Part 1.
FINANCE COMMISSION OF TEXAS
Chapter 1.
CONSUMER CREDIT REGULATION
Subchapter A. REGULATED LOAN LICENSES
2.
APPLICATION FOR LICENSE AND TRANSFER OF LICENSE
7 TAC §§1.30 - 1.34, 1.36 - 1.40
(Editor's note: The text of the following sections proposed for
repeal will not be published. The sections may be examined in the offices
of the Finance Commission of Texas or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Finance Commission of Texas (the commission)
proposes the repeal of 7 TAC §§1.30-1.34 and §§1.36 -
1.40, concerning licensing procedures. As part of an agency rule review the
commission is concurrently proposing new subchapters to relocate these rules
in a more logical order, in this issue of the
Texas
Register
.
This repeal is necessary because the sections have been rewritten and incorporated
into new subchapters.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period of the repeal as proposed will be in effect,
there will be no fiscal implications for state or local government as a result
of administering or enforcing the repeal.
Ms. Pettijohn also has determined that for each year of the first five-year
period the repeal as proposed will be in effect, the public benefit anticipated
as a result of the repeal is the logical relocation of these rules. There
is no anticipated cost to persons who are required to comply with the repeal
as proposed. There will be no adverse economic effect on small businesses.
Comments on the proposed repeal may be submitted in writing to Leslie L.
Pettijohn, Consumer Credit Commissioner, 2601 North Lamar Boulevard, Austin,
Texas 78705-4207 or by an e-mail to leslie.pettijohn@occc.state.tx.us.
The repeal is proposed under Texas Finance Code, §11.304,
which authorizes the Finance Commission to adopt rules to enforce Title 4
of the Texas Finance Code. Additionally, Texas Finance Code, §342.551
authorizes the Finance Commission to adopt rules for the enforcement of the
consumer loan chapter.
The statutory provisions (as currently in effect) affected by the proposed
repeal are Chapter 342, Texas Finance Code and the rest of Title 4.
§1.30.Definitions.
§1.31.Filing of New Application.
§1.32.Transfer of License.
§1.33.Processing of Application.
§1.34.Change in Form or Proportionate Ownership.
§1.36.Amendments to Pending Application.
§1.37.Relocation of Licensed Offices.
§1.38.Designation of Active/Inactive Status.
§1.39.Fees.
§1.40.Applications and Notices as Public Records.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on June 24, 2002.
TRD-200203948
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 4, 2002
For further information, please call: (512) 936-7640
7 TAC §§1.101 - 1.107
(Editor's note: The text of the following sections proposed for
repeal will not be published. The sections may be examined in the offices
of the Finance Commission of Texas or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Finance Commission of Texas (the commission)
proposes the repeal of 7 TAC §§1.101 - 1.107, concerning general
provisions of regulated lenders. As part of an agency rule review the commission
is concurrently proposing new subchapters to relocate these rules in a more
logical order, in this issue of the
Texas Register
.
This repeal is necessary because the sections have been rewritten and incorporated
into new subchapters.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period of the repeal as proposed will be in effect,
there will be no fiscal implications for state or local government as a result
of administering or enforcing the repeal.
Ms. Pettijohn also has determined that for each year of the first five-year
period the repeal as proposed will be in effect, the public benefit anticipated
as a result of the repeal is the logical relocation of these rules. There
is no anticipated cost to persons who are required to comply with the repeal
as proposed. There will be no adverse economic effect on small businesses.
Comments on the proposed repeal may be submitted in writing to Leslie L.
Pettijohn, Consumer Credit Commissioner, 2601 North Lamar Boulevard, Austin,
Texas 78705-4207 or by an e-mail to leslie.pettijohn@occc.state.tx.us.
The repeal is proposed under Texas Finance Code, §11.304,
which authorizes the Finance Commission to adopt rules to enforce Title 4
of the Texas Finance Code. Additionally, Texas Finance Code, §342.551
authorizes the Finance Commission to adopt rules for the enforcement of the
consumer loan chapter.
The statutory provisions (as currently in effect) affected by the proposed
repeal are Chapter 342, Texas Finance Code and the rest of Title 4.
§1.101.Purpose and Scope.
§1.102.Definitions.
§1.103.Responsibility for Acts of Agents.
§1.104.Knowledge of Laws and Regulations Required.
§1.105.Attempted Evasion of Applicability of Chapter.
§1.106.Multiple Licenses.
§1.107.Loans by Mail.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on June 24, 2002.
TRD-200203947
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 4, 2002
For further information, please call: (512) 936-7640
7 TAC §§1.101 - 1.107
The Finance Commission of Texas (the commission) proposes
new 7 TAC Subchapter A, §§1.101 - 1.107, concerning General Provisions.
As part of an agency rule review, the commission is concurrently proposing
the repeal of 7 TAC §§1.101 - 1.107, concerning general provisions
of regulated lenders in this issue of the
Texas Register
.
The proposed new subchapter relocates the proposed repealed rules in a
more logical order providing easier access for the public.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period of the new sections as proposed will be in
effect, there will be no fiscal implications for state or local government
as a result of administering or enforcing the new sections.
Ms. Pettijohn also has determined that for each year of the first five-year
period the new sections as proposed will be in effect, the public benefit
anticipated as a result of the new sections is the logical relocation of rules
for easier public use. There is no anticipated cost to persons who are required
to comply with the new sections as proposed. There will be no adverse economic
effect on small businesses.
Comments on the proposed new sections may be submitted in writing to Leslie
L. Pettijohn, Consumer Credit Commissioner, 2601 North Lamar Boulevard, Austin,
Texas 78705-4207 or by an e-mail to leslie.pettijohn@occc.state.tx.us.
The new sections are proposed under Texas Finance Code, §11.304,
which authorizes the Finance Commission to adopt rules to enforce Title 4
of the Texas Finance Code. Additionally, Texas Finance Code, §342.551
authorizes the Finance Commission to adopt rules for the enforcement of the
consumer loan chapter.
The statutory provisions (as currently in effect) affected by the proposed
new sections are Chapter 342, Texas Finance Code and the rest of Title 4.
§1.101.Purpose and Scope.
(a)
Purpose. The purpose of this chapter is to assist in the
administration and enforcement of Chapter 342 of the Texas Finance Code.
(b)
Scope.
(1)
This chapter applies to all persons engaged in the business
of making, transacting, or negotiating loans subject to Chapter 342 of the
Texas Finance Code. As such, this chapter only applies to lenders and brokers
in the business of making, transacting, or negotiating loans that:
(A)
contract for, charge, or receive interest in excess of
10% per year;
(B)
are loans extended primarily for personal, family, or household
use; and
(C)
are either unsecured or secured by a lien on real estate
or personal property under a secondary mortgage loan. This includes term loans
extended primarily for personal, family, or household purposes.
(2)
This also includes a loan broker who arranges, negotiates,
or brokers loans for a lender that funds the loan. This chapter does not apply
to any loans made under Chapters 301 - 339 of the Texas Finance Code, including,
for example, commercial and agricultural loans.
§1.102.Definitions.
Words and terms used in this chapter that are defined in Chapter 342
of the Texas Finance Code have the same meanings as defined in Chapter 342.
The following words and terms, when used in this chapter, shall have the following
meanings, unless the context clearly indicates otherwise.
(1)
Acquisition Charge--An interest charge authorized for making
the cash advance under authority of §342.252, Texas Finance Code.
(2)
Add-on interest--A method for calculating precomputed interest
in which the borrower agrees to pay the total of payments, which includes
both interest and principal, as opposed to agreeing to pay the principal plus
interest as it accrues at a certain rate. Add-on interest is calculated at
the outset of a loan on the cash advance for the full term, as if the principal
did not decline over the course of the loan. For example, a $1,000 loan with
12 monthly installments and an add-on interest amount of $8.00 per hundred
per annum would have a total charge of interest of $80 and monthly payments
of $90, yielding an annual percentage rate ("APR") of 14.45%.
(3)
Amount Financed--The amount of money which is used, forborne,
or detained and upon which interest is charged. The cash advance plus any
other amounts that are financed by the creditor are included. Any points or
other prepaid finance charges, excluding the administrative loan fee, that
are not paid at closing and that are financed as part of the transaction are
included in the amount financed. This definition is only applicable for the
purposes of this subchapter for computing earnings, deferments, maximum charges,
and determining refunds of unearned interest. It is not intended to be analogous
with the similar term that is used in the Truth-in-Lending Act (15 U.S.C. §1601
et seq.).
(4)
Authorized Charge--Any charge authorized by applicable
Texas law to be included in the credit transaction.
(5)
Authorized Lender--A person who has obtained a license
from the commissioner, or a bank, savings bank, savings and loan association,
or credit union doing business under the laws of this State or the United
States. Banks chartered in other states insured by the Federal Deposit Insurance
Corporation are included in this term. Separate entities that are subsidiaries
or affiliates of licensees or authorized banks, savings banks, savings and
loan associations, or credit unions are not authorized lenders unless they
meet the required elements of the definition of an authorized lender in their
own right.
(6)
Commissioner--Consumer Credit Commissioner of the State
of Texas.
(7)
Date of Consummation--The date of closing or execution
of a loan contract.
(8)
Default Charge or Late Charge--The additional interest
charge for late payment on a loan.
(9)
Deferment Charge--The payment of an additional interest
charge to defer the payment date of a scheduled payment on a contract.
(10)
Dual Interest Coverage--Insurance that provides benefits
to both the holder of a loan and the borrower in the event of a loss of the
security covered by the policy. The policy contains a loss payable clause
or endorsement that provides benefits that are payable at the discretion of
the holder.
(11)
Installment Account Handling Charge (IAHC)--An interest
charge authorized for making a loan under §342.252, Texas Finance Code.
(12)
Installment Loan--Any type of closed-end loan with multiple
scheduled payments.
(13)
Interest-bearing Loan--A loan in which the borrower agrees
to pay the principal and interest that accrues at a certain periodic rate.
(14)
Interpretation Letter--A formal interpretation of Title
4 of the Texas Finance Code made by the Commissioner and approved by the Finance
Commission of Texas under Texas Finance Code §14.108.
(15)
Licensee--Any person who has been issued a consumer loan
license pursuant to Chapter 342 of the Texas Finance Code. Another name for
a "consumer loan license" is "regulated loan license."
(16)
Making a Loan--The act of making a loan is either the
determination of the credit decision to provide the loan, or the act of funding
the loan or transferring money from the lender to the borrower. A person whose
name appears on the loan documents as the payee of the note is considered
to have "made" the loan.
(17)
Negotiating a Loan--The process of submitting and considering
offers between a borrower and a lender with the objective of reaching agreement
on the terms of a loan. The act of passing information between the parties
can, by itself, be considered "negotiation" if it was part of the process
of reaching agreement on the terms of a loan. "Negotiation" involves acts
which take place before an agreement to lend or funding of a loan actually
occurs.
(18)
OCCC--Office of Consumer Credit Commissioner of the State
of Texas.
(19)
Precomputed Loan--A loan in which the borrower agrees
to pay the total of payments that includes both principal and all anticipated
interest through the full term of the loan. If a borrower prepays a precomputed
loan, the borrower is entitled to a rebate of all unearned interest and unearned
charges.
(20)
Prepaid Interest--Interest paid separately in cash or
by check before or at consummation in a transaction, or withheld from the
proceeds of the credit at any time. Some common terms such as points, discounts,
and origination fees have been used to identify this charge.
(21)
Principal--The capital sum of the debt including any interest
capitalized and added to the cash advance at the inception of the loan. This
is the amount of money which is used, forborne, or detained and upon which
interest is charged. The principal amount does not include any interest accrued
after the inception of the loan, such as default charges.
(22)
Pro Rata Method--A formula for determining the amount
of unearned interest or other charges, such as insurance, to be refunded following
prepayment or acceleration by applying the amounts to equal unit periods.
This formula assumes that interest or other charges are earned in direct proportion
to the time that a loan has been outstanding.
(23)
Rebate--Refund of all or part of a precomputed charge
or interest.
(24)
Regulated Loan--Loan made under the authority of Chapter
342, Texas Finance Code.
(25)
Renewal or Refinance--A new loan contract that includes,
in whole or in part, the net balance of one or more existing loan contracts.
(26)
Simple Annual Rate--The interest rate under the loan agreement
expressed as a percentage rate per year employing the U.S. Rule method.
(27)
Sum of the Monthly Balances or Sum of the Periodic Balances
Method--Another formula for determining the amount of unearned interest or
other charges to be refunded. This is a variant of the Rule of 78s. It provides
that the fraction of the contract interest to be rebated at any given time
in the loan term is the sum of the monthly loan balances for the months remaining
in the originally scheduled loan term divided by the sum of the monthly balances
for all of the months in the scheduled loan term. For example, for a 6-month
loan of $600 which is scheduled to be repaid in $100 monthly installments,
the rebate fraction after two months would be: 400 + 300 + 200 + 100 divided
by 600 + 500 + 400 + 300 + 200 + 100 = 1000/2100 = 10/21 = 0.476 (rounded).
For any loan which is paid off in equal installments, the sum of the balances
method and the Rule of 78s will provide identical rebates. If, however, a
loan schedule contains unequal payments and especially where the debt is retired
by a final balloon payment, the rebates under the two formulas will be different.
(28)
Term Loan--A loan made repayable in a single payment.
(29)
Transacting a Loan--Any of the significant events associated
with the lending process through funding, including the preparation, negotiation
and execution of loan documents and the transfer of money by the lender to
the borrower or to a third party on the borrower's behalf. This also includes
the act of arranging a loan.
(30)
United States Rule--Ruling of United States Supreme Court
in Story v. Livingston, 38 U.S. (13 Pet.) 369, 371 (1839) that, in partial
payments on a debt, each payment is applied first to interest and any remainder
reduces the principal. Under this rule, accrued but unpaid interest cannot
be added to the principal and interest cannot be compounded.
§1.103.Responsibility for Acts of Agents.
A licensee is responsible for the acts and omissions of its officers,
directors, employees, and agents in the conduct of the licensee's business.
§1.104.Knowledge of Laws and Regulations Required.
Each officer, director, employee, and agent of a licensee shall have
a working knowledge of Chapter 342, Texas Finance Code its implementing regulations,
and other pertinent state and federal statutes and regulations that apply
to their business.
§1.105.Attempted Evasion of Applicability of Chapter.
A "device, subterfuge, or pretense to evade the application of this
title," as used in §342.051(b), Texas Finance Code refers to any transaction:
(1)
that in form may appear on its face to be something other
than a loan, but in substance meets the definition of a loan as defined in §301.002(a)(10),
Texas Finance Code; and
(2)
in which more than 10% annual interest, in substance, is
being contracted for, charged or received.
§1.106.Multiple Licenses.
(a)
Definitions. The words "make," "negotiate," "arrange,"
and "collect" as used in §342.052(b), Texas Finance Code are to be construed
as follows.
(1)
Make. Loans are "made" by the office or offices where either
the credit decision is made or the cash advance is disbursed.
(2)
Negotiate and Arrange. Loans are "negotiated" or "arranged"
in the office or offices that received any information preliminary to a credit
decision on a prospective borrower or received the executed application, agreement,
or other necessary loan documentation.
(3)
Collect. Loans are "collected" in the office or offices
from which attempts are made to collect past-due payments from the borrowers
under a loan. The mere receipt and accounting of payments does not constitute
"collection."
(b)
Application. Any office making, negotiating, arranging,
or collecting loans must be licensed. For example, if a lender receives and
reviews loan applications at one office, makes the loan decision at another
office, funds the loan at a third and collects past- due payments from another,
all of these offices must be licensed. On the other hand, an office that merely
receives, records, accounts for, processes payments need not be licensed.
§1.107.Loans by Mail.
(a)
Definitions. The words "make," "negotiate," "arrange,"
and "collect" as used in §342.053(b), Texas Finance Code are to be construed
as follows.
(1)
Make. Loans by mail are "made" by the office or offices
where either the credit decision is made or the cash advance is disbursed.
(2)
Negotiate and Arrange. Loans by mail are "negotiated" or
"arranged" in the office or offices that either provided the borrower a loan
application, a loan agreement, or other document necessary to set up a loan
transaction or received the executed application, agreement, or other necessary
loan documentation.
(3)
Collect. Loans by mail are "collected" in the office or
offices from which attempts are made to collect past-due payments from the
borrowers under a loan. The mere receipt and accounting of payments does not
constitute "collection."
(b)
Application. Any office, wherever located, making, negotiating,
arranging, or collecting loans by mail must be licensed. For example, if a
lender receives and reviews loan applications at one office, makes the loan
decision at another office, funds the loan at a third and collects past-due
payments from another, all of these offices involved in lending by mail must
be licensed. On the other hand, an office that merely receives, records, accounts
for, processes payments need not be licensed.
(c)
License not required. National banks and federally-chartered
thrifts and credit unions, wherever located, and federally-insured state banks,
state thrifts and state credit unions with offices located outside of Texas
may make loans by mail to Texas without obtaining any license under §342.051
et seq., Texas Finance Code et seq. from the OCCC and are considered to be
an authorized lender.
(d)
Internet Loans. For purposes of §342.053(b), Texas
Finance Code a loan made, negotiated, arranged or collected by or through
the Internet is considered a "loan by mail."
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 24, 2002.
TRD-200203950
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 4, 2002
For further information, please call: (512) 936-7610
7 TAC §1.201
The Finance Commission of Texas (the commission) proposes
new 7 TAC Subchapter B, §1.201, concerning interpretations and advisory
letters. As part of an agency rule review, the commission is concurrently
proposing the repeal of 7 TAC §1.911, concerning interpretations and
advisory letters, in this issue of the
Texas Register
.
The proposed new subchapter relocates the proposed repealed rules in a
more logical order providing easier access for the public.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period the new section is in effect, there will be
no fiscal implications for state or local government as a result of administering
or enforcing the new section.
Ms. Pettijohn also has determined that for each year of the first five-year
period the new section will be in effect, the public benefit anticipated as
a result of the new section is the logical relocation of rules for easier
public use. There is no anticipated cost to persons who are required to comply
with the new section as proposed. There will be no adverse economic effect
on small businesses.
Comments on the proposed new section may be submitted in writing to Leslie
L. Pettijohn, Consumer Credit Commissioner, 2601 North Lamar Boulevard, Austin,
Texas 78705-4207 or by an email to leslie.pettijohn@occc.state.tx.us.
The new section is proposed under Texas Finance Code, §11.304,
which authorizes the Finance Commission to adopt rules to enforce Title 4
of the Texas Finance Code. Additionally, Texas Finance Code, §342.551
authorizes the Finance Commission to adopt rules for the enforcement of the
consumer loan chapter.
The statutory provisions (as currently in effect) affected by the proposed
new section are Chapter 342, Texas Finance Code and the rest of Title 4.
§1.201.Interpretations and Advisory Letters.
(a)
Definitions. The following words and terms, when used in
this section, shall have the following meanings, unless the context clearly
indicates otherwise.
(1)
Advisory letter--A letter by the commissioner or a member
of the staff of the Office of Consumer Credit Commissioner providing an informal
advisory response to an inquiry concerning provisions of the Texas Finance
Code, Title 4, Subtitles A or B and is not an interpretation as defined in
paragraph (3) of this subsection.
(2)
Commissioner--The commissioner of the Office of Consumer
Credit Commissioner.
(3)
Interpretation--A letter issued by the consumer credit
commissioner and approved by the Finance Commission of Texas pursuant to Texas
Civil Statutes, Texas Finance Code, §14.108 interpreting a provision
of Title 4, Subtitle A or B in light of certain relevant facts by the requestor.
(b)
Procedures for Finance Commission of Texas interpretations.
Any person may submit a request for an interpretation. All requests must be
directed to the commissioner and contain the following items:
(1)
An explicit statement that an interpretation approved by
the Finance Commission of Texas is desired.
(2)
A concise description of the contemplated transaction or
activity contemplated, the legal issue raised, and all facts necessary to
reach a conclusion in the matter.
(3)
A statement whether or not, to the best of the requestor's
knowledge, the issue to be considered is an issue in pending litigation. Matters
in litigation will not ordinarily be answered.
(4)
A fee of $300 will be charged for an interpretation to
compensate the agency for the expense involved in researching and answering
the request. A payment of $300 should be submitted with the request. The commission
may determine and remit a partial refund if deemed applicable. The commission
may waive the fee.
(5)
Additional information. A requestor should also identify
each provision of law involved, and indicate the writer's opinion of how the
legal issues should be resolved, and the basis for that opinion, including
an analysis of any relevant court decisions, as well as, all prior interpretations
to which the request relates.
(6)
Processing time. Within ten business days of receipt of
a valid request pursuant to this subsection, the request will be filed with
the Texas Register for publication. Upon publication in the Texas Register,
any party may within 30 calendar days submit briefs or proposals pertaining
to the request. The agency will draft an interpretation or a response and
present it to the Finance Commission of Texas for their consideration. Within
ten business days of an action of the Finance Commission of Texas, a summary
of the interpretation or the response will be filed with the Texas Register
for publication. Copies of interpretations or responses shall contain a notation
of approval and the date of action by the Finance Commission of Texas.
(c)
Office of Consumer Credit Commissioner advisory letters.
Each advisory letter shall contain the following notation: "THIS ADVISORY
LETTER IS NOT AN INTERPRETATION APPROVED BY THE FINANCE COMMISSION OF TEXAS
PURSUANT TO TEXAS FINANCE CODE, §14.108. If an interpretation approved
by the Finance Commission of Texas is desired, then an interpretation should
be requested pursuant to the procedures set forth in 7 Texas Administrative
Code §1.201(b)."
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 24, 2002.
TRD-200203952
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 4, 2002
For further information, please call: (512) 936-7640
7 TAC §§1.301 - 1.310
The Finance Commission of Texas (the commission) proposes
new 7 TAC Subchapter C, §§1.301-1.310, concerning application procedures.
As part of an agency rule review, the commission is concurrently proposing
the repeal of 7 TAC §§1.30-1.40, concerning licensing procedures,
in this issue of the
Texas Register
.
The proposed new subchapter relocates the proposed repealed rules in a
more logical order providing easier access for the public.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period the new sections are in effect, there will
be no fiscal implications for state or local government as a result of administering
or enforcing the new sections.
Ms. Pettijohn also has determined that for each year of the first five-year
period the new sections will be in effect, the public benefit anticipated
as a result of the new sections is the logical relocation of rules for easier
public use. These is no anticipated cost to persons who are required to comply
with the new sections as proposed. There will be no adverse economic effect
on small businesses.
Comments on the proposed new sections may be submitted in writing to Leslie
L. Pettijohn, Consumer Credit Commissioner, 2601 North Lamar Boulevard, Austin,
Texas 78705-4207 or by an email to leslie.pettijohn@occc.state.tx.us.
The new sections are proposed under Texas Finance Code, §11.304,
which authorizes the Finance Commission to adopt rules to enforce Title 4
of the Texas Finance Code. Additionally, Texas Finance Code, §342.551
authorizes the Finance Commission to adopt rules for the enforcement of the
consumer loan chapter.
The statutory provisions (as currently in effect) affected by the proposed
new sections are Chapter 342, Texas Finance Code and the rest of Title 4.
§1.301.Definitions.
Words and terms used in this chapter that are defined in Texas Finance
Code, Chapter 342, have the same meanings as defined in Chapter 342. The following
words and terms, when used in this chapter, shall have the following meanings,
unless the context clearly indicates otherwise.
(1)
Net assets--The total value of acceptable assets used or
designated as readily available for use in the business, less liabilities,
other than those liabilities secured by unacceptable assets. Unacceptable
assets include, but are not limited to, goodwill, unpaid stock subscriptions,
lines of credit, notes receivable from an owner, property subject to the claim
of homestead or other property exemption, and encumbered real or personal
property to the extent of the encumbrance. Generally assets are available
for use if they are readily convertible to cash within 10 business days.
(2)
Principal party--All proprietors and adult individuals
with a substantial relationship to the proposed lending business of the applicant.
Individuals with a substantial relationship to the proposed lending business
of the applicant include but are not limited to:
(A)
general partners;
(B)
voting members of a limited liability corporation;
(C)
corporate officers, to include the Chief Executive Officer
or President, the Chief Financial Officer or Treasurer, and those with substantial
responsibility for lending operations or compliance with the Finance Code;
(D)
directors of privately-held corporations;
(E)
shareholders owning 10% or more of the outstanding voting
stock; and
(F)
trustees.
§1.302.Filing of New Application.
An application for issuance of a new consumer loan license must be
submitted on forms prescribed by the commissioner at the date of filing and
in accordance with the commissioner's instructions. The application shall
include, but not be limited to, the following:
(1)
Required Forms. All questions must be answered.
(A)
Application form (Form ADM-10/11).
(i)
A physical street address must be listed for the proposed
address for the applicant's lending address. A post office box or a mail box
location at a private mail-receiving service generally may not be used. If
the address has not yet been determined or the application is for an inactive
license, then the application must so state.
(ii)
If the applicant is a corporation, then the officers and
directors' sections on the back side of the form must be completed.
(iii)
The section inquiring about owners requires an answer
based upon the applicant's entity type. If an individual's interest in an
entity is community property, then spouses with a community property interest
must also be listed. If the business interest is owned by a married individual
as separate property, documentation establishing or confirming such status
should be provided.
(I)
Sole proprietorships. The individual(s) owning and operating
the business must be named.
(II)
General Partnerships. All partners must be listed and
the percentage of ownership stated.
(III)
Corporations. All shareholders holding voting stock must
be named if the corporation is privately held. If a parent corporation is
the sole or part owner of the proposed business, a narrative or diagram must
be attached that describes each level of ownership and management. This narrative
or diagram requires the listing of the names of all officers, directors and
stockholders owning 5% or more stock at each level.
(IV)
Limited Liability Partnerships. All partners, general
and limited, must be listed and the percentage of ownership stated. If a partner
is a business entity and not an individual, a narrative or diagram must be
attached that describes each level of ownership. This narrative or diagram
requires the listing of the names of all officers, directors and stockholders
owning 5% or more stock at each level.
(V)
Limited Liability Companies. All managers, officers, agents
and members, as those terms are used by the Texas Limited Liability Company
Act, Texas Civil Statutes, Article 1528n, must be named. If a member is a
business entity and not an individual, a narrative or diagram must be attached
that describes each level of ownership. This narrative or diagram requires
the listing of the names of all officers, directors and stockholders owning
5% or more stock at each level.
(VI)
Trusts/Estates. List the trustee(s) or executor(s).
(iv)
Manager. Each person who is responsible for the day-to-day
operation of one or more of applicant's proposed offices must be named.
(v)
Supervisor. Each person who will be responsible for the
supervision of a licensed location must be named.
(vi)
Signature(s). With sole proprietorships and partnerships,
all proprietors and general partners must sign. With corporate applicants,
two officers must sign unless only one officer of the corporation has been
appointed. With limited liability companies, two authorized members must sign
unless the company only has one member. With trusts or estates, the trustee
or executor must sign.
(B)
Statutory Agent Disclosure (Form ADM-13). This form must
be completed by all applicants. The statutory agent is the person or entity
to whom any legal notice may be delivered. The agent must be a Texas resident
and list an address for legal service. If the statutory agent is an individual,
the address must be a residential address. With corporations, the statutory
agent listed on Form ADM-13 should be the registered agent listed in the articles
of incorporation. With limited liability companies, the statutory agent listed
on Form ADM-13 must be the registered agent listed in the articles of organization.
If the statutory agent is not listed in the relevant organizational document,
then the applicant must submit certified minutes appointing the new agent.
(C)
Personal Affidavit (Form ADM-15/16). Every individual listed
on the license application (ADM-10/11) as a principal party or as a supervisor
or manager must complete this form. The percentage of ownership stated on
this form must correspond to the individual's percentage listed on the license
application Form ADM-10/11. The record of business associations must also
include the individual's association with the entity applying for the license.
(D)
Fingerprint Cards. A complete set of legible fingerprints
shall be provided for each individual having a substantial relationship with
the applicant. An individual has a substantial relationship with an applicant
if it is a "principal party," as that term is defined in §1.301 of this
title (relating to Definitions). Individuals who have previously been licensed
by the commissioner and principal parties of entities currently licensed by
the commissioner are not required to provide fingerprints. The commissioner
may require fingerprints of employees or other persons with some relationship
to the applicant if the commissioner believes that the individual's involvement
in the lending operation is relevant to the applicant's eligibility for a
license. All fingerprints should be submitted on the format provided by the
agency and approved by the Department of Public Safety and the Federal Bureau
of Investigation. A request for acceptable fingerprint cards may be made by
submitting a completed Form ADM-030.097.
(E)
Financial Statement (Form ADM-17/18/19).
(i)
General Information. The financial statement must be dated
no earlier than 60 days prior to the date of application. Applicants may also
submit audited financial statements dated within one year prior to the application
date in order to expedite verification procedures. All financial statements
must be certified as true, correct, and complete.
(ii)
Sole Proprietorships. Sole proprietors must complete all
sections of Form ADM-17 and the attached schedules, Form ADM-18/19, or provide
a personal financial statement that contains all of the same information requested
by Form ADM-17/18/19.
(iii)
Partnerships. A financial statement for the partnership
itself must be submitted. In addition, each general partner must submit a
financial statement. All of the financial statements for the partnership and
the partners must be dated the same day. The information requested in Schedules
1-6 (ADM-18/19) must be submitted and attached to any balance sheet that is
appended to the application.
(iv)
Corporations and Limited Liability Companies. Corporations
and limited liability companies must file a balance sheet that complies with
generally accepted accounting principles (GAAP). The information requested
in Schedules 1-6 (ADM-18/19) must be submitted and attached to any balance
sheet that is appended to the application. Financial statements are generally
not required of related parties, but may be required by the commissioner if
the commissioner believes they are relevant.
(F)
Assumed Name Certificates (Forms ADM-20 and ADM-21). For
any applicant that does business under an assumed name as that term is defined
in Texas Business & Commerce Code, §36.02(7), an assumed name certificate
must be filed as provided in this subsection.
(i)
Unincorporated applicants. Unincorporated applicants using
or planning to use an assumed name must file an assumed name certificate (ADM-20
or its equivalent) with the county clerk of the county where the proposed
business is located in compliance with Texas Business & Commerce Code, §36.0010,
as amended. An applicant must provide a copy of the assumed name certificate
that shows the filing stamp of the county clerk or, alternatively, a certified
copy.
(ii)
Incorporated applicants. Incorporated applicants using
or planning to use an assumed name must file an assumed name certificate (ADM-21
or its equivalent) in compliance with Texas Business & Commerce Code, §36.0011,
as amended. Evidence of the filing bearing the appropriate filing stamp must
be submitted or, alternatively, a certified copy.
(2)
Other Required Filings.
(A)
Loan Forms. The applicant must provide information regarding
all loan forms it intends to use.
(i)
Custom Forms. If a custom loan form is to be prepared,
a preliminary draft or proof that is complete as to format and content and
which indicates the number and distribution of copies to be prepared for each
transaction must be submitted.
(ii)
Stock Forms. If applicant purchases or plans to purchase
stock forms from a supplier, the applicant must attach a statement that includes
the supplier's name and address and a list identifying the forms to be used,
including the revision date of the form, if any.
(B)
Statement of Experience. All new applicants should provide
an attached statement setting forth the details of the applicant's prior experience
in the lending or credit granting business. If the individuals named on the
application do not have significant experience in the same type of credit
business as planned for the prospective licensee, the applicant must provide
a written statement explaining the applicant's relevant experience and why
the commissioner should find that the applicant has the necessary experience.
(C)
Statement of business operation plan. Applicants must attach
a brief narrative to the application explaining the type of lending operation
that is planned. This narrative should discuss each of the following topics:
the source of customers, purpose(s) of loans, size of loans, the source of
working capital for planned operations, whether the applicant will only be
arranging or negotiating loans for another lender or financing entity and,
if so, a list of those lenders, whether the loans will be collected at the
location where the loans are made and, if not, identify the person or firm
that will be handling servicing and state their location, and a detailed description
of the process to be utilized in collections.
(D)
Entity documents.
(i)
Partnerships. Partnership applicants must submit a complete
copy of the partnership agreement. This copy must be signed and dated by all
partners. Limited partnerships must submit a copy of the articles of partnership
filed with the secretary of state, any amendments, and a copy of the secretary
of state's acknowledgment.
(ii)
Corporations.
(I)
All corporate applicants, domestic and foreign, must provide
the following documents:
(-a-)
A copy of the articles of incorporation and any amendments;
(-b-)
A copy of the corporate bylaws;
(-c-)
Minutes of corporate meetings that record:
(-1-)
the election of all current officers and directors as
listed on the license application (Form ADM-10/11); and
(-2-)
the authorization for the application for the license;
and
(-d-)
A certificate of good standing from the comptroller of
public accounts.
(II)
All foreign corporate applicants must provide the following:
(-a-)
A certificate of authority to do business in Texas.
(-b-)
A statement of where corporate records and records of
Texas loan transactions will be kept. If these records will be maintained
at a location outside of Texas, the corporate applicant must acknowledge responsibility
for the travel costs associated with examinations in addition to the usual
examination fees or agree to make all the records available for examination
in Texas.
(III)
Publicly held corporations must file the most recent
10K and 10Q for the applicant or for the parent company.
(iii)
Trusts. A copy of the instrument that created the trust
must be filed with the application.
(iv)
Estates. A copy of the instrument establishing the estate
must be filed with the application.
(E)
Bond. The commissioner may require a bond under §342.102,
Texas Finance Code, when the commissioner finds that this would serve the
public interest. When a bond is required, the commissioner shall give written
notice to the applicant. Should a bond not be submitted within 40 calendar
days of the date of the commissioner's notice, any pending application may
be denied.
(3)
Subsequent Applications. If the applicant is currently
licensed and filing an application for a new office, the applicant must provide
the forms and other information that are unique to the new location including
the application form (ADM 10/11) and a new financial statement as provided
in paragraph (1)(E) of this section. Other information required by this section
need not be filed if the information on file with the agency is current and
valid.
§1.303.Transfer of License.
(a)
Definition. As used in this section, a "transfer of ownership"
occurs whenever an existing owner relinquishes that owner's entire interest
in a licensee or an entirely new person has obtained an ownership interest
in the licensee. This term includes any purchase or acquisition of control
over more than 10% of the outstanding voting stock of any licensed corporation,
or of any corporation which is the parent or controlling stockholder of a
licensed corporation. This term also includes any acquisition of a license
by gift, devise or descent.
(b)
Approval of transfer. No consumer loan license may be sold,
transferred or assigned without written approval of the commissioner. When
a person with no prior ownership interest in the licensee purchases or acquires
control of 10% or more of the voting stock of any licensed corporation, or
of any corporation that is the parent or controlling stockholder of a licensed
corporation, an application for transfer of the ownership of the license must
be filed.
(c)
Filing requirements. An application for transfer of a consumer
loan license must be submitted on forms prescribed by the commissioner at
the date of filing and in accordance with the rules and the commissioner's
instructions. The application for transfer shall include, but not be limited
to, the following:
(1)
Application form (Form ADM-10/11). The instructions in §1.302(1)(A)
of this title (relating to Filing of New Application) are applicable to this
filing.
(2)
Statutory Agent Disclosure (Form ADM-13). The instructions
in §1.302(1)(B) of this title are applicable to this filing.
(3)
Personal Affidavit (Form ADM-15/16). Every individual listed
on the license application (ADM-10/11) who is a principal party or is a supervisor
or manager of the transferee must complete this form. The instructions set
forth in §1.302(1)(C) of this title are applicable to this filing.
(4)
Fingerprints. A complete set of legible fingerprints shall
be provided for each individual having a substantial relationship with the
applicant. An individual has a substantial relationship with an applicant
if it is a "principal party," as that term is defined in §1.301 of this
title (relating to Definitions). Individuals who have previously been licensed
by the commissioner and principal parties of entities currently licensed by
the commissioner are not required to provide fingerprints. The commissioner
may require fingerprints of employees or other persons with some relationship
to the applicant if the commissioner believes that the individual's background
history is relevant to the applicant's eligibility for a license. All fingerprints
should be submitted on a format provided by the agency and approved by the
Department of Public Safety and the Federal Bureau of Investigation. A request
for acceptable fingerprint cards may be made by submitting a completed Form
ADM-030.097.
(5)
Evidence of the transfer of ownership. Documentation evidencing
the transfer of ownership must be filed with the application. This must include
one of the following:
(A)
a copy of the asset purchase agreement when only the assets
have been purchased;
(B)
a copy of the stock purchase agreement if 10% or more of
the outstanding voting stock of a corporate licensee has been purchased or
otherwise acquired; or
(C)
any document that transferred ownership in a licensee by
gift, devise or descent, such as a probated will or a court order.
(6)
Financial statement (ADM-17/18/19). The instructions in §1.302(1)(E)
of this title are applicable to this filing.
(7)
Other Required Filings. All filings required of new license
applicants pursuant to §1.302(2) of this title must be filed and completed
by any applicant for transfer of a license. If the applicant is currently
licensed and acquiring another location, the applicant must provide the forms
and other information that are unique to the new location. Other information
required by this subsection need not be filed if the information on file with
the agency is current and valid.
(d)
Permission to operate. No business under the license shall
be conducted by any transferee until the application has been received, all
applicable fees have been paid, and a request for permission to operate has
been approved by the commissioner. The commissioner may deny a request for
permission to operate during the pendency of the application.
(e)
Purchaser operating under seller's license. The commissioner
may approve a written agreement whereby a seller grants a buyer the authority
to operate under the seller's consumer loan license pending approval of the
buyer's license application. The agreement must provide that the seller accepts
full responsibility to the commissioner and any customer of the licensed business
for any acts of the buyer in connection with the operation of the lending
business. The written agreement between the seller and the buyer must be submitted
with a request to operate under the seller's license not less than three business
days after the date of the sale. The agreement shall be for a limited time
as provided in the agreement and in no case may such authority extend beyond
180 days.
(f)
Application filing deadline. Applications filed in connection
with transfers of ownership may be filed in advance but must be filed no later
than 10 calendar days following the actual transfer.
§1.304.Processing of Application.
(a)
Initial review. The commissioner shall respond to applications
within 15 working days of receipt stating that the application is complete
and accepted for filing or stating that the application is incomplete and
specifying the information required for acceptance.
(b)
Complete application. An application is complete when it:
(1)
conforms to the rules and the commissioner's published
instructions;
(2)
all fees have been paid; and
(3)
all requests for additional information have been satisfied.
(c)
Failure to complete application. If a complete application
has not been filed with the commissioner within 30 days after notice of deficiency
has been sent to the applicant, the application may be denied.
(d)
Hearing. Whenever an application is denied, the affected
applicant has 30 days from the date the application was denied to request
in writing a hearing to contest the denial. This hearing shall be conducted
pursuant to the Administrative Procedure Act, Government Code, Chapter 2001,
and §9.1 et seq. of this title (relating to Rules of Procedure for Contested
Case Hearings, Appeals, and Rulemakings), before an administrative law judge
who will recommend a decision to the commissioner. The commissioner will then
issue a final decision after review of the recommended decision.
(e)
Denial. Upon the final denial of an application, the annual
fee shall be refunded to applicant. The investigation fee shall be forfeited.
(f)
Processing time.
(1)
The commissioner shall ordinarily approve or deny a license
application within a maximum of 60 days after the date of filing of a completed
application.
(2)
When a hearing is requested following an initial license
application denial, the hearing shall be held within 60 days after a request
for a hearing is made unless the parties agree to an extension of time. The
commissioner shall make a final decision approving or denying the license
application after receipt of the proposal for decision from the administrative
law judge.
(3)
Exceptions. The commissioner may take more time where good
cause exists, as defined by Government Code, §2005.004, for exceeding
the established time periods in paragraphs (1) and (2) of this subsection.
§1.305.Change in Form or Proportionate Ownership.
(a)
Organizational form. When any licensee desires to change
the organizational form of its business (e.g., from sole proprietorship to
corporation), the licensee must advise the commissioner in writing of the
change within 10 calendar days by filing the appropriate transfer documents
as provided in §1.303 of this title (relating to Transfer of License).
In addition, the licensee shall submit a copy of the organizational document
(such as the articles of incorporation) for the new entity.
(b)
Merger. A merger of a corporate licensee is a change of
ownership and requires the filing of a transfer application pursuant to §1.303
of this title. A merger of the parent corporation of a licensee with another
corporation that leads to the creation of a new corporate entity requires
a transfer application pursuant to §1.303 of this title. A merger of
the parent corporation of a licensee with another corporation that results
in the situation where the surviving corporation is not the existing parent
corporation requires a transfer application pursuant to §1.303 of this
title. Mergers of other corporations with a beneficial interest beyond the
parent corporation level only require notification within 10 calendar days.
(c)
Proportionate Ownership. A mere change in the proportion
of ownership among the current owners does not require the filing of a transfer
application. A change in the proportionate interests of two or more current
owners of a consumer loan license must be reported in writing.
(d)
Notice deadline. Notices filed in connection with changes
in proportionate ownership may be filed in advance but must be filed no later
than 10 calendar days following the actual change.
§1.306.Amendments to Pending Application.
Each applicant shall provide the commissioner with information supplemental
to that contained in the applicant's original application documents and attachments.
Any action, fact, or information that would require a materially different
answer than that given in the original license application and which relates
to the qualifications for license must be reported to the commissioner within
10 business days after the person has knowledge of the action, fact or information.
§1.307.Relocation of Licensed Offices.
(a)
A licensee may move the licensed office from the licensed
location to any other location by giving notice of intended relocation to
the commissioner not less than 30 days prior to the anticipated moving date.
The notice must include the present address of the licensed office, the contemplated
new address of the licensed office, the approximate date of relocation, and
a copy of the notice to debtors.
(b)
Written notice of a relocation of an office must be mailed
to all debtors of record at least five days prior to the date of relocation.
Any licensee failing to give the required notice shall waive all default charges
on payments coming due from the date of relocation to 15 days subsequent to
the mailing of notices to debtors. Notices shall identify the licensee, give
both old and new addresses, old and new telephone numbers, and state the date
relocation is effective. The notice to debtors can be waived or modified by
the commissioner when it is in the public interest. A request for waiver or
modification must be submitted in writing for approval. The commissioner may
approve notification to debtors by signs in lieu of notification by mail,
if in the commissioner's opinion, no debtors will be adversely affected.
§1.308.Designation of Active/Inactive Status.
(a)
Inactivation of an active license. A licensee may cease
operating under a consumer loan license and render the license inactive by
giving notice of the cessation of operations to the commissioner not less
than 30 days prior to the anticipated cessation date. Notification must be
filed on the license amendment form (ADM-34). The notice must include the
address of the licensed office, a certification that no loans will be made
or collected under this license until it is reactivated, and the fee for amending
the license.
(b)
Activation of an inactive license. A licensee may activate
an inactive consumer loan license by giving notice of the intended activation
to the commissioner not less than 30 days prior to the anticipated activation
date and remitting the fee for license amendment. Notification must be filed
on the license amendment form (ADM-34) and must include the contemplated new
address of the licensed office and the approximate date of activation.
§1.309.Fees.
(a)
New licenses. A $200 investigation fee is assessed each
time an application for a new license is filed and is non-refundable. In addition,
the applicant is initially required to pay an annual license fee of $100 that
is not prorated but is refundable if the license application is denied.
(b)
License transfers. With applications for transfer of a
license, the applicant must pay an investigation fee of $200 for the first
license transfer and $50 on each additional license transfer sought simultaneously
and is non-refundable.
(c)
Fingerprint checks. The fee to investigate each applicant's
fingerprint record is $40 per set and is non-refundable. This fee must be
paid for each set of fingerprints filed with applications for new licenses
or license transfers.
(d)
License amendment. A fee of $25 must be paid each time
a licensee seeks to amend a license by rendering a license inactive, activating
an inactive license, changing the assumed name of the licensee, or relocating
an office.
(e)
License duplicate. The fee for a license duplicate is $10.
(f)
Costs of hearings. The commissioner may assess the costs
of an administrative appeal hearing afforded under §1.304(d) of this
title (relating to Processing of Application), including the cost of the administrative
law judge, the court reporter and agency staff representing the agency at
a hearing.
§1.310.Applications and Notices as Public Records.
Once a license application or notice is filed with the OCCC, it becomes
a "state record" under Government Code, §441.180(11), and "public information"
under Government Code, §552.002. Under Government Code, §§441.190,
441.191 and 552.004, the original applications and notices must be preserved
as "state records" and "public information" unless destroyed with the approval
of the director and librarian of the State Archives and Library Commission
under Government Code, §441.187. Under Government Code, §441.191,
the OCCC may not return any original documents associated with a consumer
loan license application or notice to the applicant or licensee. An individual
may request copies of a state record under the authority of the Government
Code, Chapter 552.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 24, 2002.
TRD-200203953
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 4, 2002
For further information, please call: (512) 936-7640
7 TAC §1.405
The Finance Commission of Texas (the commission) proposes
an amendment to 7 TAC §1.405, concerning application process after suspension
or revocation.
The purpose of the amendment is to make technical changes to the rules
in order to conform with the numbering of proposed new subchapters in connection
with an agency rule review.
Consumer Credit Commissioner, Leslie L. Pettijohn, has determined that,
for each year of the first five years that the amendment is in effect, there
will be no fiscal implication for state or local government as a result of
enforcing or administering the amendment.
Commissioner Pettijohn also has determined that, for each of the first
five years the amendment as proposed is in effect, the public benefit anticipated
as a result of the proposal of the amendment will be proper cite reference
in the rule to correspond with the concurrently proposed new subchapter.
Comments concerning the proposed amendment should be submitted within 30
days of publication to Leslie L. Pettijohn, Consumer Credit Commissioner,
2601 North Lamar Boulevard, Austin, Texas 78705, or by an email to leslie.pettijohn@occc.state.tx.us.
The amendment is proposed under Texas Finance Code, §11.304,
which authorizes the Finance Commission to adopt rules to enforce Title 4
of the Texas Finance Code. Additionally, Texas Finance Code, §342.551
authorizes the Finance Commission to adopt rules for the enforcement of the
consumer loan chapter.
The statutory provisions (as currently in effect) affected by the proposed
new amendment are Chapter 342, Texas Finance Code and the rest of Title 4.
§1.405.Application Process after Suspension or Revocation .
To obtain a license after a license has been suspended or revoked,
the former licensee is required to file an application for a new license pursuant
to the procedures set forth in §
1.303
[
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 24, 2002.
TRD-200203951
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 4, 2002
For further information, please call: (512) 936-7640
7 TAC §1.911
(Editor's note: The text of the following section proposed for
repeal will not be published. The section may be examined in the offices of
the Finance Commission of Texas or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Finance Commission of Texas (the commission)
proposes the repeal of 7 TAC §1.911, concerning interpretations and advisory
letters. As part of an agency rule review the commission is concurrently proposing
new subchapters to relocate these rules in a more logical order, in this issue
of the
Texas Register
.
This repeal is necessary because the sections have been rewritten and incorporated
into new subchapters.
Leslie L. Pettijohn, Consumer Credit Commissioner, has determined that
for the first five-year period of the repeal as proposed will be in effect,
there will be no fiscal implications for state or local government as a result
of administering or enforcing the repeal.
Ms. Pettijohn also has determined that for each year of the first five-year
period the repeal as proposed will be in effect, the public benefit anticipated
as a result of the repeal is the logical relocation of these rules. There
is no anticipated cost to persons who are required to comply with the repeal
as proposed. There will be no adverse economic effect on small businesses.
Comments on the proposed repeal may be submitted in writing to Leslie L.
Pettijohn, Consumer Credit Commissioner, 2601 North Lamar Boulevard, Austin,
Texas 78705-4207 or by an e-mail to leslie.pettijohn@occc.state.tx.us.
The repeal is proposed under Texas Finance Code, §11.304,
which authorizes the Finance Commission to adopt rules to enforce Title 4
of the Texas Finance Code. Additionally, Texas Finance Code, §342.551
authorizes the Finance Commission to adopt rules for the enforcement of the
consumer loan chapter.
The statutory provisions (as currently in effect) affected by the proposed
repeal are Chapter 342, Texas Finance Code and the rest of Title 4.
§1.911.Interpretations and Advisory Letters
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on June 24, 2002.
TRD-200203946
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 4, 2002
For further information, please call: (512) 936-7640
7 TAC §4.11
(Editor's note: The text of the following section proposed for
repeal will not be published. The section may be examined in the offices of
the Finance Commission of Texas or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Finance Commission of Texas (the commission)
proposes the repeal of §4.11, concerning fees. Section 4.11 implements
Finance Code, §153.303, which authorizes the commission to set currency
exchange, transportation, and transmission license application fees, license
renewal fees, and examination fees in amounts that are reasonable and necessary
to defray the cost of administering Finance Code, Chapter 153.
Concurrently with this repeal, the commission is proposing the adoption
of new §4.11. The proposed repeal and adoption will convert the rule
to a plain language format and change the existing examination fee structure.
The new examination fee structure is necessary under Finance Code, §153.303
because existing §4.11 does not generate fees in amounts sufficient for
the department to administer Finance Code, Chapter 153.
Ms. Stephanie Newberg, Deputy Commissioner, Texas Department of Banking,
has determined that, for each year of the first five years that the repeal
is in effect, there will be no fiscal implications for state or local government
as a result of enforcing or administering the repeal.
Ms. Newberg also has determined that, for each of the first five years
the repeal as proposed will be in effect, the public benefit anticipated as
a result of the repeal and adoption of proposed §4.11 is more clear regulation
for currency exchange, transportation, and transmission license holders and
generation of revenues necessary to implement Finance Code, Chapter 153 so
that currency exchange, transportation, and transmission consumers are protected.
There is no anticipated cost to persons who are required to comply with the
repeal as proposed. There will be no adverse economic effect on small businesses.
Comments concerning the proposed repeal should be submitted within 30 days
of publication to Robin Robinson, Assistant General Counsel, Texas Department
of Banking, 2601 North Lamar Boulevard, Austin, Texas 78705-4294, or by email
to robin.robinson@banking.state.tx.us.
The repeal is proposed under Finance Code, §153.002, which
authorizes the commission to adopt rules necessary or desirable to implement
Finance Code, Chapter 153, and Finance Code §153.303, which authorizes
the commission to set fees in amounts that are reasonable and necessary to
defray the cost of administering Finance Code, Chapter 153.
Finance Code, Chapter 153 is affected by the proposed repeal.
§4.11.Fees.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on June 21, 2002.
TRD-200203891
Everette D. Jobe
Certifying Official
Finance Commission of Texas
Proposed date of adoption: August 16, 2002
For further information, please call: (512) 475-1300
7 TAC §4.11
The Texas Finance Commission (the commission) proposes new §4.11,
concerning fees. Proposed §4.11 will implement Finance Code, §153.303,
which authorizes the commission to set currency exchange, transportation,
and transmission license application fees, license renewal fees, and examination
fees in amounts that are reasonable and necessary to defray the cost of administering
Finance Code, Chapter 153. Existing §4.11 is proposed for repeal in this
issue of the
Texas Register
.
Proposed §4.11 will change the department's method of calculating
and collecting currency exchange, transportation, and transmission examination
fees. Under existing §4.11, examination fees are $400 per examiner per
day plus associated travel costs. Under proposed §4.11, the $400 rate
will be replaced by an annual examination fee assessed on the total amount
of the currency exchange, transportation, and transmission transactions conducted
by a license holder. The assessed amount will include the cost of one annual
examination plus the associated travel expenses for that examination. If an
additional examination is required during a one year period because of a license
holder's failure to comply with Finance Code, Chapter 153, commission rules,
or department requests, proposed §4.11 will require a license holder
to pay for the additional examination at the rate of $600 per day for each
examiner plus any associated travel expenses. This per day rate also applies
to new license holders who have not accumulated the data necessary to calculate
their first annual examination fee. If out-of-state travel is necessary to
conduct an examination, proposed §4.11 requires a license holder to pay
the travel expenses.
Proposed §4.11 also provides a means for a license holder to request
a reduction in the annual examination fee if payment of the fee will cause
the business to be unable to pay debts as they mature or pay obligations as
they become due and payable. The remaining provisions in proposed §4.11
provide for the same licensing and renewal fees and deadlines for payment
of fees as the existing §4.11 proposed for repeal.
The fee rate increase is established by the department and approved by
the commission, and not mandated by the Legislature. It is proposed to comply
with Finance Code, §153.303, which requires the department to collect
fees from license holders in amounts necessary to administer Finance Code,
Chapter 153. The department has determined that the new fee structure will
generate fees in amounts sufficient to administer Finance Code, Chapter 153.
The new fee structure is necessary because the existing fee structure does
not generate enough revenue to cover the costs of department examinations
or other aspects of the Finance Code, Chapter 153 program. As a result, the
department has had to use other unrelated revenue sources to administer Finance
Code, Chapter 153 for the past two fiscal years.
Several factors have led to the necessity of the new fee structure. The
primary one is the disappearance of federal grant funds. The department has
historically received federal funds to administer its Finance Code, Chapter
153 program. These funds have decreased substantially over the last ten years
from a yearly average of $208,128 between 1992 and 1999, to $85,792 in 2000
and $58,005 in 2001. In addition, despite inflation and rising program costs,
there has been no fee increase on license holders since 1993. The increase
in proposed §4.11 will be the first one on license holders in nearly
ten years.
To minimize the impact of the fee increase, the department will lower bonding
requirements of license holders that receive satisfactory examination ratings.
For license holders engaged exclusively in currency exchange, the required
bond of $25,000 will be reduced to $3,500. The average yearly savings for
currency exchangers from this reduction is expected to be $400. For currency
transmission and transportation license holders, the current minimum bond
amount of $300,000 will be reduced to $200,000. The average yearly savings
for currency transmitters and transporters from this reduction is expected
to be $1,500.
The reduced bonding requirements will not affect the level of protection
afforded to consumers doing business with license holders. The risk of customer
claims on currency exchange bonds is minimal because currency exchange businesses
do not hold customer funds. Further, the department has determined that the
$200,000 bonding requirement for transmitters and transporters is more than
sufficient to address the risk associated with customer bond claims. Since
the inception of the currency exchange and transmission program in 1991, there
has been only one bond claim on behalf of transmission customers and the bond
amount in that case was substantially higher than the losses.
The department is currently developing standards for bond reductions that
will be added to §4.7. Until §4.7 is amended, a license holder may
apply for a reduction in bonding requirements under Finance Code, §153.109(f).
Stephanie Newberg, Deputy Commissioner, Texas Department of Banking, has
determined that, for each year of the first five years that the section as
proposed is in effect there will be no fiscal implication for state or local
government as a result of enforcing or administering the section. The total
amount of revenues collected by the department will remain approximately the
same. Only the sources of revenue to administer Finance Code, Chapter 153
will change under the new rule.
Ms. Newberg also has determined that, for each of the first five years
the section as proposed will be in effect, the anticipated public benefit
will be more clear regulatory requirements and increased efficiency in the
administration of Finance Code, Chapter 153 provisions. For each of the first
five years the section as proposed will be in effect, the economic costs to
persons required to comply with the rule will be increased examination fees.
The average yearly increase to license holders will be approximately $1,249.93.
Of the 85 currency exchange, transportation, and transmission license holders,
71 are micro-businesses and 14 are small businesses under the definitions
of those terms in Government Code, §2006.001. The average examination
fee increase on the micro-businesses under the proposed fee structure will
be approximately $1,263.14, or $ .02 per $100 in sales. The average examination
fee increase on the small businesses will be approximately $1,140.44, or $
.02 per $100 in sales. Because all license holders are small or micro-businesses,
this proposal will not result in a disproportionate effect on small and micro-businesses
as compared to larger businesses.
Comments on the proposed rule may be submitted to Robin Robinson, Assistant
General Counsel, Texas Department of Banking, 2601 North Lamar Boulevard,
Austin, Texas 78705-4294, or by email to robin.robinson@banking.state.tx.us.
The new section is proposed under Finance Code, §153.002,
which authorizes the commission to adopt rules necessary or desirable to implement
Finance Code, Chapter 153, and Finance Code, §153.303, which authorizes
the commission to set fees in amounts that are reasonable and necessary to
defray the cost of administering Finance Code, Chapter 153.
Finance Code, Chapter 153 is affected by the proposed amendment.
§4.11.What fees must I pay to get and maintain a currency exchange, transportation, or transmission license?
(a)
Definitions.
(1)
Examination-the process of evaluating the books and records
of a license holder relating to its currency exchange, transmission, and transportation
activities.
(2)
Financially insolvent-the inability to pay debts as they
mature or pay obligations as they become due and payable.
(b)
What fees must I pay to the department for obtaining and
renewing a currency exchange, transportation, or transmission license?
(1)
You must pay a $1,500 fee to obtain a license for your
first location and $500 for each additional location.
(2)
You must pay a $500 annual renewal fee for your first location
and $100 for each additional location.
(c)
What fees must I pay for a department examination?
(1)
You must pay an annual examination fee that is based on
your total annual dollar amount of currency exchange, transportation, and
transmission transactions, determined by adding the quarterly amounts listed
in your last four consecutive quarterly reports filed prior to July 1st of
each year under §4.3(d) of this chapter.
(A)
Your fee will be $1,500 if the annual amount of your transactions
is $500,000 or less.
(B)
If the annual amount of your transactions is greater than
$500,000 and less than $1 million, your fee will be the sum of:
(i)
$1,500, and
(ii)
the amount of your transactions over $500,000 multiplied
by a factor of .002.
(C)
If the annual amount of your transactions is equal to or
greater than $1 million and less than $15 million, your fee will be the sum
of:
(i)
$2,500, and
(ii)
the amount of your transactions over $1 million multiplied
by a factor of .00007.
(D)
If the annual amount of your transactions is equal to or
greater than $15 million, your fee will be the sum of:
(i)
$3,480, and
(ii)
the amount of your transactions over $15 million multiplied
by a factor of .00003.
(2)
If the annual examination fee that you calculated under
paragraph (1) of this subsection was over $8,000, your examination fee will
be $8,000.
(3)
If an additional examination is necessary within a one-year
period because you failed to comply with Finance Code, Chapter 153, this chapter,
or a department request made in the discharge of its regulatory duties under
Finance Code, Chapter 153 or this chapter, as determined by the department,
you must pay for the additional examination at a rate of $600 per day for
each examiner required to conduct the additional examination and any associated
travel expenses.
(4)
If you are a new license holder and have not yet filed
four quarterly reports by September 1st of your first year in business, your
first examination fee will be $600 per day for each examiner that conducts
your examination and any associated travel expenses. Your subsequent annual
examination fee will be calculated in accordance with paragraph (1) of this
subsection.
(5)
If an out-of-state examination is necessary, you must pay
the associated travel expenses in addition to the annual examination fee.
(d)
How will the department bill me for the examination fee?
The department may assess the examination fee in quarterly or fewer installments
in such periodically adjusted amounts as reasonably appear necessary to pay
for the costs of examination and to administer Finance Code, Chapter 153.
The commissioner may decrease examination fees if it is determined that a
lesser amount than would otherwise be collected is necessary to administer
Finance Code, Chapter 153.
(e)
What if I cannot afford the annual examination fee? If
you show that payment of the annual examination fee will cause your business
to become financially insolvent, the commissioner may reduce the fee. You
must request a reduction by filing an application no later than 15 days after
the due date of the fee with supporting financial records showing your impending
insolvency.
(f)
When do I need to pay the fees required by this section?
(1)
You must pay the license and license renewal fees required
by subsection (b) of this section at the time you file your application for
a license or application for renewal.
(2)
You must pay your annual examination fee required by subsection
(c) of this section no later than the 15th day after the date of the department's
billing.
(3)
You must pay additional examination fees and associated
travel costs required by subsection (c) of this section at the time of billing.
(g)
Are any of the fees I pay under this section refundable?
No, the department may not refund any amounts you pay in fees.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 21, 2002.
TRD-200203892
Everette D. Jobe
Certifying Official
Finance Commission of Texas
Proposed date of adoption: August 16, 2002
For further information, please call: (512) 475-1300
Chapter 11.
MISCELLANEOUS
Subchapter B. SAME POWERS AS NATIONAL BANKS
7 TAC §11.81, §11.83
(Editor's note: The text of the following sections proposed for
repeal will not be published. The sections may be examined in the offices
of the Texas Department of Banking or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Finance Commission of Texas (the commission)
proposes the repeal of §11.81, concerning loans, and §11.83, concerning
other matters.
Sections 11.81 and 11.83 were adopted in 1982 to help state banks remain
competitive, by authorizing certain powers and activities for state banks
that were already authorized for national banks. These rules predate the 1984
constitutional amendment to Texas Constitution, Article XVI, §16, granting
state banks "the same rights and privileges that are or may be granted to
national banks of the United States domiciled in this State." In addition,
relevant state banking law was thoroughly and comprehensively rewritten and
modernized by legislation enacted in 1995, 1999, and 2001. The need for existing §11.81
and §11.83 therefore no longer exists and repeal is appropriate. A bank
will not lose any of the powers listed in §11.81 and §11.83 as a
result of the repeal. The right to exercise these powers is adequately protected
by Texas Constitution, Article XVI, §16(c), and by current statutes and
regulations, including Finance Code, §32.009. Exercise of certain powers
is further addressed in department opinions and policies.
Mr. Gayle Griffin, Deputy Commissioner, Texas Department of Banking, has
determined that, for each year of the first five years that the repealed sections
are in effect, there will be no fiscal implications for state or local government
as a result of enforcing or administering the repeal.
Mr. Griffin also has determined that, for each of the first five years
the repeal as proposed will be in effect, the public benefit anticipated as
a result of the repeal is the removal of outdated regulations. There is no
anticipated cost to persons who are required to comply with the repeal as
proposed. There will be no adverse economic effect on small businesses.
Comments concerning the proposed repeal should be submitted within 30 days
of publication to Robin Robinson, Assistant General Counsel, Texas Department
of Banking, 2601 North Lamar Boulevard, Austin, Texas 78705-4294, or by email
to robin.robinson@banking.state.tx.us.
The repeal is proposed under Finance Code, §31.003, which
authorizes the commission to adopt rules necessary to accomplish the purposes
of Finance Code, Title 3, Subtitle A.
Finance Code, Title 3, Subtitle A is affected by the proposed repeal.
§11.81.Loans.
§11.83.Other Matters.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on June 21, 2002.
TRD-200203893
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 16, 2002
For further information, please call: (512) 475-1300
The Texas Finance Commission (commission) proposes new §21.9,
concerning waiver of requirements relating to trust company corporate activities.
The commission also proposes to amend §§21.1 - 21.6 and 21.8, concerning
fees for corporate applications and other provisions of general applicability
to trust companies; §21.23 and §21.24, concerning trust company
chartering and powers; §21.31 and §21.32, concerning trust deposits; §21.41
and §21.42, concerning trust company offices; §21.51, concerning
change of control of a trust company; §§21.61, 21.62, 21.64, 21.67,
21.68, 21.72, and 21.76, concerning application for merger, conversion, or
sale of assets of a trust company; and §21.91 and §21.92, concerning
charter amendments and certain changes in outstanding stock of a trust company.
Proposed new §21.9 will authorize the banking commissioner to waive
or modify any application requirement imposed by Chapter 21, regarding trust
company corporate activities. Existing §21.71 authorizes waiver or modification
of requirements in Chapter 21, Subchapter F, and proposed §21.9 will
extend that authority to the rest of Chapter 21. The commission is concurrently
proposing the repeal of §21.71 in this issue of the
Texas Register
.
Most of the proposed amendments merely correct citations that changed as
a result of the 1999 codification of the Texas Trust Company Act (Texas Civil
Statutes, Articles 342a-1.001 et seq), into the Finance Code.
The remaining proposed amendments concern application fees for trust companies.
The commission proposes to amend §21.2(b)(13) to increase the fee for
an application to amend articles of association from $200 to $300. The $100
increase is necessary to more fully recover the cost of processing this type
of application and will make the department fee consistent with the $300 fee
charged by the Secretary of State for the same type of application.
In addition, the commission proposes to add two new fees to §21.2
and allow recovery of investigative fees and costs on a new type of application.
Finance Code, §182.502, added to the Finance Code in 2001, permits a
trust institution to convert to a state trust company with the approval of
the banking commissioner. Proposed §21.2(b)(22) will impose a $5,000
fee for an application under new Finance Code, §182.502. In this connection, §21.2(d)
is proposed to be amended to add this application to the list of applications
that are subject to additional charges for recovery of investigative fees
and costs. Finally, proposed §21.2(b)(23) will impose a new $300 fee
for an application to exempt an acquisition of control transaction from the
requirements of Finance Code, §183.001, as provided by Finance Code, §183.001(d)(4).
This fee is considered necessary to recover the costs of processing this type
of application.
Gayle Griffin, Deputy Commissioner, Texas Department of Banking, has determined
that, for each year of the first five years that these sections are in effect,
there will be no fiscal implications for state or local government as a result
of enforcing or administering the sections as amended or adopted.
Mr. Griffin also has determined that, for each of the first five years
these sections as amended or adopted are in effect, the public benefit anticipated
as a result of the amendments or adoption will be the replacement of obsolete
statutory references with correct citations and clear guidance on corporate
applications. The anticipated costs to persons who are required to comply
with these sections as proposed are (1) $5,000 for each application to convert
a trust institution to a state trust company under Finance Code, §182.502,
(2) $5,000 in investigative fees and costs associated with conversion of a
trust institution into a state trust company under Finance Code, §182.502,
(3) $300 for each application to exempt an acquisition of control transaction
under Finance Code, §183.001(d)(4), and (4) an increase of $100 for each
application to amend articles of association under Finance Code, §182.101.
The fee increase and proposed new fees were established by the department,
and not mandated by the Legislature. There will be no adverse effect on small
businesses as a result of the proposed amendments or adoption of these sections.
Comments on the proposal may be submitted to Robin Robinson, Assistant
General Counsel, Texas Department of Banking, 2601 North Lamar Boulevard,
Austin, Texas 78705-4294, or by e-mail to robin.robinson@banking.state.tx.us.
Subchapter A. FEES AND OTHER PROVISIONS OF GENERAL APPLICABILITY
7 TAC §§21.1 - 21.6, 21.8
The amendments are proposed under Finance Code, §181.003,
which authorizes the commission to adopt rules to accomplish the purposes
of the Texas Trust Company Act, Finance Code, Title 3, Subtitle F.
Finance Code, Title 3, Subtitle F, is affected by the proposal.
§21.1.Definitions.
Words and terms used in this chapter that are defined in
the Trust
Company Act
[
(1)
Accepted filing--An application, request, notice, or protest
filed under
the Trust Company Act
[
(2) - (6)
(No change.)
(7)
Public notice--A matter, including an application, request,
notice, or protest, whether by proclamation or declaration, required or authorized
to be published in a newspaper of general circulation by
the Trust Company
Act
[
(8)
Submitted filing--An initial application, request, notice,
or protest filed under
the Trust Company Act
[
(9)
Trust Company Act--Finance
Code, Title 3, Subtitle F (§§181.001 et seq).
§21.2.Filing and Investigation Fees.
(a)
(No change.)
(b)
Filing fees. Simultaneously with a submitted application
or notice, an applicant shall pay to the department:
(1)
$5,000 for an application for trust company charter pursuant
to
Finance Code, §182.003
[
(2)
$5,000 for an application for conversion of exempt trust
company to non-exempt pursuant to
Finance Code, §182.011(d)
[
(3)
$4,000 for an application to authorize a merger or share
exchange pursuant to
Finance Code, §182.302
[
(4)
(No change.)
(5)
$4,000 for an application to authorize a purchase of assets
pursuant to
Finance Code, §182.401
[
(6)
$1,000 for an application to authorize the sale of substantially
all assets pursuant to
Finance Code, §182.405
[
(7)
$500 for a subsidiary notice letter pursuant to
Finance
Code, §184.103(c)
[
(8)
$5,000 for an application regarding acquisition of control
pursuant to
Finance Code, §183.002
[
(9)
$200 for a notice to change home office with no abandonment
of existing office pursuant to
Finance Code, §182.202(c)
[
(10)
$1,500 for an application to relocate the home office
with abandonment of existing office pursuant to
Finance Code, §182.202(d)
[
(11)
(No change.)
(12)
$200 for a notice of additional office pursuant to
Finance Code, §182.203(a)
[
(13)
$300
[
(14)
(No change.)
(15)
$100 for a request for a "no objection" letter to use
a name containing a term listed in
Finance Code, §181.004
[
(16)
$500 for an application to authorize acquisition of treasury
stock pursuant to
Finance Code, §184.102
[
(17)
$500 for an application to authorize an increase or reduction
in capital and surplus pursuant to
Finance Code, §182.103
[
(18)
$1,000 for an application for trust company exemption
pursuant to
Finance Code, §182.012
[
(19)
$1,000 for an application for authority to accept deposits
pursuant to
Finance Code, §§182.101, 184.301, and 184.302
[
(20)
$100 for the annual certification filing for an exempt
trust company pursuant to
Finance Code, §182.013
[
(21)
$100 for required filing of a statement of condition and
income pursuant to
Finance Code, §181.107;
[
(22)
$5,000 for an application to convert
from a trust institution to a state trust company pursuant to Finance Code, §182.502;
and
(23)
$300 for an application to exempt an
acquisition of control transaction from the requirements of Finance Code, §183.001
pursuant to Finance Code, §183.001(d)(4), which fee shall be applied
to a subsequent application for approval of an acquisition of control if the
exemption is denied.
(c)
(No change.)
(d)
Investigative fees and costs. An applicant for a trust
company charter
,
[
(e) - (f)
(No change.)
§21.3.Expedited Filings.
(a)
Eligible trust companies may file an expedited filing according
to forms and instructions provided by the department solely for home office
relocations within the same city pursuant to
Finance Code, §182.202(d)
[
(b)
Notwithstanding another provision of this section, the
banking commissioner may deny expedited filing treatment to an eligible trust
company, in the exercise of discretion, if the banking commissioner finds
that the filing involves one or more of the following:
(1) - (2)
(No change.)
(3)
the proposed transaction will result in a fixed asset investment
in excess of the limitation contained in
Finance Code, §184.002(a)
[
(4) - (7)
(No change.)
(c) - (e)
(No change.)
§21.4.Required Information and Abandoned Filings.
(a) - (b)
(No change.)
(c)
Time limit for providing required information. Unless otherwise
provided for in
the Trust Company Act
[
(d) - (e)
(No change.)
§21.5.Public Notice.
(a)
(No change.)
(b)
Contents. The public notice must state that a filing is
being made; the date (or expected date) of the filing; sufficient information
describing the proposed transaction, and other related information required
by
the Trust Company Act
[
(c) - (e)
(No change.)
§21.6.Applications for Trust Charter: Notices to Applicants; Application Processing Times; Appeals.
(a)
Form of application. An application to engage in a business
under
Finance Code, §182.003
[
(b) - (e)
(No change.)
§21.8.Corporate Filings.
(a)
In accordance with the applicable provisions of
the
Trust Company Act
[
(1)
(No change.)
(2)
articles of amendment under
Finance Code, §182.101
[
(3)
restated articles of association under the
Finance
Code, §182.101
[
(4)
restated articles of association with amendments under
Finance Code, §182.101
[
(5)
articles of merger under
Finance Code, §§182.301
et seq
[
(6) - (7)
(No change.)
(8)
establishment of a series of shares by the board of directors
under
Finance Code, §182.101
[
(9) - (13)
(No change.)
(b) - (d)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 21, 2002.
TRD-200203900
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 16, 2002
For further information, please call: (512) 475-1300
7 TAC §21.9
The new section is proposed under Finance Code, §181.003,
which authorizes the commission to adopt rules to accomplish the purposes
of the Texas Trust Company Act, Finance Code, Title 3, Subtitle F.
Finance Code, Title 3, Subtitle F, is affected by the proposal.
§21.9.Waiver of Requirements.
The banking commissioner in the exercise of discretion may waive or
modify any requirement imposed by this chapter.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed
with the Office of the Secretary of State on June 21, 2002.
TRD-200203901
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 16, 2002
For further information, please call: (512) 475-1300
7 TAC §21.23, §21.24
The amendments are proposed under Finance Code, §181.003,
which authorizes the commission to adopt rules to accomplish the purposes
of the Texas Trust Company Act, Finance Code, Title 3, Subtitle F.
Finance Code, Title 3, Subtitle F, is affected by the proposal.
§21.23.Option To Withhold Identity of Officers.
An applicant for a trust company charter may, at its option, withhold
the identity of prospective officers until such time as the banking commissioner
issues a final order on the application. Approval of the application will
be conditional upon the applicant's submitting resumes of qualified proposed
officers to the banking commissioner. Upon receipt of the resumes, the banking
commissioner shall review and investigate the qualification of the proposed
officers and deliver the certificate of authority pursuant to
Finance
Code, §182.006
[
§21.24.Exemptions for Trust Companies Administering Family Trusts.
(a)
Compliance required. Pursuant to
Finance Code, §182.011
and §182.012
[
(b)
Application for Exemption. A trust company administering
family trusts which seeks exemption from specified provisions of
the
Trust Company Act
[
(c)
Exemption. Subject to conditions or limitations being imposed
by the banking commissioner, a trust company administering family trusts may
request exemption from the following provisions of
the Trust Company
Act
[
(1)
the requirement of
Finance Code, §181.107(c),
[
(2)
the requirement of
Finance Code, §183.103(a)
[
(3)
the requirement of
Finance Code, §183.103(a)
[
(4)
the restrictions of
Finance Code, §183.109(a)-(c)
[
(5)
the limitations of
Finance Code, §184.002
[
(6)
the limitations of
Finance Code, §184.101
[
(7)
the restrictions of
Finance Code, §184.102
[
(8)
the limitations of
Finance Code, §184.003
[
(9)
the limitations of
Finance Code, §§184.201
- 184.203
[
(d) - (e)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed
with the Office of the Secretary of State on June 21, 2002.
TRD-200203902
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 16, 2002
For further information, please call: (512) 475-1300
7 TAC §21.31, §21.32
The amendments are proposed under Finance Code, §181.003,
which authorizes the commission to adopt rules to accomplish the purposes
of the Texas Trust Company Act, Finance Code, Title 3, Subtitle F.
Finance Code, Title 3, Subtitle F, is affected by the proposal.
§21.31.Notice To Engage in Trust Deposits.
(a)
Compliance required. A trust company may not deposit trust
funds with itself as an investment pursuant to
Finance Code, §184.301
[
(b)
Notice of activity. At least 30 days before accepting trust
deposits, a trust company shall file a notice with the banking commissioner
containing the following information, together with the filing fee required
by §21.2 of this title (relating to Filing and Investigation Fees):
(1) - (3)
(No change.)
(4)
if trust deposits are to be secured by a pledged fund of
securities:
(A)
a description of the initial fund of securities securing
the anticipated trust deposits, including disclosure of current market value
and an evaluation of the securities under the standards of
Finance Code, §184.101(e)
[
(B)
(No change.)
(5) - (7)
(No change.)
(c)
Action by banking commissioner.
(1)
The trust company may begin accepting trust deposits on
the 31st day after the date the banking commissioner receives the trust company's
completed notice letter unless the banking commissioner specifies an earlier
or later date, requests additional information, or prohibits the activity
as provided in this subsection. The banking commissioner may prohibit the
trust company from accepting trust deposits only if the banking commissioner
concludes that:
(A)
the trust deposits would not be fully insured or secured
as required by
Finance Code, §184.301
[
(B) - (C)
(No change.)
(D)
the trust company is subject to an enforcement order
issued pursuant to Finance Code, Chapter 185
[
(2)
The banking commissioner may extend the 30-day period under
paragraph (1) of this subsection if the banking commissioner determines that
the trust company's notice raises issues requiring additional information
or additional time for analysis. If the 30-day period is extended, the trust
company may accept trust deposits only on prior written approval by the banking
commissioner, except that the banking commissioner must approve or prohibit
the proposed activity or convene a hearing under
Finance Code, §181.201
[
(3)
A trust company that is denied the right to accept trust
deposits by the banking commissioner under this section may appeal as provided
by
Finance Code, §§181.202-181.204
[
(d)
Authority to accept trust deposits. Only a trust company
which transacts business with the public may deposit trust funds with itself
as an investment pursuant to
Finance Code, §184.301
[
(e)
(No change.)
§21.32.Acceptance of Trust Deposits
(a)
Compliance required. A trust company may not deposit trust
funds with itself as an investment pursuant to
Finance Code, §184.301
[
(b) - (d)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed
with the Office of the Secretary of State on June 21, 2002.
TRD-200203903
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 16, 2002
For further information, please call: (512) 475-1300
7 TAC §21.41, §21.42
The amendments are proposed under Finance Code, §181.003,
which authorizes the commission to adopt rules to accomplish the purposes
of the Texas Trust Company Act, Finance Code, Title 3, Subtitle F.
Finance Code, Title 3, Subtitle F, is affected by the proposal.
§21.41.Written Notice and Application for Change of Home Office.
(a)
Relocation by notice. If the location that is the home
office of a trust company prior to a proposed relocation of the home office
is to remain an additional office of the trust company after the relocation,
the trust company may relocate its home office by filing a written notice
pursuant to
Finance Code, §182.202(c)
[
(b)
Relocation by application. If
Finance Code, §182.202(c)
[
(c) - (f)
(No change.)
§21.42.Establishment, Relocation and Closing of an Additional Office.
(a)
Establishment or relocation by notice. A trust company
may establish or relocate an additional office pursuant to
Finance Code, §182.203
[
(b) - (h)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed
with the Office of the Secretary of State on June 21, 2002.
TRD-200203904
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 16, 2002
For further information, please call: (512) 475-1300
7 TAC §21.51
The amendments are proposed under Finance Code, §181.003,
which authorizes the commission to adopt rules to accomplish the purposes
of the Texas Trust Company Act, Finance Code, Title 3, Subtitle F.
Finance Code, Title 3, Subtitle F, is affected by the proposal.
§21.51.Application for Acquisition or Change of Control of Trust Company.
(a) - (b)
(No change.)
(c)
Public notice.
Not earlier than 14 days before, nor
later than 14 days after the date of initial submission of an application
filed
[
(d)
Confidentiality. Information obtained by the banking commissioner
under this section is confidential and may not be disclosed by the banking
commissioner or an officer or employee of the department, subject only to
such disclosure as may be permitted by
Finance Code, §183.002(c)
[
(e)
Grandfather clause. A principal shareholder or participant
that is considered to control a trust company, under
Finance Code, §183.001(b)
[
(f)
Capital requirements. A person or entity seeking to acquire
control of a trust company subject to this section must bring the trust company
into compliance with the minimum capital requirements of
Finance Code, §182.008
[
(g)
Exemptions. In addition to the acquisitions specifically
exempted pursuant to
Finance Code, §183.001(d)
[
(1) - (7)
(No change.)
(h)
Notices in lieu of filing. In the event that an application
is not required because of exemption under
Finance Code, §183.001(d)
[
(i)
Approval. Automatic approval; conditional approval. If
an application filed under this section is not approved by the banking commissioner
or is not set for hearing on or before the 60th day after notice is published
pursuant to subsection (c) of this section, the transaction may be consummated.
The banking commissioner may, before the expiration of the initial 60-day
period, give the applicant written notice that the application has been approved,
in which case the transaction may be immediately consummated on receipt of
the notice. The banking commissioner may also, before the expiration of the
initial 60-day period, give an applicant written notice that the application
has been approved subject to certain conditions. The applicant shall enter
into a written agreement with the banking commissioner concerning the conditions
on or before the 30th day after the date of notification of conditional approval.
An agreement entered into by the applicant and the banking commissioner concerning
conditional approval is enforceable against the applicant and the trust company
and is considered for all purposes an agreement under the provisions of
Finance Code, §185.002(a)
[
(j) - (l)
(No change.)
(m)
Hearing on application. The banking commissioner shall
set an application for hearing on or before the 60th day after notice is published
as required by
Finance Code, §183.003
[
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed
with the Office of the Secretary of State on June 21, 2002.
TRD-200203905
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 16, 2002
For further information, please call: (512) 475-1300
7 TAC §§21.61, 21.62, 21.64, 21.67, 21.68, 21.72, 21.76
The amendments are proposed under Finance Code, §181.003,
which authorizes the commission to adopt rules to accomplish the purposes
of the Texas Trust Company Act, Finance Code, Title 3, Subtitle F.
Finance Code, Title 3, Subtitle F, is affected by the proposal.
§21.61.Definitions.
(a)
Words and terms used in this subchapter that are defined
in
the Trust Company Act or in §21.1 if this title
[
(b)
The following words and terms, when used in this subchapter,
shall have the following meanings unless the context clearly indicates the
contrary.
(1) - (15)
(No change.)
(16)
Share exchange--A transaction by which one or more trust
companies, fiduciary institutions, or other entities acquire all of the outstanding
shares of one or more classes or series of one or more trust companies under
the authority of
Finance Code, §182.301
[
(17)
Trust company--A state trust company as defined by
Finance Code, §181.002(a)
[
(18)
(No change.)
§21.62.General.
Without the prior written consent of the banking commissioner, a trust
company may not consummate a merger, conversion, sale of assets, purchase
of assets, or share exchange. Except as otherwise provided by
Finance
Code, Chapter 182, Subchapters D - F
[
§21.64.Application for Merger or Share Exchange.
(a)
Scope. This section governs an application for merger or
share exchange pursuant to
Finance Code, §§182.301 et seq
[
(b) - (c)
(No change.)
(d)
Public notice.
Not earlier than 14 days before or
later than the 14th day after the date of the initial submission of the
[
(e)
Approval by the banking commissioner and filings with a
chartering agency.
(1)
The banking commissioner shall approve a merger or share
exchange only if the application indicates substantial compliance with all
conditions of
Finance Code, §182.302(c)
[
(2)
(No change.)
(3)
After approval of an application under this section by
the banking commissioner, the articles of merger or share exchange previously
filed with the chartering agency, if applicable, will be accepted and a certificate
of merger or share exchange will be issued by the banking commissioner who
shall perform the duties required by
Finance Code, §182.303(a)
[
(4)
(No change.)
(5)
The date of issuance of the certificate of merger or share
exchange by the banking commissioner constitutes the date of approval pursuant
to
Finance Code, §182.303(b)
[
§21.67.Notice of Merger, Reorganization, or Conversion of a Trust Company into Another Fiduciary Institution.
(a)
Scope. This section governs notice of the merger, reorganization,
or conversion of a trust company into another form of fiduciary institution
in a manner that results in extinguishment of the trust company charter, pursuant
to
Finance Code, §182.501
[
(b)
(No change.)
(c)
Notices, publication, and certificate of authority.
(1)
The applicant shall submit a copy of the published notice
of the proposed transaction required by the successor regulatory authority
or shall publish notice as required by §21.5 of this title (relating
to Public Notice). Submission of such notice, with the publisher's certificate
required by subsection (b)(6) of this section, is considered notice of the
transaction in accordance with
Finance Code, §182.501(c)(2)
[
(2)
(No change.)
(d)
(No change.)
§21.68.Opinion of Legal Counsel.
(a) - (b)
(No change.)
(c)
Unless specifically noted in the opinion, the banking commissioner
will assume that the opinions expressed are based upon and subject to the
assumptions, qualifications, limitations and exceptions set forth in the Accord,
provided the Accord is incorporated by reference. In addition, whether or
not stated in the Accord, if specifically noted in the opinion, counsel:
(1) - (3)
(No change.)
(4)
may qualify the opinions given as opinions solely for the
benefit of the banking commissioner that may not be quoted in whole or in
part or otherwise referred to in another document or report, and that may
not be furnished to a person or entity other than the banking commissioner
and the department without the written consent of counsel, except as may be
permitted or required by law, including
Finance Code, §§181.301
et seq
[
(d) - (f)
(No change)
§21.72.Approval; Conditional Approval; Denial of Application; Hearings.
(a) - (d)
(No change.)
(e)
Hearings on denial of applications. Requests for hearing
under this subchapter will be forwarded to the administrative law judge who
shall enter appropriate orders and conduct the hearing on or before a date
that is 60 days after the date the request for hearing was received, or as
soon after that as is reasonably possible, under Chapter 9 of this title (relating
to Rules of Procedure for Contested Case Hearings, Appeals, and Rulemaking)
and [
§21.76.Confidentiality.
Information obtained by the banking commissioner under this subchapter
is presumed to be public information unless such information is confidential
under
Finance Code, §§181.301 et seq
[
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed
with the Office of the Secretary of State on June 21, 2002.
TRD-200203906
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 16, 2002
For further information, please call: (512) 475-1300
6.
LOANS MADE UNDER CHAPTER 342
Subchapter A. GENERAL PROVISIONS
Subchapter B. INTERPRETATIONS AND ADVISORY LETTERS
Subchapter C. APPLICATION PROCEDURES
Subchapter D. LICENSE
1.31
] of
this title (relating to Transfer of License).
Subchapter P. REGISTRATION OF RETAIL CREDITORS
Chapter 4.
CURRENCY EXCHANGE
Part 2.
TEXAS DEPARTMENT OF BANKING
Chapter 21.
TRUST COMPANY CORPORATE ACTIVITIES
Texas Civil Statutes, Articles 342a-1.001 et seq
],
have the same meanings as defined therein. The following words and terms,
when used in this chapter, shall have the following meanings, unless the context
clearly indicates otherwise.
Texas Civil Statutes, Articles
342a-1.001 et seq
], this chapter, or another rule adopted pursuant to
the Trust Company Act
[
Texas Civil Statutes, Articles 342a-1.001
et seq
], for which the appropriate fee has been paid pursuant to §21.2
of this title (relating to Filing and Investigative Fees), and regarding which
the banking commissioner has notified the person or entity who submitted the
filing, in writing, that the submission is complete and has been accepted
for filing.
Texas Civil Statutes, Articles 342a-1.001 et seq
], this
chapter, or another rule adopted pursuant to
the Trust Company Act
[
Texas Civil Statutes, Articles 342a-1.001 et seq
], or required
to be published by the banking commissioner.
Texas Civil
Statutes, Articles 342a-1.001 et seq
], this chapter, or another rule
adopted pursuant to
the Trust Company Act
[
Texas Civil Statutes,
Articles 342a-1.001 et seq
], that has not been abandoned and is not
an accepted filing.
Texas Civil Statutes, Article
342a-3.003
];
Texas Civil Statutes, Article 342a-3.011(d)
];
Texas Civil
Statutes, Article 342a-3.302
], and §21.64 of this title (relating
to Application for Merger or Share Exchange), or $2,500 for an expedited application
if permissible pursuant to §21.63 of this title (relating to Expedited
Filings);
Texas Civil Statutes,
Article 342a-3.401
];
Texas
Civil Statutes, Article 342a-3.405
];
the Texas Civil Statutes, Article 342a-5.103(c)
], plus an amount up to an additional $3,500 if the banking commissioner
notifies the applicant that additional information and analysis is required;
Texas Civil Statutes,
Article 342a-4.002
], or $2,500 for an expedited application if the applicant
has previously been approved to control another trust company and no material
changes in the applicant's circumstances have occurred since the prior approval;
Texas Civil Statutes, Article 342a-3.202(c)
], and §21.41(a) of
this title (relating to Written Notice and Application for Change of Home
Office);
Texas Civil Statutes, Article 342a-3.202(d)
], and §21.41(b)
of this title, except as otherwise provided in paragraph (11) of this subsection;
Texas Civil Statutes, Article 342a-3.203(a)
], and §21.42 of this title (relating to Establishment, Relocation
and Closing of an Additional Office), plus an additional $1,300 if the banking
commissioner notifies the applicant pursuant to
Finance Code, §182.203(b)
[
Texas Civil Statutes, Article 342a-3.203(b)
], and §21.42(c)
of this title that additional information and analysis is required;
$200
] for an application to
amend a trust company charter (articles of association) pursuant to
Finance Code, §182.101
[
Texas Civil Statutes, Article 342a-3.101
];
Texas Civil Statutes, Article 342a-6.202
], by an entity other
than a depository institution or a trust company;
Texas Civil
Statutes, Article 342a-5.102
], and §21.91 of this title (relating
to Acquisition and Retention of Shares as Treasury Stock);
Texas Civil Statutes, Article 342a-3.103
];
Texas Civil Statutes,
Article 342a-3.012
], and §21.24 of this title (relating to Exemptions
for Trust Companies Administering Family Trusts);
Texas Civil Statutes, Article 342a-3.101 and Article 342a-5.401
],
and §21.31 of this title (relating to Notice To Engage in Trust Deposits);
Texas
Civil Statutes, Article 342a-3.013
]; [
and
]
Texas Civil
Statutes, Article 342a-2.003.
]
or
] conversion from an exempt trust
company to a non-exempt trust company or limited trust association
, or
conversion of a trust institution to a state trust company
shall pay
an investigation fee of $5,000 once the application has been accepted for
filing. If required by the banking commissioner, an applicant under another
type of application or filing listed in subsection (b) of this section shall
pay the reasonable investigative costs of the department incurred in any investigation,
review, or examination considered appropriate by the department, calculated
as provided by §17.22(a) of this title (relating to Examination and Investigation
Fees). Such investigation fee or costs must be paid by the applicant upon
written request of the department. Failure to timely pay the investigation
fee or a bill for investigative costs constitutes grounds for denial of the
submitted or accepted filing.
Texas Civil Statutes, Article 342a-3.202(d)
], and §21.41(b)
of this title (relating to Written Notice and Application for Change of Home
Office), together with the fee required by §21.2 of this title (relating
to Filing and Investigation Fees). Notice must be published as required by §21.41(e)
of this title.
Texas Civil Statutes, Article 342a-5.001(b)
];
Texas Civil Statutes,
Articles 3421-1.001 et seq (the Trust Company Act)
], this chapter or
rules and regulations adopted pursuant to the Trust Company Act, all required
information necessary for the banking commissioner to declare that a submission
is an accepted filing shall be provided to the department on or before the
61st day after the date of the initial submission of the filing. A person
or entity may request an automatic 30-day extension of time to submit required
information if the request is in writing and is received by the department
prior to the end of the initial 60-day period provided for in this subsection.
An additional extension may be requested in writing if such request is received
prior to the expiration of the automatic extension. The additional extension
shall be granted only if there is a finding of good and sufficient cause,
in the banking commissioner's discretion, to grant an extension. Notice of
the decision of the banking commissioner shall be mailed to the person or
entity seeking the extension within ten days of the receipt of the request
by the department.
Texas Civil Statutes, Articles 342a-1.001
et seq (the Trust Company Act)
], this chapter or rules and regulations
adopted pursuant to the Trust Company Act, and any other information as may
be
required by the banking commissioner. In addition, the notice must
include substantially the following text as a separately stated paragraph:
"Any person wishing to comment on this application, either for or against,
may file written comments with the Texas Department of Banking, 2601 North
Lamar Boulevard, Austin, Texas 78705-4294 on or before the 14th day after
the date of this publication. Such comments will be made a part of the record
before and considered by the banking commissioner. Any person wishing to formally
protest and oppose (describe type of application in general terms) and participate
in the application process may do so by filing a written notice of protest
with the Texas Department of Banking on or before the 14th calendar day after
the date of this publication accompanied by a protest filing fee of $2,500.
The protest fee may be reduced or waived by the banking commissioner upon
a showing of substantial hardship."
Texas Civil Statutes, Article
342a-3.003
], must be filed on a form prescribed by the banking commissioner.
Texas Civil Statutes, Articles 342a-1.001 et
seq (the Trust Company Act)
], the following corporate forms regarding
a trust company, along with the applicable filing fees, must be filed with
the banking commissioner:
Texas Civil Statutes, Article 342a-3.101
];
Texas Civil Statutes, Article 342a-3.101
];
Texas Civil Statutes, Article 342a-3.101
];
Texas Civil Statutes, Articles 342a-3.301 et seq
],
as supplemented by the Texas Business Corporation Act (TBCA), Article 5.04;
Texas Civil Statutes, Article
342a-3.101
];
Subchapter B. TRUST COMPANY CHARTERING AND POWERS
Texas Civil Statutes, Article 342a-3.006
],
if the banking commissioner finds that the proposed officers meet the requirements
of
Finance Code, §182.003(b)(3)
[
Texas Civil Statutes,
Article 342a-3.003(b)(4)
].
Texas Civil Statutes, Article 342a-3.011 and
Article 342a-3.012
], a trust company, which does not transact business
with the public, may request in writing that it be exempted from specified
provisions of
the Trust Company Act
[
Texas Civil Statutes,
Article 342a-1.001 et seq
]. The banking commissioner may grant the request
in whole or in part if the trust company does not transact business with the
public. A trust company does not transact business with the public if it acts
as a corporate fiduciary for accounts in which all beneficiaries are related
within the fourth degree of affinity or consanguinity to the person who controls
the trust company. A trust company administering family trusts which request
exemption from specified provisions of
the Trust Company Act
[
Texas Civil Statutes, Article 342a-1.001 et seq
], must comply with this
section.
Texas Civil Statutes, Article 342a-1.001 et
seq
], shall file an application, together with the appropriate filing
fee required by §21.2 of this title (relating to Filing and Investigation
Fees), with the banking commissioner. The application must specify the specific
exemptions requested and the reasons or justification for requesting the exemptions.
The application must also include a copy of the trust company's articles of
association which must contain the following statement in its purposes clause:
"The sole purpose for which the trust company is organized is to act as a
corporate fiduciary for accounts in which all beneficiaries are related within
the fourth degree of affinity or consanguinity to _______________ (name of
person who controls the trust company)."
Texas Civil Statutes, Article 342a-1.001, et seq
]:
Texas Civil Statutes, Article 342a-2.003(d)
] providing
that the report of assets portion of a statement of condition and income is
a public record.
Texas Civil Statutes, Article 342a-3.002(11)
], that five
is the minimum number of directors, managers, or managing participants that
can be specified in the articles of association, provided that the articles
of association must specify the number of directors, managers, or managing
participants, consistent with paragraph (3) of this subsection;
Texas Civil Statutes, Article 342a-4.103(a)
], that the
number of directors, managers, or managing participants of a trust company
cannot be less than five or more than 25, the majority of whom must be residents
of this state, provided that the board of a trust company seeking exemption
under this section must consist of not fewer than three or more than 25 directors,
managers, or managing participants, at least one of whom must be a resident
of this state;
Texas Civil Statutes, Article 342a-4.107(a) - (c)
], regarding
transactions with management and affiliates;
Texas Civil Statutes, Article 342a-5.001
], on investment in trust
company facilities;
Texas Civil Statutes, Article 342a-5.101
], on securities investments,
provided that the exemption request must address each limitation and the reasons
for exemption separately;
Texas Civil Statutes, Article 342a-5.102
], regarding transactions
in state trust company shares or participation shares;
Texas Civil Statutes, Article 342a-5.104
], on other real estate
investments; and
Texas Civil Statutes, Article 342a-5.201 and Article
342a-5.202
], regarding lending limit and lease financing transaction
restrictions, provided that no loans may be made from a trust company's minimum
restricted capital amount.
Subchapter C. TRUST DEPOSITS
Texas Civil Statutes, Article 342a-5.401
], unless it first
complies with this section and §21.32 of this title (relating to Acceptance
of Trust Deposits).
Texas Civil Statutes, Article 342a-5.101(f)
]; and
Texas Civil Statutes,
Article 342a-5.401
], and this section;
under Texas Civil
Statutes, Article 342a-6.001 et seq
], or is not otherwise operating
in substantial compliance with all applicable state and federal laws and regulations.
Texas Civil Statutes, Article 342a-3.009
], not later than
the 60th day after the date the banking commissioner receives the trust company's
notice. If a hearing is convened, the banking commissioner must approve or
prohibit the proposed activity not later than the 30th day after the date
the hearing is completed.
Texas Civil
Statutes, Article 342a-3.010
], or may file a new notice under this section
with additional information relevant to the banking commissioner's determination,
with applicable filing fee.
Texas Civil Statutes, Article 342a-5.401
]. An exempt trust company under
Finance Code, §§182.011-182.019
[
Texas Civil Statutes,
Articles 342a-3.011 through 342a-3.019
], may not accept trust deposits.
Texas Civil Statutes, Article 342a-5.401
], unless it first
complies with this section and §21.31 of this title (relating to Notice
To Engage in Trust Deposits). Trust deposits must be fully insured by deposit
insurance issued by the Federal Deposit Insurance Corporation (FDIC), or its
successor, or fully secured by a separate fund of pledged securities, by pledged
certificates of deposit, or a combination of the foregoing.
Subchapter D. TRUST COMPANY OFFICES
Texas Civil Statutes,
Article 342a-3.202(c)
]. The filed notice must contain all information
required by subsection (c) of this section, accompanied by the required filing
fee pursuant to §21.2 of this title (relating to Filing Fees and Cost
Deposits), and notice of the submission must be published as required by subsection
(e) of this section. A trust company filing notice of a home office relocation
under this subsection may relocate its home office on the 31st day after the
required notice and fee have been received by the banking commissioner, unless
the banking commissioner gives notice in writing, prior to the expiration
of that time period, that an earlier or later date is authorized or that additional
information and additional time for analysis is required. Upon issuance of
a notice requiring additional information and additional time for analysis,
the trust company may relocate its home office only on written approval of
the banking commissioner. Except as otherwise provided in this section, the
banking commissioner shall evaluate the notice under the criteria of §21.42(e)
of this title (relating to Establishment and Closing of an Additional Office).
Texas Civil Statutes, Article 342a-3.202(c)
], and subsection
(a) of this section do not apply, a trust company desiring to change its home
office location must file an application with the banking commissioner pursuant
to
Finance Code, §182.202(d)
[
Texas Civil Statutes, Article
342a-3.202(d)
], setting forth all information required by subsection
(d) of this section, accompanied by the required filing fee pursuant to §21.2
of this title, and notice of the submission must be published as required
by subsection (e) of this section. The banking commissioner shall issue a
written notice no later than 15 days after the date the initial filing is
received, as required by §21.4 of this title (relating to Required Information
and Abandoned Filings), informing the applicant either that all filing fees
have been paid and the application is complete and accepted for filing, or
that the application is deficient and specific additional information is required.
Except as otherwise provided in this section, the banking commissioner shall
evaluate the application under the criteria of §21.42(e) of this title.
An applicant under this subsection may not relocate its home office without
the prior written approval of the banking commissioner.
Texas Civil Statutes, Article 342a-3.203
], by filing a
written notice with the banking commissioner containing all information required
by subsection (b) of this section, accompanied by the required filing fee
pursuant to §21.2 of this title (relating to Filing Fees and Cost Deposits),
and notice of the submission must be published as required by subsection (d)
of this section. A trust company filing notice of an additional office under
this subsection may establish the additional office on the 31st day after
the date the required notice and fee are received by the banking commissioner
unless the banking commissioner gives notice in writing, prior to the expiration
of that time period, that an earlier or later date is authorized or that additional
information is required pursuant to subsection (c) of this section.
Subchapter E. CHANGE OF CONTROL
Upon notification that an initial application is complete
and accepted for filing
] pursuant to §21.4 of this title (relating
to Required Information and Abandoned Filings), the applicant shall publish
notice as required by
Finance Code, §183.002(d)
[
Texas
Civil Statutes, Article 342a-4.002(d)
], and §21.5 of this title
(relating to Public Notice) in the county where the trust company's home office
is located. One publication under this subsection is adequate unless the banking
commissioner expressly requires additional notice.
Texas Civil Statutes, Article 342a-4.002
], or by §3.111
of this title (relating to Confidential Information).
Texas Civil Statutes, Article 342a-4.001(a)
], is exempt
from filing an application under this section until the principal shareholder
acquires one or more additional shares or participation shares of the trust
company.
Texas Civil Statutes, Article 342a-3.007
], or such amount
as required by the banking commissioner at the time the transaction is consummated.
Texas
Civil Statutes, Article 342a-4.001(c)
], the following types of involuntary
acquisitions of control do not require prior written approval of the banking
commissioner:
Texas Civil Statutes, Article 342a-4.001(c)
], or subsection
(g) of this section, but an application is required to be filed with a federal
regulatory authority or a regulatory authority of another state, a copy of
the application as filed with another agency must be filed with the banking
commissioner within seven days of the date of such other filing or filings.
A notice in lieu of filing is also required of a person claiming an exemption
under
Finance Code, §183.001(d)
[
Texas Civil Statutes,
Article 342a-4.001(c)
], or paragraph (5) or (6) of subsection (g) of
this section. This notice must be filed before the securities acquired are
voted and must be accompanied by a completed authorization pursuant to subsection
(b)(2) of this section. No filing fees are required for notices filed under
this section; however, should the banking commissioner determine that an application
is required, the appropriate filing fee pursuant to §21.2 of this title
is required.
Texas Civil Statutes, Article 342a-6.002(a)
]. In the event that an applicant who has received conditional approval
does not enter into an agreement with the banking commissioner as required
by this subsection, the banking commissioner shall set the matter for hearing.
Texas Civil Statutes,
Article 342a-4.003
], and subsection (i) of this section. The notice
of hearing must comply with Government Code, §2001.051, and shall state
that the purpose of the hearing is to give the applicant an opportunity to
show all required qualifications for the banking commissioner's approval of
the acquisition or change of control application have been met. The applicant
has the burden of showing all such required qualifications by a preponderance
of evidence. After the hearing, the banking commissioner shall grant or deny
the application based solely upon the evidence presented at the hearing. An
applicant may not appeal denial of an application or conditional approval
of an application until a final order is issued. If after a hearing has been
held, the banking commissioner has entered an order denying the application,
and the order has become final, the applicant may appeal the final order as
provided by
Finance Code, §183.004
[
Texas Civil Statutes,
Article 342a-4.004
], and Government Code, Chapter 2001.
Subchapter F. APPLICATION FOR MERGER, CONVERSION, OR SALE OF ASSETS
Texas Civil Statutes, Articles 342a-1.001 et seq
], have the same meanings
as defined therein.
Texas Civil
Statutes, Article 342a-3.301
], and the Texas Business Corporation Act,
Article 5.02.
Texas Civil Statutes, Article 1.002(a)(46)
].
Texas Civil Statutes, Article
342a, Chapter 3, Subchapters D, E, and F
], or this subchapter, an application
must be filed with the banking commissioner for review and consideration of
the proposed transaction.
Texas Civil Statutes, Articles 342a-3.301 et seq
]. This section
does not apply to a merger that results in a trust company becoming another
fiduciary institution under another regulatory system pursuant to
Finance
Code, §182.501
[
Texas Civil Statutes, Article 342a-3.501
],
or other applicable law, and such transactions are governed by §21.67
of this title (relating to Merger, Reorganization, or Conversion of a Trust
Company Into Another Fiduciary Institution).
Within 14 days prior to or after submission of the initial
] application,
the applicant shall publish notice in accordance with the requirements of §21.5
of this title (relating to Public Notice) in the specified communities where
the home office of the applicant, the target entity, and the resulting trust
company are located.
Texas Civil
Statutes, Article 342a-3.302(c)
].
Texas Civil Statutes, Article 342a-3.303(a)
]. With respect to
a transaction that requires filing with the Texas secretary of state, if the
banking commissioner does not approve the articles of merger or share exchange
on or before the 90th day after the filing of the articles of merger with
the Texas secretary of state, the applicant must refile the articles of merger
or share exchange with both the Texas secretary of state and with the banking
commissioner.
Texas Civil Statutes, Article
342a-3.303(b)
], unless the merger or exchange agreement provides for
a later effective date which has been approved by the banking commissioner.
Texas Civil Statutes, Article
342a-3.501
], or other applicable law.
Texas Civil Statutes, Article 3421-3.501(c)(2)
]. The banking commissioner
may require, upon written notice to the applicant, such other publication
requirements at such times and places and in such manner as considered appropriate.
Texas Civil Statutes, Article 342a-2.101 et seq
],
and Government Code, Chapter 552.
the
] Government Code, Chapter 2001. A proposal for decision,
exceptions and replies to such proposal for decision, the final decision of
the banking commissioner, and motions for rehearing are governed by Chapter
9 of this title. An applicant may not appeal denial of an application or conditional
approval of an application until a final order is issued. After a hearing
and final order, the applicant may appeal the final order as provided in
Finance Code, §§181.202 - 181.204
[
the Act, §31.202
].
Texas Civil
Statutes, Articles 342a-2.101 et seq
], or under exceptions contained
in Government Code, Chapter 552. The applicant has the burden to request confidential
treatment for specified information, to segregate and mark documents claimed
to be confidential, and to specifically reference the provision of law that
allows confidential treatment.
Subchapter G. CHARTER AMENDMENTS AND CERTAIN CHANGES IN OUTSTANDING STOCK