TITLE 7. BANKING AND SECURITIES

PART 4. DEPARTMENT OF SAVINGS AND MORTGAGE LENDING

CHAPTER 75. APPLICATIONS

The Finance Commission of Texas (commission), on behalf of the Department of Savings and Mortgage Lending (department), adopts the repeal of all preexisting rules sections in 7 TAC Chapter 75, as follows: §§75.1 - 75.3, 75.6, 75.8, 75.10, 75.25 - 75.27, 75.31 - 75.33, 75.35, 75.36, 75.38, 75.39, 75.41, 75.81 - 75.83, 75.87 - 75.91, 75.122 - 75.124, 75.126, 75.127, and 75.201 - 75.204. The commission further adopts new rules in 7 TAC Chapter 75, as follows: §§75.1, 75.2, 75.101 - 75.104, 75.121 - 75.123, 75.131 - 75.133, 75.141 - 75.145, 75.151 - 75.153, 75.161 - 75.165, 75.171, 75.181, 75.182, 75.191, 75.201 - 75.204, 75.221 - 75.227, 75.231 - 75.234, 75.241 - 75.245, 75.251, 75.252, 75.261, 75.301 - 75.309, 75.321, 75.323 - 75.326, 75.331, and 75.332. The commission’s proposal was published in the September 2, 2022, issue of the Texas Register (47 TexReg 5186). The following rules are adopted with changes to the published text and are republished to reflect such changes: §§75.101 - 75.103, 75.121, 75.122, 75.131 - 75.133, 75.141, 75.144, 75.145, 75.152, 75.161, 75.163, 75.171, 75.182, 75.203, and 75.223. The changes regulate no new parties and affect no new subjects of regulation. As a result, the rules will not be republished as proposed rules for comment. The remaining rules in the proposal are adopted without changes to the proposed text as published in the Texas Register and will not be republished.

Explanation of and Justification for the Rules

The preexisting rules in 7 TAC Chapter 75, Applications, Chapter 76, Miscellaneous, and Chapter 77, Loans, Investments, Savings, and Deposits, implement Finance Code Title 3, Subtitle C, Savings Banks, and affect savings banks regulated by the department.

Changes Concerning the Reorganization (Consolidation) of Chapters 75, 76, and 77 into Chapter 75

When viewing the department's rules as a whole, it is somewhat difficult to discern which of the chapters affects savings banks regulated by the department, particularly when such rules are located alongside the eleven other chapters that affect savings associations and have similar titles. In consideration of the foregoing, the department has determined that it should reorganize Chapters 75 - 77 by consolidating the subject matter of such chapters into one chapter - Chapter 75 - and renaming such chapter "Savings Banks." The adopted rules: (i) repeal all existing rules in Chapter 75; and (ii) adopt new rules largely patterned after the preexisting rules in 7 TAC Chapters 75 - 77.

Changes Concerning Loan Requirements

The department's preexisting rules in Chapter 77, Subchapter A, §§77.2 - 77.9 establish various requirements for loans made by a savings bank. While such rules, at one time, were appropriate, the department has determined that, given the requirements of federal law governing loan products, the rules are now overly prescriptive and should be repealed. As a result, the subject matter of such rules is not included as new rules in this adoption.

Other Modernization and Update Changes.

The adopted rules make changes to modernize and update the preexisting rules including: adding and replacing language for clarity and to improve readability; removing unnecessary or duplicative provisions; and updating terminology.

Summary of Public Comments

Publication of the commission's proposal for the rules recited a deadline of 30 days to receive public comments, or October 2, 2022. A public hearing in accordance with Government Code §2001.029 was not required. No comments were received.

SUBCHAPTER A. CHARTER APPLICATIONS

7 TAC §§75.1 - 75.3, 75.6, 75.8, 75.10

Statutory Authority

The rule repeals are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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.

The adopted rule repeals affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204265

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER B. EXPEDITED APPLICATIONS

7 TAC §§75.25 - 75.27

Statutory Authority

The rule repeals are adopted under the authority of: Finance Code §11.302, authorizing the commission to adopt rules applicable to savings banks; and Finance Code §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.

The adopted rule repeals affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204266

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER C. ADDITIONAL OFFICES

7 TAC §§75.31 - 75.33, 75.35, 75.36, 75.38, 75.39, 75.41

Statutory Authority

The rule repeals are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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.

The adopted rule repeals affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204267

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER D. REORGANIZATION, MERGER, CONSOLIDATION, CONVERSION, PURCHASE, AND ASSUMPTION AND ACQUISITION

7 TAC §§75.81 - 75.83, 75.87 - 75.91

Statutory Authority

The rule repeals are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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.

The adopted rule repeals affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204268

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER E. CHANGE OF CONTROL

7 TAC §§75.122 - 75.124, 75.126, 75.127

Statutory Authority

The rule repeals are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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.

The adopted rule repeals affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204269

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER F. GENERAL PROVISIONS

7 TAC §§75.201 - 75.204

Statutory Authority

The rule repeals are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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.

The adopted rule repeals affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204270

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


CHAPTER 75. SAVINGS BANKS

SUBCHAPTER A. GENERAL PROVISIONS

7 TAC §75.1, §75.2

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. 7 TAC §75.2 is also adopted under the authority of, and to implement, Finance Code: §91.002 and §92.055(a).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204271

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER B. APPLICATIONS

DIVISION 1. GENERAL PROVISIONS

7 TAC §§75.101 - 75.104

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. 7 TAC §§75.101 - 75.103 are also adopted under the authority of, and to implement, Finance Code §96.002(a)(2). 7 TAC §75.102 is also adopted under the authority of Finance Code: §16.003(c), providing that the department may set the amount of fees, penalties, charges, and revenues as necessary for the purpose of carrying out the functions of the department; and §91.007, requiring the commission to adopt rules setting the amount of fees the commissioner charges, including fees relating to filing an application or other documents. 7 TAC §75.102 is also adopted under the authority of, and to implement, Finance Code: §91.007; §92.051(a)(2); §92.063; §93.004(b); and §97.001. 7 TAC §75.103 is also adopted under the authority of, and to implement, Finance Code: §92.057(a)(1); §92.352(a)(1); and §92.557(d).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

§75.101.Application Filing Requirements.

(a) Purpose and Applicability. 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 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 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 of being notified the application 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 has a continuing obligation and duty to supplement the application with any other information or supporting documentation requested by 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 agency, to the extent not previously provided to the Department.

(e) Duty to Amend. If a material change occurs in the facts contained in or information 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) Charter Application and Amendments.

(A) Charter application: $10,000.

(B) Change of name: $500.

(C) Certificate of formation or bylaws amendments: $100 per request.

(2) Office Locations.

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

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

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

(3) Reorganization, merger, consolidation, conversion, or purchase and assumption:

(A) For a reorganization, merger, or consolidation transaction in which the resulting institution will be a savings bank, a fee of $2,500 for each financial institution involved in the transaction.

(B) For a purchase and assumption transaction by a savings bank as purchaser, a fee of $2,000 for each financial institution involved in the transaction.

(C) For the conversion by a financial institution that is not a savings bank into a savings bank, the fee will be determined based on the total asset size of the institution, as follows:

(i) $0 - 125 million: $2,500.

(ii) $125 million - $500 million: $5,000.

(iii) $500 million - 1 billion: $10,000.

(iv) over 1 billion - $15,000.

(D) For the conversion of a savings bank into another type of financial institution charter, or a reorganization, merger, or consolidation transaction that otherwise results in a savings bank reorganizing into, or merging or consolidating with a financial institution that is not a savings bank, no fee will be assessed.

(E) for the conversion of a mutual savings bank into a stock savings bank, a fee of $7,500.

(4) Change of control (obtaining control of a savings bank): $5,000.

(5) Permission to issue capital notes or debentures: $1,000.

(6) Holding Companies.

(A) Registration: $2,000.

(B) Reorganization as a mutual holding company: $7,500.

(7) Investment in subsidiaries.

(A) Initial investment: $1,500, plus $100 for each office other than the home office of the proposed subsidiary.

(B) Service subsidiary application to engage in a new activity: $500.

(C) Redesignation of operating subsidiary: $300.

(D) Change of name: $100.

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

(b) Filing Fees for Expedited Applications. An applicant qualifying for expedited treatment for purposes of §75.152 of this 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) Branch office: $500.

(2) Mobile facility: $500 (no additional per-site fee).

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

(4) Reorganization, merger, or consolidation: $2,500.

(5) Purchase and assumption transactions: $2,000.

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

(d) Protest Filing Fee. A person filing a protest to an application or otherwise requesting a hearing on an application (other than the applicant) must pay a fee of $2,500 at the time the protest or request for hearing is filed.

(e) Fees Nonrefundable; Discretion to Waive Fees and Costs. All filing fees must be paid at the time the application is filed and are nonrefundable. Except for fees set or required by statute, the Commissioner, in his or her sole discretion, may waive, in whole or in part, any fees or costs required by this section.

§75.103.Public Notice of Application.

If an application requires that notice to the public be given, such notice must comply with the requirements of this section, unless otherwise provided by §75.152 of this title (relating to Expedited Applications). The notice must use language and content preapproved by the Commissioner prior to publishing. The notice must be submitted to the publisher for publication within 15 days after the date the applicant receives notice that the application is complete and accepted for filing as provided by §75.101 of this title (relating to Application Filing Requirements). The notice must be published in an English language newspaper of general circulation in each county required by the rule(s) governing such application. The applicant must, within 10 days after publishing the notice, provide the Commissioner with a publisher's affidavit evidencing that the notice was properly published in conformity with this section. The notice is deemed properly effected when the appropriate notice has been published in conformity with this section, and more than 10 days have elapsed.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204272

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 2. CHARTER APPLICATIONS AND AMENDMENTS

7 TAC §§75.121 - 75.123

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. 7 TAC §75.121 is also adopted to implement Finance Code: Chapter 92, Subchapter B; §92.203; §92.601(b); and §96.002(a)(2) and (14). 7 TAC §75.122 is also adopted under the authority of, and to implement, Finance Code: §92.063; and §96.002(a)(2) and (14).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

§75.121.Savings Bank Charter.

(a) Application Requirements. The charter application and all required supporting information must be executed by the proposed incorporators of the proposed savings bank which must consist of at least five adult residents of this state and must include all of the information required by Finance Code §92.051. The application must include a request for a corporate name to be approved by the Commissioner. The application must include the proposed home office of the savings bank, the identity and qualifications of the proposed managing officer(s), and any additional information the Commissioner deems necessary to enable the Commissioner to determine the matters set forth in Finance Code §92.058.

(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 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) 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.

(d) Public Notice. A charter application is deemed to be a complete application for purposes of Finance Code §92.057 at the time 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.

(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 the Department within 10 days from the date the public notice was made as provided by subsection (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.

(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).

(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.

(a) Approval Required. A savings bank may not change its name without the prior written approval of the Commissioner, and a savings bank may not operate under any name which has not been approved by the Commissioner in writing.

(b) Public Notice. 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 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) Persons Affected by the Change of Name. A person is affected by a change of name for purposes of Finance Code §92.063 only if the requested name change, if granted, would result in the savings bank's name being substantially or deceptively similar to the party alleged to be affected, or is otherwise reasonably anticipated to create confusion in the marketplace involving the party alleged to be affected. A person requesting a hearing on a change of name application must allege and provide information in support of their request indicating they are a person that might be affected by the proposed name change as provided by this section. 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 under Finance Code §92.063.

(e) 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 contained in Chapter 9 of this title (relating to Rules of Procedure for Contested Case Hearings, Appeals, and Rulemakings).

(f) 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) of this section.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204273

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 3. OFFICE LOCATIONS

7 TAC §§75.131 - 75.133

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. The rules are also adopted under the authority of, and to implement, Finance Code: §92.063; §96.002(a)(2) and (14); and §201.003.

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

§75.131.Branch Office.

(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 prior written approval of the Commissioner. 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).

(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.

(f) Public Notice. 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 is to be located and in the county where the savings bank has its home office.

(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 within the Department within 10 days from the date the public notice was made as provided by subsection (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.

(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).

(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 (g) of this section.

(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 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.

§75.132.Mobile Facility.

(a) Approval Required. A savings bank may not establish a mobile facility as provided by §75.202 of this title (relating to Types of Additional Offices) without prior written approval of the Commissioner.

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

(1) the proposed location(s) at and times during which the mobile facility will operate;

(2) the need for the mobile facility within the community;

(3) the personnel and office facilities to be provided; and

(4) the estimated expense to operate the mobile facility.

(c) 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. Additionally, the savings bank must show that adequate safeguards exist for the security of the mobile facility.

(d) Public Notice. An applicant seeking to establish a mobile facility 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 or counties where the proposed mobile facility is to be operating and in the county where the savings bank has its home office.

(e) Request for a Hearing; Deadline to Protest. A person affected by the proposed establishment of a mobile facility may protest or otherwise request a hearing on the mobile facility application, as provided by Finance Code §92.063. Any person affected by the proposed establishment of a mobile facility and desiring to protest the application or otherwise request a hearing on the application must file a written protest with the Department within 10 days from the date the public notice was made as provided by subsection (d) 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.

(f) 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).

(g) 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 (e) of this section.

§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 the prior written approval of 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.

(f) Public Notice. 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, the county where the proposed new location is located, and the county where the savings bank has its home office.

(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 the Department within 10 days from the date the public notice was made as provided by subsection (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.

(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).

(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 (g) of this section.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204274

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


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

7 TAC §§75.141 - 75.145

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. 7 TAC §75.141 is also adopted under the authority of, and to implement, Finance Code: Chapter 92, Subchapters C, H and I; and §96.002(a)(2) and (13). 7 TAC §75.142 is also adopted under the authority of, and to implement, Finance Code §92.352. 7 TAC §75.143 is also adopted under the authority of, and to implement, Finance Code: Chapter 92, Subchapter F; and §96.002(a)(2) and (13). 7 TAC §75.144 is adopted under the authority of, and to implement, Finance Code: Chapter 92, Subchapter G; and §96.002(a)(2) and (13). 7 TAC §75.145 is also adopted under the authority of, and to implement, Finance Code: §92.052; and §96.002(a)(2) and (13).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

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

(a) Applicability. This section governs:

(1) A reorganization, merger, or consolidation transaction in which the resulting institution will be a savings bank; and

(2) A purchase and assumption transaction by a savings bank as purchaser.

(b) Non-Applicability. This section does not govern:

(1) the conversion of a savings bank into another type of financial institution charter, or a reorganization, merger, or consolidation transaction that otherwise results in a savings bank reorganizing into, or merging or consolidating with, a financial institution that is not a savings bank, which is governed by section §75.143 of this tile (relating to Reorganization, Merger or Conversion by a Savings Bank to Another Financial Institution Charter); or

(2) the conversion by a financial institution that is not a savings bank into a savings bank, which is governed by section §75.144 (relating to Conversion into a Savings Bank).

(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) Application Required. The application for approval of the plan must contain: proof that the plan was adopted by the board of each institution involved; documentation showing that the plan has been approved by each institution by a majority of the members or shareholders entitled to vote on the plan; a statement that the corporate continuity of the resulting institution will possess the same incidents as that of a savings bank which has converted in accordance with the Texas Savings Bank Act; and a statement identifying the home office of the resulting institution. A true and correct copy of the plan, as adopted, must be filed as part of the application. All documents and their contents must be subscribed and sworn to before a notary.

(e) Public Notice. An applicant seeking reorganization, merger, consolidation, conversion, purchase and assumption, or acquisition must publish a public notice of the plan and application as provided by §75.103 of this title (relating to Public Notice of Application), which must be published in each county in which a financial institution participating in the plan has its home office. Such notice, when properly effected, is deemed to be the Commissioner's public notice of the plan and application for purposes of Finance Code §92.352.

(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 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) Hearing. If a hearing is required, the Commissioner will set a hearing on the plan and application within 60 days after the date the protest or request for hearing and the required fee are received, unless the Commissioner determines that the provisions set forth in §75.142 of this title (relating to Exemption for Supervisory Merger) apply, and the merger is designated as a supervisory merger for purposes of Finance Code §92.352(e). The hearing is governed by the procedural requirements concerning contested cases set forth in Government Code Chapter 2001 and Chapter 9 of this title (relating to Rules of Procedure for Contested Case Hearings, Appeals, and Rulemakings).

(h) Time of Decision. To the extent a hearing on the plan and application is required, the Commissioner will render a decision within 30 days after 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 plan and application is not required, the Commissioner will render a decision within 30 days after the time period for requesting a hearing on the plan and application lapsed as provided by subsection (f) of this section, unless the Commissioner establishes a longer time period, with written notice to the applicant.

(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 a certified copy of an order from the appropriate 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.

§75.144.Conversion into a Savings Bank.

(a) The Commissioner may authorize any financial institution to convert itself into a savings bank in a manner consistent with the provisions of applicable law and regulations of the institution.

(b) Plan and Application. In order to obtain such authorization, the converting institution's board must approve and authorize the filing of a conversion plan and application. Upon approval of the conversion plan, the plan must be approved by a majority vote of the members or shareholders of the financial institution entitled to vote at any annual or special meeting called to consider such conversion, a resolution declaring that the savings bank will be so converted, which resolution, verified by affidavit of the secretary or an assistant secretary, must be filed with the Commissioner and mailed to the appropriate banking agency within 10 days after the date of its adoption. At the meeting to vote on a conversion to a savings bank, the members or stockholders must also vote on the directors of the savings bank. The proposed directors must execute an application for savings bank charter as provided by Finance Code Chapter 92, Subchapter B, and §75.121 of this title (relating to Savings Bank Charter).

(c) Review by Commissioner; Approval. The Commissioner, on receipt of the application and verified copy of the minutes, will conduct an examination of the financial institution seeking conversion. Following the examination, the Commissioner will approve the conversion without a hearing if the Commissioner determines that the converting financial institution is in sound condition and meets all standards, conditions, and requirements of Finance Code Chapter 92, Subchapter B, and §75.121 of this title.

(d) Denial; Request for Hearing. An applicant is entitled to a hearing under Chapter 2001 of the Texas Government Code if the Commissioner denies an application to convert and a written request for a hearing is delivered to the Commissioner within 10 days after the date of denial. A hearings officer designated by the Commissioner will hold the hearing. 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 be completed for purposes of Finance Code §92.304.

§75.145.Mutual to Stock Conversion.

(a) The application for mutual to stock conversion must include:

(1) a plan of conversion;

(2) amendments to the savings bank's certificate of formation and bylaws;

(3) a copy of the proxy and soliciting materials to be used; and

(4) such other information the Commissioner may require.

(b) The plan of conversion must provide:

(1) a comprehensive description of the nontransferable subscription rights received each eligible accountholder, including details on oversubscriptions;

(2) that the shares of the converting savings bank be offered to persons with subscription rights and management, in that order, and that any remaining shares will be sold either in a public offering through an underwriter or directly by the converting savings bank in a direct community offering;

(3) that a direct community offering by the converting savings bank will give a preference to natural persons residing in the counties in which the savings bank has an office;

(4) that the sale price of the shares of capital stock to be sold in the conversion will be a uniform price determined in accordance with paragraph (1) of this subsection, and specify the underwriting and/or other marketing arrangements to be made;

(5) that the conversion must be completed within 24 months from the date the savings bank members approve the plan of conversion;

(6) that each savings accountholder of the converting savings bank will receive, without payment, a withdrawable savings account or accounts in the converted savings bank equal in withdrawable amount to the withdrawal value of such accountholder's savings account or accounts in the converting savings bank;

(7) for an eligibility record date;

(8) that expenses incurred in the conversion are reasonable;

(9) that the converting savings bank may not loan funds or otherwise extend credit to any person to purchase the capital stock of the savings bank;

(10) that the proxies held with respect to voting rights in the saving bank will not be voted regarding the conversion, and that new proxies will be solicited for voting on the proposed plan of conversion; and

(11) the amount of the deposit of an accountholder will be the total of the deposit balances in the accountholder's savings accounts in the converting savings bank as of the close of business on the eligibility record date. The plan of conversion may provide that the total deposit balances of less than $50 (or any lesser amounts) will not be considered for purposes of paragraph (6) of this subsection.

(c) A plan of conversion must be adopted by not less than two-thirds of the board.

(d) Public Notice. An application for mutual to stock conversion is deemed to be a complete application at the time 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.

(e) Following approval of the application for conversion by the Commissioner, the plan of conversion must be submitted to the members at an annual or special meeting and the plan must be approved, in person or by proxy, by at least a majority of the total outstanding votes of the members.

(f) No offer to sell securities of a savings bank pursuant to a plan of conversion may be made prior to Commissioner's approval of the:

(1) application for conversion;

(2) proxy statement; and

(3) offering circular.

(g) Within 45 days:

(1) of the date of the mailing of the subscription form, the subscription rights must be exercised;

(2) after the last day of the subscription period, the sale of all shares of capital stock of the converting savings bank to be made under the plan of conversion, including any sale in a public offering or direct community marketing, must be completed.

(h) The converting savings bank must pay interest at not less than the savings account interest rate on all amounts paid in cash or by check or money order to the savings bank to purchase shares of capital stock in the subscription offering or direct community offering from the date payment is received by the savings bank until the conversion is completed or terminated.

(i) For the purpose of this rule, the public offering and a direct community offering is deemed to commence upon the declaration of effectiveness by the Commissioner of the final offering circular.

(j) The Commissioner may grant a written waiver from any requirement of this rule that is not otherwise required by statute.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204275

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 5. EXPEDITED APPLICATIONS

7 TAC §§75.151 - 75.153

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. 7 TAC §§75.151 - 75.153 are also adopted under the authority of, and to implement, Finance Code §96.002(a)(2).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

§75.152.Expedited Applications.

(a) An eligible institution as defined in §75.151 of this title (relating to Eligible Institution) 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).

(b) An expedited filing must include 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) 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.

(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 adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204276

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 6. CHANGE OF CONTROL

7 TAC §§75.161 - 75.165

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. The rules are also adopted under the authority of, and to implement, Finance Code: Chapter 92, Subchapter L; and §96.002(a)(2) and (10).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

§75.161.Acquisition of a Savings Bank.

The following procedures must be followed when a person desires to obtain control of a savings bank (including change of control of a savings bank holding company).

(1) No person other than the issuer may make a public tender offer for, solicitation or a request or invitation for tenders of, or enter into and consummate any agreement to exchange securities for, seek to acquire, or acquire in the open market or by means of a privately negotiated agreement or contract, any voting security or any security convertible into a voting security of a savings bank if, after the consummation thereof, such person would directly or indirectly, or by conversion or by exercise of any right to acquire, be in control of such savings bank, unless such person has filed with the Commissioner all of the following information on an application form approved by the Commissioner and which application form is deemed by the Commissioner to be complete and has received a written order from the Commissioner approving such acquisition or change of control:

(A) the background and identity of the applicant, if such applicant and any affiliate is an individual, or all individuals who are directors, executive officers, or owners of 10% or more of the voting securities of the applicant if the applicant is not an individual. Such filing must contain the following information:

(i) name and address;

(ii) present principal business activity, occupation, or employment including position and office held and the name, principal business, and address of any corporation or other organization in which such employment is carried on;

(iii) material occupations, positions, offices, or employments previously held by the individual, giving the starting and ending dates of each and the name, principal business, and address of any business corporation or other organization in which each such occupation, position, office, or employment was carried on, indicating if any such occupation, position, office, or employment required licensing by or registration with any federal, state, or municipal governmental agency;

(iv) whether such individual is presently charged with or has ever been convicted of a violation of law in a criminal proceeding (excluding minor traffic violations) and, if so, giving the date, nature of conviction, name and location of the court, and penalty imposed or other disposition of the case;

(v) whether such individual has been or is a party to any federal, state, or municipal court lawsuit in which such individual is or was alleged to have violated any federal or state statutes or regulations, and, if so, giving the date, style of the suit, case number, court location, and disposition of the suit;

(vi) whether any such individual has been or is a party to any federal, state, or municipal governmental agency administrative actions in which such individual was or is alleged to be in violation of any governmental agency statute or regulation, and if so, giving the date, nature of the action, name and location of the governmental agency, and disposition of the case; and any other relevant information requested by the Commissioner;

(B) if the applicant is not an individual, the nature of its business operations for the past five years or for such lesser period as such applicant and any predecessors thereof have been in existence;

(C) description of the interrelationships between the applicant and all affiliates of the applicant;

(D) nature, identity, source, and amount of funds or other consideration used or to be used in effecting the acquisition of control, and, if any part of these funds or other consideration has been or is to be borrowed or otherwise obtained, there must be a description of the transaction, the names of the parties, and all arrangements, or other understanding with such parties, including all arrangements, agreements, or understandings in regard to repayment of the funds;

(E) any plans or proposals which the applicant may have to declare dividends to liquidate such savings banks, to sell its assets, or to merge it with any person or persons or to make any other material change in its business operations or corporate structure or management, including modifications in or plans to enter into any management contracts, and any financial or employment guarantees given to present and contemplated management;

(F) the terms and conditions of any proposed acquisition and the manner in which the acquisition is to be made;

(G) the number of shares of the savings bank's voting securities (including securities convertible or evidencing rights to acquire voting securities) which the applicant, its affiliates, affiliated persons, and any other related person plans to acquire, and the terms of the offer, request, invitation, agreement, or acquisition;

(H) a description of any contracts, arrangements, or understandings with respect to any voting security of the savings bank in which the applicant, its affiliates, or any related person is involved;

(I) copies of any contracts, agreements, or other documents which the Commissioner determines are relevant to the review of the application; and

(J) any other relevant information requested by the Commissioner.

(2) If the person required to file the information required by paragraph (1) of this section is a partnership, limited partnership, syndicate, trust, or other group, the Commissioner may require that the information must be given to:

(A) each partner of such partnership or limited partnership;

(B) each member of such syndicate or group; and

(C) each person who controls such partner or member.

(3) If the person required to file the information required by paragraph (1) of this section is a corporation, the Commissioner may require that the information called for must be given with respect to such corporation and each officer and director of such corporation and each person who is directly or indirectly the beneficial owner of more than 10% of the outstanding voting securities of such corporation.

(4) The transaction for acquisition of control of a savings bank may not be consummated until the Commissioner approves the application for acquisition of control. The application will be processed and considered in accordance with Finance Code §92.556 and §92.557. The Commissioner will render a decision within 60 days after the application is complete and has been accepted for filing as provided by §75.101 of this title (relating to Application Filing Requirements). The application will be denied if the Commissioner finds any of the following:

(A) the acquisition would substantially lessen competition or would in any manner be in restraint of trade and would result in a monopoly or would be in furtherance of a combination or conspiracy to monopolize or attempt to monopolize the savings and loan or the savings bank industry in any part of the state, unless the Commissioner also finds that the anticompetitive effects of the proposed acquisition are clearly outweighed in the public interest by the probable effect of acquisition in meeting the convenience and needs of the community to be served and that the proposed acquisition is not a violation of any law of this state or the United States;

(B) the financial condition of any acquiring party might jeopardize the financial stability of the savings bank being acquired;

(C) plans or proposals to liquidate or sell the savings bank or its assets are not in the best interest of the savings bank;

(D) the experience, ability, standing, competence, trustworthiness, or integrity of the applicant is such that the acquisition would not be in the best interest of the savings bank;

(E) the savings bank will not be solvent, have adequate capital structure, or be in compliance with the laws of this state after the acquisition;

(F) the acquisition would result in the violation of any law or regulation or it has been evidenced that the applicant, affiliates, or affiliated persons may cause to be abused the fiduciary responsibility held by the savings bank or other demonstration or untrustworthiness of the applicant, affiliates, or affiliated persons which would affect the savings bank has been evidenced;

(G) the applicant has not provided information pertinent to the application requested by the Commissioner; or

(H) the applicant is not acting in good faith.

§75.163.Retention of Control.

(a) The following conditions affecting any controlled savings bank, regardless of when or how such control has been acquired, are grounds for the Commissioner to investigate, seek to enjoin, or set aside any change of control of a savings bank, if the Commissioner deems the transfer to be against the public interest:

(1) the violation of any law, these regulations, abuse of the fiduciary responsibility held by a savings bank, or other demonstration of untrustworthiness by the savings bank, its holding company, or any controlling person, affiliates, affiliated persons, or any of the officers or directors which would affect the savings bank; or

(2) the violation of any antitrust law of this state by the savings bank, the holding company, or any affiliate.

(b) The Commissioner may require the submission of such information as necessary to determine whether any retention of control complies with the law of this state, as a condition of approval of such retention of control.

(c) When the Commissioner determines reasonable cause exists to believe that a change of control may have taken place without prior approval, the Commissioner may call a hearing to determine whether there has been in fact a change of control. If the Commissioner finds by a preponderance of the evidence that such unauthorized control exists, the Commissioner may, after notice and hearing, issue an order requiring immediate divestiture by certain persons of unapproved or indirect control, or the Commissioner may issue any other supervisory order the Commissioner deems appropriate.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204277

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 7. CAPITAL NOTES AND DEBNETURES

7 TAC §75.171

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. The rules are also adopted under the authority of, and to implement, Finance Code: §96.002(a)(11); and §93.004(b).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

§75.171.Capital Notes and Debentures.

(a) Approval Required. No savings bank may issue and sell its capital notes or debentures without 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) Requirements. A savings bank may, by resolution of its board and with prior approval of the Commissioner, issue capital notes, debentures, bonds, or other secured or unsecured capital obligations, which may be convertible in whole or in part to shares of permanent reserve fund stock, or may be issued with warrants attached, to purchase at a future date, shares of permanent reserve fund stock of the issuing savings bank, provided:

(1) the savings bank provides adequate proof to the satisfaction of the Commissioner that the holders of such obligations will receive properly amortized payments of both principal and interest at regularly stated intervals, or that proper provision is made for sinking fund allocations to retire all principal of and interest on such obligations; and

(2) sufficient evidence is furnished to the Commissioner as to the need and utilization of such funds by the savings bank in a profitable manner.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204278

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 8. HOLDING COMPANY APPLICATIONS

7 TAC §75.181, §75.182

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. The rules are also adopted under the authority of, and to implement, Finance Code: §96.002(a)(11) and (15); and §97.002. 7 TAC §75.182 is also adopted under the authority of, and to implement, Finance Code Chapter 98, Subchapter B.

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

§75.182.Reorganization as a Mutual Holding Company.

(a) A savings bank may reorganize as a mutual holding company by complying with the provisions of Finance Code §§97.051 - 97.053. The savings bank must provide to the Commissioner an application to reorganize in a form specified by the Commissioner. The applicant must provide one signed original and at least one copy of the application together with complete exhibits. The application must include:

(1) the proposed certificate of formation for the proposed subsidiary savings bank which must comply with the requirements of Finance Code §92.051 and §92.052 or §92.053, as applicable;

(2) the proposed bylaws for the proposed subsidiary;

(3) the proposed restated certificate of formation and bylaws of the mutual holding company;

(4) the complete plan of reorganization; and

(5) a certification by the president or secretary as to how that the reorganization, including the amendments to the certificate of formation and bylaws of the mutual holding company have been approved by a majority of the members or shareholders of the reorganizing savings bank in accordance with Finance Code Chapter 97, Subchapter B;

(b) On receipt of the application, the Commissioner may conduct an examination of the applicant savings bank.

(c) The Commissioner may approve the reorganization without a hearing if the Commissioner determines:

(1) that the resulting savings bank will be in sound condition and meets all requirements of Finance Code Chapter 92, Subchapter B, and relevant rules of the Commissioner and the Finance Commission; and

(2) the applicant has received all approvals required under federal law for the creation of a bank or thrift holding company.

(d) If the Commissioner denies an application to reorganize, the applicant may appeal in the same manner as provided in Finance Code §92.304.

(e) A mutual holding company may establish a subsidiary holding company as a direct subsidiary to hold 100% of the stock of its savings bank subsidiary in accordance with the provisions of this subsection.

(1) The subsidiary holding company may be established either at the time of the initial mutual holding company reorganization or at a subsequent date, subject to the approval of the Commissioner.

(2) For the purposes of Finance Code §97.053(a)(3) and (4), the subsidiary holding company will be treated as a savings bank issuing stock and must comply with the requirements of Finance Code §97.053(a)(3) and (4). The mutual holding company parent must at all times own more than 50% of the outstanding stock of the subsidiary holding company.

(3) The certificate of formation and bylaws of a subsidiary holding company must be approved by the Commissioner and may only be amended with the prior approval of the Commissioner by making an application in accordance with §75.123 of this title (relating to Certificate of Formation or Bylaws Amendments).

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204279

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 9. SUBSIDIARY APPLICATIONS

7 TAC §75.191

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. The rules are also adopted under the authority of, and to implement, Finance Code §96.002(a)(16)(Q).

This adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204280

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER C. OPERATIONS

DIVISION 1. OFFICE LOCATIONS

7 TAC §§75.201 - 75.204

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. The rules are also adopted under the authority of, and to implement, Finance Code: §92.063; and §96.002(a)(14).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

§75.203.Temporary Closing of Additional Offices.

In the event a savings bank closes any additional office of any type on a temporary basis, such office must be reopened within 12 months or less, unless otherwise extended by written authorization of the Commissioner. In the event such office is not reopened within the allotted 12-month period, or the longer period established by the Commissioner, if applicable, the Commissioner's approval to establish such office for purposes of §75.201 of this title (relating to Approval of Offices Required; Closing an Office; Activities Not Requiring an Approved Office) is deemed revoked. Written notice of any temporary closing must be furnished to the Commissioner no later than 10 days after such closing, and the office may not reopen until the Commissioner receives written notification at least 10 days before such reopening.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204281

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


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

7 TAC §§75.221 - 75.227

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. 7 TAC §75.221 is also adopted under the authority of, and to implement, Finance Code: §92.201; §96.002(a)(3) and (5); and §96.056. 7 TAC §75.222 is also adopted under the authority of, and to implement, Finance Code: §92.201; and §96.002(a)(3) and (4). 7 TAC §75.223 is also adopted under the authority of, and to implement, Finance Code: §96.002(a)(7) and (11); §96.051; and §96.053. 7 TAC §75.224 is also adopted under the authority of, and to implement, Finance Code §96.002(a)(11). 7 TAC §75.225 is also adopted under the authority of, and to implement, Finance Code §96.002(a)(9). 7 TAC §75.226 is also adopted under the authority of, and to implement, Finance Code §96.002(a)(11). 7 TAC §75.227 is also adopted under the authority of, and to implement, Finance Code: §92.051(b)(2); §92.058(c)(2); §92.062; §92.157; §92.205; and §96.002(a)(11).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

§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. The audit 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, with the exception of any matters specifically addressed by this section, the Texas Savings Bank Act, or the rules (regulations) adopted thereunder.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204282

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 3. CAPITAL AND CAPITAL OBLIGATIONS

7 TAC §§75.231 - 75.234

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. 7 TAC §75.231 and §75.232 are adopted under the authority of, and to implement, Finance Code: §92.052(b); §92.053(b); §92.054; §92.102; §92.203; and §96.002(a)(1) and (11). 7 TAC §75.233 is also adopted under the authority of, and to implement, Finance Code: Chapter 96, Subchapter C; and §96.002(a)(1) and (11). 7 TAC §75.234 is also adopted under the authority of, and to implement, Finance Code: §93.004(b); and §96.002(a)(11).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204283

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 4. HOLDING COMPANIES

7 TAC §§75.241 - 75.245

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. 7 TAC §§75.241 - 75.246 are also adopted under the authority of, and to implement, Finance Code: §96.002(a)(11) and (15); and §97.002. 7 TAC §75.241 is also adopted under the authority of, and to implement, Finance Code §97.002. 7 TAC §75.242 is also adopted under the authority of, and to implement, Finance Code §97.004. 7 TAC §75.243 is also adopted under the authority of, and to implement, Finance Code §97.005 and §96.352. 7 TAC §75.244 is also adopted under the authority of, and to implement, Finance Code §97.006. 7 TAC § 75.245 is also adopted under the authority of, and to implement, Finance Code §97.007. 7 TAC §75.246 is also adopted under the authority of, and to implement, Finance Code §97.003. 7 TAC §75.247 is also adopted under the authority of, and to implement, Finance Code Chapter 98, Subchapter B.

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204284

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 5. ASSESSMENTS AND FEES

7 TAC §75.251, §75.252

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to savings banks; §16.003(c), providing that the department may set the amount of fees, penalties, charges, and revenues as necessary for the purpose of carrying out the functions of the department; §91.007, requiring the commission to adopt rules setting the amount of fees the commissioner charges, including fees relating to the supervision and examination of 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. 7 TAC §75.252 is also adopted under the authority of, and to implement, Finance Code §96.055(a).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204285

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 6. COMPLAINT PROCEDURES

7 TAC §75.261

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. The rules are also adopted under the authority of, and to implement, Finance Code: Chapter 96, Subchapter C; §96.002(a)(11); and §96.054.

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204286

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER D. LOANS, INVESTMENTS, SAVINGS, AND DEPOSITS

DIVISION 1. AUTHORIZED LOANS AND INVESTMENTS

7 TAC §§75.301 - 75.309

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. The rules are also adopted under the authority of, and to implement, Finance Code §96.002(a)(16).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204287

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 2. SUBSIDIARIES

7 TAC §§75.321, 75.323 - 75.326

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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. The rules are also adopted under the authority of, and to implement, Finance Code §96.002(a)(16)(Q).

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204288

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


DIVISION 3. SAVINGS AND DEPOSITS

7 TAC §75.331, §75.332

Statutory Authority

The rules are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to savings banks; §59.310, requiring the commission to adopt rules to implement Finance Code Chapter 59, Subchapter D; 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. The rules are also adopted under the authority of, and to implement Finance Code Chapter 59, Subchapter D.

The adopted rules affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204289

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


CHAPTER 76. MISCELLANEOUS

The Finance Commission of Texas (commission), on behalf of the Department of Savings and Mortgage Lending (department), adopts the repeal all preexisting rules sections in 7 TAC Chapter 76, as follows: §§76.1, 76.2, 76.4 - 76.7, 76.12, 76.21 - 76.26, 76.41 - 76.47, 76.91 - 76.103, 76.105 - 76.110, and 76.122. The commission's proposal was published in the September 2, 2022, issue of the Texas Register (47 TexReg 5215). The rule repeals are adopted without changes to the text as published in the Texas Register and will not be republished.

Explanation of and Justification for the Rules

The preexisting rules under 7 TAC Chapter 75, Applications, Chapter 76, Miscellaneous, and Chapter 77, Loans, Investments, Savings, and Deposits, implement Finance Code Title 3, Subtitle C, Savings Banks, and affect savings banks regulated by the department.

Changes Concerning the Reorganization (Consolidation) of Chapters 75, 76, and 77 into Chapter 75

When viewing the department's rules as a whole, it is somewhat difficult to discern which of the chapters affects savings banks regulated by the department, particularly when such rules are located alongside the eleven other chapters that affect savings associations and have similar titles. In consideration of the foregoing, the department has determined that it should reorganize Chapters 75 - 77 by consolidating the subject matter of such chapters into one chapter - Chapter 75 - and renaming such chapter "Savings Banks." The adopted rules repeal all preexisting rules in Chapter 76.

Summary of Public Comments

Publication of the commission's proposal for the rules recited a deadline of 30 days to receive public comments, or October 2, 2022. A public hearing in accordance with Government Code §2001.029 was not required. No comments were received.

SUBCHAPTER A. BOOKS, RECORDS, ACCOUNTING PRACTICES, FINANCIAL STATEMENTS AND RESERVES

7 TAC §§76.1, 76.2, 76.4 - 76.7, 76.12

Statutory Authority

The rule repeals are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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.

The adopted rule repeals affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204290

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER B. CAPITAL AND CAPITAL OBLIGATIONS

7 TAC §§76.21 - 76.26

Statutory Authority

The rule repeals are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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.

The adopted rule repeals affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204291

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER C. HOLDING COMPANIES

7 TAC §§76.41 - 76.47

Statutory Authority

The rule repeals are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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.

The adopted rule repeals affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204292

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER F. FEES AND CHARGES

7 TAC §§76.91 - 76.103, 76.105 - 76.110

Statutory Authority

The rule repeals are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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 adopted rule repeals affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204293

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER H. COMPLAINT PROCEDURES

7 TAC §76.122

Statutory Authority

The rule repeal is adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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.

The adopted rule repeal affects the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204294

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


CHAPTER 77. LOANS, INVESTMENTS, SAVINGS, AND DEPOSITS

The Finance Commission of Texas (commission), on behalf of the Department of Savings and Mortgage Lending (department), adopts the repeal all preexisting rules sections in 7 TAC Chapter 77, as follows: §§77.1 - 77.11, 77.31, 77.33, 77.35, 77.51, 77.71, 77.73, 77.91 - 77.96, 77.115, and 77.116. The commission's proposal was published in the September 2, 2022, issue of the Texas Register (47 TexReg 5218). The rule repeals are adopted without changes to the text as published in the Texas Register and will not be republished.

Explanation of and Justification for the Rules

The preexisting rules under 7 TAC Chapter 75, Applications, Chapter 76, Miscellaneous, and Chapter 77, Loans, Investments, Savings, and Deposits, implement Finance Code Title 3, Subtitle C, Savings Banks, and affect savings banks regulated by the department.

Changes Concerning the Reorganization (Consolidation) of Chapters 75, 76, and 77 into Chapter 75

When viewing the department's rules as a whole, it is somewhat difficult to discern which of the chapters affects savings banks regulated by the department, particularly when such rules are located alongside the eleven other chapters that affect savings associations and have similar titles. In consideration of the foregoing, the department has determined that it should reorganize Chapters 75 - 77 by consolidating the subject matter of such chapters into one chapter - Chapter 75 - and renaming such chapter "Savings Banks." The adopted rules repeal all preexisting rules in Chapter 77.

Changes Concerning Loan Requirements

The department's preexisting rules in Chapter 77, Subchapter A, §§77.2 - 77.9 establish various requirements for loans made by a savings bank. While such rules, at one time, were appropriate, the department has determined that, given the requirements of federal law governing loan products, the rules are now overly prescriptive and should be repealed. As a result, the subject matter of such rules is not included in the department's related proposal concerning adopted new rules in 7 TAC Chapter 75, published elsewhere in this issue of the Texas Register.

Summary of Public Comments

Publication of the commission's proposal for the rules recited a deadline of 30 days to receive public comments, or October 2, 2022. A public hearing in accordance with Government Code §2001.029 was not required. No comments were received.

SUBCHAPTER A. AUTHORIZED LOANS AND INVESTMENTS

7 TAC §§77.1 - 77.11, 77.31, 77.33, 77.35, 77.51, 77.71, 77.73, 77.91 - 77.96

Statutory Authority

The rule repeals are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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.

The adopted rule repeals affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204295

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


SUBCHAPTER B. SAVINGS AND DEPOSITS

7 TAC §77.115, §77.116

Statutory Authority

The rule repeals are adopted under the authority of Finance Code: §11.302, authorizing the commission to adopt rules applicable to 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.

The adopted rule repeals affect the statutes contained in Finance Code Title 3, Subtitle C, Savings Banks.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204296

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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


CHAPTER 79. RESIDENTIAL MORTGAGE LOAN SERVICERS

SUBCHAPTER A. REGISTRATION

7 TAC §79.4

The Finance Commission of Texas (commission), on behalf of the Department of Savings and Mortgage Lending (department), adopts amendments to 7 TAC Chapter 79, §79.4, concerning Bond Requirement. The commission's proposal was published in the September 2, 2022, issue of the Texas Register (47 TexReg 5220). The rule is adopted without changes to the text as published in the Texas Register and will not be republished.

Explanation of and Justification for the Rule

The preexisting rules under 7 TAC Chapter 79, Residential Mortgage Loan Servicers, implement Finance Code Chapter 158, Residential Mortgage Loan Servicers, and affect residential mortgage loan servicers registered with the department to service residential mortgage loans secured by real estate located in Texas.

Changes Concerning Electronic Surety Bonds

Pursuant to Finance Code §158.055, a residential mortgage loan servicer, in order to qualify for the registration, must obtain and maintain a surety bond against which the department's commissioner (commissioner) may make a claim in the event the residential mortgage loan servicer is unable or unwilling to make payment to comply with a final order of the commissioner. Finance Code §158.055(g) authorizes the commission to adopt rules "establishing the terms and conditions of the surety bond and the qualifications of the surety." Preexisting §79.4 establishes requirements concerning such surety bond, including: (i) that the seal of the surety appear on the face of the bond; (ii) that the bond include an attached power of attorney; and (iii) the filing of a newly-issued bond in the event the commissioner recovers against the bond. Such requirements are relevant to the issuance of a traditional, paper surety bond. Since adoption of preexisting §79.4, there has been a growing trend, both in the surety bond industry, and with regulatory agencies that require such bonds, towards the use of electronic surety bonds. The department seeks to adopt the use of such electronic surety bonds by first allowing their optional use during the 2023 registration period (applications accepted beginning November 1, 2022), and then transitioning to electronic surety bonds on a mandatory basis, perhaps as early as the 2024 registration period (applications accepted beginning November 1, 2023). The adopted rule renders §79.4 compatible with electronic surety bonds by clarifying that the requirements concerning a seal and power of attorney apply only to a traditional, paper bond (electronic surety bonds do not include a seal or power of attorney) and eliminating the requirement to seek reissuance of the bond in the event of a successful claim (electronic surety bonds are perpetual unless cancelled and need not be reissued).

Other Modernization and Update Changes.

The adopted rule makes changes to modernize and update the rule including: adding and replacing language for clarity and to improve readability; removing unnecessary or duplicative provisions; and updating terminology.

Summary of Public Comments

Publication of the commission's proposal for the rules recited a deadline of 30 days to receive public comments, or October 2, 2022. A public hearing in accordance with Government Code §2001.029 was not required. No comments were received.

Statutory Authority

The rule is adopted under the authority of Finance Code: §158.003, authorizing the commission to adopt rules necessary for the purposes of or to ensure compliance with Finance Code Chapter 158; and §158.055(g), authorizing the commission to adopt rules establishing the terms and conditions of surety bond required of a person to be registered as a residential mortgage loan servicer under Finance Code Chapter 158.

The adopted rule affects the statutes contained in Finance Code Chapter 158, the Residential Mortgage Loan Servicer Registration Act.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 31, 2022.

TRD-202204297

Iain A. Berry

Deputy General Counsel

Department of Savings and Mortgage Lending

Effective date: November 20, 2022

Proposal publication date: September 2, 2022

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