CHAPTER 96. SUPERVISION AND REGULATION
FINANCE CODE
TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES
SUBTITLE C. SAVINGS BANKS
CHAPTER 96. SUPERVISION AND REGULATION
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 96.001. GENERAL DUTIES. The Department of Savings and
Mortgage Lending and the commissioner shall regulate savings
banks and subsidiaries of savings banks 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. 6.039, eff. September 1, 2007.
Sec. 96.002. ADOPTION OF RULES. (a) The finance commission may
adopt rules necessary to supervise and regulate savings banks and
to protect public investment in savings banks, including rules
relating to:
(1) the minimum amounts of capital required to incorporate and
operate as a savings bank, which may not be less than the amounts
required of corresponding national banks;
(2) 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;
(3) the books and records that a savings bank is required to
keep and the location at which the books and records are required
to be maintained;
(4) the accounting principles and practices that a savings bank
is required to observe;
(5) the conditions under which records may be copied or
reproduced for permanent storage before the originals are
destroyed;
(6) the form, content, and time of publication of statements of
condition;
(7) the form and content of annual reports and other reports
that a savings bank is required to prepare and publish or file;
(8) the manner in which assets, liabilities, and transactions in
general are to be described when entered in the books of a
savings bank, so that the entry accurately describes the subject
matter of the entry;
(9) 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 depreciation of or
overstated value of the asset;
(10) the change of control of a savings bank;
(11) the conduct, management, and operation of a savings bank;
(12) the withdrawable accounts, bonuses, plans, and contracts
for savings programs;
(13) the merger, consolidation, reorganization, conversion, and
liquidation of a savings bank;
(14) the establishment of an additional office or the change of
office location or name of a savings bank;
(15) the requirements for a savings bank's holding companies,
including those relating to:
(A) registration and periodic reporting of a holding company
with the commissioner; and
(B) transactions between a holding company, an affiliate of a
holding company, or a savings bank; and
(16) the powers of a savings bank to make loans and investments
that contain provisions reasonably necessary to ensure that a
loan made by a savings bank is consistent with sound lending
practices and that the savings bank's investment will promote the
purposes of this subtitle, including provisions governing:
(A) the type of loans and the conditions under which a savings
bank may originate, make, or sell loans;
(B) the conditions under which a savings bank may purchase or
participate in a loan made by another lender;
(C) the conditions for the servicing of a loan for another
lender;
(D) the conditions under which a savings bank may lend money on
the security of a loan made by another person;
(E) the conditions under which a savings bank may pledge loans
held by it as collateral for borrowing by the savings bank;
(F) the conditions under which a savings bank may invest in
securities and debt instruments;
(G) the documentation that a savings bank must have in its files
at the time of funding or purchase of a loan, an investment, or a
participation in a loan;
(H) the form and content of statements of expenses and fees and
other charges that are paid by a borrower or that a borrower is
obligated to pay;
(I) the title information that must be maintained;
(J) the borrower's insurance coverage of property securing a
loan;
(K) an appraisal report;
(L) the financial statement of a borrower;
(M) the fees or other compensation that may be paid to a person
in connection with obtaining a loan for a savings bank, including
an officer, director, employee, affiliated person, consultant, or
third party;
(N) the conditions under which the savings bank may advance
money to pay a tax, assessment, insurance premium, or other
similar charge for the protection of the savings bank's interest
in property securing the savings bank's loans;
(O) the terms under which a savings bank may acquire and deal in
real property;
(P) the valuation on a savings bank's books of real property
held by the savings bank;
(Q) the terms governing the investment by a savings bank in a
subsidiary, the powers that may be exercised by a subsidiary, and
the activities that may be engaged in by a subsidiary; and
(R) any other matter considered necessary to administer each
type of transaction.
(b) A savings bank or its subsidiary may not engage in a
transaction in violation of a rule adopted under this subtitle.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 2001, 77th Leg., ch. 867, Sec. 61, eff. Sept. 1,
2001.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.040, eff. September 1, 2007.
SUBCHAPTER B. EXAMINATIONS AND REPORTS
Sec. 96.051. ANNUAL AUDIT. (a) Not later than the 90th day
after the date its fiscal year closes, a savings bank shall
obtain an audit by an independent accounting firm that is a
member of the American Institute of Certified Public Accountants
or its successor.
(b) A copy of the audit and all correspondence reasonably
related to the audit shall be provided to the commissioner.
(c) The finance commission may adopt rules as necessary to
implement this section.
(d) An audit is not required if the savings bank:
(1) received at its most recent examination a composite rating
of 1 or 2 on the CAMEL financial institution rating scale; or
(2) had at the beginning of its current fiscal year consolidated
assets of $500 million or less.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by Acts 2001, 77th Leg., ch. 867, Sec. 62, eff. Sept. 1,
2001.
Sec. 96.053. REPORTS. (a) Before March 1 of each year, a
savings bank shall provide to the commissioner on a form to be
prescribed and furnished by the commissioner a written report of
its affairs and operations, including a complete statement of its
financial condition with a statement of income and expenses since
its last annual report under this section. The report must be
signed by the president, vice president, or secretary of the
savings bank.
(b) A savings bank shall make any other report the commissioner
may require. An additional report must be:
(1) signed in the same manner as the annual report;
(2) in the form the commissioner prescribes; and
(3) filed on the date the commissioner prescribes.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2005, 79th Leg., Ch.
1018, Sec. 5.19, eff. September 1, 2005.
Sec. 96.054. EXAMINATIONS. (a) The commissioner shall
periodically examine the affairs of each savings bank and its
subsidiaries and the transactions of any holding company that are
related to the savings bank subsidiaries of the holding company.
(b) An examination under this section may be performed in
conjunction with an examination by the Federal Deposit Insurance
Corporation or another federal depository institutions regulatory
agency having jurisdiction over a savings bank. The commissioner
may accept an examination made by an appropriate banking agency
as a substitute for an examination required by this section.
(c) On completion of a report, a copy of an examination
conducted under this section shall be furnished promptly to the
savings bank.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.055. ADDITIONAL EXAMINATIONS. (a) The commissioner at
the saving bank's cost may perform an additional examination or
audit or devote extraordinary attention to a savings bank's
affairs if the commissioner determines the conditions of the
savings bank justify the examination, audit, or attention.
(b) On completion of a report, a copy of an examination or audit
report conducted under this section shall be furnished promptly
to the savings bank.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.056. 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 a savings bank or a subsidiary or
holding company of a savings bank; and
(2) the books and records relating to a savings bank's business
kept by an officer, agent, or employee of the savings bank or the
subsidiary or holding company of the savings bank.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.057. 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 a savings bank or a
savings bank's subsidiary or holding company; 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 the 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. 96.101. INTERVENTION FOR VIOLATIONS AND UNSAFE AND UNSOUND
PRACTICES. (a) The commissioner may intervene in the affairs of
a savings bank if the savings bank or a person who participates
in the affairs of the savings bank or a subsidiary or holding
company of the savings bank:
(1) engages in or is about to engage in an unsafe and unsound
practice in conducting the affairs of the savings bank; or
(2) violates or is about to violate:
(A) the articles of incorporation or bylaws of the savings bank;
(B) a law or supervisory order applicable to the savings bank;
or
(C) a condition that the commissioner or the finance commission
has imposed on the savings bank by written order, directive, or
agreement.
(b) The commissioner may intervene in the affairs of a savings
bank if a person who participates in the affairs of the savings
bank or a subsidiary or holding company of the savings bank
violates or is about to violate an order or instruction of the
commissioner or a conservator or supervisor in charge of the
savings bank's affairs.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.102. INTERVENTION FOR FILING INAPPROPRIATE INFORMATION.
The commissioner may intervene in the affairs of a savings bank
if the savings bank or a person who participates in the affairs
of the savings bank or a subsidiary or holding company of the
savings bank files materially false or misleading information in
a filing required by Subchapter L, Chapter 92.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.103. INTERVENTION FOR ACTIVITY RESULTING IN ACTUAL OR
POTENTIAL FINANCIAL LOSS. (a) The commissioner may intervene in
the affairs of a savings bank if a person who participates in the
affairs of the savings bank or a subsidiary or holding company of
the savings bank commits or is about to commit:
(1) a fraudulent or criminal act in conducting the affairs that
may cause the savings bank or a subsidiary of the savings bank to
become or be in danger of becoming insolvent;
(2) an act that threatens immediate or irreparable harm to the
public or the savings bank, a subsidiary of the savings bank, or
the deposit account holders or creditors of the savings bank; or
(3) a breach of fiduciary duty that results in actual or
probable substantial financial losses or other damages to the
savings bank or a subsidiary of the savings bank or that would
seriously prejudice the interest of the deposit account holders
or holders of other security issued by the savings bank.
(b) The commissioner may intervene in the affairs of a savings
bank if the savings bank:
(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. 96.104. INTERVENTION RELATING TO EXAMINATION OF AFFAIRS.
(a) The commissioner may intervene in the affairs of a savings
bank if a person who participates in the affairs of the savings
bank or a subsidiary or holding company of the savings bank:
(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 savings bank'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 savings bank or a subsidiary or holding company of
the savings bank.
(b) The commissioner may intervene in the affairs of a savings
bank if the savings bank:
(1) fails to maintain books and records from which the true
financial condition of the savings bank or the state of the
savings bank's affairs can be determined; or
(2) refuses to direct a person having possession of the books,
papers, records, or accounts of the savings bank or the savings
bank's subsidiary to permit the commissioner or the
commissioner's representative to examine those documents or
accounts.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.105. TEMPORARY SUPERVISORY ORDER. (a) If the
commissioner has reasonable cause to believe that one or more
grounds for intervention under Sections 96.101-96.104 exist or
are 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 savings bank from further participating in
the affairs of the savings bank or another savings bank;
(3) an order requiring divestiture of control of a savings bank
obtained under Subchapter L, Chapter 92;
(4) an order requiring a person who participates in the affairs
of the savings bank or another savings bank to forfeit and pay an
administrative penalty in an amount of not more than $25,000; or
(5) an order placing the affairs of the savings bank under the
control of a conservator designated in the order, who may take
possession and control of the books, records, assets,
liabilities, and business of the savings bank and manage the
savings bank 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. 96.106. 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
savings bank receives the order.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.107. HEARING ON TEMPORARY SUPERVISORY ORDER; FINAL
ORDER. (a) A temporary supervisory order issued under Section
96.105 becomes final and unappealable on the 15th day after the
date on which it is issued unless before that day the savings
bank 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 hearing to be held not
earlier than the 10th 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.
(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 or a modified form that is consistent
with the facts found by the commissioner.
(d) The commissioner shall enter the final order not later than
the 15th day after the date on which the hearing is completed.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.041, eff. September 1, 2007.
Sec. 96.108. PLAN OF OPERATION OF SAVINGS BANK AFTER ORDER OF
TEMPORARY CONSERVATORSHIP. (a) Before or during a hearing under
Section 96.107 on a temporary supervisory order placing a savings
bank under the control of a conservator, the board of the savings
bank may present to the commissioner a plan to continue the
operation of the savings bank in a manner that will correct or
eliminate the grounds for the order.
(b) If the commissioner approves the plan or a modification of
the plan, the commissioner shall vacate the order and place the
savings bank 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. 96.109. ENFORCEMENT OF SUPERVISORY ORDER. (a) The
commissioner, after giving notice, may assess against a savings
bank 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 savings
bank 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. 96.110. 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. 96.111. DISCLOSURE OF INFORMATION IN SUPERVISORY ORDER;
CONFIDENTIALITY. (a) The commissioner shall report promptly to
the finance commission when a supervisory order is issued under
this chapter. The commissioner shall furnish information about a
savings bank or person as the finance commission may require in a
closed meeting. All information discussed in the closed meeting
is confidential.
(b) Except as provided by Subsection (c) or (d), information
contained in a temporary or final supervisory order or a notice,
correspondence, or other record relating to the order is
confidential.
(c) The commissioner, for good reason as determined by the
commissioner, may disclose the information described by
Subsection (b) in a hearing or judicial proceeding under Section
96.107, 96.109, or 96.110 or in a proceeding to assert a defense
under Section 96.403.
(d) The commissioner may disclose the information described by
Subsection (b) 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. 96.151. PLACEMENT OF SAVINGS BANK UNDER CONSERVATORSHIP.
If the commissioner does not approve a plan to continue the
operation of a savings bank under Section 96.108, the conservator
shall continue to manage the affairs of the savings bank 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. 96.152. 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 savings bank; and
(2) conduct the business and affairs of the savings bank.
(b) The conservator shall:
(1) remove the causes and conditions that made the
conservatorship necessary; and
(2) report to the commissioner as required by the commissioner.
(c) The conservator shall preserve, protect, and recover the
assets or property of the savings bank, including a claim or
cause of action that belongs to or may be asserted by the savings
bank. 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 savings bank 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. 96.153. 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. 96.154. TRANSFER OF MANAGEMENT OF REHABILITATED SAVINGS
BANK. If the savings bank is rehabilitated to the satisfaction
of the commissioner, the conservator shall return the management
of the savings bank to the savings bank's board under terms that
are reasonable and necessary to prevent a recurrence of the
conditions that created the need for conservatorship.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.155. SCOPE OF AUTHORITY OF OTHER PERSONS DURING
CONSERVATORSHIP. During the conservatorship, a person who
participates in the affairs of the savings bank 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. 96.156. LIMITING ORDER DURING CONSERVATORSHIP. (a) During
a conservatorship, the commissioner by order may impose
limitations on withdrawals from deposit accounts if the
commissioner determines that the interests of deposit account
holders and creditors of the savings bank are best protected by
the limitations.
(b) An order under this section:
(1) must detail the limitations imposed;
(2) must contain a reasonably detailed statement of the facts on
which the order is based; and
(3) becomes effective when served on the conservator.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.157. SERVICE OF LIMITING ORDER. (a) A limiting order
may be served by personal delivery by an agent of the
commissioner or by certified or registered mail.
(b) Service is complete when the conservator receives the order.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.158. EFFECT OF LIMITING ORDER. (a) Immediately after
receiving a limiting order, the conservator shall post a copy of
the order at the main entrance of the savings bank.
(b) A deposit account withdrawal that violates a limiting order
may not be permitted after the conservator posts the order.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.159. HEARING ON LIMITING ORDER; FINAL ORDER. (a) The
limiting order becomes final and unappealable on the 15th day
after the date on which the order is posted as provided by
Section 96.158 unless before that day at least 20 percent of the
total number of deposit account holders affected by the order
request a hearing before the commissioner to determine whether
the order should be vacated, made permanent, or modified.
(b) The commissioner shall set the hearing to be held not
earlier than the 10th 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.
(c) After the hearing, the commissioner may issue a final order
that vacates the limiting order or makes the limiting order
permanent in its original or a modified form 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. 6.042, eff. September 1, 2007.
Sec. 96.160. STAY OF LIMITING ORDER. (a) A limiting order may
not be stayed pending a hearing unless the commissioner orders a
stay.
(b) A final 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. 96.161. COST OF CONSERVATORSHIP. (a) The commissioner
shall determine the cost of the conservatorship.
(b) The cost of the conservatorship shall be paid from the
savings bank's assets as the commissioner directs.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.162. VENUE. A suit filed against a savings bank 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. 96.201. PLACEMENT OF SAVINGS BANK UNDER VOLUNTARY
SUPERVISORY CONTROL. (a) A savings bank's board may consent to
the commissioner's placement of the savings bank 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. 96.202. 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 savings bank's board of directors.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.203. COST OF SUPERVISORY CONTROL. The cost of the
supervisory control of a savings bank shall be set by the
commissioner and paid by the savings bank.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
SUBCHAPTER F. CLOSING
Sec. 96.251. CLOSING OF SAVINGS BANK BY BOARD RESOLUTION. A
savings bank's board, by resolution and with the commissioner's
consent, may close the savings bank and tender to the
commissioner for disposition as provided by this subchapter the
assets and all the affairs of the savings bank.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.252. CLOSING OF SAVINGS BANK BY COMMISSIONER'S ORDER.
The commissioner or the commissioner's representative may close a
savings bank if the commissioner determines after an examination
that:
(1) the interests of the deposit account holders and creditors
of the savings bank are jeopardized because of:
(A) the savings bank's insolvency or imminent insolvency; or
(B) a substantial dissipation of the savings bank's assets or
earnings because of a violation of a law or an unsafe or unsound
practice; and
(2) it is in the best interests of the deposit account holders
and creditors to close the savings bank and liquidate the savings
bank's assets.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.253. EFFECT OF CLOSING. (a) On closing a savings bank
under this subchapter, the commissioner may:
(1) liquidate the savings bank as provided by Subchapter G; or
(2) tender the savings bank's assets and all the savings bank'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 savings bank 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. 96.254. HEARING ON COMMISSIONER'S ORDER. (a) Not later
than the second day, excluding legal holidays, after the date on
which the commissioner closes a savings bank under Section
96.252, the savings bank, by resolution of its board, may sue in
a district court of Travis County to prohibit the commissioner
from taking further action under this subchapter.
(b) The court may restrain the commissioner from taking further
action until 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 savings bank
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 prohibiting or refusing to prohibit the
commissioner from proceeding under this subchapter.
(d) The commissioner, regardless of the judgment entered by the
court or any supersedeas bond filed, retains possession of the
savings bank'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. 96.301. LIQUIDATION OF SAVINGS BANK. (a) If the
commissioner doubts that a savings bank subject to a
conservatorship order can be rehabilitated, the commissioner may
close the savings bank as provided by Subchapter F or set a
hearing to determine whether the savings bank 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 savings bank and by publication in
a newspaper of general circulation in the county in which the
principal office of the savings bank is located.
(b) If the commissioner closes a savings bank or finds after a
hearing under Subsection (a) that the savings bank cannot be
rehabilitated and that it is in the public interest and the best
interests of the deposit account holders and creditors of the
savings bank that the bank be closed and its assets liquidated,
the commissioner by liquidation order may appoint a liquidating
agent and dissolve the savings bank.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.302. 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. 96.303. 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 savings bank;
(2) sell, enforce collection of, and liquidate the assets and
property of the savings bank;
(3) sue in the name of the liquidating agent or the savings
bank;
(4) defend an action brought against the liquidating agent or
the savings bank;
(5) receive, examine, and pass on a claim brought against the
savings bank, including a claim of a depositor;
(6) make distributions to and pay creditors, deposit account
holders, shareholders, and members of the savings bank 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
liquidating agent or that have been adjusted by a court;
(8) after the savings bank'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 for 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 savings
bank's books and records instead of a formal proof of claim on
the claimant's behalf.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.304. NOTICE. (a) Under the commissioner's supervision,
the liquidating agent shall give notice to creditors and deposit
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 savings bank maintained an office or branch
to transact business on the date the savings bank 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 savings bank at the address shown in those books.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.305. PRESENTATION OF CLAIM. (a) To be entitled to
priority, each person asserting a claim against a savings bank
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 96.304 on or
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 supporting the claim;
(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. 96.306. PRIORITY OF CLAIMS. When a savings bank is
liquidated, claims for payment have the same priority that
similar claims have when a federal savings bank is liquidated
under federal law.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.307. ACTION ON CLAIM. (a) Within three months after
the date of receipt of a claim against a savings bank 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 96.304 qualifies to participate in dividends previously
paid before an additional dividend is declared. A claim that is
presented after that period does not qualify to participate in a
dividend or distribution of assets until all approved claims
presented during the period are fully paid.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.308. 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 96.307.
(b) The determination on a claim becomes final on the expiration
of the period prescribed by Subsection (a) if suit is not filed
in accordance with that subsection.
(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. 96.309. 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
96.304.
(b) The liquidating agent shall declare and pay a final dividend
after:
(1) the prohibitory period prescribed by Subsection (a) expires;
and
(2) the liquidating agent liquidates each asset of the savings
bank capable of being liquidated or receives sufficient money
from the liquidation to:
(A) pay the costs of liquidation;
(B) pay all claims that have been presented and approved; and
(C) leave money available to pay all nonclaiming deposit account
holders and creditors of the savings bank.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.310. DEPOSIT OF MONEY BY LIQUIDATING AGENT. The
liquidating agent shall deposit all unclaimed dividends and all
money available for nonclaiming deposit account holders and
creditors in one or more state-chartered financial institutions
for the benefit of the deposit account holders and creditors
entitled to the dividends or money.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.311. PAYMENT OF NONCLAIMING DEPOSIT ACCOUNT HOLDERS AND
CREDITORS. (a) Except as provided by Subsection (b), the
liquidating agent, on demand, shall pay a deposit account holder
or creditor of the savings bank who does not make a claim under
Section 96.305 any amount held by the liquidating agent for the
benefit of the deposit account holder 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 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. 96.312. COST OF LIQUIDATION. (a) The commissioner shall
determine the cost of the liquidation.
(b) The cost of liquidation shall be paid from the savings
bank's assets as the commissioner directs.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.313. FINAL REPORT. After paying a final dividend as
provided by Section 96.309 and performing any necessary or proper
action in liquidating the savings bank's assets for the benefit
of the deposit account holders and creditors of the savings bank,
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. 96.314. CONTINUED EXISTENCE OF SAVINGS BANK FOLLOWING
LIQUIDATION. For the purpose of adjusting and settling claims
not disposed of during the liquidation, the savings bank
continues to exist until the third anniversary of the date on
which the liquidation order is issued.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.315. 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. 96.316. 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 closing order, the commissioner and the
liquidating agent are discharged from any further duty or
liability in connection with the administration of the savings
bank'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. 96.317. 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. CONFIDENTIALITY
Sec. 96.351. DISCLOSURE BY DEPARTMENT PROHIBITED. Except as
otherwise provided by this subtitle or a rule adopted under this
subtitle, the following are confidential and may not be disclosed
by the commissioner or an examiner, supervisor, conservator,
liquidator, inspector, deputy, or assistant clerk or other
employee of the Department of Savings and Mortgage Lending who is
appointed or acting under this subtitle:
(1) information, regardless of the circumstances under which the
information is obtained, regarding a financial institution or a
shareholder, participant, officer, director, manager, affiliate,
or service provider of a financial institution, other than
information in a public statement or the public portion of a call
report or profit and loss statement; and
(2) all related files and records of the department.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.043, eff. September 1, 2007.
Sec. 96.352. DISCLOSURE TO OTHER AGENCIES. This subchapter does
not prevent the proper exchange of information relating to
savings banks with a representative of a regulatory authority of
another state or any other department, agency, or instrumentality
of this or another state or the United States if the commissioner
determines the disclosure of the information 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.
Sec. 96.353. OTHER DISCLOSURE PROHIBITED. (a) Confidential
information that is provided to a financial institution or an
affiliate or service provider of a financial institution, whether
in the form of a report of examination or otherwise, is the
confidential property of the Department of Savings and Mortgage
Lending.
(b) The information may not be made public or disclosed by the
recipient or by an officer, director, manager, employee, or agent
of the recipient to a person not officially connected to the
recipient as officer, director, employee, attorney, auditor, or
independent auditor, except as authorized by a rule adopted under
this subchapter or by the commissioner's written approval.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.044, eff. September 1, 2007.
Sec. 96.354. CIVIL DISCOVERY. Discovery of confidential
information from a person subject to this subchapter under
subpoena or other legal process must comply with rules adopted
under this subtitle. The rules may:
(1) restrict release of confidential information to the portion
directly relevant to the legal dispute at issue; and
(2) require that a protective order, in the form and under
circumstances specified by the rules, be issued by a court before
release of the confidential information.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.355. INVESTIGATIVE INFORMATION. (a) Notwithstanding
any other law, the commissioner may refuse to release information
or records in the custody of the Department of Savings and
Mortgage Lending if the commissioner believes release of the
information or records might jeopardize an investigation of
possibly unlawful activities.
(b) Unless this subtitle provides otherwise, this subchapter
does not apply to any information or to a report of an
investigation obtained or made by the commissioner or the
commissioner's staff in connection with an application for
charter or with a hearing held by the commissioner under this
subtitle. The fact, information, or report may be included in the
record of the appropriate hearing.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.045, eff. September 1, 2007.
Sec. 96.356. EXAMINATION REPORT. Unless the commissioner
determines that a good reason exists to make the report public, a
report of an examination made to the commissioner is
confidential.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.357. REMOVAL FOR VIOLATION. A person who violates this
subchapter or who wilfully makes a false official report on the
condition of a financial institution shall be removed from office
or further employment with the Department of Savings and Mortgage
Lending.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.046, eff. September 1, 2007.
SUBCHAPTER I. MISCELLANEOUS PROVISIONS
Sec. 96.401. DERIVATIVE SUIT. (a) The commissioner may bring a
derivative suit on behalf of a savings bank 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 savings
bank or the shareholders, members, or creditors of the savings
bank; and
(2) the savings bank has not brought suit on the action before
the 30th day after the date on which the commissioner gives
notice to the savings bank 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 counsel from funds appropriated for the operation of the
Department of Savings and Mortgage Lending; or
(2) require the savings bank 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 savings bank 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 a savings bank on which a suit or
other effective action has not been filed or taken by or on
behalf of the savings bank 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. 6.047, eff. September 1, 2007.
Sec. 96.402. PAYMENT OF INSURED DEPOSIT LIABILITIES BY FDIC. If
the Federal Deposit Insurance Corporation pays the insured
deposit liabilities of a savings bank 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 deposit accounts have against the savings bank.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.403. ENFORCEABILITY OF LOAN PROMISE OR AGREEMENT MADE BY
SAVINGS BANK 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 savings bank before the
savings bank is placed under conservatorship or supervisory
control, the promise or agreement or a memorandum of the promise
or agreement is enforceable against the savings bank 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
savings bank and the person to whom the promise or agreement was
made; and
(3) is approved by the savings bank's board of directors.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 96.404. INTEREST IN SAVINGS BANK PROHIBITED FOR DEPARTMENT.
(a) A savings bank or a director, officer, employee, or
representative of a savings bank may not give a loan or gratuity,
directly or indirectly, to the commissioner, an employee of the
Department of Savings and Mortgage Lending, or a spouse of the
commissioner or employee.
(b) The commissioner or an employee of the Department of Savings
and Mortgage Lending may not:
(1) hold an office or position in a domestic savings bank or
exercise a right to vote on a domestic savings bank matter
because the person is a member of or shareholder in the savings
bank;
(2) hold an interest, directly or indirectly, in a domestic
savings bank; or
(3) undertake an indebtedness as a borrower, directly or
indirectly, or endorser, surety, or guarantor or sell or
otherwise dispose of a loan or investment to a domestic savings
bank.
(c) If the commissioner or an employee of the Department of
Savings and Mortgage Lending has a prohibited, direct or indirect
right or interest in a domestic savings bank at the time of
appointment or employment, the commissioner or employee shall
dispose of the right or interest not later than the 60th day
after the date of appointment or employment.
(d) If the commissioner or an employee of the Department of
Savings and Mortgage Lending is indebted as a borrower, directly
or indirectly, or is an endorser, surety, or guarantor on a note
to a domestic savings bank at the time of appointment or
employment, the commissioner or employee may continue in that
capacity until that debt is paid.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.048, eff. September 1, 2007.
Sec. 96.405. PERMITTED TRANSACTIONS FOR DEPARTMENT RELATING TO
SAVINGS BANK. (a) The commissioner or an employee of the
Department of Savings and Mortgage Lending may hold a deposit
account at a savings bank and receive earnings on the account.
(b) If a loan or other note of the commissioner or an employee
of the Department of Savings and Mortgage Lending is acquired by
a savings bank, the commissioner or employee may continue as a
borrower, endorser, surety, or guarantor of the loan or note
until the loan or note is paid.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 6.049, eff. September 1, 2007.