ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 7. BANKING AND SECURITIES PART I. State Finance Commission CHAPTER 3. Banking Section SUBCHAPTER A. Securities Activities and Subsidiaries 7 TAC sec.3.7 The Finance Commission of Texas (the commission) adopts the repeal of sec.3.7, concerning applications for creation of bank subsidiaries by a state bank, without changes to the proposed text as published in the September 3, 1996, issue of the Texas Register (21 TexReg 8353). The repeal is necessary because of changes in law made regarding subsidiaries of state banks as a result of the recent enactment of Texas Civil Statutes, Articles 342-1.001 et seq (Texas Banking Act, sec.sec.1.001 et seq) (the Act), particularly by the Act, sec.5.103. The repealed section is inconsistent with the Act, sec.5.103, and the statute is sufficiently specific to allow for repeal of sec.3.7. A new section regarding subsidiaries will be developed and proposed for adoption in a future issue of the Texas Register. No comments were received regarding the proposed repeal. The repeal of this section is adopted pursuant to rulemaking authority under the Act, sec.1.012(a)(1), which authorizes the commission to adopt rules necessary or reasonable to implement and clarify the Act. As required by the Act, sec.1.012(b), the 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 parity of state banks with 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 within this state. This agency hereby certifies that the repeal as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 1, 1996. TRD-9615913 Everette D. Jobe General Counsel, Texas Department of Banking State Finance Commission Effective date: November 22, 1996 Proposal publication date: September 3, 1996 For further information, please call: (512) 475-1300 SUBCHAPTER B. General 7 TAC sec.3.22 The Finance Commission of Texas (the commission) adopts new sec.3.22, concerning sale or lease agreements between a state bank and an officer, director, manager, managing participant, principal shareholder, or principal participant of the bank, or an affiliate of the bank (insider), without changes to the proposed text as published in the September 3, 1996, issue of the Texas Register (21 TexReg 8353). New sec.3.22(a) requires a sale or lease agreement between a state bank and an insider to be in writing. New sec.3.22(b) specifies that such agreements must have terms and rates that are substantially equivalent to or more favorable to the bank than those prevailing at the time for comparable transactions with or involving nonaffiliated parties. New sec.3.22(c) clarifies the phrase "approval of a disinterested majority of the board," and requires board consideration of all insider sale or lease agreements. New sec.3.22(d) specifies the form and content of the written request which must be submitted to the banking commissioner if a state bank must seek the prior written approval of the banking commissioner to enter into a sale or lease agreement with an insider. Finally, new sec.3.22(e) sets out applicable record keeping requirements, and new sec.3.22(f) specifies that subsection (c) is not applicable to a legally binding, written lease, entered into by a state bank prior to June 16, 1991, until such lease is renewed or extended beyond its original term. The agency received one comment from the Texas Banker's Association (TBA) which requested that the 60-day requirement of subsection (c) for obtaining banking commissioner approval be reduced to 30 days. The agency respectfully declines to make this suggested revision. Agency staffing constraints and the likelihood that many of the lease and sale agreements between a state bank and insiders will be lengthy and complex and not permit a reduction in the amount of time required for the banking commissioner to consider a sale or lease transaction. New sec.3.22 will be applicable to trust companies under Texas Civil Statutes, Article 342-1102, sec.1. Adoption of this section is made under Texas Civil Statutes, Article 342- 1.012(a), which authorizes the commission to adopt rules to implement and clarify the Act, and to preserve or protect the safety and soundness of state banks. As required by Texas Civil Statutes, Article 342-1.012(b)(1),(2), the commission considered the need to promote a stable banking environment, provide the public with convenient, safe, and competitive banking services, and allow for economic development within this state. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 1, 1996. TRD-9615914 Everette D. Jobe General Counsel, Texas Department of Banking State Finance Commission Effective date: November 22, 1996 Proposal publication date: September 3, 1196 For further information, please call: (512) 475-1300 SUBCHAPTER D. Trust Companies 7 TAC sec.3.61 The Finance Commission of Texas (the commission) adopts the repeal of sec.3.61, concerning applications for acquisition or changes of control of a Texas chartered trust company, without change to the repeal as proposed in the September 3, 1996, issue of the Texas Register (21 TexReg 8355). The repeal is necessary because of changes in law made regarding change of control of state banks as a result of the recent enactment of Texas Civil Statutes, Articles 342-1.001 et seq (Texas Banking Act, sec.sec.1.001 et seq) (the Act), particularly by the Act, sec.sec.4.001-4.007. The repealed section is inconsistent with the Act, sec.sec.4.001-4.007, and the rule adopted under the Act regarding change of control, sec.15.81 of Title 7. Further, the provisions of the statute and sec.15.81 are sufficiently specific to allow for repeal of sec.3.61. Section 15.81 and the Act, sec.sec.4.001-4.007, are applicable to a trust company by virtue of Texas Civil Statutes, Article 342-1102, sec.1. No comments were received regarding the proposed repeal. The repeal of this section is adopted under Texas Civil Statutes, Article 342- 1106(b), which authorizes the commission to adopt general rules and regulations as may be necessary to accomplish the purposes of trust company regulation. This agency hereby certifies that the repeal as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 1, 1996. TRD-9615910 Everette D. Jobe General Counsel, Texas Department of Banking Texas Department of Banking Effective date: November 22, 1996 Proposal publication date: September 3, 1996 For further information, please call: (512) 475-1300 SUBCHAPTER E. Banking House and Other Facilities 7 TAC sec.3.91 The Finance Commission of Texas (the commission) adopts new sec.3.91, concerning loan production offices, with a nonsubstantive change to the proposed text as published in the September 3, 1996, issue of the Texas Register (21 TexReg 8355). New sec.3.91 specifies the form and content of the written notification required to inform the banking commissioner of the establishment, relocation, or closure of a loan production office involving the purchase or lease of personal or real property from an officer, director, manager, managing participant, or principal shareholder or participant of the bank or an affiliate of the bank, under Texas Civil Statutes, Article 342-4.107. Also, new sec.3.91 provides that temporary loan production offices nee d not comply with its written notification provisions. Additionally, new sec.3.91 requires that state banks proposing to conduct an activity at a loan production office in Texas which is prohibited by Texas Civil Statutes, Article 342-3.205, but which is allowable for a national bank domiciled in this state, must comply with the provisions of Texas Civil Statutes, Article 342-3.010(b). Also, new sec.3.91 provides that a bank not domiciled or primarily located in this state which seeks to establish a loan production office in this state must comply with the provisions of Texas Civil Statutes, Article 342-8.003. Finally, new sec.3.91 provides that out-of-state banks must comply with the provisions of Texas Civil Statutes, Article 342- 8.002, and foreign bank corporations must comply with the provisions of Texas Civil Statutes, Article 342-9.007. The agency received one written comment requesting that sec.3.91 be clarified to provide that the provisions of sec.3.91 do not apply to foreign banks. The agency concurs and has added subsection (g), which provides that foreign banks must comply with the provisions of Texas Civil Statutes, Article 342-9.007. Adoption of this section is made under Texas Civil Statutes, Article 342- 1.012(a) (1) and (2), which authorize the commission to adopt rules necessary or reasonable to implement and clarify the Act, and to preserve or protect the safety and soundness of state banks. Adoption of this section is also made under Texas Civil Statutes, Article 9.002(b), which authorizes the commission to adopt rules specifically applicable to foreign bank corporations. As required by Texas Civil Statutes, Article 342-1.0 12(b), the 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 parity of state banks with 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 within this state. sec.3.91. Loan Production Offices. sec.3.91. Loan Production Offices. (a) Required Information. Pursuant to Texas Civil Statutes, Article 342- 3.205(b), a state bank is required to notify the banking commissioner of its intent to establish a loan production office in this state. The banking commissioner must be notified in writing before the 31st day preceding the date of establishment of the loan production office, except that the banking commissioner may waive or shorten the period if the banking commissioner does not have a significant supervisory or regulatory concern regarding the bank or its planned loan production office. The written notification must include the physical address of the planned loan production office, a list of the specific activities to be performed at the planned loan production office, the anticipated date for the establishment of the loan production office, and other information which the banking commissioner may reasonably request. (b) Relocation or closure of a loan production office. A state bank which seeks to relocate or close an established loan production office in this state, shall notify the banking commissioner in writing before the 5th day preceding the date of the planned relocation or closure of the loan production office. The written notification must include the physical address of the relocated or closed loan production office, the anticipated date for the closure or relocation of the loan production office, and other information which the banking commissioner may reasonably request. (c) Exemption: temporary loan production offices. Subsections (a) and (b) of this section do not apply to a loan production office which operates for less than a total of 21 days in any one 12-month period. Instead, state banks shall register the location of a temporary loan production office with the banking commissioner no later than the 10th day after such office is opened. As a part of such notice, the bank may indicate the anticipated repeated use of such office through the year. For example, a temporary office in a convention or exposition hall used in connection with trade shows may be registered once each year with an estimate of usage throughout the year. (d) Transactions with management and affiliates. A state bank establishing a loan production office involving the purchase or lease of personal or real property from an officer, director, manager, managing participant, or principal shareholder or participant of the bank or an affiliate of the bank, must comply with the provisions of Texas Civil Statutes, Article 342-4.107 and sec.3.22 of this Title (Relating to Sale and Lease Agreements With an Officer, Director, Principal Shareholder, or Affiliate). (e) Parity with national banks. A state bank that intends to exercise an activity at a loan production office in this state that is prohibited by Texas Civil Statutes, Article 342-3.205(a), but is allowable for a national bank domiciled in this state, shall notify the banking commissioner in accordance with the provisions of Texas Civil Statutes, Article 342-3.010(b). (f) Out-of-state banks. A bank not domiciled or primarily located in this state which seeks to establish a loan production office in this state must comply with the provisions of Texas Civil Statutes, Article 342-8.003. (g) Foreign bank corporations. A banking corporation or association incorporated or organized under the laws of jurisdiction other than the United States or a state, territory, commonwealth, or other political subdivision of the United States, must comply with the provisions of Texas Civil Statutes, Article 342- 9.007. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 1, 1996. TRD-9615911 Everette D. Jobe General Counsel, Texas Department of Banking State Finance Commission Effective date: November 22, 1996 Proposal publication date: September 3, 1996 For further information, please call: (512) 475-1300 7 TAC sec.3.92 The Finance Commission of Texas (the commission) adopts an amendment to sec.3.92, concerning user safety at unmanned teller machines, sometimes referred to as automated teller machines or ATMs, without changes to the proposed text as published the September 3, 1996, issue of the Texas Register (21 TexReg 8357). Texas Civil Statutes, Article 342-903d, as enacted by Act of May 27, 1995, 74th Legislature, Chapter 647, 1995 Texas Session Law Service 3528, governs user safety at unmanned teller machines (referred to as the ATM User Safety Act). Another statute bears a duplicate number, Article 342-903d, but concerns fees charged in connection with use of ATMs, and is not affected by sec.3.92. Provisions in the ATM User Safety Act purport to cross-reference to other provisions of the Texas Banking Code, Texas Civil Statutes, Article 342-101 et seq, for definitional purposes, but the Texas Banking Code was in large part repealed by Act of May 18, 1995, 74th Legislature, chapter 914, sec.26, 1995 Texas Session Law Service 4451, 4551, in connection with the adoption of the Texas Banking Act. Section 3.92(a) therefore contains definitions designed to facilitate understanding of these cross-references to repealed statutes. However, the former definition of ATM in sec.3.92(a)(2), drawn from Texas Civil Statutes, Article 342-903, sec.2 (repealed), was ambiguous with respect to whether a night depository could be construed to be "a machine ... capable of being operated solely by a customer, by which a customer may communicate to the financial institution ... an instruction to deposit funds into the customer's account with the financial institution." The commission does not believe the legislature contemplated the application of the ATM User Safety Act to night depositories. As amended, sec.3.92(a)(2) will exclude night depositories, although a financial institution may voluntarily apply the standards of sec.3.92 to lighting and landscaping around its night depositories if it chooses to do so. A cross-reference within sec.3.92(a)(2) to the definition of "customer convenience terminal" is also deleted as unnecessary, in order to eliminate awkward phrasing and assist understanding. No comments were received regarding the proposed amendment. Amendment of this section is adopted under the authority of Texas Civil Statutes, Article 342-903d, sec.7(a), as enacted by Act of May 27, 1995, 74th Legislature, Chapter 647, 1995 Texas Session Law Service 3528, 3530, which requires the commission to adopt rules regarding enforcement and implementation of that statute. Texas Civil Statutes, Article 342-903d, as enacted by Act of May 27, 1995, 74th Legislature, Chapter 647, 1995 Texas Session Law Service 3528, 3530, are affected by the proposed amendment. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 1, 1996. TRD-9615912 Everette D. Jobe General Counsel State Finance Commission Effective date: November 22, 1996 Proposal publication date: September 3, 1996 For further information, please call: (512) 475-1300 CHAPTER 4. Currency Exchange 7 TAC sec.4.10 The Finance Commission of Texas (the commission) adopts new sec.4.10, concerning the conduct of currency exchange or transmission business from a motorized vehicle or other mobile unit at specific locations under Texas Civil Statutes, Article 350 (the Act), with one nonsubstantive change to the proposed text as published in the September 3, 1996, issue of the Texas Register (21 TexReg 8357). Pursuant to the Act, sec.2, a person may not, with limited exceptions, engage in the business of currency exchange or transmission in this state without a license. Members of the regulated industry have requested that the commission expressly authorize a licensee to offer currency exchange or transmission services from a mobile unit. The adopted new section outlines the requirements and procedures for licensing a mobile currency business and establishes limitations and requirements specific to mobile currency exchange operations. The Act, sec.4(d), requires a separate license for each location at which currency is exchanged or accepted for transmission and each stop of a mobile unit must therefore be separately licensed. However, the adopted section will authorize the Banking Commissioner of Texas (the commissioner) to issue a consolidated license that lists each separately licensed location at which currency is exchanged or accepted for transmission by a single mobile unit. Further, the adopted section will waive the application fee for each additional stop in excess of the first stop for a single mobile unit. A licensee must operate at least one fixed office location as its initial licensed location before a license to serve an additional location by means of a mobile unit may be issued, and all records required to be maintained by a licensee must be maintained at the fixed office address to facilitate examination by the commissioner as required by the Act, sec.11. The department received one set of written comments which expressed no opposition to adoption of the section as a whole. This commenter expressed concern that, under subsection (e) of the new section, a licensee will not be able to provide mobile currency exchange services at stops that are not licensed and, as a consequence, the licensee will lose some business during the 10-day period required to amend the license locations. The Act, sec.4(d), expressly provides that each location at which currency is exchanged or accepted for transmission must be licensed. This mandate cannot be changed by rule. However, the license can include as many address locations as the licensee desires, and additional locations can be added to the license as needed. Since the department must review and process a request for additional locations, prepare an amended license, and obtain the approval of the banking commissioner, the 10-day period for issuance of a corrected license is not excessive. This commenter also inquired as to whether a licensee can apply for a single location that includes several businesses or if the specific location of each business must be included in the license application. The department will require that an applicant list the actual names and addresses of the businesses whose employees will be served by the currency exchange business and submit a map identifying the location of each. An applicant may identify businesses that are adjacent to or near one another on one map. The Department does not believe any clarification of the section is warranted. In addition, the commenter asked whether, in the event of a vehicular breakdown, a licensee could substitute one mobile unit for another if the substituted unit is not licensed for the same locations. The commenter also inquired as to whether a separate license is required for "each location at which currency is exchanged or accepted for transmission." Pursuant to the Act, sec.4(d), a separate license is required for each mobile unit except that a consolidated license may be issued under the Act, sec.4(e). Furthermore, a mobile unit may be used only to conduct currency exchange transactions at the addresses listed on the license issued for that mobile unit. To avoid the possibility that a mobile unit will not be authorized for currency exchange transactions at a particular location or locations, the department recommends that an applicant list every location where it will conduct the entirety of its mobile currency business on the license application for each unit. The licensee may then use any licensed mobile unit at any location where the licensee engages in the mobile currency exchange business. The Department does not believe any clarification of the section is warranted. In addition, the commenter asked if subsection (c)(5) of the new section will require a licensee to obtain a separate bond for a mobile unit license. A separate bond is required if a licensee's current bonding company is unwilling to cover currency exchange activity conducted from a mobile unit. Otherwise, a bond rider (issued by the bonding company that has issued the surety bond for a particular currency exchange license) authorizing mobile currency exchange activity will satisfy the bonding requirement of the new section. The new section also permits a letter of credit or deposit that complies with the Act, sec.10, to substitute for a bond. The Department does not believe any clarification of the section is warranted. Finally, this commenter asked for clarification of the insurance provision in subsection (c)(6) of the new section. The required insurance policy must insure the mobile unit against loss by theft, burglary, robbery, forgery, or embezzlement and must insure not only the vehicle itself, but also the contents of the mobile unit. Clarification is added to subsection (c)(6). The commenter also noted that insurance for contents of an armored vehicle may be impossible to find and the cost of such insurance is "astronomical." A theft, burglary, forgery, or embezzlement of the contents of a mobile unit could wholly undermine the viability of a licensee that is not insured. As a consequence, the insurance requirement of this new section is sound. However, the Department will inquire whether the required insurance is cost prohibitive. This new section is adopted pursuant to rulemaking authority under the Act, sec.7, which authorizes the commission to prescribe rules necessary to implement the Act. sec. 4.10. Mobile Currency Business. (a) Definitions. The following words and terms, when used in this section, have the following meanings unless the text clearly indicates otherwise. (1) Mobile currency business--The business of currency exchange as defined in Texas Civil Statutes, Article 350 (the Act), sec.1(4), and/or currency transmission as defined in Texas Civil Statutes, Art. 350 (the Act), sec.1(6), conducted from a mobile unit a tone or more locations. (2) Mobile unit--A motorized vehicle from which mobile currency business is conducted or will be conducted. (b) Use of a mobile unit. A licensee under the Act may not conduct a mobile currency business without first obtaining an additional license to serve each location at which the mobile unit will stop to conduct mobile currency business, and must have at least one previously existing office address at which it actively conducts licensed currency exchange and/or currency transmission before applying for a license under this section. The filing fee for an additional location set forth in sec.4.11 of this title (relating to Fees) applies to a license application under this section; except that the application fee for each additional location in excess of the first location for mobile currency business is waived. (c) Application. The application for license authorizing services from a mobile unit must be on a form prescribed by the commissioner, made under oath, and accompanied by the application fee, and must, except to the extent expressly waived in writing by the commissioner, contain the following: (1) the name, address, and pre-existing license numbers of the applicant; (2) the identification number and description of the vehicle from which mobile currency business will be conducted, the vehicle license plate number, and a photograph of the vehicle; (3) the name and address of the person or persons who will be responsible for the mobile currency business; (4) the exact locations at which the mobile unit will stop to conduct mobile currency business, identified by specific street address and by a map marking the locations; (5) proof of a bond, letter of credit, or deposit in lieu of bond, as required by the Act, sec.10; (6) a copy of a policy or policies of insurance issued by an insurance company or indemnity company authorized to do business in this state, which must insure the mobile unit and its contents against loss by theft, burglary, robbery, forgery, or embezzlement in the principal sum of $500,000. If the average amount of cash and liquid funds to be maintained in a mobile unit during a license year will exceed $500,000, the policy or policies on license renewal must be for an additional principal sum of $500 for each $1,000 or fraction thereof in excess of $500,000; (7) such other information that the commissioner may reasonably require. (d) Separate licenses. Provided the application meets the requirements of this section, the commissioner will issue a single consolidated license incorporating separate licenses for each location at which the mobile unit will conduct mobile currency business. Approval for the conduct of mobile currency business from one mobile unit does not authorize the conduct of such business from another mobile unit. A license issued under this section must be renewed annually as required by the Act, sec.4. (e) Limitations on operations. A licensee under this section may transact mobile currency business from its mobile unit only at the particular locations specified in its consolidated license. The licensee must advise the commissioner in writing of any proposed change in the locations identified in its consolidated license and must obtain a corrected consolidated license prior to conducting mobile currency business at a new location. Provided the requirements of subsection (c) of this section continue to be met by the licensee, the commissioner will issue a corrected license within ten days after receipt of the required information. (f) Compliance with the Act and rules. The licensee must maintain all records relating to currency exchange transactions conducted from the mobile unit, including but not limited to logs, records, and receipt information, in accordance with the requirements of sec.4.3 of this title (relating to Reporting and Recordkeeping). Other than records in immediate use in a mobile unit, all records related to the mobile currency business must be maintained at a fixed, licensed location of the licensee and readily available to the commissioner for examination purposes. A licensee engaged in a mobile currency business must comply with all provisions of the Act and all rules promulgated under the Act, except that sec.4.4 of this title (relating to Change of Location) is inapplicable to a location licensed for mobile currency business. (g) Compliance with other laws and requirements. Applicants and licensees shall comply with all vehicle and traffic laws and the ordinances and traffic regulations issued by municipal and other authorities. (h) Agents of the commissioner. All applications and notices required to be submitted to the commissioner under this section must be addressed to the Texas Department of Banking, Special Audits Division, 2601 North Lamar Boulevard, Austin, Texas 78705-4294. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 1, 1996. TRD-9615909 Everette D. Jobe General Counsel, Texas Department of Banking State Finance Commission Effective date: November 22, 1996 Proposal publication date: September 3,1996 For further information, please call: (512) 475-1300 PART IV. Texas Savings and Loan Department CHAPTER 67.Savings and Deposit Accounts 7 TAC sec.67.17 The Finance Commission of Texas adopts an amendment sec.67.17, concerning user safety at unmanned teller machines, sometimes referred to as automated teller machines or ATMs, to specifically exclude its application to night depositories, without changes to the proposed text as published in the September 6, 1996, issue of the Texas Register (21 TexReg 8558). Texas Civil Statutes, Article 342-903d, as enacted by Act of May 27, 1995, 74th Legislature, Chapter 647, 1995 Texas Session Law Service 3528, governs user safety at unmanned teller machines (referred to as the ATM User Safety Act). Another statute bears a duplicate number, Article 342-903d, but concerns fees charged in connection with use of ATMs, and is not affected by sec.67.17 or the adopted amendment. Section 67.17 contains definitions designed to facilitate understanding of cross-references to repealed statutes. However, the definition of ATM in sec.67.17, drawn from Texas Civil Statutes, Article 342-903, sec.2 (repealed), is ambiguous with respect to whether a night depository could be construed to be "a machine...capable of being operated solely by a customer, by which a customer may communicate to the financial institution...an instruction to deposit funds into the customer's account with the financial institution." The Finance Commission does not believe the legislature contemplated the application of the ATM User Safety Act to night depositories. As amended, sec.67.17 will exclude night depositories, although a financial institution may voluntarily apply the standards of sec.67.17 to lighting and landscaping around its night depositories if it chooses to do so. A cross-reference within sec.67.17 to the definition of "customer convenience terminal" is deleted as unnecessary, in order to eliminate awkward phrasing and assist understanding. No comments were received regarding the amended section. The amendment is adopted under Texas Revised Civil Statutes Annotated, Article 342-1.013, which provide the Finance Commission of Texas with the authority to promulgate general rules and regulations not inconsistent with the constitution and statutes of the state and, from time to time, to amend same. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 1, 1996. TRD-9615920 James L. Pledger Commissioner Texas Savings and Loan Department Effective date: November 22, 1996 Proposal publication date: September 6, 1996 For further information, please call: (512) 475-1350 CHAPTER 77.Loans, Investments, Savings and Deposits Authorized Loans and Investments 7 TAC sec.77.91 The Finance Commission of Texas adopts an amendment sec.77.91, concerning investment in and divestiture of subsidiary corporations, without changes to the proposed text as published in the September 6, 1996, issue of the Texas Register (21 TexReg 8559). Under the current sec.77.91, concerning investment in and divestiture of subsidiary corporations, a savings bank must obtain the prior written approval of the commissioner in order to invest in or divest itself of a subsidiary corporation. The amendments would require that additionally a savings bank would be required to obtain the prior written approval of the commissioner to merge an existing subsidiary corporation with any other corporation. The standard for approval would involve a finding that the terms and conditions of the merger are in the best interest of the savings bank. In adopting the section, the 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 parity of state savings banks with federal savings associations, national banks and other depository institutions in this state consistent with the safety and soundness of state savings banks and the state thrift system, and allow for economic development within this state. No comments were received regarding the amended section. The amendment is adopted under Texas Revised Civil Statutes Annotated, Article 342-1.013, which provides the Finance Commission of Texas with the authority to promulgate general rules and regulations not inconsistent with the constitution and statutes of the state and, from time to time, to amend same. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 1, 1996. TRD-9615918 James L. Pledger Commissioner Texas Savings and Loan Department Effective date: November 22, 1996 Proposal publication date: September 6, 1996 For further information, please call: (512) 475-1350 Savings and Deposits 7 TAC sec.77.115 The Finance Commission of Texas adopts an amendment to sec.77.115, concerning user safety at unmanned teller machines, sometimes referred to as automated teller machines or ATMs, to specifically exclude its application to night depositories, without changes to the proposed text as published in the September 6, 1996, issue of the Texas Register (21 TexReg 8560). Texas Civil Statutes, Article 342-903d, as enacted by Act of May 27, 1995, 74th Legislature, Chapter 647, 1995 Texas Session Law Service 3528, governs user safety at unmanned teller machines (referred to as the ATM User Safety Act). Another statute bears a duplicate number, Article 342-903d, but concerns fees charged in connection with use of ATMs, and is not affected by sec.77.115 or the adopted amendment. Section 77.115 contains definitions designed to facilitate understanding of cross-references to repealed statutes. However, the definition of ATM in sec.77.115, drawn from Texas Civil Statutes, Article 342-903, sec.2 (repealed), is ambiguous with respect to whether a night depository could be construed to be "a machine...capable of being operated solely by a customer, by which a customer may communicate to the financial institution...an instruction to deposit funds into the customer's account with the financial institution." The Finance Commission does not believe the legislature contemplated the application of the ATM User Safety Act to night depositories. As amended, sec.77.115 will exclude night depositories, although a financial institution may voluntarily apply the standards of sec.77.115 to lighting and landscaping around its night depositories if it chooses to do so. A cross-reference within sec.77.115 to the definition of "customer convenience terminal" is also deleted as unnecessary, in order to eliminate awkward phrasing and assist understanding. No comments were received regarding the amended section. The amendment is adopted under Texas Revised Civil Statutes, Annotated, Article 342-1.013, which provides the Finance Commission of Texas with the authority to promulgate general rules and regulations not inconsistent with the constitution and statutes of the state and, from time to time, to amend same. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 1, 1996. TRD-9615919 James L. Pledger Commissioner Texas Savings and Loan Department Effective date: November 22, 1996 Proposal publication date: September 6, 1996 For further information, please call: (512) 475-1350 TITLE 10. COMMUNITY DEVELOPMENT PART I. Texas Department of Housing and Community Affairs CHAPTER 1.Administration SUBCHAPTER A.General Policies and Procedures 10 TAC sec.1.2 The Texas Department of Housing and Community Affairs (Department) adopts an amendment to sec. 1.2 concerning the Department's complaint system, without changes to the proposed text as published in the October 1, 1996, Texas Register (21 TexReg 9329). The amendment changes the person to whom complaints are submitted and clarifies that manufactured housing consumer complaints are not subject to this complaint system. The Department did not receive any public comments regarding adoption of the amendment during the 30-day public comment period. The amendment is adopted under Texas Government Code, sec.2306.066, which provides Texas Department of Housing and Community Affairs with the authority to develop procedures by which complaints are filed with the department. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 4, 1996. TRD-9615965 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: November 25, 1996 Proposal publication date: October 1, 1996 For further information, please call: (512) 475-3916 SUBCHAPTER B.Block Grants 10 TAC sec.1.13 The Texas Department of Housing and Community Affairs (Department) adopts an amendment to sec. 1.13, concerning the formal complaint system established to investigate complaints received about programs funded by federal block grants administered by the Department, without changes to the proposed text published in the October 1, 1996 issue of the Texas Register (21 TexReg 9330). The amendment changes the person to whom complaints are submitted. The Department did not receive any public comments regarding adoption of the amendment during the 30-day public comment period. The amendment is adopted under Texas Government Code, sec.2105, which provides the Department with the authority to maintain a procedure for investigating complaints about programs funded by federal block grants administered by the Department. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 4, 1996. TRD-9615966 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: November 25, 1996 Proposal publication date: October 1, 1996 For further information, please call: (512) 475-3916