Source: https://www.sos.texas.gov/texreg/archive/November12019/Proposed%20Rules/7.BANKING%20AND%20SECURITIES.html
Timestamp: 2020-06-01 13:51:17
Document Index: 548177246

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7 TAC §§5.100, 5.101, 5.103, 5.105
The Finance Commission of Texas (commission) proposes amendments to §5.101 (relating to Employee Training and Education Assistance Programs) and proposes new §5.100 (relating to Definitions), §5.103 (relating to Alternative Dispute Resolution Policy), and §5.105 (relating to Negotiated Rulemaking) in 7 TAC, Chapter 5, concerning Administration of Finance Agencies.
In general, the purpose of the proposed amendments and new rules in 7 TAC, Chapter 5 is to implement provisions related to alternative dispute resolution and negotiated rulemaking required by HB 1442, the Sunset legislation for the Office of Consumer Credit Commissioner (OCCC), and required by SB 614, the Sunset legislation for the Texas Department of Banking (DOB) and the Department of Savings and Mortgage Lending (SML). The Texas Legislature passed HB 1442 and SB 614 in the 2019 legislative session.
Effective September 1, 2019, Texas Finance Code, §§12.113, 13.017, and 14.110 require the commission to develop a policy by rule to encourage the use of negotiated rulemaking procedures under Texas Government Code, Chapter 2008, and alternative dispute resolution procedures under Texas Government Code, Chapter 2009.
The OCCC, SML, and DOB distributed an early precomment draft of proposed changes to interested stakeholders for review and then held a stakeholder meeting and webinar regarding the rule changes. The OCCC, SML, and DOB did not receive any informal written precomments on the rule text draft.
Proposed new §5.100 adds a definition of "finance agency" in Chapter 5, in order to allow the term "finance agency" to be used throughout Chapter 5. The proposed amendment to §5.101 repeals the definition of "finance agencies" in Chapter 5, because this definition is being moved to proposed new §5.100.
Proposed new §5.103 implements HB 1442 and SB 614 by encouraging the use of alternative dispute resolution. Subsection (a) explains that it is the policy of the commission to use alternative dispute resolution procedures when reasonable and appropriate. Subsection (b) explains that the procedures for alternative dispute resolution must conform to model guidelines of the State Office of Administrative Hearings. Subsection (c) explains that the finance agencies will coordinate to implement alternative dispute resolution procedures and training. Subsection (d) explains that the finance agencies will collect data concerning the effectiveness of alternative dispute resolution procedures and report to the commission.
Proposed new §5.105 implements HB 1442 and SB 614 by encouraging the use of negotiated rulemaking. Subsection (a) explains that it is the policy of the commission to use negotiated rulemaking. Subsection (b) explains that the finance agencies will coordinate to implement negotiated rulemaking and training. Subsection (c) explains that the finance agencies will collect data concerning the effectiveness of negotiated rulemaking and report to the commission.
Christina Cuellar Hoke of the OCCC, Ernest Garcia of the SML, and Catherine Reyer of the DOB, have determined that for the first five-year period the proposed rule changes in Chapter 5 are in effect, there will be no fiscal implications for state or local government as a result of administering the rule amendments.
Huffman Lewis of the OCCC, Ernest Garcia of the SML, and Catherine Reyer of the DOB, have determined that for each year of the first five years the rule changes in Chapter 5 are in effect, the public benefits anticipated as a result of the changes will be that the commission's rules will be more easily understood by licensees required to comply with the rules, and will be consistent with legislation recently passed by the legislature.
There is no anticipated cost to persons who are required to comply with the rule changes as proposed. There will be no adverse economic effect on rural communities or small or micro-businesses.
During the first five years the rule changes will be in effect, the rule will not create or eliminate a government program. Implementation of the rule changes will not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the rule changes will not require an increase or decrease in future legislative appropriations to the OCCC, SML, or DOB because they are self-directed, semi-independent agencies that do not receive legislative appropriations. The proposed rule changes will not require an increase or decrease in fees paid to the agencies. The proposed rule changes create new regulations to move the definition of "finance agency" to new §5.100, to encourage the use of alternative dispute resolution in new §5.103, and to encourage the use of negotiated rulemaking in new §5.105. The proposed rule changes do not expand or repeal an existing regulation. The proposed rule changes limit current §5.101 by moving the definition of "finance agencies" out of this section. The proposed rule changes do not increase or decrease the number of individuals subject to the rules' applicability. The agencies do not anticipate that the proposed rule changes will have an effect on the state's economy.
Comments on the proposal may be submitted in writing to Michael Rigby, General Counsel, Office of Consumer Credit Commissioner, 2601 North Lamar Boulevard, Austin, Texas 78705 or by email to rule.comments@occc.texas.gov. To be considered, a written comment must be received on or before 5:00 p.m. central time on the 31st day after the date the proposal is published in the Texas Register. At the conclusion of business on the 31st day after the proposal is published in the Texas Register, no further written comments will be considered or accepted by the commission.
The rule changes are proposed under Texas Finance Code, §§12.113, 13.017, and 14.110 (as added by HB 1442 and SB 614), which authorize the commission to adopt rules to encourage the use of negotiated rulemaking procedures under Texas Government Code, Chapter 2008, and alternative dispute resolution procedures under Texas Government Code, Chapter 2009. In addition, Texas Finance Code, §§11.301, 11.302, 11.304, and 11.306 generally authorize the commission to adopt banking rules, rules applicable to state savings associations and savings banks, rules necessary to supervise the consumer credit commissioner, and rules applicable to residential mortgage loan origination.
The statutory provisions affected by the proposal are contained in Texas Finance Code, Chapters 12, 13, and 14.
§5.100.Definitions.
In this chapter, a "finance agency" means the Texas Department of Banking, the Department of Savings and Mortgage Lending, and the Office of Consumer Credit Commissioner.
(a) [For purposes of this rule, "finance agencies" means the Texas Department of Banking, the Texas Department of Savings and Mortgage Lending, and the Office of Consumer Credit Commissioner.] Pursuant to the State Employees Training Act, Chapter 656, Subchapter C of the Texas Government Code, it is the policy and practice of the finance agencies to encourage employees' professional development through training and education programs sponsored or supported by the finance agencies.
(b) The finance agencies may provide assistance for education and training that will enhance an employee's ability to perform current or prospective job duties and will benefit both the respective finance agency and the employee.
(c) Approval to participate in a training or education program is not automatic and is subject to eligibility of individual employees as established in the respective finance agency's policy, and the availability of funds within the respective finance agency's budget.
(d) The employee training and education program for the finance agencies may include one or more of the following:
(1) agency-sponsored training provided in-house or by contract;
(2) seminars and conferences;
(3) technical or professional certifications and licenses; or
(4) reimbursement for tuition, fees and required course materials.
(e) The finance agencies maintain policies for administering the employee training and education program of each respective finance agency. These policies include:
(1) eligibility requirements for participation;
(2) designation of appropriate level of approval for participation; and
(3) obligations of program participants.
(f) Approval to participate in any portion of a finance agency's training and education program will not in any way affect an employee's at-will status.
(g) In order to receive tuition reimbursement for a course offered by an institution of higher education, the employee must successfully complete the course, and the executive head of the finance agency must personally authorize the tuition reimbursement payment.
§5.103.Alternative Dispute Resolution Policy.
(a) Policy. It is the policy of the finance commission to use alternative dispute resolution procedures where reasonable and appropriate under Texas Government Code, Chapter 2009 to assist in the resolution of internal and external disputes under the jurisdiction of a finance agency.
(b) Model guidelines. The procedures for alternative dispute resolution must conform, to the extent possible, to any model guidelines issued by the State Office of Administrative Hearings for the use of alternative dispute resolution by state agencies.
(c) Coordination and training. The finance agencies will coordinate with each other as reasonable to implement the use of appropriate alternative dispute resolution procedures and provide training as needed to implement the use of alternative dispute resolution procedures.
(d) Data collection and reporting. Each finance agency will collect data concerning the effectiveness of alternative dispute resolution procedures, and report to the finance commission its use of alternative dispute resolution procedures.
§5.105.Negotiated Rulemaking.
(a) Policy. It is the policy of the finance commission to use negotiated rulemaking procedures under Texas Government Code, Chapter 2008 and §9.85 of this title (relating to Negotiated Rulemaking).
(b) Coordination and training. The finance agencies will coordinate with each other as reasonable to implement the use of negotiated rulemaking procedures and provide training as needed to implement the use of negotiated rulemaking procedures.
(c) Data collection and reporting. Each finance agency will collect data concerning the effectiveness of negotiated rulemaking procedures, and report to the finance commission its use of negotiated rulemaking procedures.
Filed with the Office of the Secretary of State on October 18, 2019.
TRD-201903822
Earliest possible date of adoption: December 1, 2019
For further information, please call: (512) 936-7623
CHAPTER 6. BANKING DEVELOPMENT DISTRICTS
7 TAC §6.1
The Finance Commission of Texas (the commission), on behalf of the Texas Department of Banking (the department), proposes to amend 7 TAC, §6.1 concerning the purpose and scope of the rules for administering the banking development district program established by Texas Finance Code, Chapter 279. The amendment is proposed to correct a citation.
Kurt Purdom, Deputy Commissioner, Texas Department of Banking, has determined that for the first five-year period the proposed rule is in effect, there will be no fiscal implications for state government or for local government as a result of enforcing or administering the rule.
Mr. Purdom has also determined that, for each year of the first five years the rule as proposed is in effect, the public benefit anticipated as a result of enforcing the rule is improved accuracy for persons required to comply with the rule.
-- create or eliminate a government program;
-- require the creation of new employee positions or the elimination of existing employee positions;
-- require an increase or decrease in future legislative appropriations to the agency;
-- require an increase or decrease in fees paid to the agency;
-- create a new regulation;
-- expand, limit or repeal an existing regulation;
-- increase or decrease the number of individuals subject to the rule's applicability; and
-- positively or adversely affect this state's economy.
To be considered, comments on the proposed amendment must be submitted no later than 5:00 p.m. on December 2, 2019. Comments should be addressed to General Counsel, Texas Department of Banking, Legal Division, 2601 North Lamar Boulevard, Suite 300, Austin, Texas 78705-4294. Comments may also be submitted by email to legal@dob.texas.gov.
The amendment is proposed under Texas Finance Code, §279.052, which provides that the commission shall adopt rules regarding the criteria for the designation of banking development districts.
Texas Finance Code, Chapter 279 is affected by the proposed amendment.
§6.1.Purpose; Scope.
(b) This chapter does not affect or circumvent:
(1) requirements under the Tax Increment Financing Act or the Property Redevelopment and Tax Abatement Act (Tax Code, [Government Code,] Chapters 311 and 312, respectively), including requirements for designation of an area as a municipal or county reinvestment zone or for authorization to enter into a tax abatement agreement; or
TRD-201903785
The Finance Commission of Texas (commission) proposes amendments to §9.82 (relating to Petitions To Initiate Rulemaking Proceedings); proposes new §9.85 (relating to Negotiated Rulemaking); proposes the repeal of §9.51 (relating to Time Deadlines for Appeal to the Finance Commission Mandatory), §9.52 (relating to Motion for Rehearing), §9.54 relating to Application for Review), §9.55 (relating to Scope of Review) §9.56 (relating to Oral Argument before the Finance Commission), and §9.57 (relating to Interim Appeals); and proposes relettering the titles of Subchapters D and E in 7 TAC, Chapter 9, concerning Rules of Procedure for Contested Case Hearings, Appeals, and Rulemakings.
In general, the purpose of the proposed amendments, repeals, and new rule in 7 TAC, Chapter 9 is to implement provisions related to negotiated rulemaking and finance commission appeals in HB 1442, the Sunset legislation for the Office of Consumer Credit Commissioner (OCCC), and SB 614, the Sunset legislation for the Texas Department of Banking (DOB) and the Department of Savings and Mortgage Lending (SML). The Texas Legislature passed HB 1442 and SB 614 in the 2019 legislative session.
Effective September 1, 2019, Texas Finance Code, §§12.113, 13.017, and 14.110 require the commission to develop a policy by rule to encourage the use of negotiated rulemaking procedures under Texas Government Code, Chapter 2008.
Effective September 1, 2019, all references to appeals to the commission have been removed from Texas Finance Code, §§14.208, 31.202, 31.204, 35.110, 181.202, 181.204, and 354.005. The proposed repeal of Subchapter C of 7 TAC, Chapter 9 would remove all provisions pertaining to appeals to the commission in conformity with the amendments to the Texas Finance Code found in SB 614 and HB 1442.
The proposed repeal of Subchapter C of Chapter 9 implements HB 1442 and SB 614 by eliminating provisions relating to appeals to the commission. The proposed amendments would also reletter Subchapters D and E as a result of the repeal of Subchapter C.
The proposed amendments to §9.82 relate to petitions to initiate rulemaking proceedings. In subsection (a), a proposed amendment would add any request to engage in negotiated rulemaking to the list of items that a petition to initiate rulemaking must include. Proposed new subsection (b) explains that an agency receiving a petition will present the petition and a recommendation to the commission. Proposed new subsection (c) explains that the commission will vote to initiate a rulemaking proceeding, or to deny the petition and state the reasons for denial.
Proposed new §9.85 describes to the procedures for negotiated rulemaking. Subsection (a) explains that an agency may propose to engage in negotiated rulemaking if the commission votes to initiate a rulemaking proceeding, or if the agency determines that a proposed rule might benefit from the process. Subsection (b) explains that an agency may appoint a convener to assist in determining whether negotiated rulemaking should proceed, as described by Texas Government Code, §2008.052. Subsection (c) explains that the agency will publish notice of intent to engage in negotiated rulemaking, as described by Texas Government Code, §2008.053. Subsection (d) explains that the agency will appoint a facilitator and committee, as described by Texas Government Code, §2008.056. Subsection (e) explains that the commission may adopt, amend, or refuse to adopt a rule created through negotiated rulemaking.
Christina Cuellar Hoke of the OCCC, Ernest Garcia of the SML, and Catherine Reyer of the DOB, have determined that for the first five-year period the rule changes to Chapter 9 are in effect, there will be no fiscal implications for state or local government as a result of administering the rule amendments.
Huffman Lewis of the OCCC, Ernest Garcia of the SML, and Catherine Reyer of the DOB, have determined that for each year of the first five years the rule changes to Chapter 9 are in effect, the public benefits anticipated as a result of the changes will be that the commission's rules will be more easily understood by licensees required to comply with the rules, and will be consistent with legislation recently passed by the legislature.
During the first five years the proposed rule changes will be in effect, the rule will not create or eliminate a government program. Implementation of the rule changes will not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the rule changes will not require an increase or decrease in future legislative appropriations to the OCCC, SML, or DOB because they are self-directed, semi-independent agencies that do not receive legislative appropriations. The proposed rule changes will not require an increase or decrease in fees paid to the agencies. The proposed rule creates a new regulation to encourage the use of negotiated rulemaking under §9.85. The proposed rule expands the current rule at §9.82, relating to a petition to initiate rulemaking, in order to address negotiated rulemaking. The proposed rule changes repeal Subchapter C of Chapter 9 to eliminate provisions relating to appeals to the commission, in accordance with HB 1442 and SB 614. The proposed rule changes do not limit an existing regulation. The proposed rule changes do not increase or decrease the number of individuals subject to the rules' applicability. The agencies do not anticipate that the proposed rule changes will have an effect on the state's economy.
SUBCHAPTER C. APPEALS TO FINANCE COMMISSION
7 TAC §§9.51, 9.52, 9.54 - 9.57
The rule changes are proposed under Texas Finance Code, §§12.113, 13.017, and 14.110 (as added by HB 1442 and SB 614), which authorize the commission to adopt rules to encourage the use of negotiated rulemaking procedures under Texas Government Code, Chapter 2008. In addition, Texas Finance Code, §§11.301, 11.302, 11.304, and 11.306 generally authorize the commission to adopt banking rules, rules applicable to state savings associations and savings banks, rules necessary to supervise the consumer credit commissioner, and rules applicable to residential mortgage loan origination.
The statutory provisions affected by the proposal are contained in Texas Finance Code, Chapters 12, 13, 14, 31, 35, 181, and 354.
§9.51.Time Deadlines for Appeal to the Finance Commission Mandatory.
§9.52.Motion for Rehearing.
§9.54.Application for Review.
§9.55.Scope of Review.
§9.56.Oral Argument before the Finance Commission.
§9.57.Interim Appeals.
TRD-201903823
General Counsel, Office of Consumer Credit Commissioner
SUBCHAPTER E. RULEMAKING
7 TAC §9.82, §9.85
§9.82.Petitions To Initiate Rulemaking Proceedings.
(a) Petitions to initiate rulemaking proceedings pursuant to Texas Government Code, §2001.021, must be submitted to the agency in writing. A petition must include:
(2) the full text of the proposed rule, and, if the petition is to modify an existing rule, the text of the proposed rule prepared in the same manner as an amendment to legislation that clearly identifies any words to be added or deleted from the existing text by underlining new language and striking through language to be deleted;
(3) a concise explanation of the legal authority to adopt the proposed rule, including a specific reference to the particular statute or other authority that authorizes it;
(4) an explanation of how the public would be benefitted by the adoption of the proposed rule;
(5) all available data or information showing a need for the proposed rule; [and]
(6) any request to engage in negotiated rulemaking under §9.85 of this title (relating to Negotiated Rulemaking); and
(7) [(6)] such other or additional information as the agency may request.
(b) An agency receiving a petition under subsection (a) of this section will present to the finance commission the petition and the agency's recommendation.
(c) The finance commission will vote to initiate a rulemaking proceeding, or to deny the petition and state the reasons for the denial.
§9.85.Negotiated Rulemaking.
(a) Initiation of process. An agency may propose to engage in negotiated rulemaking process pursuant to Texas Government Code, Chapter 2008 if:
(1) the finance commission votes to initiate a rulemaking proceeding under §9.82 of this title (relating to Petitions To Initiate Rulemaking) that includes negotiated rulemaking; or
(2) the agency determines that drafting the proposed rule might benefit from the negotiated rulemaking process.
(b) Appointment of a convener. Upon proposing a negotiated rulemaking process under subsection (a) of this section, the agency will appoint a convener to assist in determining whether it is advisable to proceed with negotiated rulemaking. The convener will be appointed pursuant to, and perform the duties described by, Texas Government Code, §2008.052.
(c) Notice of negotiated rulemaking. If the agency decides to engage in negotiated rulemaking after considering the convener's recommendation and report, then the agency will publish timely notice of its intent on its website and with the secretary of state for publication in the Texas Register in compliance with Texas Government Code, §2008.053.
(d) Appointment of facilitator and committee. The agency will appoint a facilitator and members of the negotiated rulemaking committee to carry out the duties described in Texas Government Code, §2008.056.
(e) Adoption of rule. The finance commission may adopt, amend, or refuse to adopt a rule created through the negotiated rulemaking process in its sole discretion.
TRD-201903824
The Finance Commission of Texas (the commission), on behalf of the Texas Department of Banking (the department), proposes to amend §15.42(j) concerning branch relocation, §15.115 concerning notification, and §§15.1, 15.2, 15.7, 15.23, 15.41, 15.81, 15.103 - 15.106, 15.108, 15.111, and 15.122 to update citations, correct typographical errors, simplify technical language, and ensure the consistency of the language within the chapter.
Section 15.42(j) currently states that a bank may relocate a branch immediately after the Banking Commissioner (the commissioner) notifies the bank in writing that the required fee has been paid and the notice is complete and accepted for filing. The proposed amendment relaxes this requirement by adding the current practice of allowing a bank to relocate a branch beginning on the 31st day after the date the commissioner receives the bank's notice of branch relocation. This method of approving branch relocations has worked well in practice and alleviated the need for the commissioner to issue written notifications for every branch relocation. In addition, stating that a bank's notice of relocation is complete means that the required fee has been paid and the notice has been accepted for filing. Therefore, in practice, the commissioner's written notification to the bank simply states that the bank's "required notice is complete." The proposed amendment simplifies the language in the rule to match what is currently included in the commissioner's notification.
Section 15.115 allows notification by the commissioner to be made by mail, in person, or by fax. The proposed amendment will allow notification by the commissioner to be made by email as well.
Mark Largent, Director of Corporate Activities, Texas Department of Banking, has determined that for the first five-year period the proposed rules are in effect, there will be no fiscal implications for state government or for local government as a result of enforcing or administering the rules.
Mr. Largent has also determined that, for each year of the first five years the rules as proposed are in effect, the public benefit anticipated as a result of enforcing the rules is improved accuracy and clarity for persons required to comply with the rules.
For each year of the first five years that the rule will be in effect, there will be no economic costs to persons required to comply with the rules as proposed.
To be considered, comments on the proposed amendments must be submitted no later than 5:00 p.m. on December 2, 2019. Comments should be addressed to General Counsel, Texas Department of Banking, Legal Division, 2601 North Lamar Boulevard, Suite 300, Austin, Texas 78705-4294. Comments may also be submitted by email to legal@dob.texas.gov.
SUBCHAPTER A. FEES AND OTHER PROVISIONS OF GENERAL APPLICABILITY
7 TAC §§15.1, 15.2, 15.7
Amendments to Chapter 15, Subchapter A, §§15.1, 15.2, and 15.7 are proposed under Texas Finance Code, §31.003, which provides that the commission may adopt rules necessary or reasonable to accomplish the purposes of the Texas Banking Act.
Texas Finance Code, §§202.001 and 202.004, and Texas Finance Code, Title 3, Subtitles A and G are affected by the proposed amendments to Chapter 15, Subchapter A.
§15.1.Definitions.
Words and terms used in this chapter that are defined in the Finance Code, Title 3, Subtitle A or Subtitle G, have the same meanings as defined in the Finance Code. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Accepted filing--An application, request, notice, or protest filed with the banking commissioner pursuant to the Finance Code, Title 3, Subtitle A or G, this chapter, or another rule adopted pursuant to the Finance Code if:
(A) the appropriate fee has been paid pursuant to §15.2 of this title (relating to Filing and Investigation Fees); and [(relating to Filing Fees and Cost Deposits); and]
(6) Low or moderate income area--A designated geography for CRA purposes, as defined in 12 CFR, §228.12(m)(1) and (m)(2), [§228.12(l), (n)(1), and (n)(2),] for state member banks, or 12 CFR, §345.12(m)(1) and (m)(2), [§345.12(l), (n)(1), and (n)(2),] for state nonmember banks.
§15.2.Filing and Investigation Fees.
(b) Filing fees. Simultaneously with a submitted application or notice, an applicant shall pay to the department:
(1) - (6) (No change.)
(7) $2,000 for an application to establish a branch office (including an interstate transaction) pursuant to Finance Code, §32.203, and §15.42 of this title (relating to Establishment and Closing of a Branch Office), or $1,000 if the application is eligible for expedited treatment pursuant to §15.3 of this title (relating [related] to Expedited Filings), provided that the department will not require a filing fee for an application for a new branch office to be located in a low or moderate income area and where no other depository institution operates a branch or home office;
(8) - (23) (No change.)
§15.7.Submission of Reproductions.
(b) Reproduction. For purposes of this section, the term reproduction means:
(2) a facsimile copy of an original document submitted by telephonic document transmission to the fax [telecopier telephone] number specified by the department; or
(d) Page limitations. A reproduction submitted by telephonic document transmission to the department's fax [telecopier ] machine may not exceed 25 pages in total length, including the transmittal document required by subsection (e) of this section, or it will be rejected for filing. The transmission of portions of any particular filing at different times is treated as one reproduction for purposes of this subsection.
(f) Time of receipt. To be considered received by the department, a reproduction must be in clearly legible form. The date the submission is actually received by the department or the date and time imprinted by the department's fax machine [telecopier ] on the last page of a reproduction submitted by telephonic document transfer will determine the time of receipt, provided that a reproduction received after 4:30 p.m. is considered received at 8:00 a.m. on the next business day. A reproduction will not be considered received until the department receives the entire document and the required filing fee, if any.
TRD-201903790
SUBCHAPTER B. BANK CHARTERS
7 TAC §15.23
Amendment to Chapter 15, Subchapter B, §15.23 is proposed under Texas Finance Code, §31.003, which provides that the commission may adopt rules necessary or reasonable to accomplish the purposes of the Texas Banking Act.
Texas Finance Code, Chapters 32 and 203 are affected by the proposed amendment to Chapter 15, Subchapter B.
§15.23.Application for Interim Bank Charters.
(a) General. The banking commissioner may issue an interim state bank charter solely for the purpose of facilitating the acquisition, reorganization, or merger of a pre-existing bank, if the resulting bank will engage in the business of banking in substantially the same markets. The applicant must submit the application for an interim bank charter on a form prepared and prescribed by the banking commissioner and tender the required filing fee pursuant to §15.2 of this title (relating to Filing and Investigation Fees). [ (relating to Filing Fees and Cost Deposits).] The applicant must describe in detail the entire transaction in which the interim bank charter is proposed to be used and identify the resulting bank after completion of the transaction.
TRD-201903791
7 TAC §15.41, §15.42
Amendments to Chapter 15, Subchapter C, §15.41 and §15.42 are proposed under Texas Finance Code, §31.003, which provides that the commission may adopt rules necessary or reasonable to accomplish the purposes of the Texas Banking Act.
Texas Finance Code, §32.202, §32.203, and §203.001 are affected by the proposed amendments to Chapter 15, Subchapter C.
§15.41.Written Notice or Application for Change of Home Office.
(a) Relocation by notice. Unless an application under subsection (b) of this section is required, a state bank may change its home office to one of its previously established branches pursuant to the Finance Code, §32.202(b), by filing a written notice containing the information required by subsection (c) of this section, accompanied by the filing fee required by §15.2 of this title (relating to Filing and Investigation Fees). [(relating to Filing Fees and Cost Deposits).] A bank may relocate its home office immediately after the required notice and fee has been acknowledged in writing as complete and accepted for filing by the banking commissioner. An application under subsection (b) of this section is required if the proposed home office relocation:
§15.42.Establishment and Closing of a Branch Office.
(j) Branch relocation. A bank may relocate a branch within a one-mile radius by submitting a completed written notice on a form prescribed by the banking commissioner and tendering the required filing fee pursuant to §15.2 of this title. A bank may relocate the branch beginning on the 31st day after the date the banking commissioner receives the bank's notice or immediately after the banking commissioner notifies the bank in writing that the required notice is complete. [fee has been paid and the notice is complete and accepted for filing.]
TRD-201903792
SUBCHAPTER E. CHANGE OF CONTROL APPLICATIONS
7 TAC §15.81
Amendment to Chapter 15, Subchapter E, §15.81 is proposed under Texas Finance Code, §31.003, which provides that the commission may adopt rules necessary or reasonable to accomplish the purposes of the Texas Banking Act.
Texas Finance Code, §§33.001 - 33.005 are affected by the proposed amendment to Chapter 15, Subchapter E.
§15.81.Application for Acquisition or Change of Control of State Bank.
(c) Form of application. The applicant must submit a fully completed, verified application in a form prescribed by the banking commissioner and simultaneously tender the required filing fee pursuant to §15.2 of this title (relating to Filing and Investigation Fees). [(relating to Filing Fees and Cost Deposits).] The Interagency Notice of Change of Control and the Interagency Biographical and Financial Report may be submitted in lieu of the commissioner prescribed forms if they are accompanied by the executed and notarized signature pages of the commissioner prescribed forms. The application must, except to the extent expressly waived in writing by the banking commissioner, disclose:
(1) - (14) (No change.)
(d) - (m) (No change.)
TRD-201903793
SUBCHAPTER F. APPLICATIONS FOR MERGER, CONVERSION, AND PURCHASE OR SALE OF ASSETS
7 TAC §§15.103 - 15.106, 15.108, 15.111, 15.115
Amendments to Chapter 15, Subchapter F, §§15.103 - 15.106, 15.108, 15.111 and 15.115 are proposed under Texas Finance Code, §31.003, which provides that the commission may adopt rules necessary or reasonable to accomplish the purposes of the Texas Banking Act.
Texas Finance Code, §§32.001, 32.008, 32.301 - 32.304, 32.401 - 32.405, 32.501, 32.502, 203.001, and 203.003 are affected by the proposed amendments to Chapter 15, Subchapter F.
§15.103.Expedited Filings.
(a) A financial institution that would be an eligible bank as defined in §15.1 of this title (relating to Definitions) if it was a state bank may file an expedited filing in lieu of an application required under §15.104 of this title (relating to Application for Merger or Share Exchange), §15.105 of this title (relating to Application for Authority to Purchase Assets of Another Financial Institution), or §15.108 of this title (relating to Conversion of a Financial Institution into a State Bank), and simultaneously tender the required filing fee pursuant to §15.2 of this title (relating to Filing and Investigation Fees). [(relating to Filing Fees and Cost Deposits).]
§15.104.Application for Merger or Share Exchange.
(b) Form of application. The applicant must submit a fully completed, verified application on a form prescribed by the banking commissioner and simultaneously tender the required filing fee pursuant to §15.2 of this title (relating to Filing and Investigation Fees). [(relating to Filing Fees and Cost Deposits).] The Interagency Bank Merger Act application may be used in lieu of the commissioner prescribed form if it is accompanied by the signature page and supplemental page of the commissioner prescribed form. The application must, except to the extent waived by the banking commissioner, include:
(1) - (22) (No change.)
§15.105.Application for Authority to Purchase Assets of Another Financial Institution.
(b) Form of application. The applicant must submit a fully completed, verified application on a form prescribed by the banking commissioner and simultaneously tender the required filing fee pursuant to §15.2 of this title (relating to Filing and Investigation Fees). [(relating to Filing Fees and Cost Deposits).] The application must, except to the extent waived by the banking commissioner, include:
§15.106.Application for Authority to Sell Assets.
(b) Subsection (f) of this section specifically addresses a sale of assets without shareholder approval under the Finance Code, §32.405(c) [§32.405(a)(7)] or Finance Code, §203.003.
(c) Form of application. The applicant must submit a fully completed, verified application on a form prescribed by the banking commissioner and simultaneously tender the required filing fee pursuant to §15.2 of this title (relating to Filing and Investigation Fees). [(relating to Filing Fees and Cost Deposits).] The application must, except to the extent waived by the banking commissioner, include:
(1) - (18) (No change.)
(f) Sale of assets without shareholder approval under the Finance Code, §32.405(c). [§32.405(a).] The board of a state bank, with the prior written approval of the banking commissioner, may cause a bank to sell all or substantially all of its assets without shareholder or participant approval if the banking commissioner finds the interests of depositors and creditors are jeopardized because of insolvency or imminent insolvency and that the sale is in their best interest.
§15.108.Conversion of a Financial Institution into a State Bank.
(b) Form of application. The applicant must submit a fully completed, verified application on a form prescribed by the banking commissioner and simultaneously tender a filing fee in the amount required for the filing of an application for a new bank charter pursuant to §15.2 of this title (relating to Filing and Investigation Fees). [(relating to Filing Fees and Cost Deposits).] The application must, except to the extent waived by the banking commissioner, include:
(1) - (20) (No change.)
§15.111.Investigation of Application.
(b) Costs and fees. An applicant under this subchapter must pay reasonable costs incurred in the investigation including the cost of a required examination, as provided by §3.36(h) of this title (relating to Annual Assessments and Specialty [Speciality] Examination Fees) and §15.2(e) of this title (relating to Filing and Investigation Fees). [(relating to Filing Fees and Cost Deposits).]
§15.115.Notification.
A notification by the banking commissioner under this subchapter may be by registered or certified mail, return receipt requested, and is complete when the notification is deposited in the United States mail postage prepaid, return receipt requested, mailed to the address furnished in the application. Notification may also be made in person to the applicant, or to another person, financial institution, foreign corporation or domestic corporation, or other entity subject to this subchapter, by agent-receipted delivery or by courier-receipted delivery to the address furnished in the application, by email to the email address furnished in the application, or by telephonic document transfer to the fax number [applicant's telecopier number as] furnished in the application. Notice by telephonic document transfer served after 6:00 p.m. local time of recipient is considered as notice served on the following day.
TRD-201903794
SUBCHAPTER G. CHARTER AMENDMENTS AND CERTAIN CHANGES IN OUTSTANDING STOCK
7 TAC §15.122
Amendments to Chapter 15, Subchapter G, §15.122 are proposed under Texas Finance Code, §31.003, which provides that the commission may adopt rules necessary or reasonable to accomplish the purposes of the Texas Banking Act.
Texas Finance Code, §31.002 and §32.101 are affected by the proposed amendments to Chapter 15, Subchapter G.
§15.122.Amendment of Certificate to Effect a Reverse Stock Split.
(b) Procedure. Pursuant to the Finance Code, §32.101, to effectuate a reverse stock split in compliance with this section, a state bank must:
(2) obtain the approval of the banking commissioner pursuant to subsection (d) of this section, by filing an application setting forth the information and documents required by subsection (c) of this section and the filing fee required by §15.2 of this title (relating to Filing and Investigation Fees). [(relating to Filing Fees and Cost Deposits).]
TRD-201903795
The Finance Commission of Texas (the commission), on behalf of the Texas Department of Banking (the department), proposes to amend §21.7 concerning the submission of reproductions, §21.74 concerning notification, and §§21.2, 21.6, 21.42, 21.43, and 21.61 to update citations, simplify technical language, and ensure the consistency of the language within the chapter.
Section 21.7 allows reproductions of application documents to be submitted to the Department by mail, hand delivery, or fax. The proposed amendment will allow reproductions of application documents to be submitted to the Department by email as well.
Section 21.74 allows notification by the commissioner to made by mail, in person, or by fax. The proposed amendment will allow notification by the commissioner to be made by email as well.
For each year of the first five years that the rules will be in effect, there will be no economic costs to persons required to comply with the rules as proposed.
7 TAC §§21.2, 21.6, 21.7
Amendments to Chapter 21, Subchapter A, §§21.2, 21.6 and 21.7 are proposed under Texas Finance Code, §181.003, which provides that the commission may adopt rules necessary or reasonable to accomplish the purposes of the Texas Trust Company Act.
Texas Finance Code, §§182.003, 182.012, and 182.202 are affected by the proposed amendments to Subchapter A.
§21.2.Filing and Investigation Fees.
(10) $2,000 for an application to relocate the home office with abandonment of existing office pursuant to Finance Code, §182.202(d), and §21.41(b) of this title, or $1,000 for an application accepted for expedited treatment pursuant to §21.3 of this title (relating [related] to Expedited Filings);
(11) - (17) (No change.)
(18) $2,500 for an application by an existing trust company for exemption pursuant to Finance Code, §182.012, and §21.24 of this title (relating to Exemptions for Family Trust Companies); [(relating to Exemptions for Trust Companies Administering Family Trusts);]
(19) - (22) (No change.)
§21.6.Applications for Trust Charter: Notices to Applicants; Application Processing Times; Appeals.
(a) Form of application. An application to engage in a state trust company [business] under Finance Code, §182.003, must be filed on a form prescribed by the banking commissioner.
§21.7.Submission of Reproductions.
(1) a photographic or photostatic copy or similar reproduction of an original document that is submitted to the department by mail or hand delivery;
(2) a facsimile copy of an original document submitted by telephonic document transmission to the fax number specified by the department; or
(3) if permitted by the department with respect to a specific filing, an electronic copy of an original document submitted to the email address specified by the department.
[(b) Reproduction. For purposes of this section, the term reproduction means a photographic or photostatic copy or similar reproduction of an original document that is submitted to the department by mail, hand delivery, or telephonic document transmission to the telecopier machine specified by the department.]
TRD-201903796
SUBCHAPTER D. TRUST COMPANY OFFICES
7 TAC §21.42, §21.43
Amendments to Chapter 21, Subchapter D, §21.42 and §21.43 are proposed under Texas Finance Code, §181.003, which provides that the commission may adopt rules necessary or reasonable to accomplish the purposes of the Texas Trust Company Act.
Texas Finance Code, §182.203 and §204.106 are affected by the proposed amendments to Subchapter D.
§21.42.Establishment, Relocation and Closing of an Additional Office.
(a) Establishment or relocation by notice. A trust company may establish or relocate an additional office pursuant to Finance Code, §182.203, by filing a written notice with the banking commissioner containing all information required by subsection (b) of this section, accompanied by the required filing fee pursuant to §21.2 of this title (relating to Filing and Investigation Fees), [(relating to Filing Fees and Cost Deposits),] and notice of the submission must be published as required by subsection (d) of this section. A trust company filing notice of an additional office under this subsection may establish the additional office on the 31st day after the date the required notice and fee are received by the banking commissioner unless the banking commissioner gives notice in writing, prior to the expiration of that time period, that an earlier or later date is authorized or that additional information is required pursuant to subsection (c) of this section.
§21.43.Representative Trust Offices of Federally Chartered or Federally Insured Out-of-State Banks.
(b) An out-of-state bank authorized by its charter to conduct a trust business that has not established or acquired a branch in this state may establish a representative trust office in this state:
(1) if not chartered by a federal banking regulatory agency and not insured by the Federal Deposit Insurance Corporation, only after complying with §21.44 of this title (relating to Representative Trust Offices of Out-of-State Trust Companies and Uninsured State Banks); or
TRD-201903797
SUBCHAPTER F. APPLICATION FOR MERGER, CONVERSION, OR SALE OF ASSETS
7 TAC §21.61, §21.74
Amendments to Chapter 21, Subchapter F, §21.61 and §21.74 are proposed under Texas Finance Code, §181.003, which provides that the commission may adopt rules necessary or reasonable to accomplish the purposes of the Texas Trust Company Act.
Texas Finance Code, §182.003, §182.202, and §182.203 are affected by the proposed amendments to Subchapter F.
§21.61.Definitions.
(a) Words and terms used in this subchapter that are defined in the Trust Company Act or in §21.1 of this title (relating to Definitions), have the same meanings as defined therein.
§21.74. Notification.
A notification by the banking commissioner under this subchapter may be by registered or certified mail, return receipt requested, and is complete when the notification is deposited in the United States mail postage prepaid, return receipt requested, mailed to the address furnished in the application. Notification may also be made in person to the applicant, or to the trust company or another person, fiduciary institution, foreign corporation or domestic corporation, or other entity subject to this subchapter, by agent-receipted delivery or by courier-receipted delivery to the address furnished in the application, by email to the email address furnished in the application, or by telephonic document transfer to the fax number [applicant's telecopier number as] furnished in the application. Notice by telephonic document transfer served after 6:00 p.m. local time of recipient is considered as notice served on the following day.
TRD-201903798
CHAPTER 52. DEPARTMENT ADMINISTRATION
SUBCHAPTER B. HEARINGS AND APPEALS
7 TAC §52.20
The Finance Commission of Texas (the commission), on behalf of the Department of Savings and Mortgage Lending (the department), proposes to add new Subchapter B, Hearings and Appeals, and new §52.20, concerning appeals, hearings, and informal settlement conferences, to 7 TAC Chapter 52, concerning Department Administration. The new rule is proposed to provide consistent procedures for resolving complaints concerning entities and individuals regulated by the department. The new rule is proposed in response to recommendations of the Sunset Advisory Commission that the department update its complaint resolution provisions in line with the Sunset Advisory Commission's Licensing and Regulation Model guidelines (Sunset Model).
The Sunset Model is intended as a guide to assist in evaluating occupational licensing and regulatory agencies to see if they are efficient, effective, fair, and accountable in their mission to protect the public. Complaint filing, processing, and recordkeeping are topics covered in the Sunset Model. The proposed new rule implements the applicable recommendations contained in the Sunset Model.
Caroline C. Jones, the Department of Savings and Mortgage Lending Commissioner, has determined that for the first five-year period the proposed rule is in effect, there will be no fiscal implications for state government or for local government as a result of enforcing or administering the rule.
Commissioner Jones also has determined that, for each year of the first five years the rule as proposed is in effect, the public benefit anticipated as a result of enforcing the rule is that complainants and respondents will have a better understanding of the appeal and resolution process.
1) create or eliminate a government program;
2) require the creation of new employee positions or the elimination of existing employee positions;
3) require an increase or decrease in future legislative appropriations to the agency;
4) require an increase or decrease in fees paid to the agency;
5) increase or decrease the number of individuals subject to the rule's applicability; or
6) positively or adversely affect this state's economy.
The rule creates new regulations concerning complaint resolution to conform to recommendations from the Sunset Advisory Commission.
To be considered, comments on the proposed new sections must be submitted in writing to Devyn F. Wills, Associate General Counsel, Department of Savings and Mortgage Lending, 2601 North Lamar Boulevard, Suite 201, Austin, Texas 78705-4294 or by email to smlinfo@sml.texas.gov within 30 days of publication in the Texas Register.
The new rule is proposed under Government Code §2001.004, which provides the authority to adopt rules of practice stating the nature and requirements of all available formal and informal procedures, Finance Code §11.307, which provides that the finance commission shall adopt rules applicable to each entity regulated by the department relating to consumer complaints, Finance Code §13.011, which provides that the savings and mortgage lending commissioner shall prepare information concerning the department's regulatory functions and consumer complaint resolution procedures, Finance Code §96.002, which provides that the finance commission may adopt rules necessary to supervise and regulate savings banks and to protect public investment in savings banks, Finance Code §156.102, which provides that the finance commission may adopt and enforce rules necessary for the intent of or to ensure compliance with Chapter 156, Finance Code §157.0023, which provides that the finance commission may adopt and enforce rules necessary for the intent of or to ensure compliance with Chapter 157, Finance Code §158.003, which provides that the finance commission may adopt rules necessary to ensure that residential mortgage loan servicers comply with federal and state laws, rules, and regulations, and Finance Code §180.004, which provides that the finance commission may implement rules necessary to comply with Chapter 180.
Other statutes affected by the proposed new rule are found in Finance Code Title 3, Subtitles B and C, and also Finance Code Chapters 13, 156, 157, 158, and 180.
§52.20.Appeals, Hearings, and Informal Settlement Conferences.
(a) Alternative resolution of appeal. If enforcement staff determines resolution to an appeal without a hearing is appropriate and possible, enforcement staff may pursue settlement through negotiation, agreed order, consent order, informal settlement conference, or other appropriate means.
(b) Informal settlement conference. Informal settlement conferences:
(1) are conducted at the discretion of enforcement staff;
(2) may not be used as a delay tactic;
(3) may be primarily conducted over the phone and by email; and
(4) a request for an informal settlement conference does not create any new or additional rights or obligations.
(c) Mediation. As applicable under 1 Texas Administrative Code §155.351, the department may, at the discretion of the commissioner, arrange for the services of a qualified mediator or subject matter expert to assist in resolving complaints or other matters.
(d) Hearing. Hearings may be conducted in accordance with Chapter 9 of this title, with Texas Government Code, Chapter 2001, and may be conducted by the State Office of Administrative Hearings (SOAH).
TRD-201903811
For further information, please call: (512) 475-2534
SUBCHAPTER C. ADVISORY COMMITTEES
7 TAC §52.30
The Finance Commission of Texas (the commission), on behalf of the Department of Savings and Mortgage Lending (the department), proposes to add new Subchapter C, Advisory Committees, and new section 52.30, concerning advisory committees and informal conferences, to 7 TAC Chapter 52. The new rules are proposed to formalize in rule the use of advisory committees and informal conferences by the department, including creating an automatic abolition date for such committees.
Caroline C. Jones, the Department of Savings and Mortgage Lending Commissioner, has determined that for the first five-year period the proposed rules are in effect, there will be no fiscal implications for state government or for local government as a result of enforcing or administering the rule.
Commissioner Jones also has determined that, for each year of the first five years the rules as proposed are in effect, the public benefit anticipated as a result of enforcing the rules is that complainants and respondents will have a better understanding of the appeal and resolution process.
For each year of the first five years that the rules will be in effect, there will be no economic costs to persons required to comply with the rule as proposed.
- increase or decrease the number of individuals subject to the rule's applicability; or
The rules create new regulations to formalize in rule the use of advisory committees and informal conferences by the department, including creating an automatic abolition date for such committees.
The new rules are proposed under Government Code §2001.004, which provides the authority to adopt rules of practice stating the nature and requirements of all available formal and informal procedures and Finance Code §13.018, which provides that the commissioner may appoint advisory committees to assist the department and commissioner in performing their duties.
Other statutes affected by the proposed new rules are found in Finance Code Title 3, Subtitles B and C, and also Finance Code Chapters 13, 156, 157, 158, and 180.
§52.30.Advisory Committees and Informal Conferences.
(a) Advisory committees. The mortgage industry advisory committee referenced in Texas Finance Code, §§157.0024 and 156.104, as well as any advisory committees which may be created under Texas Finance Code, §13.018 shall continue in existence and unless continued further shall be automatically abolished on September 1, 2031.
(b) Informal conferences. Without limiting any mortgage industry advisory committee's ability to advise and assist the commissioner, the commissioner may use committees, informal conferences, and consultations to obtain the opinions and advice of interested persons regarding contemplated rulemaking in accordance with Texas Government Code, §2001.031 or to otherwise advise the department. The power of any committee members appointed by the commissioner is advisory only. Any committees created, unless continued, shall be abolished.
TRD-201903812