TITLE 7. BANKING AND SECURITIES

DIVISION 1. GENERAL PROVISIONS

7 TAC §§75.101, 75.102, 75.108

Statutory Authority

This proposal is made under the authority of: Government Code §2001.004(1), requiring a state agency to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; and Finance Code: §11.302, authorizing the commission to adopt rules applicable savings banks; and §96.002(a), authorizing the commission to adopt rules necessary to supervise and regulate Texas-chartered savings banks and to protect public investment in Texas-chartered savings banks. §75.101 and §75.102 are also proposed under the authority of, and to implement, Finance Code §96.002(a)(2). §75.102 is also proposed under the authority of Finance Code §16.003(c). §75.102 is also proposed under the authority of, and to implement, Finance Code: §91.007; §92.051(a)(2); §92.063; §93.004(b); and §97.001.

This proposal affects the statutes in Finance Code Title 3, Subtitle C.

§ 75.101. Application Filing Requirements.

(a) Purpose [and Applicability]. This division establishes procedural and other requirements for applications filed with SML [Applications submitted to the Department must comply with the requirements of this section].

(b) Application Forms. All applications must be made on the current form for the application prescribed by SML [the Commissioner].

(c) Incomplete Filings; Notice of Acceptance; Deemed Withdrawal. An application is complete only if all required information and supporting documentation is included and all required fees are received. Within 30 days of receipt of an application SML [the Commissioner or the Commissioner's designee] will issue a written notice to the applicant informing them either that the application is complete and accepted for filing, or that the application is incomplete and specifying the information required to render the application complete. The application may be deemed withdrawn and the applicable fee forfeited if, within 30 days after [of] being notified the application is [was] incomplete, the applicant fails to provide [to the Department] the supplemental information or supporting documentation [necessary] to render the application complete.

(d) Duty to Supplement. The applicant must [has a continuing obligation and duty to] supplement the application with any other information or supporting documentation requested by SML [the Commissioner] in writing. The applicant must provide any information or supporting documentation submitted in connection with any related application made to the [appropriate] federal banking agency, to the extent not previously provided to SML [the Department].

(e) Duty to Amend. If a material change occurs in the [facts contained in or] information provided [furnished] in support of the application, the applicant must [file an amended application or otherwise] supplement the application to address the material change. The applicant must endeavor to resolve any potential changes or amendments to the application prior to publishing public notice of the application as provided by §75.103 of this title (relating to Public Notice of Application). The Commissioner may, in his or her sole discretion, require the applicant to republish the public notice.

§ 75.102. Application Fees and Charges.

(a) Filing Fees. An applicant must pay the following filing fees, unless an expedited filing fee applies (see subsection (b) of this section):

(1) (No change.)

(2) Office Locations.

(A) Branch office [(other than a mobile facility)]: $1,500.

(B) Mobile facility: $500, plus $100 for each community [location] where the mobile facility will operate [is to be conducting banking business for purposes of §75.132 of this title (relating to Mobile Facility)].

(C) Relocate home or additional [branch] office: $500.

(3) - (6) (No change.)

(7) Investment in subsidiaries.

(A) - (D) (No change.)

(E) Relocate home or additional [branch] office: $100.

(b) Filing Fees for Expedited Applications. An applicant qualifying for expedited treatment under [for purposes of] §75.152 of this title [chapter] (relating to Expedited Applications) must pay the following filing fees in lieu of the filing fee required by subsection (a) of this section:

(1) - (2) (No change.)

(3) Relocate home or additional office [location]: $250.

(4) - (5) (No change.)

(c) Reimbursement for Costs. In addition to filing fees established in subsections (a) and (b) of this section, the applicant must reimburse SML [the Department] for any costs incurred in connection with investigating or conducting a hearing on the application, including travel expenses.

(d) - (e) (No change.)

§ 75.108. Federal Only Applications.

If a savings bank or its holding company is required to file an application with a federal banking agency but is not required to file a similar application with SML, the savings bank must notify the Commissioner of the application and provide:

(1) a written statement of the purpose for the application;

(2) a true and correct copy of the application filed with the federal banking agency; and

(3) all supporting information provided to the federal banking agency in connection with the application.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 22, 2026.

TRD-202602512

Iain A. Berry

General Counsel

Department of Savings and Mortgage Lending

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 475-1535

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DIVISION 2. CHARTER APPLICATIONS AND AMENDMENTS

7 TAC §§75.121 - 75.123

Statutory Authority

This proposal is made under the authority of: Government Code §2001.004(1), requiring a state agency to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; and Finance Code: §11.302, authorizing the commission to adopt rules applicable savings banks; and §96.002(a), authorizing the commission to adopt rules necessary to supervise and regulate Texas-chartered savings banks and to protect public investment in Texas-chartered savings banks. §75.121 is also proposed under the authority of, and to implement, Finance Code: Chapter 92, Subchapter B; §92.203; §92.601(b); and §96.002(a)(1), (2) and (14). §75.122 is also proposed under the authority of, and to implement, Finance Code: §92.063; and §96.002(a)(2) and (14).

This proposal affects the statutes in Finance Code Title 3, Subtitle C.

§ 75.121. Savings Bank Charter.

(a) (No change.)

(b) Identification of Home Office; Definition of Community; Temporary Office Location. The proposed location for the home office must be specifically identified so as to exactly locate it within the community to be served. The term "community" as used in the Finance Code §92.058 means the geographical area surrounding the proposed location of the home office within which persons would be reasonably anticipated to patronize the proposed office in the ordinary course of their business. The Commissioner may approve the opening and operation of a temporary home office location for an approved charter, provided that such office is within a one-mile [the 1/2-mile] radius of the permanent home office approved in the charter. If a temporary home office location is approved, the savings bank must promptly cease operations at such office upon the permanent home office being constructed or rendered fit for occupancy, but in any event no later than 18 months from the date the charter was approved, unless extended in writing by the Commissioner.

(c) Managing Officer. The proposed managing officer(s) must have sufficient banking experience, ability, standing, competence, trustworthiness, and integrity to justify a reasonable belief that, under the management and supervision of the managing officer(s), the savings bank will operate in compliance with applicable law and that success of the savings bank is probable.

(d) [(c)] Capital Requirements. No application to incorporate a savings bank will be approved unless the Commissioner determines the proposed savings bank has received subscriptions for capital stock and paid-in surplus in the case of a capital stock savings bank, or pledges for savings liability and expense fund in the case of a mutual savings bank, in an amount not less than the greater of the amount required to obtain insurance of deposit accounts by the FDIC or the amount required of a national bank. No savings bank with an approved charter may open or do business as a savings bank until the Commissioner certifies that the Commissioner has received satisfactory proof that the amounts of capital stock and additional paid-in capital, or the savings liability and expense fund, as set forth in this section, have been received by the savings bank in cash, free of encumbrance.

(e) [(d)] Public Notice. A charter application is deemed to be a complete application for purposes of Finance Code §92.057 at the time SML [the Department] notifies the applicant that the application is complete and has been accepted for filing as provided by §75.101 of this title (relating to Application Filing Requirements). Upon receipt of such notice, the proposed incorporators must publish a public notice of the charter application as provided by §75.103 of this title (relating to Public Notice of Application), which must be published in the county where the proposed savings bank will have its home office. Such notice, when properly effected, is deemed to be the Commissioner's public notice of the application for purposes of Finance Code §92.057.

(f) [(e)] Request for Hearing; Deadline to Protest. A person may protest or otherwise request a hearing on the application as provided by Finance Code §92.057. Any person desiring to protest the application or otherwise requesting a hearing on the application must file a written protest with SML [the Department] within 10 days from the date the public notice was made as provided by subsection (e) [(d)] of this section, otherwise, any right or opportunity to protest or have a hearing on the application under Finance Code §92.057 is deemed waived.

(g) [(f)] Hearing. If a charter application is protested or a hearing on the application is otherwise requested, the Commissioner will set a hearing on the application within 60 days after the date the protest or request for hearing and the required fee are received. The hearing is governed by the procedural requirements concerning contested cases set forth in Chapter 9 of this title (relating to Rules of Procedure for Contested Case Hearings, Appeals, and Rulemakings).

(h) [(g)] Time of Decision. To the extent a hearing on the charter application is required, the Commissioner will render a decision within 30 days after the date the hearings officer issues his or her proposal for decision and the applicable time period for filing exceptions to the proposal for decision and replies to such exceptions has lapsed without the hearings officer amending the proposal for decision. Only then will the hearing be deemed to have ended for purposes of Finance Code §92.058. If a hearing on the charter application is not required, the Commissioner will render a decision within 30 days after the time period for protesting or requesting a hearing on the application lapsed as provided by Finance Code §92.057.

§ 75.122. Change of Name; Assumed Names.

(a) Approval Required. A savings bank may not change its name without first filing an application and obtaining the prior written approval of the Commissioner, and a savings bank may not do business [operate] under any name which has not been approved by the Commissioner [in writing].

(b) Public Notice. The [An] applicant [seeking to change its name] must publish a public notice of the application as provided by §75.103 of this title (relating to Public Notice of Application), which must be published in the county where the savings bank has its home office.

(c) Request for Hearing; Deadline to Protest. A person affected by the proposed name change may protest or otherwise request a hearing on the change of name application as provided by Finance Code §92.063. Any person affected by the proposed name change and desiring to protest the application or otherwise requesting a hearing on the application must file a written protest with SML [the Department] within 10 days from the date the public notice was made as provided by subsection (b) of this section, otherwise, any right or opportunity to protest or have a hearing on the application under Finance Code §92.063 is deemed waived.

(d) - (f) (No change.)

(g) Assumed Names. A savings bank seeking to do business under an assumed name must file an Assumed Name Certificate with the Texas Secretary of State and provide SML with a file-stamped copy. An assumed name is deemed approved by the Commissioner on receipt of the file-stamped certificate. A savings bank must register the assumed name and obtain similar approval in any other state or territory where the savings bank does business with the assumed name and provide evidence of such to the Commissioner.

§ 75.123. Certificate of Formation or Bylaws Amendments.

(a) Approval Required. A savings bank may not amend its certificate of formation, bylaws, or other governing documents without first filing an application and obtaining the prior written approval of the Commissioner.

(b) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 22, 2026.

TRD-202602513

Iain A. Berry

General Counsel

Department of Savings and Mortgage Lending

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 475-1535

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DIVISION 3. OFFICE LOCATIONS

7 TAC §75.131, §75.133

Statutory Authority

This proposal is made under the authority of: Government Code §2001.004(1), requiring a state agency to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; and Finance Code: §11.302, authorizing the commission to adopt rules applicable savings banks; and §96.002(a), authorizing the commission to adopt rules necessary to supervise and regulate Texas-chartered savings banks and to protect public investment in Texas-chartered savings banks. This proposal is also made under the authority of, and to implement, Finance Code: §92.063; and §96.002(a)(2) and (14).

This proposal affects the statutes in Finance Code Title 3, Subtitle C.

§ 75.131. Additional Office (Branch Office and Mobile Facility).

(a) Approval Required. A savings bank may not establish [a branch office or] an additional office as provided by §75.202 of this title (relating to Types of Additional Offices) without first filing an application and obtaining the prior written approval of the Commissioner. The application must include: [A branch office application is required if a state savings bank would like to establish and operate a courier/messenger service pursuant to §75.202 of this title (relating to Types of Additional Offices).]

(1) a statement of intent to establish the office;

(2) the exact location of the proposed site including street address. (For a mobile facility, specify the communities in which the vehicle will operate and the manner in which it will be used);

(3) a summary of the due diligence performed to determine the utility and viability of the office; and

(4) any other information deemed appropriate by the Commissioner.

[(b) Required Information. The application must provide the following information, subscribed to and sworn before a notary:]

[(1) proposed location for the office;]

[(2) the personnel and office facilities to be provided;]

[(3) the estimated cost and projected profits of such office; and]

[(4) any information deemed necessary by the Commissioner to render a determination on the matters set forth in subsection (c) of this section.]

[(c) Determination by Commissioner. The Commissioner will not approve the application unless the Commissioner determines that:]

[(1) the operation and condition of the savings bank affords no basis for supervisory objection;]

[(2) the character, responsibility and general fitness of the current management of the savings bank warrant a belief that the branch office will be operated in accordance with the Texas Savings Bank Act; and]

[(3) the financial effect of establishing and operating the proposed office will not adversely affect the safe and sound operation of the savings bank.]

[(d) Commencement of Operations. The branch office must commence operations within a period of 12 months after the date of approval unless the Commissioner grants a written extension. No more than one 12-month extension will be approved by the Commissioner, unless good cause for such extension is shown. At the end of any approved extension, if the office has not been opened, the approval for such office is deemed revoked and a new application must be made.]

[(e) Identification of Branch Office; Definition of Community. The proposed location for the branch office must be specifically identified so as to exactly locate it within the community to be served. The term "community" as used in Finance Code §92.060 means the geographical area surrounding the proposed location of the branch office within which persons would be reasonably anticipated to patronize the proposed office in the ordinary course of their business.]

(b) [(f)] Public Notice. The [An] applicant [seeking to establish a branch office] must publish a public notice of the application as provided by §75.103 of this title (relating to Public Notice of Application), which must be published [both] in the county where the proposed [branch] office will [is to] be located [and in the county where the savings bank has its home office].

(c) [(g)] Request for Hearing; Deadline to Protest. A person affected by the proposed [branch] office may protest or otherwise request a hearing [on the branch office application] as provided by Finance Code §92.063. Any person affected by the proposed [establishment of a branch] office and desiring to protest the application or otherwise request a hearing on the application must file a written protest with SML [within the Department] within 10 days from the date the public notice was made as provided by subsection (b) [(f)] of this section, otherwise any right or opportunity to protest or have a hearing on the application under Finance Code §92.063 is deemed waived.

(d) Persons Affected by an Additional Office. A person is affected by an additional office for purposes of Finance Code §92.063 only if the proposed office, if approved, would unduly harm an existing savings bank or federal savings bank doing business in the community where the proposed office will be located. A person requesting a hearing must provide information in support of their request indicating they are a savings bank or federal savings bank that will be unduly harmed by the proposed additional office. The Commissioner will review the request for hearing and determine, in his or her sole discretion, if the person might be affected so as to require a hearing.

(e) [(h)] Hearing. If a hearing is required, the Commissioner will set a hearing on the application within 60 days after the date the protest or request for hearing and the required fee are received. The hearing is governed by the procedural requirements concerning contested cases set forth in Chapter 9 of this title (relating to Rules of Procedure for Contested Case Hearings, Appeals, and Rulemakings).

(f) [(i)] Time of Decision. To the extent a hearing on the application is required, the Commissioner will render a decision within 30 days after the date the hearings officer issues his or her proposal for decision and the applicable time period for filing exceptions to the proposal for decision and replies to such exceptions has lapsed without the hearings officer amending the proposal for decision. If a hearing on the application is not required, the Commissioner will render a decision within 30 days after the time period for protesting or requesting a hearing on the application lapsed as provided by subsection (c) [(g)] of this section.

(g) [(j)] Offices in Other States or Territories. To the extent permitted by the laws of the state or territory in question, and subject to the requirements of this chapter, a savings bank may establish [branch] offices in any state or territory of the United States. Each application for permission to establish such [a branch] office must comply with the requirements of this section, and must include evidence of approval by [a certified copy of an order from] the appropriate banking agency approving the office or unit, or other evidence satisfactory to the Commissioner that all state or territorial regulatory requirements have been satisfied. The Commissioner will not approve the application unless the Commissioner determines that all requirements of this chapter applicable to the office have been met, and that all applicable requirements of the laws of the state or territory in question have been met.

(h) Deadline to Open. The office must open for business within 24 months after the date of approval, unless the Commissioner grants an extension in writing. If the office fails to open for business within this period, approval for the office is deemed revoked.

§ 75.133. Relocate Home or Additional Office.

(a) Approval Required. A savings bank may not move its home office or any additional office as provided by §75.202 of this title (relating to Types of Additional Offices) beyond its immediate vicinity without first filing an application and obtaining the prior written approval of the Commissioner. The application must include:

(1) a statement of intent to relocate the office;

(2) the exact location of the proposed site including street address. (For a mobile facility, specify the communities in which the vehicle will operate and the manner in which it will be used);

(3) a summary of the due diligence performed to determine the utility and viability of the office; and

(4) any other information deemed appropriate by the Commissioner.

[(b) Immediate Vicinity. The term "Immediate vicinity" as used in Finance Code §92.063 means the area within a radius of 1 mile from the present location of such office. However, if the office to be relocated has not been open for business at its present location for more than 2 years, approval in accordance with this section is required as if the office were not within the immediate vicinity. If the existing office has been open for more than 2 years, prior written notice must be provided to the Commissioner describing the saving bank's plans for the relocation, including the precise location for the new office, the date of the relocation, and information supporting that the new location of the office will be within the immediate vicinity of the present location and does not require the Commissioner's approval.]

[(c) Relocation of Existing Offices. Notwithstanding subsection (a) of this section, a savings bank may retain its existing home office as a branch office and relocate its home office to another established branch office by providing the Commissioner with prior written notice. Upon such notification, the establishment of such office is deemed to be an approved branch office of the savings bank.]

[(d) Required Information. Each application for prior approval, or prior written notice, whichever is applicable, must provide the following information, subscribed to and sworn before a notary:]

[(1) the addresses of the existing or new office location;]

[(2) a description of the land and building to be built or leased and terms thereof;]

[(3) estimates of the cost of removal to and maintenance of the new location;]

[(4) whether any affiliated parties are involved in transactions regarding the purchase, sale, construction, or lease of the new proposed office;]

[(5) evidence of the board's approval of the relocation; and]

[(6) any other information deemed necessary by the Commissioner.]

[(e) Determination by Commissioner. The Commissioner will not approve the application unless the Commissioner determines that all requirements for approval of a branch office (§75.131 of this title, relating to Branch Office) have been met.]

(b) [(f)] Public Notice. The [An] applicant [seeking to change the location of the home or an additional office] must publish a public notice of the application as provided by §75.103 of this title (relating to Public Notice of Application), which must be published in the county where the office is presently located[,] and the county where the proposed new location is located[, and the county where the savings bank has its home office].

(c) [(g)] Request for Hearing; Deadline to Protest. A person affected by the proposed change in home or additional office location may protest or otherwise request a hearing on the application, as provided by Finance Code §92.063. Any person affected by the proposed change in home or branch office location and desiring to protest the application or otherwise requesting a hearing on the application must file a written protest with SML [the Department] within 10 days from the date the public notice was made as provided by subsection (b) [(f)] of this section, otherwise any right or opportunity to protest or have a hearing on the application under Finance Code §92.063 is deemed waived.

(d) Persons Affected by the Relocation. A person is affected by the relocation of a home or additional office for purposes of Finance Code §92.063 only if the proposed relocation, if approved, would unduly harm an existing savings bank or federal savings bank doing business in the community where the office will be relocated. A person requesting a hearing must provide information in support of their request indicating they are a savings bank or federal savings bank that will be unduly harmed by the relocated office. The Commissioner will review the request and determine, in his or her sole discretion, if the person might be affected so as to require a hearing.

(e) [(h)] Hearing. If a hearing is required, the Commissioner will set a hearing on the application within 60 days after the date the protest or request for hearing and the required fee are received. The hearing is governed by the procedural requirements concerning contested cases set forth in Chapter 9 of this title (relating to Rules of Procedure for Contested Case Hearings, Appeals, and Rulemakings).

(f) [(i)] Time of Decision. To the extent a hearing on the application is required, the Commissioner will render a decision within 30 days after the date the hearings officer issues his or her proposal or decision and the applicable time period for filing exceptions to the proposal for decision and replies to such exceptions has lapsed without the hearings officer amending the proposal for decision. If a hearing on the application is not required, the Commissioner will render a decision within 30 days after the time period for protesting or requesting a hearing on the application lapsed as provided by subsection (c) [(g)] of this section.

(g) Immediate Vicinity. The term "immediate vicinity" as used in Finance Code §92.063 means the area within a one-mile radius from the present location of such office. A savings bank seeking to relocate an office within the immediate vicinity must give prior written notice to the Commissioner describing the saving bank's plans for the relocation, including the effective date of the relocation, and information showing that the new location of the office will be within the immediate vicinity of the present location and does not require approval.

(h) Relocation of Existing Offices. Notwithstanding subsection (a) of this section, a savings bank may retain its existing home office as a branch office and relocate its home office to an existing branch office by giving prior written notice to the Commissioner, including the effective date of the relocation. Upon such notification, the establishment of such offices is deemed approved by the Commissioner.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 22, 2026.

TRD-202602514

Iain A. Berry

General Counsel

Department of Savings and Mortgage Lending

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 475-1535

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7 TAC §75.132

Statutory Authority

This proposal is made under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable savings banks; and §96.002(a), authorizing the commission to adopt rules necessary to supervise and regulate Texas-chartered savings banks and to protect public investment in Texas-chartered savings banks.

This proposal affects the statutes in Finance Code Title 3, Subtitle C.

§ 75.132. Mobile Facility.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 22, 2026.

TRD-202602515

Iain A. Berry

General Counsel

Department of Savings and Mortgage Lending

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 475-1535

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DIVISION 4. REORGANIZATION, MERGER, CONSOLIDATION, CONVERSION, AND PURCHASE[,] AND ASSUMPTION AND ACQUISITION

7 TAC §§75.141 - 75.143, 75.145

Statutory Authority

This proposal is made under the authority of: Government Code §2001.004(1), requiring a state agency to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; and Finance Code: §11.302, authorizing the commission to adopt rules applicable savings banks; and §96.002(a), authorizing the commission to adopt rules necessary to supervise and regulate Texas-chartered savings banks and to protect public investment in Texas-chartered savings banks. §75.141 and §75.142 are also proposed under the authority of, and to implement, Finance Code: Chapter 92, Subchapters C, H, and I; and §96.002(a)(2) and (13). §75.143 is also proposed under the authority of, and to implement, Finance Code: Chapter 92, Subchapter F; and §96.002(a)(2) and (13). §75.145 is also proposed under the authority of, and to implement, Finance Code: §92.052; and §96.002(a)(2) and (13).

This proposal affects the statutes in Finance Code Title 3, Subtitle C.

§ 75.141. Reorganization, Merger, Consolidation , or Purchase and Assumption Transaction - Resulting in a Savings Bank.

(a) Applicability. This section governs:

(1) (No change.)

(2) A purchase and assumption transaction by a savings bank as purchaser, including the purchase of assets from an entity that is not a financial institution. A savings bank must apply for and obtain approval for a purchase and assumption transaction if the purchase price is greater than three times the saving bank's unimpaired capital and surplus, or if the purchase involves potentially substantial risks to safety and soundness.

(b) (No change.)

(c) Plan Required. Any savings bank seeking to reorganize, merge, and/or consolidate or to engage in a purchase and assumption transaction in which the resulting institution will be a savings bank must do so pursuant to a plan adopted by the board and filed with the Commissioner as a part of an application for approval. [Purchase and assumption transactions include purchases of assets, deposit accounts, or other liabilities in bulk not made in the ordinary course of business.]

(d) - (e) (No change.)

(f) Request for Hearing; Deadline to Protest. Any interested person desiring to protest the plan and application or otherwise request a hearing on the plan and application must file a written protest with SML [the Department] within 10 days from the date the public notice was made as provided by subsection (e) of this section, otherwise any right or opportunity to protest or have a hearing on the application under Finance Code §92.352 is deemed waived.

(g) - (h) (No change.)

(i) Transactions Involving Financial Institutions in Other States or Territories. To the extent permitted by the laws of the state or territory in question, and subject to the requirements of this section, a savings bank may acquire, by merger or purchase of stock, a financial institution incorporated under the laws of another state or territory. Each such application must include evidence of approval by [a certified copy of an order from] the appropriate banking agency [state regulatory authority approving the merger or acquisition], or other evidence satisfactory to the Commissioner that all state or territorial regulatory requirements have been satisfied. The Commissioner will not approve such an application unless the Commissioner determines that all requirements of this section have been met, and all applicable requirements of the laws of the state or territory in question have been met.

§ 75.142. Exemption for Supervisory Merger.

(a) (No change.)

(b) For purposes of this section, unsafe condition means that the savings bank is (or savings banks are) insolvent or in imminent danger of insolvency, or that there has been a substantial dissipation of assets or earnings due to any violation(s) of applicable law, rules, or regulations, or to any unsafe or unsound practice or practices; or that the savings bank is in an unsafe and unsound condition to transact business in that there has been a substantial reduction of its capital; or that the savings bank and its directors and officers have violated any material conditions of its charter or bylaws, the terms of any order issued by the Commissioner, or any agreement between the savings bank and the Commissioner; or that the savings bank, its directors, and officers have concealed or refused to permit examination of the books, papers, accounts, records, and affairs, of the savings bank by the Commissioner or other duly authorized personnel of SML [the Department]; or any other condition affecting the savings bank which the Commissioner and the board agree place the savings bank in an unsafe condition.

(c) (No change.)

§ 75.143. Reorganization, Merger, or Conversion by a Savings Bank to Another Financial Institution Charter.

(a) - (c) (No change.)

(d) The Commissioner is deemed to have consented to the reorganization, merger or conversion into another type of financial institution charter at the time SML [the Department] notifies the savings bank that the filing made in accordance with this section is complete and has been accepted for filing as provided by §75.101 of this title (relating to Application Filing Requirements). Upon compliance with the provisions of this section and the granting of a successor charter by the appropriate banking agency, a copy of which must be filed with SML [the Commissioner], the savings bank receiving the new charter ceases to exist as a savings bank and will no longer be subject to the jurisdiction of the Commissioner. The foregoing notwithstanding, SML [the Commissioner] must receive the original charter certificate or a certified affidavit of lost certificate in order to be released from the requirement to pay annual assessments as provided by §75.251 of this title (relating to Annual Assessments.)

§ 75.145. Mutual to Stock Conversion.

(a) A savings bank may not convert from a mutual savings bank to a stock savings bank without first filing an application and obtaining the prior written approval of the Commissioner. The application for mutual to stock conversion must include:

(1) - (3) (No change.)

(b) - (c) (No change.)

(d) Public Notice. An application for mutual to stock conversion is deemed to be a complete application at the time SML [the Department] notifies the applicant that application is complete and has been accepted for filing as provided by §75.101 of this title (relating to Application Filing Requirements). Upon receipt of such notice, the proposed incorporators must publish a public notice of the application as provided by §75.103 of this title (relating to Public Notice of Application), which must be published in each county in which the savings bank has an office, and must prominently post the notice in each of its offices where it conducts business with customers in person.

(e) - (j) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 22, 2026.

TRD-202602516

Iain A. Berry

General Counsel

Department of Savings and Mortgage Lending

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 475-1535

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DIVISION 5. EXPEDITED APPLICATIONS

7 TAC §75.151, §75.152

Statutory Authority

This proposal is made under the authority of: Government Code §2001.004(1), requiring a state agency to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; and Finance Code: §11.302, authorizing the commission to adopt rules applicable savings banks; and §96.002(a), authorizing the commission to adopt rules necessary to supervise and regulate Texas-chartered savings banks and to protect public investment in Texas-chartered savings banks. This proposal is also made under the authority of, and to implement, Finance Code §96.002(a)(2).

This proposal affects the statutes in Finance Code Title 3, Subtitle C.

§ 75.151. Eligible Institution.

An eligible institution is a financial institution that:

(1) (No change.)

(2) received a composite rating of either 1 or 2 as defined by the Uniform Financial Institutions Rating System (CAMELS) at the most recent examination by SML [the Department] or the federal banking agency [regulatory agencies], and management is rated either 1 or 2;

(3) received a Community Reinvestment Act [CRA] and compliance rating of satisfactory or above at the savings bank's most recent inspection by the [appropriate] federal banking agency;

(4) - (5) (No change.)

§ 75.152. Expedited Applications.

(a) An application filed by an eligible institution as defined in §75.151 of this title (relating to Eligible Institution) is given expedited treatment for the following application types: [may file an expedited filing in lieu of an application required pursuant to §75.131 of this title (relating to Branch Office), §75.132 of this title (relating to Mobile Facility), §75.133 of this title (relating to Relocate Home or Branch Office Location), or §75.111 of this title (relating to Reorganization, Merger, Consolidation or Purchase and Assumption Transaction - Resulting in a Savings Bank), and simultaneously tender the required filing fee pursuant to §75.102 of this title (relating to Application Fees and Charges).]

(1) §75.131 of this title (relating to Additional Office (Branch Office and Mobile Facility));

(2) §75.133 of this title (relating to Relocate Home or Additional Office); and

(3) §75.141 of this title (relating to Reorganization, Merger, Consolidation, or Purchase and Assumption Transaction - Resulting in a Savings Bank).

(b) Required Information. The application [An expedited filing] must include all information required for a non-expedited application. [the following items, unless waived in writing by the Commissioner:]

[(1) a detailed description of the transaction;]

[(2) a pro forma balance sheet and income statement for all parties to the transaction, including adjustments, reflecting the proposed transaction as of the most recent quarter ended immediately prior to the filing of the application, demonstrating that the resulting state savings bank is well capitalized as defined by 12 C.F.R. §324.403, including pro forma financials for the first four quarters after the effective date of the transaction;]

[(3) a certified resolution of the board and, if required, shareholders approving the proposed transaction;]

[(4) copies of all other required regulatory notices or filings submitted concerning the transaction; and]

[(5) evidence satisfactory to the Commissioner that a public notice of the application has been published and effected as provided by §75.103 of this title (relating to Public Notice of Application), published in each county where a non-expedited application is required to be published (however, the requirement for the publication to be preapproved by the Commissioner does not apply to an application made in accordance with this section, and the notice may be published contemporaneously with the application being submitted; provided, the notice is otherwise deemed to be acceptable to the Commissioner).]

(c) Public Notice. The applicant must publish a public notice of the application to the same extent and in the same manner required of a non-expedited application. The foregoing notwithstanding, the requirement for the public notice to be approved by the Commissioner prior to publishing does not apply to an expedited application, and the notice may be published contemporaneously with the application being filed, provided the notice is deemed acceptable to the Commissioner.

(d) [(c)] The Commissioner will render a decision on the expedited application within 30 days after the date the expedited filing is complete and has been accepted for filing as provided by §75.101 of this title (Relating to Application Filing Requirements), provided, the application is not protested or a hearing is not otherwise requested. The Commissioner may, at any time before the time period to render a decision on the application has expired, elect to refer the expedited application to a hearing. If a hearing is required, consideration of the application will proceed in the same fashion as a non-expedited application.

(e) [(d)] The applicant bears the burden to supply all material information necessary to enable the Commissioner to make a fully informed decision regarding the expedited filing, including but not limited to, the applicant's eligibility to make the application on an expedited basis in accordance with §75.151 of this title (relating to Eligible Institution).

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 22, 2026.

TRD-202602517

Iain A. Berry

General Counsel

Department of Savings and Mortgage Lending

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 475-1535

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DIVISION 7. CAPITAL NOTES AND DEBENTURES [DEBNETURES]

7 TAC §75.171

Statutory Authority

This proposal is made under the authority of: Government Code §2001.004(1), requiring a state agency to adopt rules of practice stating the nature and requirements of all available formal and informal procedures; and Finance Code: §11.302, authorizing the commission to adopt rules applicable savings banks; and §96.002(a), authorizing the commission to adopt rules necessary to supervise and regulate Texas-chartered savings banks and to protect public investment in Texas-chartered savings banks. This proposal is also made under the authority of, and to implement, Finance Code: §96.002(a)(11); and §93.004(b).

This proposal affects the statutes in Finance Code Title 3, Subtitle C.

§ 75.171. Capital Notes and Debentures.

(a) Approval Required. No savings bank may issue and sell its capital notes or debentures without first filing an application and obtaining the prior written approval of the Commissioner. The Commissioner, in approving the issuance and sale, may impose any conditions the Commissioner determines necessary with regard to safety and soundness and maintenance of adequate financial condition particularly in areas of preservation of capital, quality of earnings, and adequacy of reserves.

(b) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 22, 2026.

TRD-202602518

Iain A. Berry

General Counsel

Department of Savings and Mortgage Lending

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 475-1535

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DIVISION 1. OFFICE LOCATIONS

7 TAC §75.201, §75.202

Statutory Authority

This proposal is made under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable savings banks; and §96.002(a), authorizing the commission to adopt rules necessary to supervise and regulate Texas-chartered savings banks and to protect public investment in Texas-chartered savings banks. This proposal is also made under the authority of, and to implement, Finance Code: §92.063; and §96.002(a)(14).

This proposal affects the statutes in Finance Code Title 3, Subtitle C.

§ 75.201. Approval of Offices Required; Closing an Office; Activities Not Requiring an Approved Office.

(a) Approval Required. A [No] savings bank may not establish an additional office[, maintain,] or relocate its home office[,] or an approved additional office as provided by §75.202 of this title (relating to Types of Additional Offices), without first submitting an application and obtaining the prior written approval of the Commissioner, except as otherwise provided by §75.133 of this title (relating to Relocate Home or Additional Office).

(b) - (d) (No change.)

(e) Activities Not Requiring an Approved Office. The following activities of a savings bank, or any combination thereof, may be performed at a location other than the home or a branch office and such location does not constitute an "additional office" requiring notice to or the prior approval of the Commissioner for purposes of Finance Code §92.063:

(1) - (7) (No change.)

(8) A savings bank may establish a messenger service that is operated by a savings bank or its affiliate that picks up and delivers items relating to transactions in which deposits are received or checks paid or money lent, provided the messenger service is approved by the federal banking agency.

§ 75.202. Types of Additional Offices.

The following types of additional offices may be established [and maintained] by a savings bank:

(1) a branch office where deposits are received or checks paid or money lent [offices at which the savings bank may transact any business that could be done in the home office]; and

(2) a mobile facility that does not have a single permanent site and uses a vehicle that travels to various locations to enable the public to conduct banking business, and that may serve defined locations on a regular schedule or may serve a defined area at varying times and locations (also known as a mobile branch); [facilities at which the savings bank may transact any business of the institution which could be done in the home office (a detailed record of the transactions at such facility must be maintained); and]

[(3) courier/messenger service to transport items relevant to the bank's transactions with its customers, including courier services between financial institutions.]

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 22, 2026.

TRD-202602519

Iain A. Berry

General Counsel

Department of Savings and Mortgage Lending

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 475-1535

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DIVISION 2. BOOKS, RECORDS, ACCOUNTING PRACTICES, FINANCIAL STATEMENTS, AND RESOURCES

7 TAC §75.223, §75.228

Statutory Authority

This proposal is made under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable savings banks; and §96.002(a), authorizing the commission to adopt rules necessary to supervise and regulate Texas-chartered savings banks and to protect public investment in Texas-chartered savings banks. §75.223 is also proposed under the authority of, and to implement, Finance Code: §96.002(a)(4), (7), (8), and (11); §96.051; and §96.053. §75.228 is also proposed under the authority of, and to implement, Finance Code: §96.002(a)(6); and §96.053.

This proposal affects the statutes in Finance Code Title 3, Subtitle C.

§ 75.223. Financial Statements; Annual Reports; Audits.

For safety and soundness purposes, no later than 90 days after its fiscal year end, each savings bank is required to submit [to the Department] the results and findings of an independent audit of its financial statements and all correspondence reasonably related to the audit to SML. The audit must [is to] be performed in accordance with generally accepted auditing standards and the provisions of the FDIC set forth in 12 C.F.R. §363.2 and §363.3, except for [with the exception of] any matters specifically addressed by this chapter or [section,] the Texas Savings Bank Act[, or the rules (regulations) adopted thereunder].

§ 75.228. Call Reports.

(a) Filing Requirements. Call reports must be filed with the Federal Financial Institutions Council (FFIEC) by the deadlines established by the FFIEC. The call report must be filed using the current form prescribed by the FFIEC.

(b) Duty to File Complete and Accurate Reports. The call report must contain complete and accurate information at the time it is filed. A savings bank must act diligently to compile all information necessary to complete the call report in advance of the deadline to file the call report. A call report containing incomplete or inaccurate information is deemed to be a failure to file the call report. The filing of incomplete or inaccurate information, even on a temporary basis with the intent to amend the call report with complete and accurate information, constitutes a violation and may result in an enforcement action.

(c) Amended Filings. If a savings bank amends its call report, it must provide written notice to the Commissioner and provide an explanation of why the amended filing was necessary and a summary of the specific information amended.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 22, 2026.

TRD-202602520

Iain A. Berry

General Counsel

Department of Savings and Mortgage Lending

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 475-1535

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DIVISION 5. ASSESSMENTS AND FEES

7 TAC §75.251, §75.252

Statutory Authority

This proposal is made under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable savings banks; and §96.002(a), authorizing the commission to adopt rules necessary to supervise and regulate Texas-chartered savings banks and to protect public investment in Texas-chartered savings banks. This proposal is also made under the authority of, and to implement, Finance Code: §16.003(c); and §91.007. §75.252 is also made under the authority of, and to implement, Finance Code §96.055.

This proposal affects the statutes in Finance Code Title 3, Subtitle C.

§ 75.251. Annual Assessments.

(a) Annual assessment. All savings banks chartered under the laws of the state and all foreign savings banks (as defined by Finance Code §91.002 [the Texas Savings Bank Act]) holding a certificate of authority to do business in this state must pay [to the department] an annual assessment fee to SML in an amount determined by the Commissioner as provided by subsection (c) of this section in accordance with the rate requirements set by the Finance Commission [of Texas], and subject to the maximum assessment rates established by subsection (d) of this section. Information [The Department will maintain on its website information] concerning current rate requirements is available on SML's website (sml.texas.gov).

(b) Payment of Assessment. The annual assessment must be paid in quarterly installments. Upon receipt of a written invoice from SML [the department], the savings bank must pay the assessment fee by electronic/ACH payment, or by another method, if directed to do so by SML [the Department].

(c) Determination of assessment. The assessment will be determined based on either the total assets, or total risk-weighted assets of the savings bank, whichever results in the lowest fee being assessed. The valuation of assets will be determined as of the close of the calendar quarter immediately preceding the effective date of the assessment. A savings bank's total assets or total risk-weighted assets will be derived from the savings bank's call report [Federal Financial Institutions Examination Council consolidated report of condition and income (call report), filed in accordance with federal law]. If a savings bank is not required [by applicable federal law] to disclose its total risk-weighted assets in the call report, the savings bank may voluntarily report [to the Commissioner] information concerning its total risk-weighted assets to the Commissioner for purposes of calculating its assessment, which must be provided to the Commissioner in the manner and within the time prescribed by the Commissioner; otherwise, the assessment will be based on the savings bank's total assets.

(d) Maximum Assessment Rates. The assessment rates set by the Finance Commission [of Texas] may not exceed the maximum rates established in the following rate schedule:

Figure: 7 TAC §75.251(d) (No change.)

§ 75.252. Fee for Special Examination.

(a) A special examination is one that is conducted outside the context of a savings bank's annual examination and includes, but is not limited to, examinations of a savings bank holding company, interstate branches of savings banks in Texas as the host state, and a savings bank's affiliates and third-party service providers. The savings bank or other regulated entity that is the subject of the special examination is subject to a fee and liable for SML's [the Department's] costs as provided by this section in order to recoup the salary expense of the examiner(s) plus a proportionate share of SML's [Department] overhead allocable to the special examination, and the actual costs by the examiner in conducting the special examination.

(b) The fee for a special examination under this section will be calculated at a rate not to exceed $75 per examiner per hour. The entity that is the subject of the examination must also pay [to the Department] an amount for actual travel expenses and costs incurred by SML's [the Department's] examiner(s), including mileage, public transportation, food, and lodging. The Commissioner, in his or her sole discretion, may lower the applicable rate for the examination fee or waive, in whole or in part, any fees or costs chargeable in accordance with this section.

(c) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 22, 2026.

TRD-202602521

Iain A. Berry

General Counsel

Department of Savings and Mortgage Lending

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 475-1535

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DIVISION 6. COMPLAINT PROCEDURES

7 TAC §75.261

Statutory Authority

This proposal is made under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable savings banks; and §96.002(a), authorizing the commission to adopt rules necessary to supervise and regulate Texas-chartered savings banks and to protect public investment in Texas-chartered savings banks. This proposal is also made under the authority of, and to implement, Finance Code: Chapter §96.002(a)(11).

This proposal affects the statutes in Finance Code Title 3, Subtitle C.

§ 75.261. [Savings Bank] Complaint Notice [Notes].

[(a)] A savings bank must give written notice to its customers concerning SML's regulatory oversight. The notice must be in the current form prescribed by SML and posted on its website (sml.texas.gov). A savings bank is deemed to be in compliance with this section if: [Definitions. ]

(1) The savings bank provides the notice to the customer within 30 days after establishing a customer relationship. The notice may be included in an account agreement, a loan agreement, an initial privacy notice, or similar; [Privacy notice means any notice which a state savings bank gives regarding a consumer's right to privacy, regardless of whether it is required by a specific state or federal law or given voluntarily.]

(2) The savings bank conspicuously posts the notice in each area where the savings bank conducts business with customers in person. The notice is deemed to be conspicuously posted if it is posted in the same place as other required notices and disclosures (such as the equal housing lending poster, Community Reinvestment Act notice, and Home Mortgage Disclosure Act notice); and [Required notice means a notice in a form set forth or provided for in subsection (b)(1) of this section.]

(3) The savings bank posts the notice on each website of the savings bank, other than a social media site, that is accessible by the public and either used to conduct banking business or from which the savings bank advertises to solicit such business. The notice is deemed to be conspicuously posted when it is displayed on the initial or home page of the website (typically the base-level domain) or is contained in a linked page with the link to such page being readily apparent on such initial or home page.

[(b) Notice of how to file complaints.]

[(1) In order to let its consumers know how to file complaints, state savings banks must use the following notice: The (name of state savings bank) is chartered under the laws of the State of Texas and by state law is subject to regulatory oversight by the Department of Savings and Mortgage Lending. Any consumer wishing to file a complaint against the (name of state savings bank) should contact the Department of Savings and Mortgage Lending through one of the means indicated below: In Person or by Mail: 2601 North Lamar Boulevard, Suite 201, Austin, Texas 78705-4294, Phone: (877) 276-5550, Fax: (512) 936-2003, or through the Department's website at www.sml.texas.gov.]

[(2) A required notice must be included in each privacy notice that a state savings bank sends out.]

[(3) Regardless of whether a state savings bank is required by any state or federal law to give privacy notices, each state savings bank must take appropriate steps to let its consumers know how to file complaints by giving them the required notice in compliance with paragraph (1) of this subsection.]

[(4) The following measures are deemed to be appropriate steps to give the required notice:]

[(A) In each area where a state savings bank conducts business on a face-to-face basis, the required notice, in the form specified in paragraph (1) of this subsection, must be conspicuously posted. A notice is deemed to be conspicuously posted if a customer with 20/20 vision can read it from the place where he or she would typically conduct business or if it is included on a bulletin board, in plain view, on which all required notices to the general public (such as equal housing posters, licenses, Community Reinvestment Act notices, etc.) are posted.]

[(B) For customers who are not given privacy notices, the state savings bank must give the required notice when the customer relationship is established.]

[(C) The required notice must be posted on each website of the savings bank that is accessible by the public and either used to conduct banking activities or from which the savings bank advertises to solicit such business. The required notice is deemed to be conspicuously posted on a website when it is displayed on the initial or home page of the website (typically the base-level domain name) or is otherwise contained in a linked page with the link to such page prominently displayed on such initial or home page.]

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 22, 2026.

TRD-202602522

Iain A. Berry

General Counsel

Department of Savings and Mortgage Lending

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 475-1535

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DIVISION 1. AUTHORIZED LOANS AND INVESTMENTS

7 TAC §75.306

Statutory Authority

This proposal is made under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable savings banks; and §96.002(a), authorizing the commission to adopt rules necessary to supervise and regulate Texas-chartered savings banks and to protect public investment in Texas-chartered savings banks. This proposal is also made under the authority of, and to implement, Finance Code §96.002(a)(16).

This proposal affects the statutes in Finance Code Title 3, Subtitle C.

§ 75.306. Loans to and Transactions with Officers, Directors, Affiliated Persons, and Employees.

All transactions, including loans, involving officers, directors, affiliated persons, controlling persons or employees are subject to the requirements of Federal Reserve Board Regulations O and W, which sections are hereby incorporated by reference. SML [The Department] will monitor and enforce compliance with such provisions.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 22, 2026.

TRD-202602523

Iain A. Berry

General Counsel

Department of Savings and Mortgage Lending

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 475-1535

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DIVISION 4. OPERATION OF PAWNSHOPS

7 TAC §85.402, §85.406

The Finance Commission of Texas (commission) proposes amendments to §85.402 (relating to Recordkeeping) and §85.406 (relating to Law Enforcement Reporting) in 7 TAC Chapter 85, Subchapter A, concerning Rules of Operation for Pawnshops.

The rules in 7 TAC Chapter 85, Subchapter A govern pawnshops. In general, the purpose of the proposed rule changes to 7 Chapter 85, Subchapter A is to implement changes resulting from the commission's review of the subchapter under Texas Government Code, §2001.039.

Proposed amendments to §85.402 would update recordkeeping requirements for pawnshops. Pawnshops are required to maintain transaction records under Texas Finance Code, §371.152, and are required to allow the OCCC to access records under Texas Finance Code, §371.202. Currently, provisions throughout §85.402 refer to both paper and electronic recordkeeping systems. A proposed amendment to §85.402(b) would rearrange language to refer to electronic recordkeeping systems before referring to paper systems, based on licensees' increasing use of electronic systems rather than paper systems. Additional proposed amendments to §85.402 relate to data security recordkeeping. A proposed amendment at §85.402(i)(1) specifies that licensees must maintain written policies and procedures for an information security program to protect consumers' customer information, as required by the Federal Trade Commission's Safeguards Rule, 16 C.F.R. part 314. Another proposed amendment at §83.402(i)(2) specifies that if a licensee maintains customer information concerning 5,000 or more consumers, then the licensee must maintain a written incident response plan and written risk assessments, as required by 16 C.F.R. §314.4. A proposed amendment at §83.402(j) specifies that licensees must maintain data breach notifications to consumers and to the Office of the Attorney General under Texas Business & Commerce Code, §521.053. Data security is a crucial issue. The OCCC's 2025-2029 strategic plan includes action items to "[p]romote cybersecurity awareness and best practices among regulated entities" and "[m]onitor cybersecurity incidents and remediation efforts reported by regulated entities." Recent data breaches affecting financial institutions highlight the urgent need for vigilance in this industry. The proposed data security recordkeeping amendments will help ensure that the OCCC can monitor this crucial issue.

A proposed amendment to §85.406 would revise a requirement related to law enforcement reporting. Pawnshops are required to allow peace officers to inspect transaction records under Texas Finance Code, §371.204. Currently, §85.406 provides suggested guidelines for pawnshops to report transactions electronically to law enforcement agencies. A proposed amendment to §85.406(b)(1) would remove a reference to transmitting information to law enforcement by disk, because the OCCC understands that disks are no longer commonly used.

Mirand Diamond, Director of Licensing, Finance and Human Resources, has determined that for the first five-year period the proposed rule changes are in effect, there will be no fiscal implications for state or local government as a result of administering the rule changes.

Christine Graham, Director of Consumer Protection, has determined that for each year of the first five years the proposed amendments are in effect, the public benefit anticipated as a result of the changes will be that the commission's rules will be more easily understood by licensees required to comply with the rules, and will better enable licensees to comply with Texas Finance Code, Chapter 371 and related legal requirements.

The OCCC does not anticipate economic costs to persons who are required to comply with the rule changes as proposed. If there are economic costs, then the OCCC anticipates that these will be minimal. Regarding the proposed amendments related to information security programs and data breach notifications in §85.402, licensees are required to develop this information by existing statutes and regulations outside of the proposed amendments, so any costs do not result from the proposed amendments.

The OCCC is not aware of any adverse economic effect on small businesses, micro-businesses, or rural communities resulting from this proposal. But in order to obtain more complete information concerning the economic effect of these rule changes, the OCCC invites comments from interested stakeholders and the public on any economic impacts on small businesses, as well as any alternative methods of achieving the purpose of the proposal while minimizing adverse impacts on small businesses, micro-businesses, and rural communities.

During the first five years the proposed rule changes will be in effect, the rules will not create or eliminate a government program. Implementation of the rule changes will not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the rule changes will not require an increase or decrease in future legislative appropriations to the OCCC, because the OCCC is a self-directed, semi-independent agency that does not receive legislative appropriations. The proposal does not require an increase or decrease in fees paid to the OCCC. The proposal would not create a new regulation. The proposal would expand current §85.402 by adding references to certain cybersecurity-related information. The proposal would limit current §85.406 by removing a reference to disks. The proposal would not repeal a current regulation. The proposed rule changes do not increase or decrease the number of individuals subject to the rule's applicability. The agency does not anticipate that the proposed rule changes will have an effect on the state's economy.

In March 2026, the OCCC issued an advance notice of rule review, seeking informal feedback on the rule review. Notice of the review of 7 TAC Chapter 85, Subchapter A was published in the Texas Register on April 3, 2026 (51 TexReg 2257). The OCCC and the commission did not receive any comments in response to these notices.

The OCCC distributed an early precomment draft of proposed changes to interested stakeholders for review. The OCCC did not receive any written precomments on the rule text draft.

Comments on the proposal may be submitted in writing to Matthew Nance, General Counsel, Office of Consumer Credit Commissioner, 2601 North Lamar Boulevard, Austin, Texas 78705 or by email to rule.comments@occc.texas.gov. The commission invites any comments with information related to the cost, benefit, or effect of the proposed rule changes, including any applicable data, research, or analysis, from any person required to comply with the proposed rule changes or any other interested person. To be considered, a written comment must be received on or before the 30th day after the date the proposal is published in the Texas Register. After the 30th day after the proposal is published in the Texas Register, no further written comments will be considered or accepted by the commission.

The rule amendments are proposed under Texas Finance Code, §371.006, which authorizes the commission to adopt rules to enforce Texas Finance Code, Chapter 371 (the Texas Pawnshop Act).

The statutory provisions affected by the proposal are contained in Texas Finance Code, Chapter 371. In addition, Texas Finance Code, §11.304 authorizes the Finance Commission to adopt rules necessary to supervise the OCCC and ensure compliance with Texas Finance Code, Title 4.

§ 85.402. Recordkeeping.

(a) (No change.)

(b) Record retention. Any required book, record, or instrument pertaining to a transaction, whether electronic or paper [or electronic], must be available for a minimum of two years from the date of the last recorded event. Records must be available for inspection during normal business hours by the commissioner's authorized representative. For purposes of this section, the date of the last recorded event is the date a pledged item is taken into inventory, redeemed, renewed, seized, or voided.

(c) - (h) (No change.)

(i) Information security program. A licensee must maintain the following for an information security program:

(1) written policies and procedures for an information security program to protect consumers' customer information under the Federal Trade Commission's Safeguards Rule, 16 C.F.R. part 314; and

(2) if a licensee maintains customer information concerning 5,000 or more consumers, a written incident response plan and written risk assessments under 16 C.F.R. §314.4.

(j) Data breach notifications. A licensee must maintain the following for data breach notifications:

(1) the text of any data breach notification provided to consumers, including any notification under Texas Business & Commerce Code, §521.053, for a period of four years from the date of the notification; and

(2) any data breach notification provided to a government agency, including any notification provided to the Office of the Attorney General under Texas Business & Commerce Code, §521.053, for a period of four years from the date of the notification.

§ 85.406. Law Enforcement Reporting.

(a) Reporting requirements. The information on the pawn ticket must be made available to the law enforcement agency electronically or through the production of a separate copy of the pawn ticket.

(b) Suggested electronic reporting guidelines. These suggested guidelines are intended to give pawnshops considerable flexibility to fit individual needs while providing some guidance. Modifications to the guidelines may be made without the loss of protection from any liability defense. Electronic reporting is voluntary and should occur under mutually acceptable terms to the pawnbroker and the law enforcement agency. Information reported electronically should be transmitted by a method mutually acceptable to both the pawnshop and the law enforcement agency. The suggested guidelines are:

(1) the transmission be made using a [disk,] flash drive, remote access to secure websites maintained by law enforcement, or remote access to secure bulletin boards or websites;

(2) the information be provided in comma-delimited ASCII text with field titles as the first record of the transmission;

(3) the information be sent in batches no smaller than the daily activity;

(4) the information include all purchase and pawn transactions in a single transmission; and

(5) the law enforcement agency not be given direct access to a pawnshop's computer system.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 19, 2026.

TRD-202602508

Matthew Nance

General Counsel

Office of Consumer Credit Commissioner

Earliest possible date of adoption: August 2, 2026

For further information, please call: (512) 936-7660

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