FINANCE CODE
CHAPTER 96. SUPERVISION AND REGULATION
SUBCHAPTER A. GENERAL PROVISIONS
§ 96.001. GENERAL DUTIES. The Savings and Loan
Department and the commissioner shall regulate savings banks and
subsidiaries of savings banks operating under this subtitle.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 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
Savings and Loan Department 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, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 867, § 61, eff. Sept. 1, 2001.
SUBCHAPTER B. EXAMINATIONS AND REPORTS
§ 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, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 867, § 62, eff. Sept. 1, 2001.
§ 96.052. STATEMENT OF FINANCIAL CONDITION. (a) In
January of each year, a savings bank shall prepare and publish in a
newspaper of general circulation in the county in which the home
office of the savings bank is located a statement of its financial
condition as of the last business day of the preceding year.
(b) The statement must be in the form prescribed or approved
by the commissioner.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 96.053. REPORTS. (a) Before February 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
SUBCHAPTER C. SUPERVISORY INTERVENTION
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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
Savings and Loan Department.
(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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
SUBCHAPTER D. CONSERVATORSHIP
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 96.153. TERM OF CONSERVATOR. The conservator shall
serve until the purposes of the conservatorship are accomplished.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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
Savings and Loan Department.
(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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
SUBCHAPTER E. VOLUNTARY SUPERVISORY CONTROL
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
SUBCHAPTER F. CLOSING
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
SUBCHAPTER G. LIQUIDATION
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
SUBCHAPTER H. CONFIDENTIALITY
§ 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 Savings and Loan Department 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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
Savings and Loan Department.
(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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 96.355. INVESTIGATIVE
INFORMATION. (a) Notwithstanding any other law, the commissioner
may refuse to release information or records in the custody of the
Savings and Loan Department 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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 Savings and Loan Department.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
SUBCHAPTER I. MISCELLANEOUS PROVISIONS
§ 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 Savings and Loan Department; or
(2) require the savings bank for which the suit is
brought to pay the counsel directly or to reimburse the Savings and
Loan Department 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 Savings and Loan Department 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1997.
§ 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
Savings and Loan Department, or a spouse of the commissioner or
employee.
(b) The commissioner or an employee of the Savings and Loan
Department 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 Savings and
Loan Department 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 Savings and
Loan Department 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, § 1, eff. Sept. 1, 1997.
§ 96.405. PERMITTED TRANSACTIONS FOR DEPARTMENT
RELATING TO SAVINGS BANK. (a) The commissioner or an employee of
the Savings and Loan Department 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 Savings and Loan Department 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, § 1, eff. Sept. 1, 1997.
