FINANCE CODE
CHAPTER 187. MULTISTATE TRUST BUSINESS
SUBCHAPTER A. GENERAL PROVISIONS
§ 187.001. DEFINITIONS. (a) In this chapter:
(1) "Acquire" means an act that results in direct or
indirect control by an out-of-state trust company of a state trust
institution, including an act that causes the company to:
(A) merge with the state trust institution;
(B) assume direct or indirect ownership of a
controlling interest in any class of voting shares of the state
trust institution; or
(C) assume direct ownership or control of all or
substantially all of the accounts of a state trust institution.
(2) "Bank" means:
(A) a state bank chartered under Chapter 32 or
the laws of another state;
(B) a national bank chartered under federal law;
or
(C) a foreign bank that is organized under the
laws of a territory of the United States, Puerto Rico, Guam,
American Samoa, or the Virgin Islands and that has its deposits
insured by the Federal Deposit Insurance Corporation.
(3) "Branch" has the meaning assigned by Section
31.002(a).
(4) "Credit union" means a credit union chartered
under Chapter 122, the laws of another state, or federal law.
(5) "De novo trust office" means a trust office
located in a host state that:
(A) is originally established by a trust company
as a trust office; and
(B) does not become a trust office of the trust
company as a result of an acquisition or conversion of another trust
institution.
(6) "Foreign bank" has the meaning assigned by Section
1(b)(7), International Banking Act (12 U.S.C. Section 3101(7)), as
amended.
(7) "Home state" means:
(A) with respect to a federally chartered trust
institution or a foreign bank, the state in which the institution
maintains its principal office; and
(B) with respect to another trust institution,
the state that chartered the institution.
(8) "Home state regulator" means the supervisory
agency with primary responsibility for chartering and supervising a
trust company.
(9) "Host state" means a state, other than the home
state of a trust company, or a foreign country in which the trust
company maintains or seeks to acquire or establish an office.
(10) "Office" means, with respect to a trust company,
the principal office, a trust office, or a representative trust
office.
(11) "Out-of-state trust company" means a trust
company:
(A) whose home state is another state; or
(B) that is chartered under the laws of a foreign
country.
(12) "Principal office" means:
(A) with respect to a state trust company, its
home office as defined by Section 181.002(a); and
(B) with respect to a bank, savings bank, savings
association, foreign bank, or out-of-state trust company, its main
office or principal place of business in the United States.
(13) "Representative trust office" means an office at
which a trust company has been authorized by the banking
commissioner to engage in activities other than acting as a
fiduciary as provided by Subchapter C.
(14) "Savings association" means a savings and loan
association chartered under Chapter 62, the laws of another state,
or federal law.
(15) "Savings bank" means a savings bank chartered
under Chapter 92, the laws of another state, or federal law.
(16) "State" means any state of the United States, the
District of Columbia, any territory of the United States, Puerto
Rico, Guam, American Samoa, the Trust Territory of the Pacific
Islands, the Virgin Islands, and the Northern Mariana Islands.
(17) "State trust institution" means a trust
institution whose home state is this state.
(18) "Supervisory agency" means:
(A) an agency of another state or a foreign
country with primary responsibility for chartering and supervising
a trust institution; and
(B) with respect to a federally chartered trust
institution or foreign bank, the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, the Board of
Governors of the Federal Reserve System, the Office of Thrift
Supervision, or the National Credit Union Administration, as
applicable.
(19) "Trust company" means a state trust company or a
company chartered under the laws of another state or a foreign
country to conduct a trust business that is not a bank, credit
union, savings association, savings bank, or foreign bank.
(20) "Trust institution" means a bank, credit union,
foreign bank, savings association, savings bank, or trust company
that is authorized by its charter to conduct a trust business.
(21) "Trust office" means an office, other than the
principal office, at which a trust company is licensed by the
banking commissioner to conduct a trust business.
(b) The definitions provided by Section 181.002(a) apply to
this chapter to the extent not inconsistent with this chapter.
(c) The definitions shall be liberally construed to
accomplish the purposes of this chapter.
(d) The finance commission by rule may adopt other
definitions to accomplish the purposes of this chapter.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.002. COMPANIES AUTHORIZED TO CONDUCT A TRUST
BUSINESS. (a) A company may not conduct a trust business in this
state unless the company is a trust institution and is:
(1) a state trust company chartered pursuant to this
subtitle;
(2) a bank, savings association, savings bank, or
credit union that maintains its principal office or a branch in this
state in accordance with governing law, or another office in this
state with the power to conduct a trust business to the extent
permitted by rule;
(3) a trust company chartered under the laws of
another state or a foreign country that has a trust office in this
state licensed by the banking commissioner pursuant to this
chapter; or
(4) a foreign bank with an office in this state that is
authorized to act as a fiduciary pursuant to Section 204.106.
(b) Notwithstanding Subsection (a), a trust institution
that does not maintain a principal office, branch, or trust office
in this state may act as a fiduciary in this state to the extent
permitted by Section 105A, Probate Code.
(c) A company does not engage in the trust business in this
state in a manner requiring a charter or license under this subtitle
by engaging in an activity identified in Section 182.021, except
that the registration requirements of Section 187.202 may apply to
a trust representative office engaging in the activity.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.003. INTERSTATE TRUST BUSINESS OF STATE TRUST
COMPANY. Subject to the approval of the banking commissioner
pursuant to Section 182. 203, a state trust company may engage in
the trust business in another state or a foreign country at a trust
office or a trust representative office to the extent permitted by
and subject to applicable laws of the state or foreign country.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.004. TRUST BUSINESS OF OUT-OF-STATE TRUST
COMPANY. (a) An out-of-state trust company that establishes or
maintains an office in this state under this chapter may conduct any
activity at the office that would be authorized under the laws of
this state for a state trust company to conduct at the office.
(b) Before establishing an office in this state, an
out-of-state trust company must comply with Section 201.102.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.005. DESIGNATION OF TRUSTEE AND GOVERNING
LAW. (a) Unless another law restricts the designation of
trustee, a person residing in this state may designate a trust
institution to act as a fiduciary on behalf of the person.
(b) Unless another law specifies governing law and except as
provided in Subsection (c), if a trust or its subject matter bears a
reasonable relation to this state and also to another state or a
foreign country, a trust institution and its affected client may
agree that the law of this state or of the other state or country
governs their rights and duties, including the law of a state or a
foreign country where the affected client resides or where the
trust institution has its principal office.
(c) Notwithstanding Subsection (b), a trust institution is
subject to Sections 113.052 and 113.053, Property Code, with
respect to a trust if the trust is established by a client that
resides in this state and is solicited from or accepted by an office
of the trust institution in this state.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.006. TAXATION. An out-of-state trust institution
doing business in this state is subject to the franchise tax to the
extent provided by Chapter 171, Tax Code.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.007. SEVERABILITY. The provisions of this
chapter or applications of those provisions are severable as
provided by Section 312.013, Government Code.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
SUBCHAPTER B. OUT-OF-STATE TRUST COMPANY TRUST OFFICE
§ 187.101. TRUST OFFICES IN THIS STATE. An out-of-state
trust company may engage in a trust business at an office in this
state only if it establishes and maintains a trust office in this
state as permitted by this subchapter.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.102. ESTABLISHING AN INTERSTATE TRUST
OFFICE. (a) An out-of-state trust company that does not operate a
trust office in this state may not establish and maintain a de novo
trust office in this state unless:
(1) a state trust company would be permitted to
establish a de novo trust office in the home state or foreign
country of the out-of-state trust company; and
(2) a bank whose home state is this state would be
permitted to establish a de novo branch in the home state or foreign
country of the out-of-state trust company.
(b) Subject to Subsection (a), a de novo trust office may be
established in this state under this section through the
acquisition of a trust office in this state of an existing trust
institution.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.103. ACQUIRING AN INTERSTATE TRUST
OFFICE. (a) An out-of-state trust company that does not operate a
trust office in this state and that meets the requirements of this
subchapter may acquire an existing trust institution in this state
and after the acquisition operate and maintain the acquired
institution as a trust office in this state, subject to Subchapter
A, Chapter 183, or Subchapter A, Chapter 33, if applicable. If the
institution to be acquired is a bank or a state savings bank,
Section 203.005 applies to the transaction.
(b) An out-of-state trust institution that does not operate
a trust office in this state may not establish and maintain a trust
office in this state through the acquisition of a trust office of an
existing trust institution except as provided by Section 187.102.
This section does not affect or prohibit a trust institution or
other person from chartering a state trust company pursuant to
Section 182.001.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.104. REQUIREMENT OF NOTICE. An out-of-state
trust company desiring to establish and maintain a de novo trust
office or acquire an existing trust institution in this state and to
operate and maintain the acquired institution as a trust office
pursuant to this subchapter shall provide written notice of the
proposed transaction to the banking commissioner on or after the
date on which the out-of-state trust company applies to the home
state regulator for approval to establish and maintain or acquire
the trust office. The filing of the notice shall be preceded or
accompanied by a copy of the resolution adopted by the board
authorizing the additional office and the filing fee, if any,
prescribed by law. The written notice must contain sufficient
information to enable an informed decision under Section 187.105.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.105. CONDITIONS FOR APPROVAL. (a) A trust
office of an out-of-state trust company may be acquired or
established in this state under this subchapter if:
(1) the out-of-state trust company confirms in writing
to the banking commissioner that while it maintains a trust office
in this state, it will comply with all applicable laws of this
state;
(2) the out-of-state trust company provides
satisfactory evidence to the banking commissioner of compliance
with Section 201.102 and the applicable requirements of its home
state regulator for acquiring or establishing and maintaining the
office;
(3) all filing fees have been paid as required by law;
and
(4) the banking commissioner finds that:
(A) applicable conditions of Section 187.102 or
187.103 have been met;
(B) if a state bank is being acquired, the
applicable requirements of Subchapter A, Chapter 33, and Section
203.005 have been met, or if a state trust company is being
acquired, the applicable requirements of Subchapter A, Chapter 183
have been met; and
(C) any conditions imposed by the banking
commissioner pursuant to Subsection (b) have been satisfied.
(b) The banking commissioner may condition approval of a
trust office on compliance by the out-of-state trust company with
any requirement applicable to formation of a state trust company
pursuant to Sections 182.003(b) and 182.007.
(c) If all requirements of Subsection (a) have been met, the
out-of-state trust company may commence business at the trust
office on the 61st day after the date the banking commissioner
notifies the company that the notice required by Section 187.104
has been accepted for filing, unless the banking commissioner
specifies an earlier or later date.
(d) The 60-day period of review may be extended by the
banking commissioner on a determination that the written notice
raises issues that require additional information or additional
time for analysis. If the period of review is extended, the
out-of-state trust company may establish the office only on prior
written approval by the banking commissioner.
(e) If all requirements of Subsection (a) have been met, the
banking commissioner may otherwise deny approval of the office if
the banking commissioner finds that the out-of-state trust company
lacks sufficient financial resources to undertake the proposed
expansion without adversely affecting its safety or soundness or
that the proposed office is contrary to the public interest. In
acting on the notice, the banking commissioner shall consider the
views of the appropriate supervisory agencies.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.106. ADDITIONAL TRUST OFFICES. An out-of-state
trust company that maintains a trust office in this state under this
subchapter may establish or acquire additional trust offices or
representative trust offices in this state to the same extent that a
state trust company may establish or acquire additional offices in
this state pursuant to the procedures for establishing or acquiring
the offices set forth in Section 182.203.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
SUBCHAPTER C. OUT-OF-STATE TRUST INSTITUTION REPRESENTATIVE TRUST
OFFICE
§ 187.201. REPRESENTATIVE TRUST OFFICE
BUSINESS. (a) An out-of-state trust institution may establish a
representative trust office as permitted by this subchapter to:
(1) solicit, but not accept, fiduciary appointments;
(2) act as a fiduciary in this state to the extent
permitted for a foreign corporate fiduciary by Section 105A,
Probate Code;
(3) perform ministerial duties with respect to
existing clients and accounts of the trust institution;
(4) engage in an activity permitted by Section
182.021; and
(5) to the extent the office is not acting as a
fiduciary:
(A) receive for safekeeping personal property of
every description;
(B) act as assignee, bailee, conservator,
custodian, escrow agent, registrar, receiver, or transfer agent;
and
(C) act as financial advisor, investment advisor
or manager, agent, or attorney-in-fact in any agreed capacity.
(b) Except as provided by Subsection (a), a trust
representative office may not act as a fiduciary or otherwise
engage in the trust business in this state.
(c) Subject to the requirements of this subchapter, an
out-of-state trust institution may establish and maintain
representative trust offices anywhere in this state.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.202. REGISTRATION OF REPRESENTATIVE TRUST
OFFICE. (a) Except as provided by Subsection (e) with respect to
a credit union, a savings association, or a savings bank, an
out-of-state trust institution that does not maintain a branch or
trust office in this state and that desires to establish or acquire
and maintain a representative trust office shall:
(1) file a notice on a form prescribed by the banking
commissioner, setting forth:
(A) the name of the out-of-state trust
institution;
(B) the location of the proposed office; and
(C) satisfactory evidence that the notificant is
a trust institution;
(2) pay the filing fee, if any, prescribed by law; and
(3) submit a copy of the resolution adopted by the
board authorizing the representative trust office and a copy of the
trust institution's registration filed with the secretary of state
pursuant to Section 201.102.
(b) The notificant may commence business at the
representative trust office on the 31st day after the date the
banking commissioner receives the notice unless the banking
commissioner specifies an earlier or later date.
(c) The 30-day period of review may be extended by the
banking commissioner on a determination that the written notice
raises issues that require additional information or additional
time for analysis. If the period of review is extended, the
out-of-state trust institution may establish the representative
trust office only on prior written approval by the banking
commissioner.
(d) The banking commissioner may deny approval of the
representative trust office if the banking commissioner finds that
the notificant lacks sufficient financial resources to undertake
the proposed expansion without adversely affecting its safety or
soundness or that the proposed office would be contrary to the
public interests. In acting on the notice, the banking
commissioner shall consider the views of the appropriate
supervisory agencies.
(e) A credit union, savings association, or savings bank
that does not maintain a branch in this state and desires to
establish or acquire and maintain a representative trust office
shall comply with this section, except that the notice required by
Subsection (a) must be filed with, and the duties and
responsibilities of the banking commissioner under Subsections
(b)-(d) shall be performed by:
(1) the Texas credit union commissioner, with respect
to a credit union; or
(2) the Texas savings and loan commissioner, with
respect to a savings association or savings bank.
(f) An out-of-state trust institution that fails to
register as required by this section is subject to Subchapter C,
Chapter 185.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
SUBCHAPTER D. SUPERVISION OF OUT-OF-STATE TRUST COMPANY
§ 187.301. COOPERATIVE AGREEMENTS; FEES. (a) To
carry out the purposes of this subtitle, the banking commissioner
may:
(1) enter into cooperative, coordinating, or
information sharing agreements with another supervisory agency or
an organization affiliated with or representing one or more
supervisory agencies;
(2) with respect to periodic examination or other
supervision or investigation, accept reports of examination or
investigation by, and reports submitted to, another supervisory
agency in lieu of conducting examinations or investigations or
receiving reports as might otherwise be required or permissible
under this subtitle;
(3) enter into contracts with another supervisory
agency having concurrent regulatory or supervisory jurisdiction to
engage the services of the agency for reasonable compensation to
assist with the banking commissioner's performance of official
duties under this subtitle or other law, or to provide services to
the agency for reasonable compensation in connection with the
agency's performance of official duties under law, except that
Chapter 2254, Government Code, does not apply to those contracts;
(4) enter into joint examinations or joint enforcement
actions with another supervisory agency having concurrent
regulatory or supervisory jurisdiction, except that the banking
commissioner may independently take action under Section 187.305 if
the banking commissioner determines that the action is necessary to
carry out the banking commissioner's responsibilities under this
subtitle or to enforce compliance with the laws of this state; and
(5) assess supervisory and examination fees to be paid
by an out-of-state trust company that maintains one or more offices
in this state in connection with the banking commissioner's
performance of duties under this subtitle.
(b) Supervisory or examination fees assessed by the banking
commissioner in accordance with this subtitle may be shared with
another supervisory agency or an organization affiliated with or
representing one or more supervisory agencies in accordance with an
agreement between the banking commissioner and the agency or
organization. The banking commissioner may also receive a portion
of supervisory or examination fees assessed by another supervisory
agency in accordance with an agreement between the banking
commissioner and the agency.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.302. EXAMINATIONS; PERIODIC REPORTS. (a) To
the extent consistent with Section 187.301, the banking
commissioner may make examinations of a trust office or trust
representative office established and maintained in this state by
an out-of-state trust company pursuant to this chapter as the
banking commissioner considers necessary to determine whether the
office is being operated in compliance with the laws of this state
and in accordance with safe and sound fiduciary practices.
Sections 181.104-181.106 apply to the examinations.
(b) The finance commission may by rule prescribe
requirements for periodic reports regarding a trust office or trust
representative office in this state. The required reports must be
provided by the trust institution maintaining the office.
Reporting requirements under this subsection must be appropriate
for the purpose of enabling the banking commissioner to discharge
the responsibilities of the banking commissioner under this
chapter.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.303. INTERPRETIVE STATEMENTS AND
OPINIONS. (a) Subject to Subsection (b), to encourage the
effective coordination and implementation of home state laws and
host state laws with respect to interstate trust business, the
banking commissioner, directly or through a deputy banking
commissioner or department attorney in the manner provided by
Sections 181. 101 and 181.102, and with the effect provided by
Section 181.103, may issue:
(1) an interpretive statement for the general guidance
of trust institutions in this state and the public; or
(2) an opinion interpreting or determining the
applicability of the laws of this state to the trust business and
the operation of a branch, trust office, or another office in this
state of an out-of-state trust institution, or in other states by
state trust companies.
(b) With respect to the trust business of a credit union,
savings association, or savings bank, the duties and
responsibilities of the banking commissioner under Subsection (a)
shall be performed by:
(1) the Texas credit union commissioner, with respect
to a credit union; or
(2) the Texas savings and loan commissioner, with
respect to a savings association or savings bank.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001. Amended by Acts 2001, 77th Leg., ch. 412, § 3.14, eff.
Sept. 1, 2001.
§ 187.304. CONFIDENTIAL INFORMATION. Information
obtained directly or indirectly by the banking commissioner
relative to the financial condition or business affairs of a trust
institution, other than the public portions of a report of
condition or income statement, or a present, former, or prospective
shareholder, participant, officer, director, manager, affiliate,
or service provider of the trust institution, whether obtained
through application, examination, or otherwise, and each related
file or record of the department is confidential and may not be
disclosed by the banking commissioner or an employee of the
department except as expressly provided by Subchapter D, Chapter
181.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.305. ENFORCEMENT; APPEALS. (a) If the banking
commissioner determines that an out-of-state trust company has
violated this subtitle or other applicable law of this state, the
banking commissioner may take all enforcement actions the banking
commissioner would be empowered to take if the out-of-state trust
company were a state trust company, except that the banking
commissioner shall promptly give notice to the home state regulator
of each enforcement action to be taken against an out-of-state
trust company and, to the extent practicable, shall consult and
cooperate with the home state regulator in pursuing and resolving
the enforcement action. An out-of-state trust company may appeal a
final order or other decision of the banking commissioner under
this subtitle as provided by Sections 181.202-181. 204.
(b) Notwithstanding Subsection (a), the banking
commissioner may enforce this subtitle against a trust institution
by appropriate action in the courts, including an action for
injunctive relief, if the banking commissioner concludes the action
is necessary or desirable.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
§ 187.306. NOTICE OF SUBSEQUENT EVENT. Each
out-of-state trust company that has established and maintains an
office in this state pursuant to this subtitle shall give written
notice, at least 30 days before the effective date of the event, or,
in the case of an emergency transaction, a shorter period before the
effective date consistent with applicable state or federal law, to
the banking commissioner of:
(1) a merger or other transaction that would cause a
change of control with respect to the trust company, with the result
that an application would be required to be filed with the home
state regulator or a federal supervisory agency;
(2) a transfer of all or substantially all of the trust
accounts or trust assets of the out-of-state trust company to
another person; or
(3) the closing or disposition of an office in this
state.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.001(a), eff. Sept.
1, 2001.
