Part 1.
FINANCE COMMISSION OF TEXAS
Chapter 3.
STATE BANK REGULATION
Subchapter B. GENERAL
7 TAC §3.22
The Finance Commission of Texas (the commission), on behalf
of the Texas Department of Banking, proposes an amendment to §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.
Finance Code, §33.109, is intended to apply to specified bank transactions
with individuals that are also officers, directors, or principal shareholders
of the bank or of an affiliate of the bank. Ambiguous statutory language in §33.109
indicates that the section also addresses transactions between a bank and
an affiliate of the bank. Such transactions are adequately addressed by applicable
federal law.
The proposed amendment to §3.22 will clarify that transactions between
a bank and an affiliate of the bank are not included within the requirements
of Finance Code, §33.109, if such transactions are subject to and in
compliance with the Federal Reserve Act, §23A and §23B, (12 U.S.C. §371c
and §371c-1), and implementing regulations, applicable to nonmember insured
state banks by virtue of the Federal Deposit Insurance Act, §18(j)(1)
(12 U.S.C. §1828(j)(1)). The existing exemption in subsection (f) has
become obsolete and is proposed for deletion.
In addition, to enhance readability the proposed amendment will eliminate
additional terms used to invoke the law regarding limited banking associations,
terms that by statute are synonymous with officer, director, and principal
shareholder, see Finance Code, §33.211.
Robert L. Bacon, Deputy Commissioner of the Texas Department of Banking,
has determined that, for each year of the first five years that the amendment
as proposed is in effect, there will be no fiscal implication for state or
local governments.
Mr. Bacon has further determined that, for each year of the first five
years that the amendment as proposed is in effect, the anticipated public
benefit will be enhanced clarity and reduction of regulatory burden. 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 concerning the proposed amendment must be submitted
within 30 days of publication to Everette Jobe, Senior Counsel, Texas Department
of Banking, 2601 North Lamar Boulevard, Suite 300, Austin, Texas 78705-4294
or by email to ejobe@banking.state.tx.us.
The section is proposed under Finance Code, §11.012(a),
which authorizes the commission to adopt rules to implement and clarify applicable
laws and to preserve or protect the safety and soundness of state banks. As
required by Finance Code, §11.012(b), 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.
Finance Code, §33.109, is affected by the proposed amendment.
§3.22.Sale or Lease Agreements with an Officer, Director, or [
(a)
Agreement in writing. A sale or lease agreement between
a state bank and an officer, director, [
(b)
Terms of agreement. A sale or lease agreement between a
state bank and an officer, director, [
(c) - (d)
(No change.)
(e)
Records. A state bank shall maintain the originals of all
sale or lease agreements with an officer, director,
or
[
(f)
Exemption.
Finance Code, §33.109, and this section
do not apply to a transaction subject to and in compliance with the Federal
Reserve Act, §23A and §23B (12 U.S.C. §371c and §371c-1),
and implementing regulations, applicable to nonmember insured state banks
by virtue of the Federal Deposit Insurance Act, §18(j)(1) (12 U.S.C. §1828(j)(1))
[
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 February 23, 2007.
TRD-200700741
Sarah J. Shirley
General Counsel
Finance Commission of Texas
Proposed date of adoption: April 20, 2007
For further information, please call: (512) 475-1300
Chapter 21.
TRUST COMPANY CORPORATE ACTIVITIES
Subchapter B. TRUST COMPANY CHARTERING AND POWERS
7 TAC §21.24
The Finance Commission of Texas (the commission), on behalf
of the Texas Department of Banking, proposes an amendment to §21.24,
concerning exemptions for trust companies administering family trusts.
Pursuant to Finance Code, §182.011, upon application the banking commissioner
may grant exemptions to a trust company from specified provisions of the Finance
Code if the banking commissioner finds that 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
or customers are related within the fourth degree of affinity or consanguinity
to a person who controls the trust company.
Section 21.24 implements Finance Code, §182.011. The proposed amendment
to §21.24(b) will clarify that a beneficial shareholder of a trust company
can be considered to be a person who controls the trust company for purposes
of Finance Code, §182.011(a). The proposed amendment will eliminate certain
difficulties in estate planning caused by the perceived requirement that the
controlling family member must have direct voting control of the family trust
company.
As proposed, the identification of a beneficial shareholder as the controlling
person for purposes of Finance Code, §182.011(a), would be permissive
and would not affect determinations of control made pursuant to Finance Code, §183.001.
Robert L. Bacon, Deputy Commissioner of the Texas Department of Banking,
has determined that, for each year of the first five years that the amendment
as proposed is in effect, there will be no fiscal implication for state or
local governments.
Mr. Bacon has further determined that, for each year of the first five
years that the amendment as proposed is in effect, the anticipated public
benefit will be consistency of law between estate planning for federal tax
purposes and the law applicable to exempt family trust companies. 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 concerning the proposed amendment must be submitted
within 30 days of publication to Everette Jobe, Senior Counsel, Texas Department
of Banking, 2601 North Lamar Boulevard, Suite 300, Austin, Texas 78705-4294
or by email to ejobe@banking.state.tx.us.
The amendment is proposed pursuant to Finance Code, §182.011(e)(1),
which authorizes the commission to adopt rules defining the circumstances
under which a state trust company may be exempted because it does not transact
business with the public.
Finance Code, §182.011, is affected by the proposed amendment.
§21.24.Exemptions for Trust Companies Administering Family Trusts.
(a)
(No change.)
(b)
Application for Exemption.
(1)
A trust company administering family trusts
which seeks exemption from specified provisions of the Trust Company Act,
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)."
(2)
A person who has beneficial ownership of
sufficient outstanding shares of a class of voting securities to constitute
control of a state trust company may be designated as the control person for
purposes of Finance Code, §182.011(a) and this section. Such identification
of a beneficial shareholder as the controlling person is permissive and does
not affect determinations of control made pursuant to Finance Code, §183.001.
(c) - (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 February 23, 2007.
TRD-200700740
Sarah J. Shirley
General Counsel
Texas Department of Banking
Proposed date of adoption: April 20, 2007
For further information, please call: (512) 475-1300
Chapter 84.
MOTOR VEHICLE INSTALLMENT SALES
Subchapter A. SALES FINANCE LICENSES
Manager, Managing Participant, ] Principal Shareholder of the Bank [ or Participant, ] or of an Affiliate of the Bank .
manager, managing participant,
] or principal shareholder [
, or participant
] of the bank
or
of
an affiliate of the bank must be in writing. Existing verbal
agreements must be reduced to writing and approved by the board.
manager, managing participant,
] or principal shareholder [
or participant
] of the bank or
of
an affiliate of the bank must comply with applicable laws and regulations,
be consistent with prudent and sound banking principles, and 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.
manager,
managing participant,
] principal shareholder [
, or principal participant
] of the bank [
,
] or
of
an affiliate
of the
bank
, which documents must be made available at all times to the Texas
Department of Banking for examination and review. For purposes of this subsection,
required documentation need not be retained beyond three years after the expiration
of the sale or lease agreement to which the documentation pertains.
Subsection (d) of this section does not apply 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
].
Part 2.
TEXAS DEPARTMENT OF BANKING
Part 5.
OFFICE OF CONSUMER CREDIT COMMISSIONER