/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 and those subject to superDear Mr. Johnson: vision and examination. 

We beg to acknowledge receipt of your letter requesting an opinion from this department as follows: 

We have recently been approached by the executive officer of a loan and brokerage company, which 

company o erates by law under the provisions of Article 152 E: a. 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 t 7 and to the antepenultimate paragraph thereof, wherein you will observe that it is 

stated that all corporations, domestic and foreign, 

incorporated under subdivisions 48, 49 and 50 of 

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, we request a 

clarification of the above quoted expression in Opinion No. o-6947 which apparently does not differentiate 

between corporations subject to supervision and those 

; subject to supervision and examination.” 
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Hon. I. S, Johnson, page 2 (O-7232) 

Article 1524a of Vernon’s Codification of the Revised 

Civil Statutes, commonly known as the “Loan and Brokerage Companies’ Act”‘, specifically dealing with the question of examlnation by your department of such corporations, provides in Section 2 as 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 a fee 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 an examination shall accept a 

financial statement made on 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 a general 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 examinationOur Opinion 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 who have heretofore 

been granted permission to do business in Texas and 

who may hereafter be granted permission to do business in Texas and having as their purpose or purposes 

any part of the provisions set out in Section One of 

this Act. Every foreign corporation having such a 

permit to do business in this State shall be subject 

to the examination of the Banking Commissioner of Texas 

in the same manner and under the same terms and conditions as examination of domestic corporations. * . .( 
Hon. De S. Johnson, page 3 (O-7232) 

‘IBy the terms of the foregoing legislative enactments and particularly the 1945 amendment to Article 6165a, supra, both domestic and fore1 n corporations incorporated under subdivisions 4 8 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 do not come within the definition of ioan 

broker as defined In Article 6165a, V.A.C.S., 1925.” 

When the 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 on the contrary he meant 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 d under 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 we have said that the executive 

officer mentioned by you is In error. 

Very truly yours 

ATTORNEY GENERAL OF TEXAS 

By /s/ Ocie Speer 

Ocie Speer, Assistant 

APPROVED NOV 1, 1946 

/s/ Grover Sellers 

ATTORNEY GENERAL OF TEXAS 

@PROVED: OPINION COMMITTEE 

BY: BWB, CHAIRMAN 

OS-MR:wb