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, adopts the amendments to §3.22, concerning sale or lease agreements between a state bank and an officer, director, or principal shareholder of the bank or of an affiliate of the bank. The amendments are adopted without changes to the proposed text as published in the March 9, 2007, issue of the Texas Register (32 TexReg 1173), therefore the text will not be republished.
Finance Code, §33.109, is intended to apply to specified bank transactions with individuals who 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 amendments to §3.22 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 previously existing exemption in subsection (f) has become obsolete and is deleted.
To enhance readability, the amendments also eliminate superfluous 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.
The commission received no comments regarding the proposed amendments.
The amendments are adopted 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.
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 April 20, 2007.
TRD-200701501
Sarah J. Shirley
General Counsel
Finance Commission of Texas
Effective date: May 10, 2007
Proposal publication date: March 9, 2007
For further information, please call: (512) 475-1300
Chapter 21. TRUST COMPANY CORPORATE ACTIVITIES
Subchapter B. TRUST COMPANY CHARTERING AND POWERS
The Finance Commission of Texas (the commission), on behalf of the Texas Department of Banking, adopts an amendment to §21.24, concerning exemptions for trust companies administering family trusts, without changes to the proposed text as published in the March 9, 2007, issue of the Texas Register (32 TexReg 1174). The text will not be republished.
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 amendment to §21.24(b) clarifies 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 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.
The designation of a beneficial shareholder as the controlling person for purposes of Finance Code, §182.011(a), is permissive and does not affect determinations of control made pursuant to Finance Code, §183.001.
The commission received no comments regarding the proposal.
The amendment is adopted 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.
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 April 20, 2007.
TRD-200701504
Sarah J. Shirley
General Counsel
Texas Department of Banking
Effective date: May 10, 2007
Proposal publication date: March 9, 2007
For further information, please call: (512) 475-1300
Chapter 84. MOTOR VEHICLE INSTALLMENT SALES
Subchapter A. SALES FINANCE LICENSES
The Finance Commission of Texas (commission) adopts new 7 TAC §84.112, concerning Effect of Criminal History Information on Applicants and Licensees, and §84.113, concerning Crimes Directly Related to Fitness for License; Mitigating Factors. The new rules are adopted without changes to the proposal published in the March 9, 2007, issue of the Texas Register (32 TexReg 1175).
In general, the purpose of §84.112 and §84.113 is to formally state current agency practice regarding the effects of criminal history information on applicants for and current holders of motor vehicle sales finance licenses. These rules provide consistency across each category of agency licensees, as similar rules were first adopted for pawnbrokers and were recently adopted with regard to regulated lenders.
Section 84.112 describes the effect of criminal history information on applicants and licensees. Subsection (a) explains the collection and consideration of criminal history information. Subsection (b) outlines the information that must be provided on arrests, charges, indictments, and convictions. As per Texas Occupations Code, §53.022, subsection (c) of the rule outlines the factors the agency will consider in determining whether a conviction relates to the occupation of being a motor vehicle sales finance dealer. Subsection (d) provides the effects of criminal convictions on applicants and licensees, including a list of crimes involving moral character.
Section 84.113 is a companion rule to §84.112. Section 84.113 describes the crimes directly related to the fitness for holding a license, as well as mitigating factors that will be considered, as per Texas Occupations Code, §53.023.
The commission received no written comments on the proposal.
These new sections are adopted under Texas Finance Code, §11.304, which authorizes the commission to adopt rules to enforce Title 4 of the Texas Finance Code. Additionally, Texas Finance Code, §348.513 grants the commission the authority to adopt rules to enforce the motor vehicle installment sales chapter.
These rules affect Texas Finance Code, Chapter 348.
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 April 20, 2007.
TRD-200701506
Leslie L. Pettijohn
Commissioner
Office of Consumer Credit Commissioner
Effective date: May 10, 2007
Proposal publication date: March 9, 2007
For further information, please call: (512) 936-7640