Bill Text: TX SB1916 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Relating to savings and loan associations, savings banks, residential mortgage loan originators and servicers, and other persons or entities under the regulatory jurisdiction of the Department of Savings and Mortgage Lending and the savings and mortgage lending commissioner; creating an offense.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-05-09 - Left pending in committee [SB1916 Detail]
Download: Texas-2017-SB1916-Introduced.html
85R5936 TSR-F | ||
By: Buckingham | S.B. No. 1916 |
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relating to savings and loan associations, savings banks, | ||
residential mortgage loan originators and servicers, and other | ||
persons or entities under the regulatory jurisdiction of the | ||
Department of Savings and Mortgage Lending and the savings and | ||
mortgage lending commissioner; creating an offense. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Sections 62.001(a), (b), and (d), Finance Code, | ||
are amended to read as follows: | ||
(a) Five or more residents of this state may apply to form | ||
and incorporate an association by submitting to the commissioner an | ||
application and the filing fee. | ||
(b) An application must contain: | ||
(1) two copies of the association's certificate of | ||
formation [ |
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(A) the name of the association; | ||
(B) the location of the principal office; and | ||
(C) the names and addresses of the initial | ||
directors; | ||
(2) two copies of the association's bylaws; | ||
(3) data sufficiently detailed and comprehensive to | ||
enable the commissioner to make a determination under Section | ||
62.007, including statements, exhibits, and maps; | ||
(4) other information relating to the association and | ||
its operation that the finance commission by rule requires; and | ||
(5) financial information about each applicant, | ||
incorporator, director, or shareholder that the finance commission | ||
by rule requires. | ||
(d) The certificate of formation [ |
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SECTION 2. Section 62.002(a), Finance Code, is amended to | ||
read as follows: | ||
(a) A capital stock association's certificate of formation | ||
[ |
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(1) the aggregate number of shares of common stock | ||
that the association may issue; | ||
(2) the par value of each share or that the shares are | ||
without par value; | ||
(3) whether the association may issue preferred stock; | ||
(4) the amount of stock that has been subscribed and | ||
will be paid for before the association begins business; | ||
(5) the name and address of each subscriber and the | ||
amount subscribed by each; and | ||
(6) the amount of paid-in surplus with which the | ||
association will begin business. | ||
SECTION 3. Section 62.003, Finance Code, is amended to read | ||
as follows: | ||
Sec. 62.003. ADDITIONAL INCORPORATION REQUIREMENTS FOR | ||
MUTUAL ASSOCIATION. (a) A mutual association's certificate of | ||
formation [ |
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the amount of savings liability of the association and the amount of | ||
the expense fund with which the association will begin business. | ||
(b) Before approving the certificate of formation | ||
[ |
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commissioner may require the association to have subscriptions for | ||
an aggregate amount of savings accounts and an expense fund in an | ||
aggregate amount that the commissioner, under rules of the finance | ||
commission, finds is necessary for the successful operation of the | ||
association. | ||
SECTION 4. Sections 62.007(a) and (b), Finance Code, are | ||
amended to read as follows: | ||
(a) The commissioner may approve an application to | ||
incorporate only if the commissioner finds that: | ||
(1) the prerequisites to incorporation required by | ||
this chapter are satisfied; | ||
(2) the character, responsibility, and general | ||
fitness of each person named in the certificate of formation | ||
[ |
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that: | ||
(A) the business of the association will be | ||
honestly and efficiently conducted in accordance with the intent | ||
and purpose of this subtitle; and | ||
(B) the association will have qualified | ||
full-time management; | ||
(3) there is a public need for the association; | ||
(4) the volume of business in the community in which | ||
the association will conduct its business indicates a profitable | ||
operation is probable; and | ||
(5) the operation of the association will not unduly | ||
harm an existing association. | ||
(b) On finding that the requirements of Subsection (a) are | ||
fulfilled, the commissioner shall: | ||
(1) enter an order approving the application and | ||
stating the findings required by Subsection (a); | ||
(2) issue under official seal a certificate of | ||
incorporation; | ||
(3) deliver a copy of the approved certificate of | ||
formation [ |
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incorporators; and | ||
(4) permanently retain a copy of the certificate of | ||
formation [ |
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SECTION 5. The heading to Section 62.010, Finance Code, is | ||
amended to read as follows: | ||
Sec. 62.010. AMENDMENT OF CERTIFICATE OF FORMATION | ||
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SECTION 6. Section 62.010(a), Finance Code, is amended to | ||
read as follows: | ||
(a) An association may amend its certificate of formation | ||
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majority vote of those entitled to vote attending an annual meeting | ||
or a special meeting called for that purpose. | ||
SECTION 7. Section 62.011(a), Finance Code, is amended to | ||
read as follows: | ||
(a) Only with the prior approval of the commissioner may an | ||
association: | ||
(1) establish an office other than the principal | ||
office stated in the association's certificate of formation | ||
[ |
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(2) move an office from its immediate vicinity; or | ||
(3) change the association's name. | ||
SECTION 8. Section 62.051, Finance Code, is amended to read | ||
as follows: | ||
Sec. 62.051. PURPOSE OF INCORPORATION. A person may apply | ||
to form and incorporate an association for the purpose of: | ||
(1) purchasing the assets, assuming the liabilities, | ||
excluding liability to stockholders, and continuing the business of | ||
an association the commissioner considers to be in an unsafe | ||
condition; or | ||
(2) acquiring an existing association by merger. | ||
SECTION 9. Sections 62.053(a) and (e), Finance Code, are | ||
amended to read as follows: | ||
(a) The commissioner shall approve an application under | ||
this subchapter if the commissioner finds that: | ||
(1) the business of the association that is to be | ||
reorganized or merged can be effectively continued under the | ||
certificate of formation [ |
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(2) the reorganization or merger is in the best | ||
interest of the general public and the savers, depositors, | ||
creditors, and shareholders of the association that is to be | ||
reorganized or merged. | ||
(e) In a merger, a shareholder of a capital stock | ||
association has the same dissenter's rights as a shareholder of a | ||
domestic business corporation under the Business Organizations | ||
Code [ |
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SECTION 10. Section 62.156(c), Finance Code, is amended to | ||
read as follows: | ||
(c) An association may retire or redeem preferred stock in | ||
the manner provided by: | ||
(1) the certificate of formation [ |
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(2) a resolution of the board establishing the rights | ||
and preferences relating to the stock. | ||
SECTION 11. Sections 62.157(a) and (c), Finance Code, are | ||
amended to read as follows: | ||
(a) The certificate of formation [ |
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(1) authorize that shares of preferred stock be | ||
divided into and issued in series; and | ||
(2) determine the rights and preferences of each | ||
series or part of a series. | ||
(c) The certificate of formation [ |
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classes of preferred stock into series and to determine the rights | ||
and preferences of the shares of each series. A copy of the | ||
resolution must be submitted to the commissioner before the shares | ||
may be issued. The commissioner shall file the resolution in the | ||
commissioner's office if the resolution conforms to this subtitle. | ||
After the resolution is filed, it is considered an amendment of the | ||
association's certificate of formation [ |
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SECTION 12. Section 62.252(b), Finance Code, is amended to | ||
read as follows: | ||
(b) The directors shall execute [ |
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application required by Section 62.251. | ||
SECTION 13. Section 62.351(c), Finance Code, is amended to | ||
read as follows: | ||
(c) A shareholder of a capital stock association has the | ||
same dissenter's rights as a shareholder of a domestic corporation | ||
under the Business Organizations Code [ |
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SECTION 14. Section 62.405(c), Finance Code, is amended to | ||
read as follows: | ||
(c) A surviving association that is a domestic association | ||
shall operate under: | ||
(1) the certificate of formation [ |
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of the merging or consolidating domestic association; and | ||
(2) the laws applicable to a domestic association. | ||
SECTION 15. Section 62.454(b), Finance Code, is amended to | ||
read as follows: | ||
(b) After the merger takes effect: | ||
(1) a corporation that was merged ceases to exist; | ||
(2) the association assumes the rights and obligations | ||
of the corporation and owns the property of the association; and | ||
(3) the association's certificate of formation is | ||
[ |
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that a change is stated in the plan of merger. | ||
SECTION 16. Section 66.002, Finance Code, is amended to | ||
read as follows: | ||
Sec. 66.002. ADOPTION OF RULES. The finance commission may | ||
adopt rules relating to: | ||
(1) the minimum amounts of capital stock and paid-in | ||
surplus required for incorporation as a capital stock association; | ||
(2) the minimum amounts of savings liability and | ||
expense funds required for incorporation as a mutual association; | ||
(3) the fees and procedures for processing, hearing, | ||
and deciding applications filed with the commissioner or the | ||
Department of Savings and Mortgage Lending under this subtitle; | ||
(4) the books and records that an association is | ||
required to keep and the location at which the books and records are | ||
required to be maintained; | ||
(5) the accounting principles and practices that an | ||
association is required to observe; | ||
(6) the conditions under which records may be copied | ||
or reproduced for permanent storage before the original records are | ||
destroyed; | ||
(7) [ |
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[ |
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other reports that an association is required to prepare and | ||
publish or file; | ||
(8) [ |
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transactions in general are to be described when entered in the | ||
books of an association, so that the entry accurately describes the | ||
subject matter of the entry; and | ||
(9) [ |
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commissioner may require an asset to be charged off or reserves | ||
established by transfer from surplus or paid-in capital because of | ||
the depreciation of or overstated value of the asset. | ||
SECTION 17. Section 66.101, Finance Code, is amended to | ||
read as follows: | ||
Sec. 66.101. INTERVENTION FOR VIOLATIONS AND UNSAFE AND | ||
UNSOUND PRACTICES. The commissioner may intervene in the affairs | ||
of an association if the association or a person who participates in | ||
the affairs of the association or a subsidiary of the association: | ||
(1) engages in or is about to engage in an unsafe and | ||
unsound practice in conducting the affairs of the association; or | ||
(2) violates or is about to violate: | ||
(A) the certificate of formation [ |
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(B) a law or supervisory order applicable to the | ||
association; or | ||
(C) a condition that the commissioner or the | ||
finance commission has imposed on the association by written order | ||
or agreement. | ||
SECTION 18. Section 67.001(b), Finance Code, is amended to | ||
read as follows: | ||
(b) Subsection (a) does not prohibit activity that is not | ||
considered to be transacting business in this state under Section | ||
9.251, Business Organizations Code [ |
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SECTION 19. Sections 92.051(a), (b), and (d), Finance Code, | ||
are amended to read as follows: | ||
(a) Five or more adult residents of this state may apply to | ||
form and incorporate a savings bank by submitting to the | ||
commissioner: | ||
(1) an application to incorporate a savings bank that | ||
is: | ||
(A) in a form specified by the commissioner; and | ||
(B) signed by each incorporator; and | ||
(2) the filing fee. | ||
(b) An application must contain: | ||
(1) two copies of the savings bank's certificate of | ||
formation [ |
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(A) the name of the savings bank; | ||
(B) the location of the principal office; and | ||
(C) the names and addresses of the initial | ||
directors; | ||
(2) two copies of the savings bank's bylaws; | ||
(3) data sufficiently detailed and comprehensive to | ||
enable the commissioner to make findings under Section 92.058, | ||
including statements, exhibits, and maps; | ||
(4) other information relating to the savings bank and | ||
its operation that the finance commission by rule requires; and | ||
(5) financial information about each applicant, | ||
incorporator, director, officer, or shareholder that the finance | ||
commission by rule requires. | ||
(d) The certificate of formation [ |
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SECTION 20. Section 92.052(a), Finance Code, is amended to | ||
read as follows: | ||
(a) A capital stock savings bank's certificate of formation | ||
[ |
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(1) the aggregate number of shares of common stock | ||
that the savings bank may issue; | ||
(2) the par value of each share or that the shares are | ||
without par value; | ||
(3) whether the savings bank may issue preferred | ||
stock; | ||
(4) the amount of stock that has been subscribed and | ||
will be paid for before the savings bank begins business; | ||
(5) the name and address of each subscriber and the | ||
amount subscribed by each; and | ||
(6) the amount of paid-in surplus with which the | ||
savings bank will begin business. | ||
SECTION 21. Section 92.053, Finance Code, is amended to | ||
read as follows: | ||
Sec. 92.053. ADDITIONAL REQUIREMENTS FOR MUTUAL SAVINGS | ||
BANK. (a) A mutual savings bank's certificate of formation | ||
[ |
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of deposit liability of the savings bank and the amount of the | ||
expense fund with which the savings bank will begin business. | ||
(b) Before approving the certificate of formation [ |
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require the savings bank to have subscriptions for an aggregate | ||
amount of deposit accounts and an expense fund in an aggregate | ||
amount the finance commission by rule establishes as necessary for | ||
the successful operation of a mutual savings bank. | ||
SECTION 22. Sections 92.058(b) and (c), Finance Code, are | ||
amended to read as follows: | ||
(b) The commissioner may approve an application to | ||
incorporate only if: | ||
(1) the prerequisites to incorporation required by | ||
this chapter are satisfied; | ||
(2) the character, responsibility, and general | ||
fitness of each person named in the certificate of formation | ||
[ |
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that: | ||
(A) the business of the savings bank will be | ||
honestly and efficiently conducted in accordance with the intent | ||
and purpose of this subtitle; and | ||
(B) the savings bank will have qualified | ||
full-time management; | ||
(3) there is a public need for the savings bank; | ||
(4) the volume of business in the community in which | ||
the savings bank will conduct its business indicates a profitable | ||
operation is probable; and | ||
(5) the operation of the savings bank will not unduly | ||
harm an existing savings bank or state or federal savings and loan | ||
association. | ||
(c) On finding that each requirement of Subsection (b) is | ||
met, the commissioner shall: | ||
(1) enter an order approving the application and | ||
stating the findings required by Subsection (b); | ||
(2) issue under official seal a certificate of | ||
incorporation; | ||
(3) deliver a copy of the approved certificate of | ||
formation [ |
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incorporators; and | ||
(4) permanently retain a copy of the certificate of | ||
formation [ |
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SECTION 23. The heading to Section 92.062, Finance Code, is | ||
amended to read as follows: | ||
Sec. 92.062. AMENDMENT OF CERTIFICATE OF FORMATION | ||
[ |
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SECTION 24. Section 92.062(a), Finance Code, is amended to | ||
read as follows: | ||
(a) A savings bank may amend its certificate of formation | ||
[ |
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majority vote of those entitled to vote attending an annual meeting | ||
or a special meeting called for that purpose. | ||
SECTION 25. Section 92.063(a), Finance Code, is amended to | ||
read as follows: | ||
(a) Only with the prior approval of the commissioner given | ||
in accordance with rules of the finance commission may a savings | ||
bank: | ||
(1) establish an office other than the principal | ||
office stated in the savings bank's certificate of formation | ||
[ |
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(2) move an office from its immediate vicinity; or | ||
(3) change the savings bank's name. | ||
SECTION 26. Section 92.101, Finance Code, is amended to | ||
read as follows: | ||
Sec. 92.101. PURPOSE OF INCORPORATION. A person may apply | ||
to form and incorporate a savings bank for the purpose of: | ||
(1) purchasing the assets, assuming the liabilities | ||
other than liability to shareholders, and continuing the business | ||
of a financial institution the commissioner considers to be in an | ||
unsafe condition; | ||
(2) acquiring an existing financial institution by | ||
merger; or | ||
(3) facilitating a reorganization or merger with or | ||
into a savings bank under rules adopted by the finance commission. | ||
SECTION 27. Sections 92.103(a) and (e), Finance Code, are | ||
amended to read as follows: | ||
(a) The commissioner shall approve an application under | ||
this subchapter if the commissioner finds that: | ||
(1) the business of the financial institution that is | ||
to be reorganized or merged can be effectively continued under the | ||
certificate of formation [ |
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(2) the reorganization or merger is in the best | ||
interest of the public and the savers, depositors, creditors, and | ||
shareholders of the financial institution that is to be reorganized | ||
or merged. | ||
(e) In a merger, a shareholder of a capital stock financial | ||
institution has the same dissenter's rights as a shareholder of a | ||
domestic business corporation under the Business Organizations | ||
Code [ |
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SECTION 28. Section 92.152(b), Finance Code, is amended to | ||
read as follows: | ||
(b) The members or shareholders shall elect the board by a | ||
majority vote at the annual meeting. The directors may be elected | ||
for staggered terms of longer than one year as provided by the | ||
savings bank's bylaws or certificate of formation [ |
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SECTION 29. Section 92.158(a), Finance Code, is amended to | ||
read as follows: | ||
(a) The voting rights of a person entitled to vote at an | ||
annual or special meeting of a savings bank are the same as those of | ||
a shareholder of a domestic business corporation under the Business | ||
Organizations Code [ |
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SECTION 30. Section 92.209(c), Finance Code, is amended to | ||
read as follows: | ||
(c) A savings bank may retire or redeem preferred stock in | ||
the manner provided by: | ||
(1) the certificate of formation [ |
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(2) a resolution of the board of the savings bank | ||
establishing the rights and preferences relating to the stock. | ||
SECTION 31. Sections 92.210(a) and (c), Finance Code, are | ||
amended to read as follows: | ||
(a) The certificate of formation [ |
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(1) authorize that shares of preferred stock be | ||
divided into and issued in series; and | ||
(2) determine the rights and preferences of each | ||
series or part of a series. | ||
(c) The certificate of formation [ |
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classes of preferred stock into series and to determine the rights | ||
and preferences of the shares of each series. A copy of the | ||
resolution must be submitted to the commissioner before the shares | ||
may be issued. The commissioner shall file the resolution in the | ||
commissioner's office if the resolution conforms to this subtitle. | ||
After the resolution is filed, it is considered an amendment of the | ||
savings bank's certificate of formation [ |
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SECTION 32. Section 92.302(b), Finance Code, is amended to | ||
read as follows: | ||
(b) The directors, or the president and secretary, shall | ||
execute [ |
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incorporation as provided by Subchapter B. | ||
SECTION 33. Section 92.351(c), Finance Code, is amended to | ||
read as follows: | ||
(c) A shareholder of a capital stock savings bank has the | ||
same dissenter's rights as a shareholder of a domestic corporation | ||
under the Business Organizations Code [ |
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SECTION 34. Section 92.405(c), Finance Code, is amended to | ||
read as follows: | ||
(c) A surviving savings bank that is a domestic savings bank | ||
shall operate under: | ||
(1) the certificate of formation [ |
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of the merging or consolidating domestic savings bank; and | ||
(2) the law applicable to a domestic savings bank. | ||
SECTION 35. Section 92.454(b), Finance Code, is amended to | ||
read as follows: | ||
(b) After the merger takes effect: | ||
(1) a corporation that was merged ceases to exist; | ||
(2) the savings bank assumes the rights and | ||
obligations of the corporation and owns the property of the | ||
corporation; and | ||
(3) the savings bank's certificate of formation is | ||
[ |
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that a change is stated in the plan of merger. | ||
SECTION 36. Section 94.301, Finance Code, is amended to | ||
read as follows: | ||
Sec. 94.301. AUTHORIZATION. With the prior approval | ||
[ |
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finance commission, a savings bank may invest in a subsidiary | ||
corporation created under general corporation law. | ||
SECTION 37. Section 96.002(a), Finance Code, is amended to | ||
read as follows: | ||
(a) The finance commission may adopt rules necessary to | ||
supervise and regulate savings banks and to protect public | ||
investment in savings banks, including rules relating to: | ||
(1) the minimum amounts of capital required to | ||
incorporate and operate as a savings bank, which may not be less | ||
than the amounts required of corresponding national banks; | ||
(2) the fees and procedures for processing, hearing, | ||
and deciding applications filed with the commissioner or the | ||
Department of Savings and Mortgage Lending under this subtitle; | ||
(3) the books and records that a savings bank is | ||
required to keep and the location at which the books and records are | ||
required to be maintained; | ||
(4) the accounting principles and practices that a | ||
savings bank is required to observe; | ||
(5) the conditions under which records may be copied | ||
or reproduced for permanent storage before the originals are | ||
destroyed; | ||
(6) [ |
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[ |
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bank is required to prepare and publish or file under this chapter; | ||
(7) [ |
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transactions in general are to be described when entered in the | ||
books of a savings bank, so that the entry accurately describes the | ||
subject matter of the entry; | ||
(8) [ |
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may require an asset to be charged off or reserves established by | ||
transfer from surplus or paid-in capital because of depreciation of | ||
or overstated value of the asset; | ||
(9) [ |
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(10) [ |
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a savings bank; | ||
(11) [ |
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plans, and contracts for savings programs; | ||
(12) [ |
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reorganization, conversion, and liquidation of a savings bank; | ||
(13) [ |
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or the change of office location or name of a savings bank; | ||
(14) [ |
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holding companies, including those relating to: | ||
(A) registration and periodic reporting of a | ||
holding company with the commissioner; and | ||
(B) transactions between a holding company, an | ||
affiliate of a holding company, or a savings bank; and | ||
(15) [ |
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and investments that contain provisions reasonably necessary to | ||
ensure that a loan made by a savings bank is consistent with sound | ||
lending practices and that the savings bank's investment will | ||
promote the purposes of this subtitle, including provisions | ||
governing: | ||
(A) the type of loans and the conditions under | ||
which a savings bank may originate, make, or sell loans; | ||
(B) the conditions under which a savings bank may | ||
purchase or participate in a loan made by another lender; | ||
(C) the conditions for the servicing of a loan | ||
for another lender; | ||
(D) the conditions under which a savings bank may | ||
lend money on the security of a loan made by another person; | ||
(E) the conditions under which a savings bank may | ||
pledge loans held by it as collateral for borrowing by the savings | ||
bank; | ||
(F) the conditions under which a savings bank may | ||
invest in securities and debt instruments; | ||
(G) the documentation that a savings bank must | ||
have in its files at the time of funding or purchase of a loan, an | ||
investment, or a participation in a loan; | ||
(H) the form and content of statements of | ||
expenses and fees and other charges that are paid by a borrower or | ||
that a borrower is obligated to pay; | ||
(I) the title information that must be | ||
maintained; | ||
(J) the borrower's insurance coverage of | ||
property securing a loan; | ||
(K) an appraisal report; | ||
(L) the financial statement of a borrower; | ||
(M) the fees or other compensation that may be | ||
paid to a person in connection with obtaining a loan for a savings | ||
bank, including an officer, director, employee, affiliated person, | ||
consultant, or third party; | ||
(N) the conditions under which the savings bank | ||
may advance money to pay a tax, assessment, insurance premium, or | ||
other similar charge for the protection of the savings bank's | ||
interest in property securing the savings bank's loans; | ||
(O) the terms under which a savings bank may | ||
acquire and deal in real property; | ||
(P) the valuation on a savings bank's books of | ||
real property held by the savings bank; | ||
(Q) the terms governing the investment by a | ||
savings bank in a subsidiary, the powers that may be exercised by a | ||
subsidiary, and the activities that may be engaged in by a | ||
subsidiary; and | ||
(R) any other matter considered necessary to | ||
administer each type of transaction. | ||
SECTION 38. Section 96.101(a), Finance Code, is amended to | ||
read as follows: | ||
(a) The commissioner may intervene in the affairs of a | ||
savings bank if the savings bank or a person who participates in the | ||
affairs of the savings bank or a subsidiary or holding company of | ||
the savings bank: | ||
(1) engages in or is about to engage in an unsafe and | ||
unsound practice in conducting the affairs of the savings bank; or | ||
(2) violates or is about to violate: | ||
(A) the certificate of formation [ |
||
|
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(B) a law or supervisory order applicable to the | ||
savings bank; or | ||
(C) a condition that the commissioner or the | ||
finance commission has imposed on the savings bank by written | ||
order, directive, or agreement. | ||
SECTION 39. Section 97.052, Finance Code, is amended to | ||
read as follows: | ||
Sec. 97.052. APPLICATION FOR APPROVAL OF REORGANIZATION. | ||
The application for approval of reorganization must contain: | ||
(1) a brief statement summarizing a reorganization | ||
plan; | ||
(2) two copies of the proposed certificate of | ||
formation [ |
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bank acknowledged by the incorporators of the subsidiary savings | ||
bank; | ||
(3) two copies of the proposed bylaws of the savings | ||
bank; | ||
(4) a statement that the plan of reorganization was | ||
advised, authorized, and approved by the savings bank in the manner | ||
and by the vote required by its charter and the laws of this state; | ||
and | ||
(5) a statement of the manner of approval. | ||
SECTION 40. Section 98.001(b), Finance Code, is amended to | ||
read as follows: | ||
(b) Subsection (a) does not prohibit activity that is not | ||
considered to be transacting business in this state under Section | ||
9.251, Business Organizations Code [ |
||
|
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SECTION 41. Section 119.101(c), Finance Code, is amended to | ||
read as follows: | ||
(c) A stockholder of a capital stock savings bank has the | ||
same right to examine the relevant books and records of a savings | ||
bank as a shareholder of a business corporation under the Business | ||
Organizations Code [ |
||
SECTION 42. Section 156.004(a), Finance Code, is amended to | ||
read as follows: | ||
(a) At the time a residential mortgage loan [ |
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submits an application to a residential mortgage loan originator | ||
sponsored by and conducting business for a licensed or registered | ||
residential mortgage loan company under this chapter, the | ||
residential mortgage loan originator shall provide to the applicant | ||
a disclosure form. The form must [ |
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(1) include the name, address, and toll-free telephone | ||
number for the department [ |
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(2) contain information on how to file a complaint or | ||
recovery fund claim [ |
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SECTION 43. Section 157.0021(b), Finance Code, is amended | ||
to read as follows: | ||
(b) A mortgage banker that indicates in its registration | ||
that it acts as a residential mortgage loan servicer shall provide | ||
to the borrower of each residential mortgage loan that it services | ||
and that is secured by a lien on residential real estate located in | ||
this state the following notice not later than the 30th day after | ||
the date the mortgage banker commences servicing the loan: | ||
"COMPLAINTS REGARDING THE SERVICING OF YOUR TEXAS MORTGAGE | ||
SHOULD BE SENT TO THE DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, | ||
______________________________ (street address of the Department | ||
of Savings and Mortgage Lending). A TOLL-FREE CONSUMER HOTLINE IS | ||
AVAILABLE AT _______________ (telephone number of the Department of | ||
Savings and Mortgage Lending's toll-free consumer hotline)." | ||
SECTION 44. The heading to Subchapter C, Chapter 158, | ||
Finance Code, is amended to read as follows: | ||
SUBCHAPTER C. INVESTIGATIONS;[ |
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AGAINST REGISTRANT | ||
SECTION 45. Section 158.101, Finance Code, is amended to | ||
read as follows: | ||
Sec. 158.101. DISCLOSURE STATEMENT. A registrant shall | ||
provide to the borrower of each residential mortgage loan that it | ||
services and that is secured by a lien on residential real estate | ||
located in this state the following notice not later than the 30th | ||
day after the registrant commences servicing the loan: | ||
"COMPLAINTS REGARDING THE SERVICING OF YOUR TEXAS MORTGAGE | ||
SHOULD BE SENT TO THE DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, | ||
______________________________ (street address of the Department | ||
of Savings and Mortgage Lending). A TOLL-FREE CONSUMER HOTLINE IS | ||
AVAILABLE AT _______________ (telephone number of the Department of | ||
Savings and Mortgage Lending's toll-free consumer hotline)." | ||
SECTION 46. The heading to Section 158.102, Finance Code, | ||
is amended to read as follows: | ||
Sec. 158.102. INSPECTIONS; INVESTIGATIONS [ |
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SECTION 47. Section 158.102, Finance Code, is amended by | ||
adding Subsections (a-1), (a-2), and (e) to read as follows: | ||
(a-1) The commissioner may conduct an inspection of a | ||
registrant as the commissioner determines necessary to determine | ||
whether the registrant is complying with this chapter and | ||
applicable rules. The inspection under this subsection may include | ||
an inspection of the books, records, documents, operations, and | ||
facilities of the registrant. | ||
(a-2) For reasonable cause, the commissioner at any time may | ||
investigate a registrant to determine whether the registrant is | ||
complying with this chapter and applicable rules. | ||
(e) The commissioner may conduct an undercover or covert | ||
investigation only if the commissioner, after due consideration of | ||
the circumstances, determines that the investigation is necessary | ||
to prevent immediate harm and to carry out the purposes of this | ||
chapter. | ||
SECTION 48. Subchapter C, Chapter 158, Finance Code, is | ||
amended by adding Section 158.107 to read as follows: | ||
Sec. 158.107. UNREGISTERED ACTIVITY; OFFENSE. (a) An | ||
individual who is not exempt under this chapter or other applicable | ||
law and who acts as a residential mortgage loan servicer without | ||
first obtaining a registration as required under this chapter | ||
commits an offense. | ||
(b) An offense under this section is a Class B misdemeanor. | ||
A second or subsequent conviction for an offense under this section | ||
is a Class A misdemeanor. | ||
SECTION 49. The Finance Commission of Texas shall adopt | ||
rules to implement Section 156.004(a), Finance Code, as amended by | ||
this Act, not later than January 1, 2018. | ||
SECTION 50. Section 156.004(a), Finance Code, as amended by | ||
this Act, applies only to an application for a residential mortgage | ||
loan that is submitted on or after January 1, 2018. An application | ||
for a residential mortgage loan that is submitted before January 1, | ||
2018, is governed by the law in effect on the date the application | ||
was submitted, and the former law is continued in effect for that | ||
purpose. | ||
SECTION 51. Section 157.0021(b), Finance Code, as amended | ||
by this Act, and Section 158.101, Finance Code, as amended by this | ||
Act, apply only to a residential mortgage loan that is made on or | ||
after the effective date of this Act. A residential mortgage loan | ||
that is made before the effective date of this Act is governed by | ||
the law in effect on the date the residential mortgage loan was | ||
made, and the former law is continued in effect for that purpose. | ||
SECTION 52. (a) Except as otherwise provided by this | ||
section, this Act takes effect September 1, 2017. | ||
(b) Section 156.004(a), Finance Code, as amended by this | ||
Act, takes effect January 1, 2018. |