2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle G - Bank Holding Companies; Interstate Bank Operations › Chapter 204 - Foreign Banks › Subchapter B. Direct Branch and Agency Offices of Foreign Banks › Section 204.114. Asset Maintenance

Sec. 204.114.  ASSET MAINTENANCE.  (a)  In accordance with rules adopted under this subtitle, a foreign bank licensed to establish and maintain a Texas state branch or agency shall at all times satisfy the ratio of branch or agency assets to liabilities determined by the commissioner, in the commissioner's sole discretion, to be necessary or desirable with respect to the foreign bank.  The type of assets to be held in this state are specified by Subsection (b) and the type of liabilities to be included in the ratio are specified by Subsection (c).
(b)  Assets to be held in this state for the purpose of satisfying the ratio of assets to liabilities:
(1)  include:
(A)  currency, bonds, notes, debentures, drafts, bills of exchange, or other evidences of indebtedness, including loan participation agreements or certificates;
(B)  other obligations payable in the United States or in United States funds or, with the prior approval of the commissioner, in funds freely convertible into United States funds;  and
(C)  other assets the commissioner permits or as may be specified by rule;  and
(2)  exclude obligations of a person for money borrowed to the extent that the total of the obligations of the person exceeds 10 percent of total assets considered for purposes of this section.
(c)  Liabilities included for purposes of calculating the ratio of assets to liabilities:
(1)  include all liabilities of the foreign bank appearing in the books, accounts, or records of its Texas state branch or agency, including acceptances;  and
(2)  exclude amounts due and other liabilities to other offices, agencies, branches, and wholly owned subsidiaries of the foreign bank, and other liabilities the commissioner determines.  The existence of a nominal number of directors' shares outstanding does not cause a subsidiary to be considered less than wholly owned.
(d)  Subject to rules adopted under this subtitle, the commissioner, in the commissioner's sole discretion, may vary the ratio of assets to liabilities required by this section for a foreign bank as may be necessary or desirable to reflect differences among Texas branches or Texas agencies because of:
(1)  the financial condition of Texas branch or agency offices of the foreign bank;
(2)  the financial condition of branch or agency offices of the foreign bank located in other states;
(3)  the general economic conditions prevalent in the home country of the foreign bank;  or
(4)  the financial condition of the foreign bank itself, including:
(A)  the financial condition of its branches and agencies located in other countries;
(B)  the financial condition of its affiliated bank and nonbank subsidiaries in the United States;  and
(C)  the financial condition of the foreign bank on a worldwide consolidated basis or in its home country.
(e)  For purposes of this section, assets must be valued at the lower of principal amount or market value.  The commissioner may determine the value of a non-marketable security, loan, or other asset or obligation held or owed to the foreign bank or its Texas state branch or agency in this state.  If the commissioner cannot determine the value of an non-marketable asset, the asset must be excluded from the ratio computation.
(f)  The commissioner may require a foreign bank to deposit the assets required to be held in this state pursuant to this section with specific banks in this state designated by the commissioner if, because of the existence or the potential occurrence of unusual and extraordinary circumstances, the commissioner considers it necessary or desirable for the maintenance of a sound financial condition, the protection of depositors, creditors, and the public interest in this state, and the maintenance of public confidence in the business of a Texas state branch or agency.
Added by Acts 1999, 76th Leg., ch. 344, Sec. 1.001, eff. Sept. 1, 1999.