/I -

Hon. L. S. Johnson opinion N6~.‘O-7232

Commissioner State Department of Ret Construction of Article 152&a, Banking Vernon’s Cod.Rev ;Civ.Stat

.,with Austin 

### 14, respect to corporations subject to

Texas supervision by the Banking Commissioner andthose subject to superDear Mr. Johnson: vision and examination.

Webeg to acknowledge receipt of your letter requesting anopinion from this department as follows:

We have recently been approached by the executive officer of aloan and brokerage company, which company oerates by law under the provisions of Article 

### 152 a.

E: This officer contends that his corporation is subject to examination by the Banking Department and bases his contention upon the fact that Attorney General’s opinion No. 

### 0-6947 so states.

“This corporation is one whose year-end financial statement does not reflect any liability that would be classifiable as the type which automatically places themsubject to annual visitation for examination purposes by this Department, as such liabilities are defined by and treated in Attorney General’s opinion No. 

### o-5858.

“ite invite our attention to Attorney General’s opinion No. 

### 0-69 7 t andto the antepenultimate paragraph thereof, wherein you will observe that it is stated that all corporations, domestic and foreign, incorporated under subdivisions 

### 48, 49 and 50of Article 1302 R.C.S. 1925 and Article 1303b V.A.C.S. 1925 are subject to examination by the Department of Banking of the State of Texas.

“In view of the provisions of Section.2 ,of Article 1524a, V.B.C.S. 1925 upon which Att0rne.y General’s opinion No. O-5858 was in part based, werequest a clarification of the above quoted expression in Opinion No. 

### o-6947 which apparently does not differentiate between corporations subject to supervision andthose ;subject to supervision and examination.”- --

Hon. I. S, Johnson, page 2 (O-7232)

Article 1524a of Vernon’s Codification of the Revised Civil Statutes, commonly known as the 

### “Loan andBrokerage Companies’ Act”‘, specifically dealing with the question of examlnation byyour department of such corporations, provides in Section 2as follows:

“The Banking Commissioner 

### ,of Texas shall examine or cause to be examined such corporations annually or oftener if he deems it necessary. Said corporation shall pay the actual traveling expenses, hotel bills, and all other actual expense incident to ’ such examinati,on and afee not exceeding Twentyfive Dollars ($25) per day per person engaged in such examination. If such corporation had not sold in Texas its bonds, notes, certificates, debentures, or other obligations and does not offer for sale 07 sell in Texas its bonds, notes, certificates, debentures or other obligations, the Banking Commissioner of Texas, in lieu of anexamination shall accept a financial statement madeon such form, containing such information as he desires. * * *‘I It will be observed that such a corporation, which has

“not sold in Texas its bonds, notes, certificates, debentures, or other obligations, and does not offer for sale or sell in Texas its bonds, notes, certificates, debentures, or other obligations”, is not subject to examination by the Banking Commissioner. All such corporations in ageneral way are subject to the supervision of the Banking Commissioner, but only the class having sold or offered for sale, the instruments mentioned above in Texas is subject to actual visitation or examinationOurOpinion No. 

### O-6947 referred to by you does not announce any different rule. The language referred to by you in that opinion is as follows:

“‘Sec. 10. The provisions of this Act shall apply to foreign corporations whohave heretofore been granted permission to dobusiness in Texas and whomayhereafter be granted permission to dobusiness in Texas andhaving as their purpose or purposes anypart of the provisions set out in Section Oneof this Act. Every foreign corporation having such a permit to dobusiness in this State shall be subject to the examination of the Banking Commissioner of Texas in the samemanner andunder the sameterms and conditions as examination of domestic corporations. *

. .(Hon. DeS. Johnson, page 3 (O-7232)

‘IBythe terms of the foregoing legislative enactments andparticularly the 1945 amendment to Article 6165a, supra, both domestic and fore1 ncorporations incorporated under subdivisions 48 49 and 50, Article 1302, R.C.S., 1925, and Article !303b, V.A.C.S., 1925 are subject to examination by the Department of 6anking of the State of Texas and hence donot comewithin the definition of ioan broker as defined In Article 6165a, V.A.C.S., 1925.” Whenthe entire quotation i.s considered, it is clear the writer of the opinion was not d.ealing with the narrow field of examination by the Commissioner, as contradistinguished from supervi.sion of such concerns, but onthe contrary hemeant merely to assert that such corporations doing business in Texas un-, der permit were subject to examination of the Banking Commission.- as such corooration o aaniz dunder the laws of TexG. We i:ve seen that by thatSte$ theze corporations are all subject to suuervision, but not all of them are subject to examination.

It follows from what wehave said that the executive officer mentioned by you is In error. Very truly yours ATTORNEY

GENERAL

OFTEXAS By/s/ Ocie Speer Ocie Speer, Assistant APPROVED

NOV1, 1946 /s/ Grover Sellers ATTORNEY

GENERAL

OFTEXAS @PROVED: OPINIONCOMMITTEE BY: BWB,CHAIRMAN OS-MR:wb