|
(3) the action: |
|
(A) involves personal dishonesty on the part of |
|
the person; or |
|
(B) demonstrates wilful or continuing disregard |
|
for the safety or soundness of the bank. |
|
(b) If the banking commissioner has grounds for action under |
|
Subsection (a) and finds that a removal or prohibition order |
|
appears to be necessary and in the best interest of the bank |
|
involved and its depositors, creditors, and shareholders [or
|
|
participants], the banking commissioner may serve a proposed |
|
removal or prohibition order, as appropriate, on a person alleged |
|
to have committed or participated in the action. The proposed order |
|
must: |
|
(1) be delivered by personal delivery or by registered |
|
or certified mail, return receipt requested; |
|
(2) state with reasonable certainty the grounds for |
|
removal or prohibition; and |
|
(3) state the effective date of the order, which may |
|
not be before the 21st day after the date the proposed order is |
|
delivered or mailed. |
|
SECTION 43. Section 35.005(a), Finance Code, is amended to |
|
read as follows: |
|
(a) If the banking commissioner believes that immediate |
|
action is necessary to prevent immediate and irreparable harm to |
|
the bank and its depositors, creditors, and shareholders [or
|
|
participants], the banking commissioner may issue one or more cease |
|
and desist, removal, or prohibition orders as emergency orders to |
|
become effective immediately on service without prior notice or |
|
hearing. Service must be by personal delivery or by registered or |
|
certified mail, return receipt requested. |
|
SECTION 44. Section 35.006, Finance Code, is amended to |
|
read as follows: |
|
Sec. 35.006. COPY OF LETTER OR ORDER IN BANK RECORDS. A |
|
copy of a determination letter, proposed order, emergency order, or |
|
final order issued by the banking commissioner under this |
|
subchapter shall be immediately brought to the attention of the |
|
board of the affected bank, regardless of whether the bank is a |
|
party, and filed in the minutes of the board. Each director[,
|
|
manager, or managing participant] shall immediately certify to the |
|
banking commissioner in writing that the certifying person has read |
|
and understood the determination letter, proposed order, emergency |
|
order, or final order. The required certification may not be |
|
considered an admission of a person in a subsequent legal or |
|
administrative proceeding. |
|
SECTION 45. Section 35.101(a), Finance Code, is amended to |
|
read as follows: |
|
(a) The banking commissioner by order may appoint a |
|
supervisor over a state bank if the banking commissioner determines |
|
from examination or other credible evidence that the bank is in |
|
hazardous condition and that an order of supervision appears to be |
|
necessary and in the best interest of the bank and its depositors, |
|
creditors, and shareholders [or participants], or the public. |
|
SECTION 46. Section 35.102(a), Finance Code, is amended to |
|
read as follows: |
|
(a) The banking commissioner by order may appoint a |
|
conservator for a state bank if the banking commissioner determines |
|
from examination or other credible evidence that the bank is in |
|
hazardous condition and immediate and irreparable harm is |
|
threatened to the bank, its depositors, creditors, or shareholders |
|
[or participants], or the public. |
|
SECTION 47. Section 35.106, Finance Code, is amended to |
|
read as follows: |
|
Sec. 35.106. AUTHORITY OF SUPERVISOR. During a period of |
|
supervision, a bank, without the prior approval of the banking |
|
commissioner or the supervisor or as otherwise permitted or |
|
restricted by the order of supervision, may not: |
|
(1) dispose of, sell, transfer, convey, or encumber |
|
the bank's assets; |
|
(2) lend or invest the bank's money; |
|
(3) incur a debt, obligation, or liability; or |
|
(4) pay a cash dividend to the bank's shareholders [or
|
|
participants]. |
|
SECTION 48. Section 35.107(b), Finance Code, is amended to |
|
read as follows: |
|
(b) Subject to any limitation in the order of appointment or |
|
other direction of the banking commissioner, the conservator has |
|
all the powers of the directors, [managers, managing participants,] |
|
officers, and shareholders [or participants] of the bank and shall |
|
conduct the business of the bank and take all steps the conservator |
|
considers appropriate to remove the conditions causing the |
|
conservatorship. During the conservatorship, the board may not |
|
direct or participate in the affairs of the bank. |
|
SECTION 49. Section 36.101, Finance Code, is amended to |
|
read as follows: |
|
Sec. 36.101. INITIATING VOLUNTARY DISSOLUTION. (a) A |
|
state bank may initiate voluntary dissolution and surrender its |
|
charter as provided by this subchapter: |
|
(1) with the approval of the banking commissioner; |
|
(2) after complying with the provisions of the [Texas] |
|
Business Organizations Code [Corporation Act] regarding board and |
|
shareholder approval for voluntary dissolution; and |
|
(3) by filing the documents as provided by Section |
|
36.102. |
|
(b) The shareholders [or participants] of a state bank |
|
initiating voluntary dissolution by resolution shall appoint one or |
|
more persons to act as the liquidating agent or committee. The |
|
liquidating agent or committee shall conduct the liquidation as |
|
provided by law and under the supervision of the bank's board. The |
|
board, in consultation with the banking commissioner, shall require |
|
the liquidating agent or committee to give a suitable bond. |
|
SECTION 50. Section 36.102, Finance Code, is amended to |
|
read as follows: |
|
Sec. 36.102. FILING RESOLUTIONS WITH BANKING |
|
COMMISSIONER. After resolutions to dissolve and liquidate a state |
|
bank have been adopted by the bank's board and shareholders [or
|
|
participants], a majority of the directors[, managers, or managing
|
|
participants] shall verify and file with the banking commissioner |
|
duplicate certified copies of: |
|
(1) the resolutions of the shareholders [or
|
|
participants] that: |
|
(A) are adopted at a meeting for which proper |
|
notice was given or by unanimous written consent; and |
|
(B) approve the dissolution and liquidation of |
|
the bank; |
|
(2) the resolutions of the board approving the |
|
dissolution and liquidation of the bank [if the bank is operated by
|
|
a board of directors or managers]; and |
|
(3) a copy of the notice to the shareholders [or
|
|
participants] informing them of the meeting. |
|
SECTION 51. Sections 36.108(a), (c), and (d), Finance Code, |
|
are amended to read as follows: |
|
(a) After the bank has taken all of the actions specified by |
|
Sections 36.102, 36.105, and 36.107, paid all its debts and |
|
obligations, and transferred all property for which a legal |
|
claimant has been found after the time for presentation of claims |
|
has expired, the bank shall make a list from its books of the names |
|
of each depositor, creditor, owner of personal property in the |
|
bank's possession or custody, or lessee of any safe, vault, or box, |
|
who has not claimed or has not received a deposit, debt, dividend, |
|
interest, balance, or other amount or property due to the person. |
|
The list must be sworn to or affirmed by a majority of the bank's |
|
board [or managing participants]. |
|
(c) After the banking commissioner has reviewed the list and |
|
has reconciled the unclaimed cash and property with the amounts of |
|
money and property reported and transferred to the comptroller, the |
|
banking commissioner shall allow the bank to distribute the bank's |
|
remaining assets, if any, among its shareholders[, participants, or
|
|
participant-transferees] as their ownership interests appear. |
|
(d) After distribution of all remaining assets under |
|
Subsection (c), the bank shall file with the department: |
|
(1) an affidavit and schedules, sworn to or affirmed |
|
by a majority of the bank's board [or managing participants], |
|
showing the distribution to each shareholder[, participant, or
|
|
participant-transferee]; |
|
(2) all copies of reports of examination of the bank in |
|
its possession; and |
|
(3) its original charter or an affidavit stating that |
|
the original charter is lost. |
|
SECTION 52. Section 36.201(b), Finance Code, is amended to |
|
read as follows: |
|
(b) A majority of the bank's directors[, managers, or
|
|
managing participants] may voluntarily close the bank and place it |
|
with the banking commissioner for liquidation. |
|
SECTION 53. Section 36.203(c), Finance Code, is amended to |
|
read as follows: |
|
(c) The receiver has all the powers of the directors, |
|
[managers, managing participants,] officers, and shareholders [or
|
|
participants] of the bank as necessary to support an action taken on |
|
behalf of the bank. |
|
SECTION 54. Section 36.204(a), Finance Code, is amended to |
|
read as follows: |
|
(a) A state bank, acting through a majority of its |
|
directors, [managers, or managing participants,] may intervene in |
|
an action filed by the banking commissioner closing a state bank to |
|
challenge the banking commissioner's closing of the bank and to |
|
enjoin the banking commissioner or other receiver from liquidating |
|
its assets. The bank must file the intervention not later than the |
|
second business day after the closing of the bank, excluding legal |
|
holidays. The court may issue an ex parte order restraining the |
|
receiver from liquidating bank assets pending a hearing on the |
|
injunction. The receiver shall comply with the restraining order |
|
but may petition the court for permission to liquidate an asset as |
|
necessary to prevent its loss or diminution pending the outcome of |
|
the injunction. |
|
SECTION 55. Section 36.208, Finance Code, is amended to |
|
read as follows: |
|
Sec. 36.208. RIGHTS FIXED. The rights and liabilities of |
|
the bank in liquidation and of a depositor, creditor, officer, |
|
director, [manager, managing participant,] employee, shareholder, |
|
[participant, participant-transferee,] agent, or other person |
|
interested in the bank's estate are fixed on the date of closing of |
|
the bank for liquidation except as otherwise directed by the court |
|
or as expressly provided otherwise by this subchapter or Subchapter |
|
D. |
|
SECTION 56. Section 36.212(a), Finance Code, is amended to |
|
read as follows: |
|
(a) Each bank affiliate, officer, director, [manager,
|
|
managing participant,] shareholder, [participant,
|
|
participant-transferee,] trustee, agent, servant, employee, |
|
attorney, attorney-in-fact, or correspondent shall immediately |
|
deliver to the receiver, without cost to the receiver, any record or |
|
other property of the bank or that relates to the business of the |
|
bank. |
|
SECTION 57. Section 36.213(a), Finance Code, is amended to |
|
read as follows: |
|
(a) On application by the receiver, the court with or |
|
without notice may issue an injunction: |
|
(1) restraining a bank officer, director, [manager,
|
|
managing participant,] shareholder, [participant,
|
|
participant-transferee,] trustee, agent, servant, employee, |
|
attorney, attorney-in-fact, correspondent, or other person from |
|
transacting the bank's business or wasting or disposing of its |
|
property; or |
|
(2) requiring the delivery of the bank's property or |
|
assets to the receiver subject to the further order of the court. |
|
SECTION 58. Section 36.216, Finance Code, is amended to |
|
read as follows: |
|
Sec. 36.216. PREFERENCES. (a) A transfer of or lien on the |
|
property or assets of a state bank is voidable by the receiver if |
|
the transfer or lien: |
|
(1) was made or created less than: |
|
(A) four months before the date the bank is |
|
closed for liquidation; or |
|
(B) one year before the date the bank is closed |
|
for liquidation if the receiving creditor was at the time an |
|
affiliate, officer, director, or [manager, managing participant,] |
|
principal shareholder[, or participant] of the bank or an affiliate |
|
of the bank; |
|
(2) was made or created with the intent of giving to a |
|
creditor or depositor, or enabling a creditor or depositor to |
|
obtain, a greater percentage of the claimant's debt than is given or |
|
obtained by another claimant of the same class; and |
|
(3) is accepted by a creditor or depositor having |
|
reasonable cause to believe that a preference will occur. |
|
(b) Each bank officer, director, [manager, managing
|
|
participant,] shareholder, [participant, participant-transferee,] |
|
trustee, agent, servant, employee, attorney-in-fact, or |
|
correspondent, or other person acting on behalf of the bank, who has |
|
participated in implementing a voidable transfer or lien, and each |
|
person receiving property or the benefit of property of the bank as |
|
a result of the voidable transfer or lien, are personally liable for |
|
the property or benefit received and shall account to the receiver |
|
for the benefit of the depositors and creditors of the bank. |
|
(c) The receiver may avoid a transfer of or lien on the |
|
property or assets of a bank that a depositor, creditor, or |
|
shareholder[, participant, or participant-transferee] of the bank |
|
could have avoided and may recover the property transferred or its |
|
value from the person to whom it was transferred or from a person |
|
who has received it unless the transferee or recipient was a bona |
|
fide holder for value before the date the bank was closed for |
|
liquidation. |
|
SECTION 59. Section 36.301(a), Finance Code, is amended to |
|
read as follows: |
|
(a) This section applies only to a claim by a person, other |
|
than a shareholder[, participant, or participant-transferee] |
|
acting in that capacity, who has a claim against a state bank in |
|
liquidation, including a claimant with a secured claim and a |
|
claimant under a fiduciary relationship who has been ordered by the |
|
receiver to file a proof of claim under Section 36.223. |
|
SECTION 60. Section 36.308, Finance Code, is amended to |
|
read as follows: |
|
Sec. 36.308. OBJECTION TO APPROVED CLAIM. The receiver |
|
with court approval shall set a date for objection to an approved |
|
claim. On or before that date a depositor, creditor, other |
|
claimant, or shareholder[, participant, or participant-transferee] |
|
of the bank may file an objection to an approved claim. The |
|
objection shall be heard and determined by the court. If the |
|
objection is sustained, the court shall direct an appropriate |
|
modification of the schedule of claims. |
|
SECTION 61. Section 36.310(c), Finance Code, is amended to |
|
read as follows: |
|
(c) As soon as practicable after the determination of all |
|
objections, appeals, and claims based on previously unliquidated or |
|
undetermined demands governed by Section 36.305, the receiver shall |
|
distribute the assets of the bank in satisfaction of approved |
|
claims other than claims asserted in a person's capacity as a |
|
shareholder[, participant, or participant-transferee]. |
|
SECTION 62. Section 36.312(b), Finance Code, is amended to |
|
read as follows: |
|
(b) Assets shall be distributed in the following order of |
|
priority: |
|
(1) administrative expenses; |
|
(2) approved claims of secured creditors to the extent |
|
of the value of the security as provided by Section 36.304; |
|
(3) approved claims of beneficiaries of insufficient |
|
commingled fiduciary money or missing fiduciary property and |
|
approved claims of depositors of the bank; |
|
(4) other approved claims of general creditors not |
|
falling within a higher priority under this section, including |
|
unsecured claims for taxes and debts due the federal government or a |
|
state or local government; |
|
(5) approved claims of a type described by |
|
Subdivisions (1)-(4) that were not filed within the period |
|
prescribed by this subchapter; and |
|
(6) claims of capital note or debenture holders or |
|
holders of similar obligations and proprietary claims of |
|
shareholders[, participants, participant-transferees,] or other |
|
owners according to the terms established by issue, class, or |
|
series. |
|
SECTION 63. Sections 36.313(a), (b), (c), and (d), Finance |
|
Code, are amended to read as follows: |
|
(a) If bank assets remain after the receiver has provided |
|
for unclaimed distributions and all of the liabilities of the bank |
|
in liquidation, the receiver shall distribute the remaining assets |
|
to the shareholders [or participants] of the bank. |
|
(b) If the remaining assets are not liquid or if they |
|
otherwise require continuing administration, the receiver may call |
|
a meeting of the shareholders [or participants and
|
|
participant-transferees] of the bank. The receiver shall give |
|
notice of the meeting: |
|
(1) in a newspaper of general circulation in the |
|
county where the home office of the bank was located; and |
|
(2) by written notice to the shareholders [or
|
|
participants and participant-transferees] of record at their last |
|
known addresses. |
|
(c) At the meeting, the shareholders [or participants] |
|
shall appoint one or more agents to take over the affairs to |
|
continue the liquidation for the benefit of the shareholders [or
|
|
participants and participant-transferees]. Voting privileges are |
|
governed by the bank's bylaws and articles of association. If a |
|
quorum cannot be obtained at the meeting, the banking commissioner |
|
shall appoint an agent. An agent appointed under this subsection |
|
shall execute and file with the court a bond approved by the court, |
|
conditioned on the faithful performance of all the duties of the |
|
trust. |
|
(d) Under order of the court the receiver shall transfer and |
|
deliver to the agent or agents for continued liquidation under the |
|
court's supervision all assets of the bank remaining in the |
|
receiver's hands. The court shall discharge the receiver from |
|
further liability to the bank and its depositors, creditors, and |
|
shareholders[, participants, and participant-transferees]. |
|
SECTION 64. Section 37.004(b), Finance Code, is amended to |
|
read as follows: |
|
(b) A bank or a director, [manager, managing participant,] |
|
officer, or employee of a bank does not incur liability or loss of |
|
rights because of a closing authorized by this chapter. |
|
SECTION 65. Section 181.002(a)(7), Finance Code, is amended |
|
to read as follows: |
|
(7) "Capital" means: |
|
(A) the sum of: |
|
(i) the par value of all shares or |
|
participation shares of a state trust company having a par value |
|
that have been issued; |
|
(ii) the consideration set by the board [in
|
|
the manner provided by the Texas Business Corporation Act] for all |
|
shares or participation shares of the state trust company without |
|
par value that have been issued, except the part of that |
|
consideration that: |
|
(a) has been actually received; |
|
(b) is less than all of that |
|
consideration; and |
|
(c) the board, by resolution adopted |
|
not later than the 60th day after the date of issuance of those |
|
shares, has allocated to surplus with the prior approval of the |
|
banking commissioner; and |
|
(iii) an amount not included in |
|
Subparagraphs (i) and (ii) that has been transferred to capital of |
|
the state trust company, on the payment of a share dividend or on |
|
adoption by the board of a resolution directing that all or part of |
|
surplus be transferred to capital, minus each reduction made as |
|
permitted by law; less |
|
(B) all amounts otherwise included in Paragraphs |
|
(A)(i) and (ii) that are attributable to the issuance of securities |
|
by the state trust company and that the banking commissioner |
|
determines, after notice and an opportunity for hearing, should be |
|
classified as debt rather than equity securities. |
|
SECTION 66. Section 181.005(a), Finance Code, is amended to |
|
read as follows: |
|
(a) The provisions of the [Texas] Business Organizations |
|
Code [Corporation Act] regarding liability, defenses, and |
|
indemnification of a director, officer, agent, or employee apply to |
|
a director, officer, agent, or employee of a state trust company in |
|
this state. Except as limited by those provisions, a disinterested |
|
director, manager, managing participant, officer, or employee of a |
|
state trust company may not be held personally liable in an action |
|
seeking monetary damages arising from the conduct of the state |
|
trust company's affairs unless the damages resulted from the gross |
|
negligence or wilful or intentional misconduct of the person during |
|
the person's term of office or service with the state trust company. |
|
SECTION 67. Section 181.308(a), Finance Code, is amended to |
|
read as follows: |
|
(a) Notwithstanding Section 21.218 or 101.502, [Article
|
|
2.44, Texas] Business Organizations Code [Corporation Act], a |
|
shareholder or participant of a state trust company may not |
|
examine: |
|
(1) a report of examination or other confidential |
|
property of the department that is in the possession of the state |
|
trust company; or |
|
(2) a book or record of the state trust company that |
|
directly or indirectly pertains to financial or other information |
|
maintained by the state trust company on behalf of its clients, |
|
including a specific item in the minutes of the board or a committee |
|
of the board regarding client account review and approval or any |
|
report that would tend to identify the state trust company's |
|
client. |
|
SECTION 68. Section 182.009, Finance Code, is amended to |
|
read as follows: |
|
Sec. 182.009. APPLICATION OF GENERAL CORPORATE LAW. (a) |
|
The [Texas] Business Organizations Code applies [Corporation Act
|
|
and the Texas Miscellaneous Corporation Laws Act (Article 1302-1.01
|
|
et seq., Vernon's Texas Civil Statutes) are incorporated into this
|
|
chapter and apply] to a trust association as if it were a for-profit |
|
corporation, and [the Texas Limited Liability Company Act (Article
|
|
1528n, Vernon's Texas Civil Statutes) applies] to a limited trust |
|
association as if it were a limited liability company, [as if they
|
|
were part of this subtitle] to the extent not inconsistent with this |
|
subtitle or the proper business of a state trust company, except |
|
that: |
|
(1) a reference to the secretary of state means the |
|
banking commissioner unless the context requires otherwise; and |
|
(2) the right of shareholders or participants to |
|
cumulative voting in the election of directors or managers exists |
|
only if granted by the state trust company's articles of |
|
association. |
|
(b) Unless expressly authorized by this subtitle or a rule |
|
of the finance commission, a state trust company may not take an |
|
action authorized by a law listed under Subsection (a) or (d) |
|
regarding its corporate status, capital structure, or a matter of |
|
corporate governance, of the type for which a law listed under |
|
Subsection (a) would require a filing with the secretary of state if |
|
the state trust company were a business corporation or a limited |
|
liability company, without submitting the filing to the banking |
|
commissioner for prior written approval of the action. |
|
(c) The finance commission may adopt rules to alter or |
|
supplement the procedures and requirements of the laws listed by |
|
Subsection (a) or (d) applicable to an action taken under this |
|
chapter by a state trust company. |
|
(d) Notwithstanding Subsection (a), this subsection |
|
establishes governing law with respect to a state trust company |
|
organized before January 1, 2006: |
|
(1) to the extent not inconsistent with this subtitle |
|
or the proper business of a state trust company: |
|
(A) the Texas Business Corporation Act, the Texas |
|
Miscellaneous Corporation Laws Act (Article 1302-1.01 et seq., |
|
Vernon's Texas Civil Statutes), and any other law relating to |
|
general business corporations apply to a state trust company, and a |
|
reference in this subtitle to the Business Organizations Code is |
|
considered a reference to the prior law; and |
|
(B) the Texas Limited Liability Company Act |
|
(Article 1528n, Vernon's Texas Civil Statutes) and any other law |
|
relating to a limited liability company organized in Texas apply to |
|
a limited trust association, and a reference in this subtitle to the |
|
Business Organizations Code is considered a reference to the prior |
|
law; |
|
(2) the finance commission may establish rules |
|
permitting a state trust company to elect to be governed by the |
|
provisions of the Business Organizations Code to the extent not |
|
inconsistent with this subtitle or the proper business of a state |
|
trust company; and |
|
(3) this subsection expires January 1, 2010. |
|
SECTION 69. Section 182.021, Finance Code, is amended to |
|
read as follows: |
|
Sec. 182.021. ACTIVITIES NOT REQUIRING CHARTER. Subject to |
|
Subchapter C, Chapter 187, a company does not engage in the trust |
|
business in a manner requiring a state charter by: |
|
(1) acting in a manner authorized by law and in the |
|
scope of authority as an agent of a trust institution; |
|
(2) rendering a service customarily performed as an |
|
attorney in a manner approved and authorized by the Supreme Court of |
|
Texas or State Bar of Texas; |
|
(3) acting as trustee under a deed of trust made only |
|
as security for the payment of money or for the performance of |
|
another act; |
|
(4) conducting business as a trust institution if the |
|
exercise of fiduciary powers in this state by the trust institution |
|
is not otherwise prohibited by law; |
|
(5) engaging in a business regulated by the Office of |
|
Consumer Credit Commissioner, except as limited by rules adopted by |
|
the finance commission; |
|
(6) receiving and distributing rents and proceeds of |
|
sale as a licensed real estate broker on behalf of a principal in a |
|
manner authorized by the Texas Real Estate Commission; |
|
(7) engaging in a securities transaction or providing |
|
an investment advisory service as a licensed and registered dealer, |
|
salesman, or advisor to the extent that the activity is regulated by |
|
the State Securities Board or the Securities and Exchange |
|
Commission; |
|
(8) engaging in the sale and administration of an |
|
insurance product by an insurance company or agent authorized or |
|
licensed by the Texas Department of Insurance to the extent that the |
|
activity is regulated by the Texas Department of Insurance; |
|
(9) engaging in the lawful sale of prepaid funeral |
|
benefits under a permit issued by the banking commissioner under |
|
Chapter 154; |
|
(10) engaging in the lawful business of a perpetual |
|
care cemetery corporation under Chapter 712, Health and Safety |
|
Code; |
|
(11) engaging as a principal in the money services |
|
business [or agent in the lawful sale of checks] under a license |
|
issued by the banking commissioner under Chapter 151 [152]; |
|
(12) acting as trustee under a voting trust as |
|
provided by Section 6.251, Business Organizations Code [Article
|
|
2.30, Texas Business Corporation Act]; |
|
(13) acting as trustee by a public, private, or |
|
independent institution of higher education or a university system, |
|
as defined by Section 61.003, Education Code, including an |
|
affiliated foundation or corporation of such an institution or |
|
system acting as trustee as provided by the Education Code; |
|
(14) engaging in another activity expressly excluded |
|
from the application of this subtitle by rule of the finance |
|
commission; |
|
(15) rendering services customarily performed by a |
|
certified accountant in a manner authorized by the Texas State |
|
Board of Public Accountancy; |
|
(16) serving as trustee of a charitable trust as |
|
provided by Section 2.106, Business Organizations Code [Article
|
|
2.31, Texas Non-Profit Corporation Act (Article 1396-2.31,
|
|
Vernon's Texas Civil Statutes)]; |
|
(17) performing escrow or settlement services if |
|
licensed or authorized under Title 11, Insurance Code; |
|
(18) acting as a qualified intermediary in a tax |
|
deferred exchange under Section 1031, Internal Revenue Code of |
|
1986, and applicable regulations; or |
|
(19) providing permitted services at a trust |
|
representative office established in this state pursuant to |
|
Subchapter C, Chapter 187. |
|
SECTION 70. Section 182.101(d), Finance Code, is amended |
|
to read as follows: |
|
(d) Amendment or restatement of the articles of association |
|
of a state trust company and approval of the board and shareholders |
|
or participants must be made or obtained in accordance with the |
|
[Texas] Business Organizations Code [Corporation Act] for the |
|
amendment or restatement of a certificate of formation by a |
|
for-profit corporation [articles of incorporation], except as |
|
otherwise provided by this subtitle or rules adopted under this |
|
subtitle. The original and one copy of the articles of amendment or |
|
restated articles of association must be filed with the banking |
|
commissioner for approval. Unless the submission presents novel or |
|
unusual questions, the banking commissioner shall approve or reject |
|
the amendment or restatement not later than the 31st day after the |
|
date the banking commissioner considers the submission |
|
informationally complete and accepted for filing. The banking |
|
commissioner may require the submission of additional information |
|
as considered necessary to an informed decision to approve or |
|
reject any amendment or restatement of articles of association |
|
under this section. |
|
SECTION 71. Section 182.102(b), Finance Code, is amended |
|
to read as follows: |
|
(b) A series of shares or participation shares may be |
|
established in the manner provided by the [Texas] Business |
|
Organizations Code [Corporation Act] as if a state trust company |
|
were a domestic corporation, but the shares or participation shares |
|
of the series may not be issued and sold except on compliance with |
|
Section 182.103. The state trust company shall file the original |
|
and one copy of the statement of action required by the [Texas] |
|
Business Organizations Code [Corporation Act] with the banking |
|
commissioner. |
|
SECTION 72. Section 182.301, Finance Code, is amended to |
|
read as follows: |
|
Sec. 182.301. MERGER AUTHORITY. (a) Subject to this |
|
subchapter and with the prior written approval of the banking |
|
commissioner, a state trust company may merge with another person |
|
to the same extent as a for-profit [business] corporation under the |
|
[Texas] Business Organizations Code [Corporation Act]. |
|
(b) Implementation of the plan of merger by the parties and |
|
approval of the board, shareholders, participants, or owners of the |
|
parties must be made or obtained as provided by the [Texas] Business |
|
Organizations Code [Corporation Act] as if the state trust company |
|
were a domestic corporation and all other parties to the merger were |
|
foreign corporations and other entities, except as otherwise |
|
provided by rules adopted under this chapter. |
|
SECTION 73. Section 182.304, Finance Code, is amended to |
|
read as follows: |
|
Sec. 182.304. RIGHTS OF DISSENTERS TO MERGER. A |
|
shareholder, participant, or participant-transferee may dissent |
|
from the merger to the extent and by following the procedure |
|
provided by the [Texas] Business Organizations Code [Corporation
|
|
Act] or rules adopted under this subtitle. |
|
SECTION 74. Section 182.501(b), Finance Code, is amended |
|
to read as follows: |
|
(b) The merger or conversion must be made and approval of |
|
the state trust company's board, shareholders, or participants must |
|
be obtained in accordance with the [Texas] Business Organizations |
|
Code [Corporation Act] as if the state trust company were a domestic |
|
corporation and all other parties to the transaction, if any, were |
|
foreign corporations or other entities, except as may be otherwise |
|
provided by rule. For purposes of this subsection, a conversion is |
|
considered a merger into the successor trust institution. |
|
SECTION 75. Section 183.102, Finance Code, is amended to |
|
read as follows: |
|
Sec. 183.102. BYLAWS. Except as provided by Section |
|
183.207, each state trust company shall adopt bylaws and may amend |
|
its bylaws from time to time for the purposes and in accordance with |
|
the procedures set forth in the [Texas] Business Organizations Code |
|
[Corporation Act]. |
|
SECTION 76. Section 186.101(a), Finance Code, is amended |
|
to read as follows: |
|
(a) A state trust company may initiate voluntary |
|
dissolution and surrender its charter as provided by this |
|
subchapter: |
|
(1) with the approval of the banking commissioner; |
|
(2) after complying with the provisions of the [Texas] |
|
Business Organizations Code [Corporation Act] regarding board and |
|
shareholder approval for voluntary dissolution; and |
|
(3) by filing the notice of dissolution as provided by |
|
Section 186.102. |
|
SECTION 77. Section 202.005(a), Finance Code, is amended to |
|
read as follows: |
|
(a) The commissioner may: |
|
(1) examine a bank holding company that controls a |
|
Texas bank to the same extent as if the bank holding company were a |
|
Texas state bank; and |
|
(2) bring an enforcement proceeding under Chapter 35 |
|
against a bank holding company that violates or participates in a |
|
violation of Subtitle A [this subtitle], an agreement filed with |
|
the commissioner under this chapter, or a rule adopted by the |
|
finance commission or order issued by the commissioner under |
|
Subtitle A [this subtitle], as if the bank holding company were a |
|
Texas state bank. |
|
SECTION 78. Section 274.001(1), Finance Code, is amended to |
|
read as follows: |
|
(1) "Bank" has the meaning assigned by Section |
|
31.002(a)(2) [2(c), Bank Holding Company Act of 1956 (12 U.S.C.
|
|
Section 1841(c)) as amended], excluding a bank that does not have |
|
its main office or a branch located in this state. |
|
SECTION 79. Section 274.003, Finance Code, is amended to |
|
read as follows: |
|
Sec. 274.003. SUBSIDIARY TRUST COMPANY. An entity is a |
|
subsidiary trust company of a bank holding company if: |
|
(1) the entity is a: |
|
(A) trust company organized [corporation
|
|
incorporated] under Subchapter A, Chapter 182; or |
|
(B) bank that is organized to conduct a trust |
|
business and any incidental business or to exercise trust powers; |
|
and |
|
(2) more than 50 percent of the voting stock of the |
|
entity is directly or indirectly owned by the bank holding company. |
|
SECTION 80. Sections 31.002(a)(28), (36), and (41), |
|
32.002(d), 33.201(b), 33.202, 33.203, 33.205, 33.207, and |
|
35.007(d), Finance Code, are repealed. |
|
SECTION 81. This Act takes effect September 1, 2007. |