CHAPTER 66. ENFORCEMENT AND REGULATION
FINANCE CODE
TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES
SUBTITLE B. SAVINGS AND LOAN ASSOCIATIONS
CHAPTER 66. ENFORCEMENT AND REGULATION
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 66.001. GENERAL DUTIES. The Department of Savings and
Mortgage Lending and the commissioner shall regulate associations
and subsidiaries of associations operating under this subtitle.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.029, eff. September 1, 2007.
Sec. 66.002. ADOPTION OF RULES. The finance commission may
adopt rules relating to:
(1) the minimum amounts of capital stock and paid-in surplus
required for incorporation as a capital stock association;
(2) the minimum amounts of savings liability and expense funds
required for incorporation as a mutual association;
(3) the fees and procedures for processing, hearing, and
deciding applications filed with the commissioner or the
Department of Savings and Mortgage Lending under this subtitle;
(4) the books and records that an association is required to
keep and the location at which the books and records are required
to be maintained;
(5) the accounting principles and practices that an association
is required to observe;
(6) the conditions under which records may be copied or
reproduced for permanent storage before the original records are
destroyed;
(7) the form, contents, and time of publication of statements of
condition;
(8) the form and contents of annual reports and other reports
that an association is required to prepare and publish or file;
(9) the manner in which assets, liabilities, and transactions in
general are to be described when entered in the books of an
association, so that the entry accurately describes the subject
matter of the entry; and
(10) the conditions under which the commissioner may require an
asset to be charged off or reserves established by transfer from
surplus or paid-in capital because of the depreciation of or
overstated value of the asset.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 2001, 77th Leg., ch. 867, Sec. 31, eff. Sept. 1,
2001.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.030, eff. September 1, 2007.
SUBCHAPTER B. EXAMINATIONS
Sec. 66.051. EXAMINATIONS. (a) The commissioner shall
periodically examine the affairs of each association, including
the subsidiaries and transactions of the association and the
dealings of any savings and loan holding company that are related
to the savings and loan subsidiaries of the association.
(b) An examination must include an audit if an independent audit
is not available or is unsatisfactory to the commissioner.
(c) On completion of an audit, the auditor shall sign and
certify the audit report. A copy shall be filed promptly with the
commissioner.
(d) An examination under this section may be made in conjunction
with an examination by the Federal Home Loan Bank Board, a
Federal Home Loan Bank, or the Federal Deposit Insurance
Corporation. The commissioner shall accept an audit made by or
accepted by one of those agencies in an examination of an
association.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.052. ADDITIONAL EXAMINATIONS. (a) The commissioner at
the association's cost shall conduct an additional examination or
audit or devote extraordinary attention to an association's
affairs if the commissioner determines that the condition of the
association makes it necessary or expedient to do so.
(b) A copy of the report of an examination or audit conducted
under this section shall be furnished promptly to the
association. The report shall be:
(1) presented to the board of the association at its next
regular meeting or at a special meeting called for purposes of
permitting the presentation of the report; and
(2) noted in the minutes of the meeting.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.053. ACCESS TO BOOKS AND RECORDS. The commissioner, a
deputy commissioner, or an examiner or auditor of the
commissioner shall be given free access to:
(1) the books and records of an association;
(2) the books and records of a subsidiary or savings and loan
holding company of an association relating to the association's
business; and
(3) the books and records kept by an officer, agent, or employee
of the association, subsidiary, or savings and loan holding
company relating to the association's business.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.054. SUBPOENA; ADMINISTRATION OF OATH OR AFFIRMATION.
(a) In an examination conducted under this subchapter, the
commissioner, the deputy commissioner, or an examiner or auditor
of the commissioner may:
(1) subpoena witnesses;
(2) administer an oath or affirmation to a person, including a
director, officer, agent, or employee of an association; or
(3) require and compel by subpoena the production of documents,
including records, books, papers, and contracts.
(b) The commissioner may apply to a district court in Travis
County for an order requiring a person to obey a subpoena or to
appear or answer questions in connection with an examination.
(c) The court shall issue an order under Subsection (b) if the
court finds good cause to issue the subpoena or to take
testimony.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER C. SUPERVISORY INTERVENTION
Sec. 66.101. INTERVENTION FOR VIOLATIONS AND UNSAFE AND UNSOUND
PRACTICES. The commissioner may intervene in the affairs of an
association if the association or a person who participates in
the affairs of the association or a subsidiary of the
association:
(1) engages in or is about to engage in an unsafe and unsound
practice in conducting the affairs of the association; or
(2) violates or is about to violate:
(A) the articles of incorporation or bylaws of the association;
(B) a law or supervisory order applicable to the association; or
(C) a condition that the commissioner or the finance commission
has imposed on the association by written order or agreement.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.102. INTERVENTION FOR FILING INAPPROPRIATE INFORMATION.
The commissioner may intervene in the affairs of an association
if the association or a person who participates in the affairs of
the association or a subsidiary of the association files
materially false or misleading information in a filing required
by Subchapter L, Chapter 62.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.103. INTERVENTION FOR ACTIVITY RESULTING IN ACTUAL OR
POTENTIAL LOSS. (a) The commissioner may intervene in the
affairs of an association if a person who participates in the
affairs of the association or a subsidiary or savings and loan
holding company of the association commits or is about to commit:
(1) a fraudulent or criminal act in conducting the affairs that
may cause the association or a subsidiary of the association to
become or be in danger of becoming insolvent;
(2) an act that threatens immediate or irreparable harm to the
public or the association, a subsidiary of the association, or
the account holders or creditors of the association; or
(3) a breach of fiduciary duty that results in actual or
probable substantial financial losses or other damages to the
association or a subsidiary of the association or that would
seriously prejudice the interest of savings account holders or
holders of other security issued by the association.
(b) The commissioner may intervene in the affairs of an
association if the association:
(1) is insolvent;
(2) is in imminent danger of insolvency; or
(3) makes or is about to make:
(A) a loan the value of the security for which is materially
overstated; or
(B) an investment the market value of which is materially
overstated.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.104. INTERVENTION RELATING TO EXAMINATION OF AFFAIRS.
(a) The commissioner may intervene in the affairs of an
association if a person who participates in the affairs of the
association or a subsidiary or savings and loan holding company
of the association:
(1) refuses or is about to refuse to submit to interrogation
under oath by the commissioner or the commissioner's agent with
respect to the association's affairs; or
(2) materially alters, conceals, removes, or falsifies or is
about to materially alter, conceal, remove, or falsify a book or
record of the association or a subsidiary of the association.
(b) The commissioner may intervene in the affairs of an
association if the association:
(1) fails to maintain books and records from which the true
financial condition of the association or the state of the
association's affairs can be determined; or
(2) refuses to direct a person having possession of the books,
papers, records, or accounts of the association or the
association's subsidiary to permit the commissioner or the
commissioner's authorized representative to inspect or examine
those documents or accounts.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.105. TEMPORARY SUPERVISORY ORDER. (a) If the
commissioner has reasonable cause to believe that one or more of
the grounds for intervention under Section 66.101 exists or is
imminent, the commissioner may issue without notice and hearing
one or more of the following types of temporary supervisory
orders to correct and eliminate the grounds for supervisory
action:
(1) an order to cease and desist from continuing a particular
action, an order to take affirmative action, or both;
(2) an order suspending or prohibiting a person who participates
in the affairs of the association from further participating in
the affairs of the association or of another association;
(3) an order requiring divestiture of control of an association
obtained under Subchapter L, Chapter 62; or
(4) an order placing the affairs of the association under the
control of a conservator designated in the order, who may take
possession and control of the books, records, property, assets,
liabilities, and business of the association and manage the
association under the direction of the commissioner.
(b) An order under this section:
(1) must contain a reasonably detailed statement of the facts on
which the order is based; and
(2) takes effect when issued.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.106. SERVICE OF TEMPORARY SUPERVISORY ORDER. (a) A
temporary supervisory order may be served by personal delivery by
an agent of the commissioner or by certified or registered mail.
(b) Service is complete when an officer or director of the
association receives the order.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.107. HEARING ON TEMPORARY SUPERVISORY ORDER; FINAL
ORDER. (a) A temporary supervisory order issued under Section
66.105 becomes final and unappealable on the 16th day after the
date on which the order is issued unless before that day the
association or a person affected by the order requests a hearing
before the commissioner to determine whether the order should be
vacated, made permanent, or modified.
(b) The commissioner shall set the matter for hearing to be held
not earlier than the 11th day or later than the 30th day after
the date of the request. The hearing must be held at the offices
of the Department of Savings and Mortgage Lending in Austin.
(c) After the hearing, the commissioner may enter a final order
that vacates the temporary order or makes the temporary order
permanent in its original form or a modified form that is
consistent with the facts found by the commissioner.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.031, eff. September 1, 2007.
Sec. 66.108. PLAN OF OPERATION OF ASSOCIATION AFTER ORDER OF
TEMPORARY CONSERVATORSHIP. (a) Before or during a hearing under
Section 66.107 on a temporary supervisory order placing an
association under the control of a conservator, the board of the
association may present to the commissioner a plan to continue
the operation of the association in a manner that will correct or
eliminate the grounds on which the order is based.
(b) If the commissioner approves the plan or a modification of
the plan, the commissioner shall vacate the order placing the
association under conservatorship, conditioned on the
implementation and diligent prosecution of the plan.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.109. ENFORCEMENT OF SUPERVISORY ORDER. (a) The
commissioner, after giving notice, may assess against an
association or another person designated in a final supervisory
order who violates the order, or both, an administrative penalty
of not more than $1,000 each for each day of the violation. The
association may not reimburse or indemnify a person for any part
of the penalty.
(b) In addition to any other remedy provided by law, the
commissioner may institute in a district court in Travis County:
(1) a suit for injunctive relief to stop or prevent a violation
of a supervisory order; or
(2) a suit for injunctive relief and to collect the
administrative penalty.
(c) A bond is not required of the commissioner with respect to
injunctive relief granted under this section.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.110. STAY OF SUPERVISORY ORDER. (a) A temporary
supervisory order may not be stayed pending a hearing unless the
commissioner orders a stay.
(b) A final supervisory order may not be stayed pending judicial
review unless the reviewing court orders a stay for good cause.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.111. DISCLOSURE OF INFORMATION IN SUPERVISORY ORDER;
CONFIDENTIALITY. (a) Except as provided by Subsection (b) or
(c), information contained in a temporary or final supervisory
order or a notice, correspondence, or other record relating to
the order is confidential.
(b) The commissioner, for good reason as determined by the
commissioner, may disclose the information described by
Subsection (a) in a hearing or judicial proceeding under Section
66.107, 66.109, or 66.110 or in a proceeding to assert a defense
under Section 66.403.
(c) The commissioner may disclose the information described by
Subsection (a) to a department, agency, or instrumentality of
this or another state or the United States if the commissioner
determines that disclosure is necessary or proper to enforce the
laws of this or another state or the United States.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER D. CONSERVATORSHIP
Sec. 66.151. PLACEMENT OF ASSOCIATION UNDER CONSERVATORSHIP. If
the commissioner does not approve a plan to continue the
operation of an association under Section 66.108, the conservator
shall continue to manage the affairs of the association unless
the temporary conservatorship order is modified or vacated:
(1) by order of the commissioner; or
(2) as a result of judicial review.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.152. DUTIES OF CONSERVATOR. (a) The conservator and
any deputy or assistant conservator appointed by the
commissioner, under the direction and supervision of the
commissioner, shall:
(1) take possession and control of the books, records, property,
assets, liabilities, and business of the association; and
(2) conduct the business and affairs of the association.
(b) The conservator shall:
(1) undertake to remove the causes and conditions that made the
conservatorship necessary; and
(2) during the conservatorship, report to the commissioner as
required by the commissioner.
(c) The conservator shall take measures necessary to preserve,
protect, and recover the assets or property of the association,
including a claim or cause of action that belongs to or may be
asserted by the association. The conservator may deal with that
property in the capacity of conservator.
(d) The conservator may file, prosecute, or defend a suit
brought by or against the association if the conservator
considers it necessary to protect the interested party or
property affected by the suit.
(e) A suit filed by the conservator under Subsection (c) must be
brought in Travis County.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.153. TERM OF CONSERVATOR. The conservator shall serve
until the purposes of the conservatorship are accomplished.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.154. TRANSFER OF MANAGEMENT OF REHABILITATED
ASSOCIATION. If the association is rehabilitated, the
conservator shall return the management of the association to the
association's board under terms that are reasonable and necessary
to prevent a recurrence of the conditions that created the need
for the conservatorship.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.155. SCOPE OF AUTHORITY OF OTHER PERSONS DURING
CONSERVATORSHIP. During the conservatorship, a person who
participates in the affairs of the association shall act
according to the conservator's instructions and may exercise only
the authority that the conservator expressly grants.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.156. COST OF CONSERVATORSHIP. (a) The commissioner
shall determine the cost of the conservatorship.
(b) The cost of conservatorship shall be paid from the
association's assets.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.157. VENUE. A suit filed against an association or its
conservator while a conservatorship order is in effect must be
brought in Travis County.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER E. VOLUNTARY SUPERVISORY CONTROL
Sec. 66.201. PLACEMENT OF ASSOCIATION UNDER VOLUNTARY
SUPERVISORY CONTROL. (a) An association's board may consent to
the commissioner's placement of the association under supervisory
control.
(b) The commissioner may appoint the supervisor and one or more
deputy supervisors.
(c) Supervisory control continues until the conditions for which
the supervisory control was imposed are corrected.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.202. POWERS OF SUPERVISORS. A supervisor or deputy
supervisor has the powers of a conservator under Subchapter D and
any other power established by agreement between the commissioner
and the association's board of directors.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.203. COST OF SUPERVISORY CONTROL. The cost of the
supervisory control of an association shall be set by the
commissioner and paid by the association.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER F. CLOSING
Sec. 66.251. CLOSING OF ASSOCIATION BY BOARD RESOLUTION. An
association's board, by resolution and with the commissioner's
consent, may close the association and tender to the commissioner
for disposition as provided by this subchapter the assets and all
the affairs of the association.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.252. CLOSING OF ASSOCIATION BY COMMISSIONER'S ORDER.
The commissioner or the commissioner's representative may close
an association if the commissioner determines after an
examination that:
(1) the interests of the depositors and creditors of the
association are jeopardized because of:
(A) the association's insolvency or imminent insolvency; or
(B) a substantial dissipation of the association's assets or
earnings because of a violation of a law or an unsafe or unsound
practice; and
(2) it is in the best interest of the depositors and creditors
to close the association and liquidate the association's assets.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.253. NOTICE OF CLOSING. (a) Immediately after an
association is closed by its board or by the commissioner under
this subchapter, the commissioner shall post at the main entrance
of the association an appropriate notice of the closure. After
notice is posted, a judgment lien, attachment lien, or other
voluntary lien may not attach to an asset of the association, and
a director or an officer or agent of the association may not:
(1) act for the association; or
(2) convey, transfer, assign, pledge, mortgage, or encumber an
asset of the association.
(b) An attempt to take an action prohibited under Subsection
(a)(2) after the notice is posted or in anticipation of posting
the notice, including preferring in any manner a depositor or
creditor of the association, is void.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.254. EFFECT OF CLOSING. (a) On closing an association
under this subchapter, the commissioner may:
(1) liquidate the association as provided by Subchapter E; or
(2) tender the association's assets and all the association's
affairs to the Federal Deposit Insurance Corporation and appoint
the Federal Deposit Insurance Corporation as receiver or
liquidating agent to act in accordance with this chapter or
federal law.
(b) The Federal Deposit Insurance Corporation on accepting the
tender and appointment prescribed by Subsection (a)(2) may:
(1) act without bond or other security as to the appointment;
and
(2) without court supervision, exercise any right, power, or
privilege provided by the laws of this state to a receiver or
liquidating agent, as applicable, and any applicable right,
power, or privilege available under federal law.
(c) On acceptance of the appointment prescribed by Subsection
(a)(2), possession of and title to all the assets, business, and
property of the association pass to the Federal Deposit Insurance
Corporation without the execution of any instrument transferring
title or right of use.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.255. HEARING ON COMMISSIONER'S ORDER. (a) Not later
than the second day, excluding legal holidays, after the date on
which the commissioner closes an association under Section
66.252, the association, by resolution of its board, may sue in a
district court of Travis County to enjoin the commissioner from
taking further action under this subchapter.
(b) The court, without notice or hearing, may restrain the
commissioner from taking further action until after a hearing on
the suit is held. If the court restrains the commissioner, the
court shall instruct the commissioner to hold the assets and
affairs of the association in the commissioner's possession until
disposition of the suit. On receipt of this instruction, the
commissioner shall refrain from taking further action, other than
a necessary or proper action approved by the court to prevent
loss or depreciation in the value of the assets.
(c) The court as soon as possible shall hear the suit and shall
enter a judgment enjoining or refusing to enjoin the commissioner
from proceeding under this subchapter.
(d) The commissioner, regardless of the judgment entered by the
court or any supersedeas bond filed, shall retain possession of
the association's assets until final disposition of any appeal of
the judgment.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER G. LIQUIDATION
Sec. 66.301. LIQUIDATION OF ASSOCIATION. (a) If the
commissioner doubts that an association subject to a
conservatorship order can be rehabilitated, the commissioner may
set a hearing to determine whether the association should be
liquidated. Not later than the 10th day before the hearing date,
notice of the hearing shall be given by certified mail to the
officers and directors of the association and by publication in a
newspaper of general circulation in the county in which the
principal office of the association is located.
(b) If the commissioner finds that the association cannot be
rehabilitated and it is in the public interest and the best
interest of the savings account holders and creditors of the
association that the bank be closed and its assets liquidated,
the commissioner by liquidation order may appoint a liquidating
agent and dissolve the association.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.302. REMOVAL OR REPLACEMENT OF LIQUIDATING AGENT. (a)
The commissioner, with or without cause, may remove a liquidating
agent and appoint another agent.
(b) If a liquidating agent resigns, dies, or otherwise becomes
unable to serve, the commissioner shall promptly appoint another
agent.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.303. DUTIES OF LIQUIDATING AGENT. (a) Under the
commissioner's supervision, the liquidating agent shall:
(1) receive and take possession of the books, records, assets,
and property of the association;
(2) sell, enforce collection of, and liquidate the assets and
property of the association;
(3) sue in the name of the liquidating agent or the association;
(4) defend an action brought against the liquidating agent or
the association;
(5) receive, examine, and pass on a claim brought against the
association, including a claim of a depositor;
(6) make distributions to and pay creditors, depositors,
shareholders, and members of the association as their interests
appear;
(7) from time to time make a ratable liquidation dividend on
claims that have been proved to the satisfaction of the
association's board of directors or the liquidating agent or that
have been adjusted by a court;
(8) after the association's assets have been liquidated, make
further liquidation dividends on claims previously proved or
adjusted; and
(9) execute documents and perform any other action that the
liquidating agent considers necessary or desirable to the
liquidation.
(b) For purposes of making a further liquidation dividend under
Subsections (a)(7) and (8), the liquidating agent may accept the
statement of an amount due a claimant as shown on the
association's books and records instead of a formal proof of
claim filed on the claimant's behalf.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.304. NOTICE. (a) Under the commissioner's supervision,
the liquidating agent shall give notice to creditors and savings
account holders directing them to present and prove their claims
and requiring them to file a written proof of claim at the
address designated in the notice.
(b) The notice shall be published once a week for three
successive weeks in a newspaper of general circulation in each
county in which the association maintained an office or branch to
transact business on the date the association ceased unrestricted
operations.
(c) Not later than the 30th day after the date on which the
notice is first published, the liquidating agent shall mail a
similar notice to each depositor and creditor named in the books
of the association at the address shown in those books.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.305. PRESENTATION OF CLAIM. (a) To be entitled to
priority, each person asserting a claim against an association
being liquidated under this subchapter must present the claim in
writing to the commissioner or the liquidating agent at the
address designated in the notice under Section 66.304 before the
last day of the 18th month after the date the notice is first
published.
(b) The claim must:
(1) contain a statement of the facts on which the claim is
based;
(2) set out any right of payment priority or other specific
right asserted by the claimant; and
(3) be signed and sworn to by the claimant.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.306. PRIORITY OF CLAIMS. On liquidation of an
association, claims for payment have the following priority:
(1) obligations incurred by the commissioner or the liquidating
agent, fees and assessments due the Department of Savings and
Mortgage Lending, and expenses of liquidation, all of which may
be covered by the proper reserve of money;
(2) approved claims of creditors, to the extent that the claims
are secured by, or constitute a lien on, the assets or property
of the association;
(3) approved claims of depositors against the general
liquidating account of the association;
(4) approved claims of general creditors and the unsecured
portion of a creditor obligation described by Subdivision (2);
(5) otherwise approved claims that were not filed within the
time prescribed by Section 66.305;
(6) approved claims of subordinated creditors; and
(7) claims of shareholders of the association.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.032, eff. September 1, 2007.
Sec. 66.307. ACTION ON CLAIM. (a) Within three months after
the date of receipt of a claim against an association being
liquidated, the liquidating agent shall approve or reject the
claim in whole or in part, unless that period is extended by
written agreement with the claimant.
(b) A liquidating agent who approves the claim or a part of the
claim shall classify the claim and enter the claim and the action
taken in a claim register.
(c) A liquidating agent who rejects the claim in whole or in
part, or who denies a right of payment priority or any other
right asserted by the claimant, shall notify the claimant of the
action by registered mail.
(d) An approved claim presented after the declaration and
payment of any dividend and on or before the last day of the 18th
month after the date on which notice is first published under
Section 66.304 qualifies to participate in dividends previously
paid before an additional dividend is declared. A claim that was
not presented during that period does not qualify to participate
in a dividend or distribution of assets until all approved claims
filed during that period are fully paid.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.308. HEARING ON CLAIM; APPEAL OF ADVERSE DETERMINATION
OF CLAIM. (a) A claimant may appeal an adverse determination of
a claim by filing suit on the claim in a district court of Travis
County within three months after the date on which notice is
mailed under Section 66.307.
(b) The determination on a claim becomes final and is not
subject to review if suit is not filed in accordance with
Subsection (a).
(c) Review by a district court under Subsection (a) is by trial
de novo.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.309. PAYMENT OF FINAL DIVIDEND. (a) The liquidating
agent may not pay a final dividend before the first day of the
19th month after the date notice is first published under Section
66.304.
(b) The liquidating agent shall declare and pay a final dividend
after:
(1) the period provided by Subsection (a) expires; and
(2) the liquidating agent liquidates each asset of the
association capable of being liquidated or receives sufficient
money from the liquidation to:
(A) pay the costs of the liquidation;
(B) pay all claims that have been presented and established; and
(C) leave money available to pay all nonclaiming depositors and
creditors of the association.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.310. DEPOSIT OF MONEY BY LIQUIDATING AGENT. The
liquidating agent shall deposit all unclaimed dividends and all
money available for nonclaiming depositors and creditors in one
or more state-chartered financial institutions for the benefit of
the depositors and creditors entitled to the dividends or money.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.311. PAYMENT OF NONCLAIMING DEPOSITORS AND CREDITORS.
(a) Except as provided by Subsection (b), the liquidating agent,
on demand, shall pay a depositor or creditor of the association
who does not make a claim under Section 66.305 any amount held by
the liquidating agent for the benefit of the depositor or
creditor.
(b) If the liquidating agent has a doubt about the identity of a
claimant or the claimant's right to the money, the liquidating
agent shall reject the claim and notify the claimant by
registered mail.
(c) The liquidating agent's rejection of a claim becomes final
if the claimant does not file suit against the liquidating agent
to recover the money in a district court of Travis County within
three months after the date on which the notice is mailed.
(d) A suit under Subsection (c) is an action in rem. Judgment is
binding on all persons interested in the money.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.312. COST OF LIQUIDATION. (a) The commissioner shall
determine the cost of the liquidation.
(b) The cost of liquidation shall be paid from the association's
assets as the commissioner directs.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.313. FINAL REPORT. After paying a final dividend as
provided by Section 66.309 and performing any necessary or proper
action in liquidating the association's assets for the benefit of
the depositors and creditors of the association, the liquidating
agent shall file with the commissioner a final report of the
liquidation.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.314. CONTINUED EXISTENCE OF ASSOCIATION FOLLOWING
LIQUIDATION. For the purposes of adjusting and settling claims
not disposed of during the liquidation, the association continues
to exist until the third anniversary of the date the liquidation
order is issued.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.315. SPECIAL LIQUIDATING AGENT. At the completion of
the liquidation, the commissioner may appoint a special
liquidating agent if necessary to adjust and settle undisposed
claims.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.316. CLOSING OF LIQUIDATION; ORDER AND LIABILITY. (a)
The liquidating agent shall certify the completion of the
liquidation to the commissioner, who shall then issue an order
closing the liquidation.
(b) After the commissioner issues the order, the commissioner
and the liquidating agent are discharged from any further duty or
liability in connection with the administration of the
association's affairs.
(c) After the closing order, a person does not have a claim,
suit, or action against the commissioner or the liquidating
agent, individually or in an official capacity, except a suit to
recover an unclaimed deposit as provided by this subchapter.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.317. ADMINISTRATIVE PROCEDURE. The procedures for a
contested case hearing under Chapter 2001, Government Code, apply
to a hearing set by the commissioner under this subchapter.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER H. RECEIVERSHIP OF UNINSURED ASSOCIATIONS
Sec. 66.351. PLACEMENT OF CERTAIN ASSOCIATIONS IN RECEIVERSHIP.
(a) After a final liquidation order has been issued under
Subchapter F or G for an association the deposits of which are
not insured by the Federal Deposit Insurance Corporation or
another state or federal agency, the commissioner or liquidating
agent may apply to a district court of Travis County to appoint a
receiver for the association.
(b) The court shall appoint a receiver if the court finds
substantial evidence that:
(1) the commissioner has met all applicable requirements of
Subchapter F or G for issuing the liquidation order;
(2) service of the liquidation order has been completed as
provided by Section 66.106; and
(3) the order is a final unappealable order under Subchapter F
or G.
(c) The court shall appoint the liquidating agent appointed
during the liquidation of the association to serve as
transitional receiver during the first 60 days of the
receivership. The court may appoint a different receiver for the
remainder of the receivership.
(d) After the court appoints a receiver, liquidation of the
association under the supervision of the commissioner ends and
the receiver shall liquidate the association under the
supervision of the court.
(e) A receiver is governed by:
(1) Subchapter F, to the extent that subchapter is not
inconsistent with this section;
(2) Subchapter G, other than Sections 66.302 and 66.316, and to
the extent that subchapter is not inconsistent with this section;
and
(3) state law applicable to receiverships generally to the
extent the law is not inconsistent with this chapter.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.352. DUTIES OF RECEIVER. On appointment, the receiver
shall:
(1) immediately take charge of the affairs of the association,
subject to the direction of the court; and
(2) conduct the business of the association or act as necessary
to conserve the assets and protect the rights of the depositors
or creditors and shareholders and members of the association.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.353. COMPENSATION OF RECEIVER. The receiver is entitled
to compensation as determined by the court.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.354. EFFECT OF RECEIVERSHIP ON COMMISSIONER AND
LIQUIDATING AGENT. (a) On appointment of the receiver, the
commissioner and liquidating agent are discharged from further
duty in connection with the administration or regulation of the
affairs of the association and are not liable, individually or in
an official capacity, for an action or a failure to act while the
association was in liquidation under this chapter.
(b) The appointment or the action of a receiver under this
subchapter does not invalidate an authorized action taken by the
liquidating agent under Subchapter G. The prior action of the
liquidating agent is considered valid as if the action had been
approved by the court in the receivership proceedings.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.355. RECEIPT OF ITEMS AS EVIDENCE IN RECEIVERSHIP
PROCEEDING; CERTIFICATION. (a) A book, record, document, or
paper of the association received and held by the receiver during
the receivership proceeding or a certified copy of one of those
items, under the hand and official seal of the receiver, is
admissible as evidence in a case brought by or against the
receiver without additional evidence of authenticity except for a
certificate of the receiver stating that the item was received
from the custody of the association or found among the
association's effects.
(b) In a case brought by or against the receiver, the receiver
may:
(1) certify the correctness of a paper, document, or record of
the receiver's office, including an item described by Subsection
(a); and
(2) certify under seal of the receiver to a fact contained in
the paper, document, or record in evidence in a case in which the
original would be evidence.
(c) When admitted into evidence, the original or a certified
copy or part of an item described by Subsection (b) becomes prima
facie evidence of the facts disclosed in the item.
(d) This section applies to a case brought by or against the
liquidating agent before the appointment of a receiver as if the
case had been brought by or against the receiver.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.356. TITLE AND CUSTODY OF ASSOCIATION'S ASSETS. (a)
The property and assets of the association are in the custody of
the court from the date the receivership begins.
(b) The receiver and a receiver's successor in office have title
to all property, contracts, and rights of action of the
association, wherever located, beginning on the date the order
directing the receiver to take possession is entered. The title
of the receiver relates back to the date the liquidation of the
association begins unless the court provides otherwise.
(c) The filing or recording of the order in a record office of
the state has the same effect for notice purposes as a filed or
recorded deed, bill of sale, or other evidence of title.
(d) If the court considers it desirable to protect the assets of
the association, the court may require a bond from the receiver,
in an amount set by the court, to be paid from the association's
assets.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER I. MISCELLANEOUS PROVISIONS
Sec. 66.401. DERIVATIVE SUIT. (a) The commissioner may bring a
derivative suit on behalf of an association on an unpursued cause
of action if:
(1) the commissioner determines that the suit should be brought
to protect the public interest or the interest of the association
or the shareholders, members, or creditors of the association;
and
(2) the association has not brought suit on the action before
the 31st day after the date on which the commissioner gives
notice to the association that suit should be brought.
(b) Except as provided by another statute that provides for
mandatory venue, venue is in a district court of Travis County.
(c) The commissioner may employ legal counsel to bring and
prosecute a derivative suit. The commissioner may:
(1) pay the counsel from funds appropriated for the operation of
the Department of Savings and Mortgage Lending; or
(2) require the association for which the suit is brought to pay
the counsel directly or to reimburse the Department of Savings
and Mortgage Lending for the payment.
(d) The association shall be paid an amount equal to the amount
of the proceeds of a judgment on a suit brought under this
section less unreimbursed costs and expenses, including
attorney's fees, incurred by the Department of Savings and
Mortgage Lending in prosecuting the suit.
(e) In this section, "unpursued cause of action" means an
existing claim belonging to an association on which a suit or
other effective action has not been filed or taken by or on
behalf of the association on or before the last day of the sixth
month after the date on which the cause of action arose,
involving:
(1) a claim for monetary damages or recovery of property;
(2) a claim for equitable relief;
(3) a cause of action for breach of contract or for enforcement
of a contract; or
(4) a claim on a fidelity bond.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.033, eff. September 1, 2007.
Sec. 66.402. PAYMENT OF INSURED DEPOSIT LIABILITIES BY FDIC. If
the Federal Deposit Insurance Corporation pays the insured
deposit liabilities of an association that has been closed or is
being liquidated under this chapter, regardless of whether the
Federal Deposit Insurance Corporation has become receiver or
liquidating agent, the Federal Deposit Insurance Corporation is
subrogated, to the extent of the payment, to all rights that the
owners of the savings accounts or deposits have against the
association.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 66.403. ENFORCEABILITY OF LOAN PROMISE OR AGREEMENT MADE BY
ASSOCIATION BEFORE CONSERVATORSHIP OR SUPERVISORY CONTROL. If a
promise or agreement to lend money is not otherwise unenforceable
under Chapter 26, Business & Commerce Code, and if the
promise or agreement is made by the association before the
association is placed under conservatorship or supervisory
control, the promise or agreement or a memorandum of the promise
or agreement is enforceable against the association only if the
promise or agreement or memorandum:
(1) is in writing and states the material terms of the loan and
the loan's repayment;
(2) is signed by an authorized officer or employee of the
association and the person to whom the promise or agreement was
made; and
(3) is approved by the association's board.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.