FINANCE CODE
TITLE 2. FINANCIAL REGULATORY AGENCIES
CHAPTER 11. FINANCE COMMISSION OF TEXAS
SUBCHAPTER A. GENERAL PROVISIONS
§ 11.001. DEFINITIONS. (a) The definitions provided
by Section 31.002 apply to this chapter.
(b) In this chapter, "finance agency" means:
(1) the Texas Department of Banking;
(2) the Savings and Loan Department; or
(3) the Office of Consumer Credit Commissioner.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 867, § 1, eff. Sept. 1, 2001.
§ 11.002. PURPOSE OF COMMISSION; STRATEGIC
PLAN. (a) The finance commission is responsible for overseeing
and coordinating the Texas Department of Banking, the Savings and
Loan Department, and the Office of Consumer Credit Commissioner and
serves as the primary point of accountability for ensuring that
state depository and lending institutions function as a system,
considering the broad scope of the financial services industry.
The finance commission is the policy-making body for those finance
agencies and is not a separate state agency. The finance commission
shall carry out its functions in a manner that protects consumer
interests, maintains a safe and sound banking system, and increases
the economic prosperity of the state.
(b) The finance commission shall prepare and periodically
update a strategic plan for coordination of the state financial
system. Each finance agency shall cooperate in preparation of the
plan.
Added by Acts 2001, 77th Leg., ch. 867, § 2, eff. Sept. 1, 2001.
SUBCHAPTER B. COMPOSITION AND OPERATION
§ 11.101. APPOINTMENT; TERMS; OATH. (a) The Finance
Commission of Texas is composed of nine members appointed by the
governor with the advice and consent of the senate.
(b) Members of the finance commission serve staggered terms
of six years with the terms of one-third of the members expiring
February 1 of each even-numbered year.
(c) An appointment to the finance commission must be made
without regard to the race, color, age, sex, religion, disability,
or national origin of the appointee.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 11.102. QUALIFICATIONS OF MEMBERS. (a) A member of
the finance commission must be a registered voter of this state.
Not more than two members may be residents of the same state
senatorial district.
(b) One member of the finance commission must be a banking
executive, one member of the finance commission must be a savings
executive, one member of the finance commission must be a consumer
credit executive, and one member of the finance commission must be a
mortgage broker.
(c) Five members of the finance commission must be
representatives of the general public. At least one of those
members must be a certified public accountant.
(d) A person may not be a public member of the finance
commission if the person or the person's spouse:
(1) is registered, certified, or licensed by a
regulatory agency in an industry regulated by a finance agency;
(2) is employed by or participates in the management
of a business entity or other organization regulated by or
receiving money from a finance agency;
(3) owns or controls, directly or indirectly, more
than a 10 percent interest in a business entity or other
organization regulated by or receiving money from a finance agency;
or
(4) uses or receives a substantial amount of tangible
goods, services, or money from a finance agency other than
compensation or reimbursement authorized by law for finance
commission membership, attendance, or expenses.
(e) For the purposes of this section:
(1) "Banking executive" means a person who:
(A) has had five years' or more executive
experience in a bank during the seven-year period preceding the
person's appointment; and
(B) is an officer of a state bank.
(2) "Savings executive" means a person who:
(A) has had five years' or more executive
experience in a savings association or savings bank during the
seven-year period preceding the person's appointment; and
(B) is an officer of a state savings association
or savings bank.
(3) "Consumer credit executive" means a person who:
(A) has had five years' or more executive
experience in an entity regulated by the consumer credit
commissioner during the seven-year period preceding the person's
appointment; and
(B) is an officer of an entity regulated by the
consumer credit commissioner.
(4) "Mortgage broker" means a person who:
(A) has had five years' or more experience as a
mortgage broker, as defined by Section 156.002, during the
seven-year period preceding the person's appointment; and
(B) is a mortgage broker, as defined by Section
156.002.
(f) Experience as banking commissioner, deputy banking
commissioner, examiner, or supervisor of examiners for a state or
federal banking regulatory agency is considered executive
experience in a bank for the purposes of Subsection (e)(1)(A).
Experience as savings and loan commissioner, deputy savings and
loan commissioner, examiner, or supervisor of examiners for a state
or federal savings and loan regulatory agency is considered
executive experience in a savings association or savings bank for
the purposes of Subsection (e)(2)(A).
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 867, § 3, eff. Sept. 1, 2001.
§ 11.1021. CONFLICT OF INTEREST. (a) In this section,
"Texas trade association" means a cooperative and voluntarily
joined association of business or professional competitors in this
state designed to assist its members and its industry or profession
in dealing with mutual business or professional problems and in
promoting their common interest.
(b) A person may not be a member of the finance commission
if:
(1) the person is an officer, employee, or paid
consultant of a Texas trade association in an industry regulated by
a finance agency; or
(2) the person's spouse is an officer, manager, or paid
consultant of a Texas trade association in an industry regulated by
a finance agency.
(c) A person may not be a member of the finance commission if
the person is required to register as a lobbyist under Chapter 305,
Government Code, because of the person's activities for
compensation on behalf of a profession related to the operation of a
finance agency.
Added by Acts 2001, 77th Leg., ch. 867, § 4, eff. Sept. 1, 2001.
§ 11.103. REMOVAL OF MEMBERS. (a) It is a ground for
removal from the finance commission that a member:
(1) does not have at the time of taking office the
qualifications required by Section 11.102;
(2) does not maintain during service on the finance
commission the qualifications required by Section 11.102;
(3) is ineligible for membership under Section 11.102
or 11.1021;
(4) cannot, because of illness or disability,
discharge the member's duties for a substantial part of the member's
term; or
(5) is absent from more than half of the regularly
scheduled finance commission meetings that the member is eligible
to attend during a calendar year without an excuse approved by a
majority vote of the finance commission.
(b) If the banking commissioner, savings and loan
commissioner, or consumer credit commissioner has knowledge that a
potential ground for removal exists, the banking commissioner,
savings and loan commissioner, or consumer credit commissioner
shall notify the presiding officer of the finance commission of the
potential ground. The presiding officer shall then notify the
governor and the attorney general that a potential ground for
removal exists. If the potential ground for removal involves the
presiding officer, the banking commissioner, savings and loan
commissioner, or consumer credit commissioner shall notify the next
highest ranking officer of the finance commission, who shall then
notify the governor and the attorney general that a potential
ground for removal exists.
(c) The validity of an action of the finance commission is
not affected by the fact that it was taken when a ground for removal
of a member of the finance commission existed.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 867, § 5, eff. Sept. 1, 2001.
§ 11.104. EXPENSES AND COMPENSATION OF MEMBERS. A
member of the finance commission is entitled to:
(1) the reimbursement for reasonable and necessary
expenses incidental to travel incurred in connection with the
performance of official duties; and
(2) a per diem as set by legislative appropriation for
each day that the member engages in the business of the finance
commission.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 11.105. MATTER IN WHICH MEMBER HAS PERSONAL
INTEREST. A member of the finance commission may not act or
participate in the portion of a commission meeting during which the
matter considered specifically relates to an entity:
(1) of which the member or the member's spouse is an
officer, director, stockholder, shareholder, manager, participant,
participant-transferee, or owner; or
(2) in which the member or the member's spouse has
another financial interest.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 11.106. MEETINGS. (a) The finance commission shall
hold at least six regular public meetings during each calendar year
on dates set by the commission.
(b) The presiding officer or three members of the finance
commission may call a special public meeting of the commission.
(c) The finance commission may hold an open or closed
special meeting by telephone conference call if:
(1) immediate action is required;
(2) the convening at one location of a quorum of the
finance commission is difficult or impossible;
(3) notice is given for the meeting as for other
meetings;
(4) the notice specifies a location for the meeting at
which the public may attend;
(5) each part of the meeting that is required to be
open to the public is audible to the public at the location
specified in the notice of the meeting; and
(6) the meeting is tape-recorded and the tape
recording of each portion of the meeting that is required to be open
to the public is made available to the public.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 11.107. PRESIDING OFFICER. (a) The governor shall
appoint a member of the finance commission as presiding officer of
the commission. The presiding officer serves at the will of the
governor.
(b) The presiding officer shall preside at and provide for
the keeping of minutes of each public meeting of the finance
commission.
(c) The presiding officer may:
(1) adopt rules and procedures as the presiding
officer considers necessary for the orderly operation of the
finance commission and for communication among the finance
commission, the department, the Savings and Loan Department, and
the Office of Consumer Credit Commissioner;
(2) adopt internal procedures governing the time and
place of meetings, the type of notice for special public meetings,
the manner in which public meetings are to be conducted, and other
similar matters; and
(3) appoint committees composed of finance commission
members as the presiding officer considers necessary to carry out
the commission's business.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 11.108. SUNSET PROVISION. The finance commission is
subject to Chapter 325, Government Code (Texas Sunset Act). Unless
continued in existence as provided by that chapter, the commission
is abolished September 1, 2013.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 867, § 6, eff. Sept. 1, 2001.
§ 11.109. STANDARDS OF CONDUCT. The presiding officer
of the finance commission or the presiding officer's designee shall
provide to members of the finance commission, as often as
necessary, information regarding the requirements for office under
this title, including information regarding a person's
responsibilities under applicable laws relating to standards of
conduct for state officers.
Added by Acts 2001, 77th Leg., ch. 867, § 7, eff. Sept. 1, 2001.
§ 11.110. TRAINING. (a) A person who is appointed to
and qualifies for office as a member of the finance commission may
not vote, deliberate, or be counted as a member in attendance at a
meeting of the finance commission until the person completes a
training program that complies with this section.
(b) The training program must provide the person with
information regarding:
(1) the legislation that created the finance agencies
and the finance commission;
(2) the programs operated by the finance agencies;
(3) the role and functions of the finance agencies;
(4) the rules of the finance commission with an
emphasis on the rules that relate to disciplinary and investigatory
authority;
(5) the current budget for the finance agencies;
(6) the results of the most recent formal audit of the
finance agencies;
(7) the requirements of:
(A) the open meetings law, Chapter 551,
Government Code;
(B) the public information law, Chapter 552,
Government Code;
(C) the administrative procedure law, Chapter
2001, Government Code; and
(D) other laws relating to public officials,
including conflict-of-interest laws; and
(8) any applicable ethics policies adopted by the
finance commission or the Texas Ethics Commission.
(c) A person appointed to the finance commission is entitled
to reimbursement, as provided by the General Appropriations Act,
for the travel expenses incurred in attending the training program
regardless of whether the attendance at the program occurs before
or after the person qualifies for office.
Added by Acts 2001, 77th Leg., ch. 867, § 7, eff. Sept. 1, 2001.
§ 11.111. SEPARATION OF FUNCTIONS. The finance
commission shall develop and implement policies that clearly
separate the policymaking responsibilities of the finance
commission and the management responsibilities of the banking
commissioner, savings and loan commissioner, and consumer credit
commissioner and staff of the finance agencies.
Added by Acts 2001, 77th Leg., ch. 867, § 7, eff. Sept. 1, 2001.
§ 11.112. PUBLIC TESTIMONY. The finance commission
shall develop and implement policies that provide the public with a
reasonable opportunity to appear before the finance commission and
to speak on any issue under the jurisdiction of the finance
agencies.
Added by Acts 2001, 77th Leg., ch. 867, § 7, eff. Sept. 1, 2001.
SUBCHAPTER C. STAFF AND EXPENSES
§ 11.202. HEARINGS OFFICER AND AUDITOR. (a) The
finance commission shall direct a finance agency to employ an
internal auditor to provide services to and facilitate commission
oversight and control over the finance agencies.
(b) The Texas Department of Banking may employ a hearings
officer to serve the finance agencies as determined by interagency
agreement. For the purposes of Section 2003.021, Government Code,
a hearings officer employed under this section is considered to be
an employee of each agency for which hearing services are provided.
The hearings officer's only duty is to preside over matters related
to contested cases before a finance agency or the finance
commission.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 867, § 8, eff. Sept. 1, 2001.
§ 11.203. LIMITATION ON DIRECTION OF AUDITOR. The
internal auditor reports to the finance commission and is not
subject to direction by the employing finance agency.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 867, § 9, eff. Sept. 1, 2001.
§ 11.204. SHARING OF STAFF, EQUIPMENT, AND FACILITIES;
ALLOCATION OF COSTS. (a) The finance commission shall use the
staff, equipment, and facilities of the finance agencies to the
extent necessary to carry out the finance commission's duties. To
reduce administrative costs, the finance agencies shall share
staff, equipment, and facilities to the extent that the sharing
contributes to cost efficiency without detracting from the staff
expertise needed for individual areas of agency responsibility.
(b) An interagency agreement must provide that the cost of
staff used by the finance commission, including the internal
auditor, is to be charged to the finance agencies in proportion to
the amount of time devoted to each agency's business. All other
costs of operation of the finance commission are to be shared by and
included in the budgets of the finance agencies in proportion to the
amount of cash receipts of each of those agencies.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 867, § 10, eff. Sept. 1, 2001.
SUBCHAPTER D. POWERS AND DUTIES
§ 11.301. BANKING RULES. The finance commission may
adopt banking rules as provided by Section 31.003.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 11.302. SAVINGS ASSOCIATION AND SAVINGS BANK
RULES. (a) The finance commission may adopt rules applicable to
state savings associations or to savings banks and may authorize
state savings associations and savings banks to invest money of
state savings associations or savings banks in any manner permitted
for a federal savings association or federal savings bank domiciled
in this state. This subsection does not authorize the finance
commission to diminish or limit a right or power specifically given
to state savings associations or savings banks by state law.
(b) The finance commission may adopt rules to:
(1) prevent state savings associations or savings
banks from concentrating an excessive or unreasonable portion of
the resources of state savings associations or savings banks in a
type or character of loan or security authorized by Subtitle B or C,
Title 3; and
(2) establish standards for investments by state
savings associations or savings banks, including limits on the
amount that a state savings association or savings bank may invest
in a type or character of investment to an amount or percentage of
the savings association's or savings bank's assets or net worth.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 11.303. DISCLOSURE OF CERTAIN INFORMATION TO FINANCE
COMMISSION PROHIBITED. Information regarding the financial
condition of a state savings association or savings bank obtained
through examination or otherwise may not be disclosed to a member of
the finance commission, except that the savings and loan
commissioner may disclose to the finance commission a file or
record pertinent to a hearing or matter pending before the
commission.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 11.304. CONSUMER CREDIT RULES. The finance
commission may adopt rules necessary to supervise the consumer
credit commissioner and ensure compliance with Chapter 14 and Title
4.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 11.305. RESEARCH. (a) The finance commission shall
instruct the consumer credit commissioner to establish a program to
address alternatives to high-cost lending in this state. The
program shall:
(1) study and report on the problem of high-cost
lending, including without limitation the availability, quality,
and prices of financial services, including lending and depository
services, offered in this state to agricultural businesses, small
businesses, and individual consumers in this state;
(2) evaluate alternatives to high-cost lending and the
practices of business entities in this state that provide financial
services to agricultural businesses, small businesses, and
individual consumers in this state;
(3) develop models to provide lower-cost alternatives
to assist borrowers who contract for high-cost loans; and
(4) track the location of lenders who enter into loan
contracts providing for an interest charge authorized by Section
342.201, map the location of the lenders by senatorial district and
by any other appropriate areas, provide other demographic
information relating to the loans and the location of the lenders,
and provide information on the changes in the distribution of the
lenders from 1997 through the date of the report.
(b) The program may:
(1) apply for and receive public and private grants
and gifts to conduct the research authorized by this section;
(2) contract with public and private entities to carry
out studies and analyses under this section;
(3) provide funding for pilot programs; and
(4) make grants to nonprofit institutions working to
provide alternatives to high-cost loans.
(c) Not later than December 1 of each year, the consumer
credit commissioner shall provide to the legislature a report
detailing its findings and making recommendations to improve the
availability, quality, and prices of financial services.
(d) The Texas Department of Banking and the Savings and Loan
Department shall jointly conduct a continuing review of the
condition of the state banking system. The review must include a
review of all available national and state economic forecasts and
an analysis of changing banking practices and new banking
legislation. Periodically the departments shall submit a report to
the finance commission on the results of the review, including
information relating to the condition of the state banking system
at the time of the report and the predicted condition of that system
in the future.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 867, § 11, eff. Sept. 1, 2001; Acts
2001, 77th Leg., ch. 916, § 7, eff. Sept. 1, 2001; Acts 2003,
78th Leg., ch. 211, § 2.03(c), eff. June 16, 2003.
§ 11.3055. FINANCIAL SERVICES STUDY. (a) The finance
commission may assign the banking commissioner, savings and loan
commissioner, or consumer credit commissioner to conduct research
on:
(1) the availability, quality, and prices of financial
services, including lending and depository services, offered in
this state to agricultural businesses, small businesses, and
individual consumers in this state; and
(2) the practices of business entities in this state
that provide financial services to agricultural businesses, small
businesses, and individual consumers in this state.
(b) The banking commissioner, savings and loan
commissioner, or consumer credit commissioner may:
(1) apply for and receive public and private grants
and gifts to conduct the research authorized by this section; and
(2) contract with public and private entities to carry
out studies and analyses under this section.
Renumbered from V.T.C.A., Finance Code § 11.305(a), (b) and
amended by Acts 2003, 78th Leg., ch. 211, § 2.03(c), eff. June
16, 2003.
§ 11.306. MORTGAGE BROKER RULES. The finance
commission may adopt mortgage broker rules as provided by Chapter
156.
Added by Acts 1999, 76th Leg., ch. 1254, § 1, eff. Sept. 1, 1999.
Amended by Acts 2001, 77th Leg., ch. 867, § 12, eff. Sept. 1,
2001.
§ 11.307. RULES RELATING TO CONSUMER
COMPLAINTS. (a) The finance commission shall adopt rules
applicable to each entity regulated by the Texas Department of
Banking or the Savings and Loan Department specifying the manner in
which the entity provides consumers with information on how to file
complaints with the appropriate agency.
(b) The finance commission shall adopt rules applicable to
each entity regulated by a finance agency requiring the entity to
include information on how to file complaints with the appropriate
agency in each privacy notice that the entity is required to provide
consumers under law, including Pub. L. No. 106-102.
Added by Acts 2001, 77th Leg., ch. 867, § 13, eff. Sept. 1, 2001.
§ 11.308. INTERPRETATION OF HOME EQUITY LENDING
LAW. The finance commission may, on request of an interested
person or on its own motion, issue interpretations of Sections
50(a)(5)-(7), (e)-(p), (t), and (u), Article XVI, Texas
Constitution. An interpretation under this section is subject to
Chapter 2001, Government Code, and is applicable to all lenders
authorized to make extensions of credit under Section 50(a)(6),
Article XVI, Texas Constitution, except lenders regulated by the
Credit Union Commission. The finance commission and the Credit
Union Commission shall attempt to adopt interpretations that are as
consistent as feasible or shall state justification for any
inconsistency.
Acts 2003, 78th Leg., ch. 1207, § 1.
