2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 185 - Enforcement Actions › Subchapter A. Enforcement Orders › Section 185.003. Removal or Prohibition Order

Sec. 185.003.  REMOVAL OR PROHIBITION ORDER.  (a)  The banking commissioner has grounds to remove or prohibit a present or former officer, director, manager, managing participant, or employee of a state trust company from office or employment in, or prohibit a controlling shareholder or participant or other person participating in the affairs of a state trust company from further participation in the affairs of, the state trust company or any other entity chartered, registered, permitted, or licensed by the banking commissioner if the banking commissioner determines from examination or other credible evidence that:
(1)  the person:
(A)  intentionally committed or participated in the commission of an act described by Section 185.002(a) with regard to the affairs of a financial institution, as defined by Section 201.101;
(B)  violated a final cease and desist order issued by a state or federal regulatory agency against the person or an entity in which the person is or was an officer, director, or employee; or
(C)  made, or caused to be made, false entries in the records of a financial institution;
(2)  because of this action by the person:
(A)  the financial institution has suffered or will probably suffer financial loss or expense, or other damage;
(B)  the interests of the clients, depositors, creditors, or shareholders of the financial institution have been or could be prejudiced; or
(C)  the person has received financial gain or other benefit by reason of the action, or likely would have if the action had not been discovered; and
(3)  that action by the person:
(A)  involves personal dishonesty on the part of the person; or
(B)  demonstrates wilful or continuing disregard for the safety or soundness of the financial institution.
(b)  If the banking commissioner has grounds for action under Subsection (a) and finds that a removal or prohibition order appears to be necessary and in the best interest of the public, the banking commissioner may serve a proposed removal or prohibition order, as appropriate, on an officer, employee, director, manager or managing participant, controlling shareholder or participant, or other person alleged to have committed or participated in the violation or other conduct described by Section 185.002(a).  The order must:
(1)  be delivered by personal delivery or by registered or certified mail, return receipt requested;
(2)  state with reasonable certainty the grounds for removal or prohibition;
(3)  state the effective date of the order, which may not be before the 21st day after the date the proposed order is delivered or mailed; and
(4)  state the duration of the order, including whether the duration of the order is perpetual.
(b-1)  The banking commissioner may make a removal or prohibition order perpetual or effective for a specific period of time, may probate the order, or may impose other conditions on the order.
(c)  The order takes effect if the person against whom the order is directed does not request a hearing in writing before the effective date.  After taking effect the order is final and nonappealable as to that person.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.  Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 6.017(a), eff. Sept. 1, 2001.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 183 (S.B. 1165), Sec. 9, eff. May 28, 2011.
Acts 2013, 83rd Leg., R.S., Ch. 940 (H.B. 1664), Sec. 15, eff. June 14, 2013.
Acts 2015, 84th Leg., R.S., Ch. 422 (H.B. 3555), Sec. 11, eff. September 1, 2015.