Part IV. Texas Savings and Loan Department

Chapter 75. Applications

Subchapter A. Charter Applications

7 TAC §75.3, §75.10

The Finance Commission of Texas proposes to amend 7 TAC §75.3 and §75.10 regarding charter application procedures for state savings banks to update and enhance flexibility in the charter application process.

The proposed amendment to §75.3 removes the requirement for specific language to be published in notices of charter applications. The 74th Legislature authorized the Finance Commission to employ a hearings officer to provide services to the Texas Department of Banking, Savings and Loan Department and Office of Consumer Credit Commissioner. In 1995, the Finance Commission adopted 7 T.A.C., Chapter 9 establishing practices and procedures to be followed by the hearing officer in the conduct of hearings for the Department. At that time, Department rules regarding notice and hearing procedures were modified to provide consistency and give the Commissioner the flexibility to approve publication of a notice worded differently than the existing §75.3. This amendment to §75.3 clarifies that process.

The proposed amendment to §75.10 gives discretion to the Commissioner to set a hearing to consider the facts or obtain additional information for a change of name application.

James L. Pledger, Savings and Loan Commissioner, has determined that for the first five year period the new sections as proposed will be in effect, the public benefit will be less regulatory burden and faster application processing, and that there will be no fiscal implications for state and local government as a result of enforcing or administering these sections. Mr. Pledger estimates that, for the first five years the proposed section is in effect, there will be no economic costs as a result of complying with the proposed sections. No difference will exist between the cost of compliance for small businesses and the cost of compliance for the largest businesses affected by these sections.

Comments on the proposed sections may be submitted in writing to James L. Pledger, Commissioner, Savings and Loan Department, 2601 North Lamar Boulevard, Suite 201, Austin, Texas 78705-4294, or e-mailed to TSLD@mail.capnet.state.tx.us.

The new sections are proposed under §11.302 of the Finance Code , which authorizes the commission to adopt rules 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 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.

Subtitle C of the Finance Code , §§92.001-92.063, Vernon's Texas Annotated Civil Statutes, are affected by the new sections.

§75.3.Publication of Notice of Charter Application.

The proposed incorporators shall publish at least 20 days before the date of the hearing in a newspaper printed in the English language of general circulation in the county where the proposed savings bank will have its principal office[ , ] a notice approved by the commissioner. [ in the following form: ]

[ "Notice is hereby given that application has been made to the Savings and Loan Commissioner of the State of Texas for the approval of a charter for _________________________________ (corporate title of proposed savings bank) with principal office to be located at _____________ in the city of ____________________________, ________________________County, Texas. ]

[ Notice is further given that a hearing on the application will be held at ___________________, on the _______day of ______________________________, 19__, in the _________________ (location of the hearing), pursuant to authority and jurisdiction granted by the Texas Savings Bank Act, Article _____. ]

[ The nature and purpose of the hearing is to accumulate a record of pertinent information and data in support of the application and in opposition to the application, from which the commissioner shall determine whether to grant or deny the charter application. ]

[ The applicants for charter assert that: ]

[ (1)

The prerequisites to incorporation required by Chapter 92, Subchapter B of the Texas Savings Bank Act have been satisfied;]

[ (2)

The character, responsibility, and general fitness of the persons named in the articles of incorporation command confidence and warrant belief that the business of the proposed savings bank will be honestly and efficiently conducted in accordance with the intent and purpose of the Texas Savings Bank Act and that the proposed savings bank will have qualified full-time management;]

[ (3)

There is a public need for the proposed savings bank and the volume of business in the community in which the proposed savings bank will conduct its business indicates that a profitable operation is probable; and]

[ (4)

The operation of the proposed savings bank will not unduly harm any existing savings bank or state or federal savings and loan association.]

[ Any person intending to appear and to participate in the hearing on this application may do so only if written notice of such intention is filed with and received by the commissioner at 2601 North Lamar, Suite 201, Austin, Texas 78705, and by the applicant's agent named above, at least 10 days prior to the date of such hearing. Such notice shall include the docket number of the application. If a protest is filed, the hearing on the application may be continued to a later date at the same location. ]

[ ISSUED in Austin, Texas, the ______day of ___________, 19___." ]

§75.10.Change of Name.

(a)

(No change.)

(b)

As provided for new charter applications, notice must be given [ An application ] for change of name application. If protested, the commissioner shall consider the protest and may in the exercise of his sole discretion [ shall be ] set the application for hearing to consider the facts or obtain additional information. [ by the commissioner and notice given as provided for new charter applications, and the hearing may be dispensed with by the commissioner under the same conditions. ]

[ (c)

The commissioner shall furnish approved forms of the application for change of name. Copies of the applications may be obtained from the Department at 2601 North Lamar Boulevard, Suite 201, Austin, Texas 78705.]

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 December 15, 1998.

TRD-9818378

James L. Pledger

Commissioner

Texas Savings and Loan Department

Earliest possible date of adoption: January 31, 1999

For further information, please call: (512) 475-1350

7 TAC §§75.25-75.27

The Finance Commission of Texas proposes new 7 TAC §§75.25 through 75.27 regarding expedited application procedures for certain state savings banks relating to branch offices, change of office location, merger, consolidation, or purchase and assumption transactions. A reduction in related application fees in Chapter 79 is separately proposed for amendment for expedited applications.

Proposed §75.25 establishes the criteria for a savings bank to be eligible to file an expedited application. This is proposed as a reduction of regulatory burden to those savings banks that are well rated, well managed, and not operating under any regulatory directive or agreement.

Proposed §75.26 describes the items necessary to be filed with an expedited application. It requires that the applicant supply the Commissioner all information necessary to make a fully informed decision regarding an expedited filing.

Proposed §75.27 permits discretion to the Commissioner to deny expedited filing treatment to an otherwise eligible applicant if he finds that the proposed transaction involves significant policy, supervisory, or legal issues.

James L. Pledger, Savings and Loan Commissioner, has determined that for the first five year period the new sections as proposed will be in effect, the public benefit will be reduced regulatory burden and faster application processing, and that there will be no fiscal implications for state and local government as a result of enforcing or administering these sections. Mr. Pledger estimates that, for the first five years the proposed section is in effect, those institutions that are eligible to file under expedited treatment will have reduced economic costs as a result of complying with the proposed sections. No difference will exist between the cost of compliance for small businesses and the cost of compliance for the largest businesses affected by these sections.

Comments on the proposed sections may be submitted in writing to James L. Pledger, Commissioner, Savings and Loan Department, 2601 North Lamar Boulevard, Suite 201, Austin, Texas 78705-4294, or e-mailed to TSLD@mail.capnet.state.tx.us.

The new sections are proposed under §11.302 of the Finance Code , which authorizes the commission to adopt rules 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 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.

Subtitle C of the Finance Code , §92.063 and §§92.351-92.355, Vernon's Texas Annotated Civil Statutes, are affected by the new sections.

§75.25.Eligible Institution.

An eligible institution is a financial institution that:

(1)

is well capitalized as defined in 12 CFR §325.103;

(2)

received a composite rating of either 1 or 2 as defined by the Uniform Financial Institutions Rating System (CAMELS) at the most recent examination by the department or federal regulatory agencies, and management is rated either 1 or 2;

(3)

received a CRA rating of satisfactory or above at the savings bank's most recent inspection by the appropriate federal regulatory agency;

(4)

is not operating in violation of a regulatory condition or directive imposed by the state or federal banking regulatory agency; and,

(5)

is not operating under a memorandum of understanding, order to cease and desist, or other state or federal supervisory enforcement order issued by a state or federal banking regulatory agency.

§75.26.Expedited Applications.

(a)

An eligible institution as defined in §75.25 of this title (relating to Eligible Institution) may file an expedited filing in lieu of an application required pursuant to §75.33 of this title (relating to Branch Office Applications), §75.38 of this title (relating to Change of Office Location), or §75.81 of this title (relating to Reorganization, Merger, Consolidation or Purchase and Assumption Transaction), and simultaneously tender the required filing fee pursuant to Chapter 79 of this title, §§79.91-79.99 of this title (relating to Fees and Charges).

(b)

An expedited filing must include the following items, unless waived in writing by the commissioner:

(1)

a detailed description of the transaction;

(2)

a pro forma balance sheet and income statement for all parties to the transaction, including adjustments, reflecting the proposed transaction as of the most recent quarter ended immediately prior to the filing of the application, demonstrating that the resulting state savings bank is well capitalized as defined in 12 CFR §325.103;

(3)

a certified resolution of the board and, if required, shareholders approving the proposed transaction;

(4)

copies of all other required regulatory notices or filings submitted concerning the transaction; and,

(5)

a copy of the public notice published in conformity with the section of this subsection that would apply had the applicant not filed an expedited filing.

(c)

The commissioner shall approve or deny an expedited filing on or before a date that is 30 days after the date the expedited filing is deemed complete. The commissioner may, in the exercise of discretion, before the expiration of the period for decision, give the applicant written notice that the commissioner will convene a hearing to obtain evidence related to the application, and the decision will thereafter be made in accordance with §§79.71-79.73 of this title (relating to Hearings).

(d)

The applicant bears the burden to supply all material information necessary to enable the commissioner to make a fully informed decision regarding the expedited filing.

§75.27.Denial of Expedited Treatment.

(a)

The commissioner may deny expedited filing treatment to an otherwise eligible applicant, in the exercise of discretion, if the commissioner finds that the proposed transaction involves significant policy, supervisory, or legal issues; is contingent upon other statutory or regulatory approval; results in an entity that is not a financial institution; or involves an entity that is not domiciled in Texas.

(b)

The commissioner shall provide written notification to the applicant within 15 days after receipt of the application if expedited filing treatment is denied, indicating the reason for denial. Notification is effective when mailed by the commissioner and is not subject to appeal.

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 December 15, 1998.

TRD-9818352

James L. Pledger

Commissioner

Texas Savings and Loan Department

Earliest possible date of adoption: January 31, 1999

For further information, please call: (512) 475-1350