Part 1.
FINANCE COMMISSION OF TEXAS
Chapter 3.
STATE BANK REGULATION
Subchapter B. GENERAL
7 TAC §3.37
The Texas Finance Commission (the commission) adopts the
amendment to §3.37 concerning the calculation of annual assessments for
banks. The section is adopted without changes to the proposed text as published
in the May 17, 2002 issue of the
Texas Register
(27 TexReg 4254) and the text will not be republished.
Section 3.37 provides a table with steps for determining annual assessments
for banks. The amendment reduces assessments for banks with over $1 billion
in assets by adjusting the applicable multiplication factor in the assessable
asset group of over $1 billion and by adding two new assessment categories:
(1) for banks with assets between $5 billion and $10 billion; and (2) banks
with over $10 billion in assets. The addition of these new categories makes
assessments more equitable for larger banks by recognizing the increased efficiencies
of supervision of larger institutions.
The commission received no comments on the proposal for amendment.
The amendment is adopted under Finance Code, §§11.301
and 31.003, which authorize the commission to adopt rules to recover the cost
of maintaining and operating the Department of Banking by imposing and collecting
ratable and equitable fees, and under Finance Code §31.106, which requires
each state bank to pay the equitable or proportionate cost of maintenance
and operation of the department and the cost of enforcement of applicable
Finance Code provisions.
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.
Filed with the Office of
the Secretary of State on June 21, 2002.
TRD-200203890
Everette D. Jobe
Certifying Official
Finance Commission of Texas
Effective date: July 11, 2002
Proposal publication date: May 17, 2002
For further information, please call: (512) 475-1300
Chapter 17.
TRUST COMPANY REGULATION
Subchapter A. GENERAL
7 TAC §17.1
The Finance Commission of Texas (the commission), on behalf
of the Texas Department of Banking, adopts the repeal of §17.1, concerning
Ratable Increases in Required Capital, without changes to the proposal as
published in the May 17, 2002 issue of the
Texas
Register
(27 TexReg 4255).
The commission adopted §17.1 for the specific purpose of providing
a timetable for a trust company to achieve a minimum restricted capital requirement
of not less than $1 million by September 1, 2000. All Texas trust companies
have achieved and now maintain at least the minimum required level of restricted
capital. The repeal of §17.1 eliminates an obsolete regulation.
The commission received no comments regarding the proposed repeal.
The repeal is adopted under Government Code, §2001.039,
which requires a state agency to review each of its rules every four years
and readopt, readopt with amendments, or repeal a rule based upon the agency's
rule review and its determination as to whether the reasons for initially
adopting the rule continue to exist.
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.
Filed with the Office of
the Secretary of State on June 21, 2002.
TRD-200203894
Everette D. Jobe
Certifying Official
Texas Department of Banking
Effective date: July 11, 2002
Proposal publication date: May 17, 2002
For further information, please call: (512) 475-1300
The Finance Commission of Texas (the commission), on behalf of the
Texas Department of Banking (department), adopts amendments to §17.2,
concerning trust company advertising; §17.3, concerning sale or lease
agreements with an officer, director, principal shareholder or affiliate; §17.4,
concerning bonding requirements; and §17.23, concerning call reports.
The amendments are adopted without changes to the proposed text as published
in the May 17, 2002 issue of the
Texas Register
(27 TexReg 4256). The text will not be republished.
The department has determined that the statutory references in these sections
need to be amended. The sections cite statutes that were repealed in connection
with the codification of Texas Revised Statutes, Article 342a-1.001, et seq.
into the Finance Code in 1999. The amendments conform the statutory references
to the sections in which the referenced authority now appears in Finance Code,
Title 3, Subtitle F.
The commission received no comments regarding the proposal.
Subchapter A. GENERAL
7 TAC §§17.2 - 17.4
The amendments are adopted under Finance Code, §181.003,
which authorizes the commission to adopt rules as necessary for the implementation
and administration of Finance Code, §§181.001, et seq.
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.
Filed with the Office of
the Secretary of State on June 21, 2002.
TRD-200203895
Everette D. Jobe
Certifying Official
Texas Department of Banking
Effective date: July 11, 2002
Proposal publication date: May 17, 2002
For further information, please call: (512) 475-1300
7 TAC §17.23
The amendments are adopted under Finance Code, §181.003,
which authorizes the commission to adopt rules as necessary for the implementation
and administration of Finance Code, §§181.001, et seq.
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.
Filed
with the Office of the Secretary of State on June 21, 2002.
TRD-200203896
Everette D. Jobe
Certifying Official
Texas Department of Banking
Effective date: July 11, 2002
Proposal publication date: May 17, 2002
For further information, please call: (512) 475-1300
The Finance Commission of Texas (the commission), on behalf of the
Texas Department of Banking (department), adopts amendments to §19.1,
concerning grandfathered loans; §19.21, concerning grandfathered investments; §19.22,
concerning investments in mutual funds; and §19.51, concerning other
real estate owned. The amendments are adopted without changes to the proposed
text as published in the May 17, 2002 issue of the
Texas Register
(27 TexReg 4257). The text will not be republished.
The department has determined that the statutory references in these sections
need to be amended. The sections cite statutes that were repealed in connection
with the codification of Texas Revised Statutes, Article 342a-1.001, et seq.
into the Finance Code in 1999. The amendments conform the statutory references
to the sections in which the referenced authority now appears in Finance Code,
Title 3, Subtitle F.
The commission received no comments regarding the proposal.
Subchapter A. LOANS
7 TAC §19.1
The amendments are adopted under Finance Code, §181.003,
which authorizes the commission to adopt rules as necessary for the implementation
and administration of Finance Code, §§181.001, et seq.
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.
Filed with the Office of
the Secretary of State on June 21, 2002.
TRD-200203897
Everette D. Jobe
Certifying Official
Texas Department of Banking
Effective date: July 11, 2002
Proposal publication date: May 17, 2002
For further information, please call: (512) 475-1300
7 TAC §19.21, §19.22
The amendments are adopted under Finance Code, §181.003,
which authorizes the commission to adopt rules as necessary for the implementation
and administration of Finance Code, §§181.001, et seq.
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.
Filed
with the Office of the Secretary of State on June 21, 2002.
TRD-200203898
Everette D. Jobe
Certifying Official
Texas Department of Banking
Effective date: July 11, 2002
Proposal publication date: May 17, 2002
For further information, please call: (512) 475-1300
7 TAC §19.51
The amendments are adopted under Finance Code, §181.003,
which authorizes the commission to adopt rules as necessary for the implementation
and administration of Finance Code, §§181.001, et seq.
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.
Filed
with the Office of the Secretary of State on June 21, 2002.
TRD-200203899
Everette D. Jobe
Certifying Official
Texas Department of Banking
Effective date: July 11, 2002
Proposal publication date: May 17, 2002
For further information, please call: (512) 475-1300
Subchapter B. REGULATION OF LICENSES
7 TAC §§25.19 - 25.23
The Finance Commission of Texas (the commission) adopts amendments
to §25.19, concerning notice of seizure and the bid process; §25.20,
concerning guaranty fund claims filing procedures and eligibility for payment
standards; §25.21, concerning introduction to the joint memorandum of
understanding between the Department of Banking (department), the Texas Funeral
Service Commission, and the Texas Department of Insurance; §25.22, concerning
the joint memorandum of understanding; and §25.23, concerning application
fees. Section 25.19 is adopted with changes to the text as published in the
May 17, 2002, issue of the
Texas Register
(27 TexReg 4259). Sections 25.20 - 25.23 are adopted without changes and will
not be republished.
Section 25.19 provides procedures for the department in connection with
cancellation of a prepaid funeral permit and seizure of prepaid funeral funds.
The section requires the department to maintain a bid list of permit holders
who wish to assume a canceled permit holder's obligations under prepaid funeral
contracts and the right to receive the balance of the prepaid funeral funds
paid or to be paid under the contracts. Subsection (c) of this section requires
the department to notify persons on the bid list within 60 days after it cancels
a permit. One of the changes to this provision clarifies that it means on
or before the 60th day after the date of final cancellation. The clarification
is necessary to ensure that bids are not solicited prior to a determination
on an order of cancellation through the hearing process, if a hearing is requested
by a permit holder. The other change to subsection (c) adds all funeral providers
in the vicinity of a canceled permit holder to the list of persons the department
must notify after a permit cancellation. The addition of these persons to
the bid list will enable the department to more quickly place preneed contracts
of a canceled permit holder with another permit holder and thereby ensure
consumers are protected. The addition will also increase the likelihood that
preneed contracts will be placed with a provider that is conveniently located
to consumers.
Section 25.20 provides procedures for making a claim against the Guaranty
Fund. The section requires a claimant to file a certified copy of the death
certificate for a person designated to receive funeral benefits under a preneed
contract. One of the changes to the provision clarifies that the department
will accept a copy of the certified copy of the death certificate, which will
save consumers the cost of purchasing a new certified copy. The remaining
changes include nonsubstantive clerical or clarifying changes and the deletion
of an obsolete provision.
Section 25.21 provides an introduction to the memorandum of understanding
between the department, the Texas Funeral Service Commission, and the Texas
Department of Insurance, set out in §25.22. The only amendment to §25.21
is to update a citation. The amendments to §25.22 make the rule consistent
with the rules of the Texas Funeral Service Commission, which has recently
adopted these changes in the memorandum of understanding. The changes are
nonsubstantive clerical changes or updates to citations, except for the change
to §25.22(g)(2). The amendment to this provision increases the minimum
recommended penalty that may be assessed by the Texas Funeral Services Commission
for a violation of Finance Code, Chapter 154, from $500 to $1,000.
Section 25.23 governs application fees. The amendments increase the new
permit application fee and the re-application fee of a previous permit holder
from $500 to $2,500. The amendments also increase fees associated with conversion
of a trust-funded prepaid funeral benefits operation to an insurance- funded
prepaid funeral benefits operation. Applications for conversions that result
in the issuance of an annuity product identical in form to one that was previously
approved by the department will increase from $500 to $1,000. The total fee
the department can charge for processing an incomplete conversion application
will increase from $1,000 to $2,000. The higher fees reflect the actual cost
to the department related to these applications. These fees were established
by the department, and not mandated by the Legislature.
No comments were received on the proposal.
The amendments are adopted under Finance Code, §154.051,
which authorizes the commission to adopt rules necessary to enforce and administer
Finance Code, Chapter 154.
§25.19.Notice of Seizure; the Bid Process.
(a)
Notice to purchasers. Within 30 days of cancellation of
a permit to sell prepaid funeral benefits and the seizure of prepaid funeral
funds, the department shall notify those who have purchased prepaid funeral
contracts from the cancelled permit holder. The notice shall inform the purchasers
of the cancellation and seizure; provide instructions set out in Texas Civil
Statutes, Article 548b, §4(g); provide an address to which any future
payments due under the contracts must be sent; explain how monies can be released
from the seized funds prior to selection of a successor permit holder; and
explain how the contract may be cancelled should the purchaser wish to cancel
it.
(b)
Bid list. The department shall maintain a bid list of permit
holders who wish to bid for the right to assume the cancelled permit holder's
obligations under prepaid funeral contracts and the right to receive the balance
of prepaid funeral funds paid or to be paid under those contracts. Upon the
request of any permit holder, the department shall add to or delete from the
bid list the permit holder's name. The department shall purge the list by
deleting the names of those whose permits are cancelled or surrendered prior
to the consideration of any bid award.
(c)
Solicitation of bids. On or before the 60th day after the
date of final cancellation of a permit to sell prepaid funeral benefits, the
department shall notify those on the bid list and all funeral providers in
the vicinity of the canceled permit holder of the cancellation. The notice
shall include the name and address of the cancelled permit holder, the number
and aggregate dollar amount of unperformed prepaid funeral contracts, the
balance of unearned prepaid funeral funds, and the date by which sealed bid
proposals must be submitted to the department to be considered for the bid
award. The notice shall also include instructions as to how eligible potential
bidders may inspect the cancelled permit holder's prepaid funeral contract
records. The seized contracts will be bid on as a bloc rather than on an individual
contract basis, and the commissioner shall have the discretion to combine
or group contracts seized for bidding and sale purposes. The notice shall
inform any non-permit holder that it must apply for and obtain a permit from
the commissioner to sell prepaid funeral benefits in the State of Texas in
the event that it receives the bid award.
(d)
Solicitation of bids on certain contracts. The commissioner
may also from time to time solicit bids on seized prepaid funeral contracts
which were not placed with successor permittees as a result of the original
or any subsequent bid solicitations.
(e)
Selection criteria.
(1)
Time of selection. After the deadline has expired for submitting
sealed bids, the commissioner may select a successor to the cancelled permit
holder.
(2)
Criteria for permit holders. If the bidder is a permit
holder, the commissioner shall consider:
(A)
whether the bidder has demonstrated an ability to properly
manage, maintain, and account for its own prepaid funeral funds;
(B)
whether the bidder has properly remedied violations of
law cited by the department in its examination reports;
(C)
whether the bidder has a history of repeated or continuous
violations;
(D)
whether the bidder has the ability to fulfill the terms
of the prepaid funeral contract;
(E)
whether the bidder poses any other significant regulatory
concern; and
(F)
the amount of money in the cancelled permit holder's prepaid
funeral funds, the value of receivables that are due under the contracts of
the cancelled permit holder to a successor permit holder, the amount of money
offered for the prepaid funeral business, the current or potential claim against
the guaranty fund, and any other relevant information.
(3)
Criteria for non-permit holder funeral providers. If the
bidder is a non-permit holder funeral provider, the commissioner shall consider,
to the extent applicable, all of the factors listed in paragraph (2) of this
subsection and the following:
(A)
the bidder's general reputation in the community where
it is located;
(B)
whether the bidder's business ability, experience, character,
and general fitness warrant the confidence of the public;
(C)
any state or federal regulatory or law enforcement, administrative,
or other action taken against the bidder; and
(D)
the bidder's willingness to obtain a permit from the commissioner
to sell prepaid funeral benefits in the State of Texas and to abide by the
statutes and rules governing such permits.
(4)
Rejection of bids. The commissioner may reject all bid
proposals received pursuant to this section. If all bids are rejected, a new
bid proposal may be solicited or, alternatively, the balance of prepaid funeral
funds paid or to be paid under the contracts of the cancelled permit holder
shall be received into the guaranty fund for management by the Guaranty Fund
Advisory Council, and the department shall manage the prepaid funeral contracts;
provided, however, that the commissioner may thereafter solicit additional
bid proposals under subsection (d) of this section.
(f)
Selection of successor. The commissioner alone shall be
responsible for the selection of a successor permit holder under this section.
The commissioner shall make no contract regarding the selection of a successor
permit holder that obligates the guaranty fund in any way until a vote of
the members of the Guaranty Fund Advisory Council approving such obligation
has been given in a properly posted open meeting.
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.
Filed with the Office of
the Secretary of State on June 21, 2002.
TRD-200203909
Everette D. Jobe
Certifying Official
Texas Department of Banking
Effective date: July 11, 2002
Proposal publication date: May 17, 2002
For further information, please call: (512) 475-1300
Chapter 80.
MORTGAGE BROKER AND LOAN OFFICER LICENSING
Subchapter B. PROFESSIONAL CONDUCT
7 TAC §80.9
The Finance Commission of Texas (the "Finance Commission")
adopts an amendment to §80.9, concerning the filing of consumer complaints
with the Texas Savings and Loan Department (the "department") with changes
to the proposed text as published in the March 15, 2002, issue of the
Background and Summary of Factual Basis for the Rules
Section 80.9(c) will specify the manner in which Mortgage Brokers and Loan
Officers provide consumers with information on how to file complaints with
the department. The new subsection will also require that the information
on how to file complaints be included with each privacy notice a Mortgage
Broker or Loan Officer is required by law to provide to consumers.
The amendment to the rule was approved by the Finance Commission on February
22, 2002, for publication for public comments. No written comments were received.
On June 5, 2002, the Mortgage Broker Advisory Committee reviewed the new
subsection for final adoption and advised the Commissioner and the Finance
Commission that the new subsection should be adopted without changes to the
form in which they were published.
The amendment is adopted under the authority of
Finance Code
, §11.307, which requires the Finance Commission to
adopt rules specifying the manner in which Mortgage Brokers and Loan Officers
provide consumers with information on how to file complaints with the department.
§80.9.Required Disclosures.
(a)
At the time an application for a Mortgage Loan is made
to a Mortgage Broker or Loan Officer, the Mortgage Broker or Loan Officer
shall provide the Mortgage Applicant with a disclosure describing their relationship,
the duties of the Mortgage Broker or Loan Officer to the Mortgage Applicant,
and a description of how the Mortgage Broker or Loan Officer will be compensated
for his or her services. Such disclosures are to be made using forms promulgated
by the Commissioner. Such disclosures shall include a statement to the effect
that the Department oversees the enforcement of the Act (including conducting
investigations of any complaints) and provide a consumer toll free telephone
number for the Department.
(b)
Anytime a Mortgage Broker or Loan Officer charges or receives
from a Mortgage Applicant a fee for a service that is provided by a third
party and retains any portion of the fee so charged or received:
(1)
The portion retained by the Mortgage Broker or Loan Officer
and a description of the service actually rendered by the Mortgage Broker
or Loan Officer shall be disclosed to the Mortgage Applicant in writing and
(2)
The portion so retained by the Mortgage Broker or Loan
Officer shall not exceed the reasonable value of services actually rendered
by the Mortgage Broker or Loan Officer for the benefit of the Mortgage Applicant.
(3)
Any Mortgage Broker or Loan Officer retaining any portion
of any fee or fees charged by third parties, however denominated, shall maintain
appropriate documentation to substantiate the basis for the retention of such
monies, including the reasonable value of the services rendered for such fee
or fees.
(4)
Affiliated business arrangements, as provided for under
the Real Estate Settlement Procedures Act, and payments made pursuant thereto
shall be disclosed to Mortgage Applicants as provided for by the Real Estate
Settlement Procedures Act and the regulations implementing that act.
(c)
Consumer Complaint Procedure
(1)
Definitions
(A)
"Privacy notice" means any notice which a Mortgage Broker
or Loan Officer gives regarding a consumer's right to privacy, regardless
of whether it is required by a specific state or federal law or given voluntarily.
(B)
"Required notice" means a notice in a form set forth or
provided for in paragraph (2)(A) of this subsection.
(2)
Notice of how to file complaints
(A)
In order to let its consumers know how to file complaints,
Mortgage Brokers and Loan Officers must use the following notice: (Name of
Mortgage Broker or Loan Officer) is licensed under the laws of the State of
Texas and by state law is subject to regulatory oversight by the Texas Savings
and Loan Department. Any consumer wishing to file a complaint against (name
of Mortgage Broker or Loan Officer) should contact the Texas Savings and Loan
Department through one of the means indicated below: In Person or by U.S.
Mail: 2601 North Lamar Boulevard, Suite 201, Austin, Texas 78705-4294, Telephone
No.: (877) 276-5550, Fax No.: (512) 475-1360, E-mail: TSLD@tsld.state.tx.us
(B)
A required notice must be included in each privacy notice
that a Mortgage Broker or Loan Officer sends out.
(C)
Regardless of whether a Mortgage Broker or Loan Officer
is required by any state or federal law to give privacy notices, each Mortgage
Broker or Loan Officer must take appropriate steps to let its consumers know
how to file complaints by giving them the required notice in compliance with
subparagraph (A) of this paragraph or by providing the disclosure specified
in this subsection.
(D)
Any one of the following measures is deemed to be an appropriate
step to give the required notice:
(i)
In each registered office or branch office where a Mortgage
Broker or Loan Officer conducts business on a face-to-face basis, the required
notice, in the form specified in subparagraph (A) of this paragraph, must
be conspicuously posted. A notice is deemed to be conspicuously posted if
a customer with 20/20 vision can read it from the place where he or she would
typically conduct business or if it is included on a bulletin board, in plain
view, on which all required notices to the general public (such as equal housing
posters, licenses, etc.) are posted;
(ii)
If a Mortgage Broker or Loan Officer maintains a web site,
the required notice must be included in a screen prominently displayed; or
(iii)
Providing a completed mortgage broker disclosure in the
form required by subsection (a) of this section executed at application.
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.
Filed with the Office of
the Secretary of State on June 24, 2002.
TRD-200203938
James L. Pledger
Commissioner
Texas Savings and Loan Department
Effective date: July 14, 2002
Proposal publication date: March 15, 2002
For further information, please call: (512) 475-1350
Chapter 82.
ADMINISTRATION
Part 2.
TEXAS DEPARTMENT OF BANKING
Chapter 17.
TRUST COMPANY REGULATION
Subchapter B. EXAMINATION AND CALL REPORTS
Chapter 19.
TRUST COMPANY LOANS AND INVESTMENTS
Subchapter B. INVESTMENTS
Subchapter C. REAL ESTATE
Chapter 25.
PREPAID FUNERAL CONTRACTS
Part 4.
TEXAS SAVINGS AND LOAN DEPARTMENT
Part 5.
OFFICE OF CONSUMER CREDIT COMMISSIONER