Part 1. FINANCE COMMISSION OF TEXAS
Chapter 3. STATE BANK REGULATION
Subchapter B. GENERAL
The Finance Commission of Texas (the commission), on behalf of the Texas Department of Banking (the department), proposes to amend §3.37, concerning the calculation of annual assessment for banks.
Section 3.37 specifies the assessment rates governing the calculation and payment of fees that the Texas Department of Banking (department) is authorized to recover for maintaining and operating the department and enforcing applicable provisions of the Finance Code. The proposed amendment to §3.37 does not change the assessment rates applicable to state banks but creates an additional category of discounted fees applicable to certain well-managed and well-capitalized banks that now qualify for an extended examination schedule.
Until recently, both state and federal law permitted a well-managed and well-capitalized bank with total assets less than $250 million to be examined under an extended 18 month examination cycle, subject to supervisory discretion to conduct an examination more frequently if warranted. The recently enacted Financial Services Regulatory Relief Act of 2006 increased the total asset threshold to $500 million from $250 million for federal examination purposes, effectively allowing more banks to qualify for the extended 18 month examination cycle under federal law.
The department does not have safety and soundness concerns with this federal change in examination frequency for a bank with total assets less than $500 million, and has taken steps to similarly change the state examination cycle to enable continued, coordinated examinations with federal agencies.
The strategy underlying bank assessments in §3.37 is risk-based. Well-managed and well-capitalized banks with total assets of less than $250 million that qualify for the 18-month examination cycle currently receive a discount on assessments. A well-managed and well-capitalized bank with total assets of $250-$500 million that now qualifies for the 18-month examination cycle should also receive a discount on assessments. The proposed amendment to the table in Figure: 7 TAC §3.37 will reduce the assessment rate multiplier for these banks from 100% to 87.5%.
Robert L. Bacon, Deputy Commissioner, Texas Department of Banking, has determined that, for each year of the first five years that the section is in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the section. Although department revenue attributable to the banks affected by the proposed amendment will decline, total department revenue will remain stable and sufficient to fully fund the department's expenses because of reduced expenses attributable to the affected banks and additional revenue attributable to new banks periodically added to the department's jurisdiction.
Mr. Bacon has also determined that, for each of the first five years the section as amended is in effect, the public benefit anticipated as a result of the proposed amendment is reduced regulatory burden in the form of reduced assessment fees for certain state banks with total assets of $250-$500 million that will be eligible for an 18-month instead of a 12-month examination frequency cycle. For each year of such first five years, there will be no economic costs to persons required to comply with the proposed amendment. Finally, Mr. Bacon has determined that the proposed amendment will not have an adverse effect upon small businesses or micro-businesses.
To be considered, comments on the proposed amendment must be submitted not later than 30 days after the date of publication of this notice. Comments should be addressed to Everette D. Jobe, Senior Counsel, Texas Department of Banking, 2601 North Lamar Boulevard, Suite 300, Austin, Texas 78705-4294. Comments may also be submitted by email to ejobe@banking.state.tx.us.
The amendment is proposed pursuant to Finance Code, §§11.301, 31.003(a)(4), and 31.106, which authorize the commission to adopt rules necessary or reasonable to recover the cost of supervision and regulation by imposing and collecting ratable and equitable fees.
Finance Code, §31.106, is affected by the proposed amendments.
§3.37.Calculation of Annual Assessment for Banks.
The annual assessment for a state bank is calculated as described in §3.36 of this title (relating to Annual Assessments and Specialty Examination Fees), based on the values in the following table:
[Figure: 7 TAC §3.37]
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 April 20, 2007.
TRD-200701502
Sarah J. Shirley
General Counsel
Finance Commission of Texas
Proposed date of adoption: June 15, 2007
For further information, please call: (512) 475-1300
Chapter 15. CORPORATE ACTIVITIES
Subchapter C. BANK OFFICES
The Finance Commission of Texas (commission) proposes new §15.43, concerning establishment and operation of a remote service unit. Proposed §15.43 would codify Texas Department of Banking Opinion No. 07-01, issued February 20, 2007, concluding that a remote service unit is not a "branch" under Texas law.
Proposed §15.43 defines a remote service unit as an automated facility, operated by a customer of a bank, that conducts banking functions such as receiving deposits, paying withdrawals, or lending money. The term includes an unmanned or automated teller machine, automated loan machine, and automated device for receiving deposits, and the device may be equipped with a telephone or video device that allows contact with bank personnel. The proposed section would exclude a remote service unit from the definition of "branch" in Finance Code, §31.002(a)(8).
Robert L. Bacon, Deputy Commissioner, Texas Department of Banking, has determined that for the first five year period the section is in effect, there will be no fiscal implications for state or local governments as a result of enforcing or administering the section.
Mr. Bacon has also determined that, for each of the first five years the section as proposed will be in effect, the anticipated public benefit will be increased banking convenience for businesses in this state and reduced regulatory burden for state banks. No economic costs will be incurred by a person required to comply with this section. There will be no adverse economic effect on small businesses.
To be considered, comments on the proposed rule must be submitted not later than 30 days after the date of publication of this notice. Comments should be addressed to Everette Jobe, Senior Counsel, Texas Department of Banking, 2601 North Lamar Boulevard, Austin, Texas 78705-4294, or by email to ejobe@banking.state.tx.us.
The new section is proposed under Finance Code, §31.003(a), which authorizes the commission to adopt rules to accomplish the purposes of Finance Code, Title 3, Subtitle A, and Finance Code, §31.002(a)(8)(H), which authorizes the commission to adopt rules exempting a banking facility from the definition of "branch." As required by §31.003(b), in proposing the section the finance commission considered the need to promote a stable banking environment, provide the public with convenient, safe, and competitive banking services, preserve and promote the competitive position of state banks with regard to national banks and other depository institutions in this state consistent with the safety and soundness of state banks and the state bank system, and allow for economic development in this state.
Finance Code, Chapter 32, is affected by the proposed section.
§15.43.Establishment and Operation of a Remote Service Unit.
(a) "Remote service unit" means an automated facility, operated by a customer of a bank, that conducts banking functions such as receiving deposits, paying withdrawals, or lending money, and includes an unmanned or automated teller machine, an automated loan machine, and an automated device for receiving deposits. A remote service unit may be equipped with a telephone or video device that allows contact with bank personnel.
(b) A remote service unit is not a branch within the meaning of Finance Code, §31.002(a)(8). A remote service unit established, operated, and maintained by a state bank is not subject to licensing, registration, or prior regulatory approval.
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 April 20, 2007.
TRD-200701503
Sarah J. Shirley
General Counsel
Texas Department of Banking
Proposed date of adoption: June 15, 2007
For further information, please call: (512) 475-1300