reglab/statecodes huggingface dataset:
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 183 - Ownership and Management of State Trust Company › Subchapter C. Limited Trust Association › Section 183.203. Contracting for Debt or Obligation

Sec. 183.203.  CONTRACTING FOR DEBT OR OBLIGATION.  Except as provided by this section or the certificate of formation of the limited trust association, a debt, liability, or other obligation may be contracted for or incurred on behalf of a limited trust association only by:
(1)  a majority of the managers, if management of the limited trust association has been vested in a board of managers;
(2)  a majority of the managing participants; or
(3)  an officer or other agent vested with actual or apparent authority to contract for or incur the debt, liability, or other obligation.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 575 (S.B. 804), Sec. 27, eff. June 14, 2013.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 183 - Ownership and Management of State Trust Company › Subchapter C. Limited Trust Association › Section 183.204. Management of Limited Trust Association

Sec. 183.204.  MANAGEMENT OF LIMITED TRUST ASSOCIATION.  (a)  Management of a limited trust association is vested in the participants in proportion to each participant's contribution to capital, as adjusted periodically to properly reflect any additional contribution.  The certificate of formation may provide that management of a limited trust association is vested in a board of managers to be elected annually by the participants as prescribed by the bylaws or the participation agreement.
(b)  Participants of a limited trust association may not retain management and must elect a board of managers if:
(1)  any participant is disqualified from serving as a managing participant under Section 183.103;
(2)  the limited trust association has fewer than five or more than 25 participants;  or
(3)  any participant has been removed by the banking commissioner under Subchapter A, Chapter 185.
(c)  The certificate of formation, bylaws, and participation agreement of a limited trust association may use the term "director" instead of "manager" and the term "board" instead of "board of managers."
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 575 (S.B. 804), Sec. 28, eff. June 14, 2013.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 183 - Ownership and Management of State Trust Company › Subchapter C. Limited Trust Association › Section 183.205. Withdrawal or Reduction of Participant's Contribution to Capital

Sec. 183.205.  WITHDRAWAL OR REDUCTION OF PARTICIPANT'S CONTRIBUTION TO CAPITAL.  (a)  Except as otherwise provided by this chapter, a participant may not receive from a limited trust association any part of the participant's contribution to capital unless:
(1)  all liabilities of the limited trust association, except liabilities to participants on account of contribution to capital, have been paid;
(2)  after the withdrawal or reduction, sufficient property of the limited trust association will remain to pay all liabilities of the limited trust association, except liabilities to participants on account of contribution to capital;
(3)  all participants consent; or
(4)  the certificate of formation is canceled or amended to set out the withdrawal or reduction.
(b)  A participant may demand the return of the participant's contribution to capital on the dissolution of the association and the failure of the full liability participants to exercise the right to carry on the business of the limited trust association as provided by Section 183.208.
(c)  A participant may demand the return of the participant's contribution to capital only in cash unless a different form of return of the contribution is allowed by the certificate of formation or by the unanimous consent of all participants.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 575 (S.B. 804), Sec. 29, eff. June 14, 2013.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 183 - Ownership and Management of State Trust Company › Subchapter C. Limited Trust Association › Section 183.206. Interest in Limited Trust Association; Transferability of Interest

Sec. 183.206.  INTEREST IN LIMITED TRUST ASSOCIATION;  TRANSFERABILITY OF INTEREST.  (a)  The interest of a participant or participant-transferee in a limited trust association is the personal property of the participant or the participant-transferee and may be transferred as provided by the bylaws or the participation agreement.
(b)  A transferee of a participant's interest has the status of a participant-transferee and does not by the transfer become a participant or obtain a right to participate in the management of the limited trust association.
(c)  A participant-transferee is entitled to receive only a share of profits, return of contribution, or other distributive benefit in respect to the interest transferred to which the participant who transferred the interest would have been entitled.
(d)  A participant-transferee may become a participant only as provided by the bylaws or the participation agreement.
(e)  A limited trust association may add additional participants in the same manner as participant-transferees after payment in full of the capital contribution to the limited trust association payable for the issuance of additional participation interests.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 183 - Ownership and Management of State Trust Company › Subchapter C. Limited Trust Association › Section 183.207. Bylaws of Limited Trust Association

Sec. 183.207.  BYLAWS OF LIMITED TRUST ASSOCIATION.  (a)  A limited trust association in which management is retained by the participants is not required to adopt bylaws if the provisions required by law to be contained in the bylaws are contained in the certificate of formation or the participation agreement.
(b)  If a limited trust association has adopted bylaws that designate each full liability participant, the limited trust association shall file a copy of the bylaws with the banking commissioner.  Only the portion of the bylaws designating each full liability participant is a public record.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 575 (S.B. 804), Sec. 30, eff. June 14, 2013.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 183 - Ownership and Management of State Trust Company › Subchapter C. Limited Trust Association › Section 183.208. Dissolution

Sec. 183.208.  DISSOLUTION.  (a)  A limited trust association organized under this chapter is dissolved on:
(1)  the expiration of the period fixed for the duration of the limited trust association;
(2)  a vote to dissolve or the execution of a written consent to dissolve by all full liability participants, if any, and a sufficient number of other participants that, combined with all full liability participants, hold at least two-thirds of the participation shares in each class in the association, or a greater fraction as provided by the certificate of formation;
(3)  except as provided by the certificate of formation, the death, insanity, expulsion, bankruptcy, retirement, or resignation of a participant unless a majority in interest of all remaining participants elect in writing not later than the 90th day after the date of the event to continue the business of the association; or
(4)  the occurrence of an event of dissolution specified in the certificate of formation.
(b)  A dissolution under this section is considered to be the initiation of a voluntary dissolution under Subchapter B, Chapter 186.
(c)  An event of dissolution described by Subsection (a)(3) does not cancel or revoke a contract to which the limited trust association is a party, including a trust indenture or agreement or voluntary dissolution under Subchapter B, Chapter 186, until the period for the remaining participants to continue the business of the limited trust association has expired without the remaining participants having completed the necessary action to continue the business of the limited trust association.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 575 (S.B. 804), Sec. 31, eff. June 14, 2013.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 183 - Ownership and Management of State Trust Company › Subchapter C. Limited Trust Association › Section 183.209. Allocation of Profits and Losses

Sec. 183.209.  ALLOCATION OF PROFITS AND LOSSES.  The profits and losses of a limited trust association may be allocated among the participants and among classes of participants as provided by the participation agreement.  Without the prior written approval of the banking commissioner to use a different allocation method, the profits and losses must be allocated according to the relative interests of the participants as reflected in the certificate of formation and related documents filed with and approved by the banking commissioner.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 575 (S.B. 804), Sec. 32, eff. June 14, 2013.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 183 - Ownership and Management of State Trust Company › Subchapter C. Limited Trust Association › Section 183.210. Distributions

Sec. 183.210.  DISTRIBUTIONS.  Subject to Section 182.103, distributions of cash or other assets of a limited trust association may be made to the participants as provided by the participation agreement.  Without the prior written approval of the banking commissioner to use a different distribution method, distributions must be made to the participants according to the relative interests of the participants as reflected in the certificate of formation and related documents filed with and approved by the banking commissioner.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 575 (S.B. 804), Sec. 33, eff. June 14, 2013.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 183 - Ownership and Management of State Trust Company › Subchapter C. Limited Trust Association › Section 183.211. Application of Other Provisions to Limited Trust Associations

Sec. 183.211.  APPLICATION OF OTHER PROVISIONS TO LIMITED TRUST ASSOCIATIONS.  For purposes of applying the provisions of this subtitle other than this subchapter to a limited trust association, as the context requires:
(1)  a manager and the board of managers are considered to be a director and the board of directors;
(2)  if there is not a board of managers, a participant is considered to be a director and all of the participants are considered to be the board of directors;
(3)  a participant or participant-transferee is considered to be a shareholder;
(4)  a participation share is considered to be a share of stock;  and
(5)  a distribution is considered to be a dividend.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter A. Acquisition and Ownership of Trust Company Facilities and Other Real Property › Section 184.001. Definition

Sec. 184.001.  DEFINITION.  In this subchapter, "state trust company facility" means real property, including an improvement, that a state trust company owns or leases, to the extent the lease or the leasehold improvement is capitalized, for the purpose of:
(1)  providing space for state trust company employees to perform their duties and for state trust company employees and customers to park;
(2)  conducting trust business, including meeting the reasonable needs and convenience of the public and the state trust company's clients, computer operations, document and other item processing, maintenance, and record retention and storage;
(3)  holding, improving, and occupying as an incident to future expansion of the state trust company's facilities;  or
(4)  conducting another activity authorized by rules adopted under this subtitle.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter A. Acquisition and Ownership of Trust Company Facilities and Other Real Property › Section 184.002. Investment in State Trust Company Facilities

Sec. 184.002.  INVESTMENT IN STATE TRUST COMPANY FACILITIES.  (a)  Without the prior written approval of the banking commissioner, a state trust company may not directly or indirectly invest an amount in excess of the company's restricted capital in state trust company facilities, furniture, fixtures, and equipment.  Except as otherwise provided by rules adopted under this subtitle, in computing the limitation provided by this subsection a state trust company:
(1)  shall include:
(A)  its direct investment in state trust company facilities;
(B)  an investment in equity or investment securities of a company holding title to a facility used by the state trust company for the purposes specified by Section 184.001;
(C)  a loan made by the state trust company to or on the security of equity or investment securities issued by a company holding title to a facility used by the state trust company; and
(D)  any indebtedness incurred on state trust company facilities by a company:
(i)  that holds title to the facility;
(ii)  that is an affiliate of the state trust company; and
(iii)  in which the state trust company is invested in the manner described by Paragraph (B) or (C); and
(2)  may exclude an amount included under Subdivisions (1)(B)-(D) to the extent any lease of a facility from the company holding title to the facility is capitalized on the books of the state trust company.
(b)  Real property described by Subsection 184.001(3) and not improved and occupied by the state trust company ceases to be a state trust company facility on the third anniversary of the date of its acquisition unless the banking commissioner on application grants written approval to further delay in the improvement and occupation of the property by the state trust company.
(c)  A state trust company shall comply with regulatory accounting principles in accounting for its investment in and depreciation of trust company facilities, furniture, fixtures, and equipment.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 940 (H.B. 1664), Sec. 14, eff. June 14, 2013.
Acts 2023, 88th Leg., R.S., Ch. 98 (S.B. 1646), Sec. 2, eff. May 19, 2023.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter A. Acquisition and Ownership of Trust Company Facilities and Other Real Property › Section 184.003. Other Real Property

Sec. 184.003.  OTHER REAL PROPERTY.  (a)  A state trust company may not invest its restricted capital in real property except:
(1)  as permitted by this subtitle or rules adopted under this subtitle;
(2)  with the prior written approval of the banking commissioner; or
(3)  as necessary to avoid or minimize a loss on a loan or investment previously made in good faith.
(b)  With the prior written approval of the banking commissioner, a state trust company may:
(1)  exchange real property for other real property or personal property;
(2)  invest additional money in or improve real property acquired under this subsection or Subsection (a);  or
(3)  acquire additional real property to avoid or minimize loss on real property acquired as permitted by Subsection (a).
(c)  A state trust company shall dispose of any real property subject to Subsection (a) not later than the fifth anniversary of the date the real property:
(1)  was acquired, except as otherwise provided by rules adopted under this subtitle;
(2)  ceases to be used as a state trust company facility; or
(3)  ceases to be a state trust company facility as provided by Section 184.002(b).
(d)  The banking commissioner on application may grant one or more extensions of time for disposing of real property under Subsection (c) if the banking commissioner determines that:
(1)  the state trust company has made a good faith effort to dispose of the real property;  or
(2)  disposal of the real property would be detrimental to the state trust company.
(e)  Subject to the exercise of prudent judgment, a state trust company may invest its secondary capital in real property. The factors to be considered by a state trust company in exercise of prudent judgment include the factors contained in Section 184.101(e).
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2021, 87th Leg., R.S., Ch. 915 (H.B. 3607), Sec. 8.001, eff. September 1, 2021.
Acts 2023, 88th Leg., R.S., Ch. 98 (S.B. 1646), Sec. 3, eff. May 19, 2023.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter B. Investments › Section 184.102. Transactions in State Trust Company Shares or Participation Shares

Sec. 184.102.  TRANSACTIONS IN STATE TRUST COMPANY SHARES OR PARTICIPATION SHARES.  Except with the prior written approval of the banking commissioner:
(1)  a state trust company may not acquire its own shares or participation shares unless the amount of its undivided profits is sufficient to fully absorb the acquisition of the shares or participation shares under regulatory accounting principles;  and
(2)  a state trust company may not acquire a lien on its own shares or participation shares unless the amount of indebtedness secured is less than the amount of the state trust company's undivided profits.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter B. Investments › Section 184.103. State Trust Company Subsidiaries

Sec. 184.103.  STATE TRUST COMPANY SUBSIDIARIES.  (a)  Except as otherwise provided by this subtitle or rules adopted under this subtitle, and subject to the exercise of prudent judgment, a state trust company may invest its secondary capital to acquire or establish one or more subsidiaries to conduct any activity that may lawfully be conducted through the form of organization chosen for the subsidiary.  The factors to be considered by a state trust company in exercise of prudent judgment include the factors contained in Section 184.101(e).
(b)  A state trust company that intends to acquire, establish, or perform new activities through a subsidiary shall submit a letter to the banking commissioner describing in detail the proposed activities of the subsidiary.
(c)  The state trust company may acquire or establish a subsidiary or begin performing new activities in an existing subsidiary on the 31st day after the date the banking commissioner receives the state trust company's letter, unless the banking commissioner specifies an earlier or later date.  The banking commissioner may extend the 30-day period on a determination that the state trust company's letter raises issues that require additional information or additional time for analysis.  If the period is extended, the state trust company may acquire or establish the subsidiary, or perform new activities in an existing subsidiary, only on prior written approval of the banking commissioner.
(d)  A subsidiary of a state trust company is subject to regulation by the banking commissioner to the extent provided by this subtitle or rules adopted under this section.  In the absence of limiting rules, the banking commissioner may regulate a subsidiary as if it were a state trust company.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.  Amended by Acts 2001, 77th Leg., ch. 528, Sec. 24, eff. Sept. 1, 2001.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter B. Investments › Section 184.104. Other Investment Provisions

Sec. 184.104.  OTHER INVESTMENT PROVISIONS.  (a)  Without the prior written approval of the banking commissioner, a state trust company may not make any investment of its secondary capital in any investment that incurs or may incur, under regulatory accounting principles, a liability or contingent liability for the state trust company.
(b)  The banking commissioner may, on a case-by-case basis, require a state trust company to dispose of any investment of its secondary capital, if the banking commissioner finds that the divestiture of the asset is necessary to protect the safety and soundness of the state trust company.  The banking commissioner in the exercise of discretion under this subsection shall consider safety and soundness factors, including those contained in Section 182.008(b).  The proposed effective date of an order requiring a state trust company to dispose of an asset must be stated in the order and must be on or after the 21st day after the date the proposed order is mailed or delivered.  Unless the state trust company requests a hearing before the banking commissioner in writing before the effective date of the proposed order, the order becomes effective and is final and nonappealable.
(c)  Subject to Subsections (a) and (b), to Section 184.105, and to the exercise of prudent judgment, a state trust company may invest its secondary capital in any type or character of investment for the purpose of generating income or profit.  The factors to be considered by a state trust company in exercise of prudent judgment include the factors contained in Section 184.101(e).
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.  Amended by Acts 2001, 77th Leg., ch. 528, Sec. 25, eff. Sept. 1, 2001.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter B. Investments › Section 184.105. Engaging in Commerce Prohibited

Sec. 184.105.  ENGAGING IN COMMERCE PROHIBITED.  (a)  Except as otherwise provided by this subtitle or rules adopted under this subtitle, a state trust company may not invest its funds in trade or commerce by buying, selling, or otherwise dealing goods or by owning or operating a business not part of the state trust business, except as necessary to fulfill a fiduciary obligation to a client.
(b)  Under this section, engaging in an approved financial activity or an activity incidental or complementary to a financial activity, whether as principal or agent, is not considered to be engaging in commerce.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.  Amended by Acts 2001, 77th Leg., ch. 528, Sec. 26, eff. Sept. 1, 2001.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter C. Loans › Section 184.201. Lending Limits

Sec. 184.201.  LENDING LIMITS.  (a)  A state trust company's total outstanding loans and extensions of credit to a person other than an insider may not exceed an amount equal to 15 percent of the state trust company's restricted capital.
(b)  The aggregate loans and extensions of credit outstanding at any time to insiders of the state trust company may not exceed an amount equal to 15 percent of the state trust company's restricted capital.  All covered transactions between an insider and a state trust company must be engaged in only on terms and under circumstances, including credit standards, that are substantially the same as those for comparable transactions with a person other than an insider.
(c)  The finance commission may adopt rules to administer this section, including rules to:
(1)  establish limits, requirements, or exemptions other than those specified by this section for particular classes or categories of loans or extensions of credit;  and
(2)  establish collective lending and investment limits.
(d)  The banking commissioner may determine whether a loan or extension of credit putatively made to a person will be attributed to another person for purposes of this section.
(e)  A state trust company may not lend trust deposits, except that a trustee may make a loan to a beneficiary of the trust if the loan is expressly authorized or directed by the instrument or transaction establishing the trust.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter C. Loans › Section 184.202. Violation of Lending Limit

Sec. 184.202.  VIOLATION OF LENDING LIMIT.  (a)  An officer, director, manager, managing participant, or employee of a state trust company who approves or participates in the approval of a loan with actual knowledge that the loan violates Section 184.201 is jointly and severally liable to the state trust company for the lesser of the amount by which the loan exceeded applicable lending limits or the state trust company's actual loss.  The person remains liable for that amount until the loan and all prior indebtedness of the borrower to the state trust company have been fully repaid.
(b)  The state trust company may initiate a proceeding to collect an amount due under this section at any time before the date the borrower defaults on the subject loan or any prior indebtedness or before the fourth anniversary of that date.
(c)  A person who is liable for and pays amounts to the state trust company under this section is entitled to an assignment of the state trust company's claim against the borrower to the extent of the payments.
(d)  For purposes of this section, an officer, director, manager, managing participant, or employee of a state trust company is presumed to know the amount of the state trust company's lending limit under Section 184.201 and the amount of the borrower's aggregate outstanding indebtedness to the state trust company immediately before a new loan or extension of credit to that borrower.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter C. Loans › Section 184.203. Lease Financing Transaction

Sec. 184.203.  LEASE FINANCING TRANSACTION.  (a)  Subject to rules adopted under this subtitle, a state trust company may become the owner and lessor of tangible personal property for lease financing transactions on a net lease basis on the specific request and for the use of a client.  Without the written approval of the banking commissioner to continue holding property acquired for leasing purposes under this subsection, the state trust company may not hold the property more than six months after the date of expiration of the original or any extended or renewed lease period agreed to by the client for whom the property was acquired or by a subsequent lessee.
(b)  A rental payment received by the state trust company in a lease financing transaction under this section is considered to be rent and not interest or compensation for the use, forbearance, or detention of money.  However, a lease financing transaction is considered to be a loan or extension of credit for purposes of Sections 184.201 and 184.202.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter C. Loans › Section 184.204. General Banking Privileges Not Conferred

Sec. 184.204.  GENERAL BANKING PRIVILEGES NOT CONFERRED.  This subchapter does not confer general banking privileges on a state trust company.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter D. Trust Deposits › Section 184.301. Trust Deposits

Sec. 184.301.  TRUST DEPOSITS.  (a)  A state trust company may deposit trust funds with itself as an investment if:
(1)  the deposit is authorized by the settlor or beneficiary;
(2)  the state trust company maintains as security for the deposit a separate fund of securities, legal for trust investments, under control of a federal reserve bank or a clearing corporation, as defined by Section 8.102, Business & Commerce Code, within or outside this state;
(3)  the total market value of the security is at all times at least equal to the amount of the deposit;  and
(4)  the separate fund is designated as a separate fund.
(b)  A state trust company may make periodic withdrawals from or additions to a securities fund required by Subsection (a) as long as the required value is maintained.  Income from the securities in the fund belongs to the state trust company.
(c)  Security for a deposit under this section is not required for a deposit under Subsection (a) to the extent the deposit is insured by the Federal Deposit Insurance Corporation or its successor.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter D. Trust Deposits › Section 184.302. General Banking Privileges Not Conferred

Sec. 184.302.  GENERAL BANKING PRIVILEGES NOT CONFERRED.  This subchapter does not confer general banking privileges on a state trust company.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter E. Liabilities and Pledge of Assets › Section 184.401. Borrowing Limit

Sec. 184.401.  BORROWING LIMIT.  Except with the prior written approval of the banking commissioner, a state trust company may not have outstanding liabilities, excluding trust deposit liabilities arising under Section 184.301, that exceed an amount equal to five times its restricted capital.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 184 - Investments, Loans, and Deposits › Subchapter E. Liabilities and Pledge of Assets › Section 184.402. Pledge of Assets

Sec. 184.402.  PLEDGE OF ASSETS.  (a)  A state trust company may not pledge or create a lien on any of its assets except to secure:
(1)  the repayment of money borrowed;
(2)  trust deposits as specifically authorized or required by:
(A)  Section 184.301;
(B)  Title 9, Property Code;  or
(C)  rules adopted under this chapter;  or
(3)  deposits made by:
(A)  the United States;
(B)  a state, county, or municipality;  or
(C)  an agency of the United States or a state, county, or municipality.
(b)  An act, deed, conveyance, pledge, or contract in violation of this section is void.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 185 - Enforcement Actions › Subchapter A. Enforcement Orders › Section 185.0001. Applicability to State Trust Company Subsidiaries

Sec. 185.0001.  APPLICABILITY TO STATE TRUST COMPANY SUBSIDIARIES.  This subchapter applies to a subsidiary of a state trust company, a present or former officer, director, manager, managing participant, or employee of a subsidiary, or a controlling shareholder or other person participating in the affairs of a subsidiary in the same manner as the subchapter applies to a state trust company, a present or former officer, director, manager, managing participant, or employee of a state trust company, or a controlling shareholder or other person participating in the affairs of a state trust company.
Added by Acts 2015, 84th Leg., R.S., Ch. 422 (H.B. 3555), Sec. 9, eff. September 1, 2015.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 185 - Enforcement Actions › Subchapter A. Enforcement Orders › Section 185.001. Determination Letter

Sec. 185.001.  DETERMINATION LETTER.  (a)  If the banking commissioner determines from examination or other credible evidence that a state trust company is in a condition that may warrant the issuance of an enforcement order under this chapter, the banking commissioner may notify the state trust company in writing of the determination, the requirements the state trust company must satisfy to abate the determination, and the time in which the requirements must be satisfied to avert further administrative action.  The determination letter must be delivered by personal delivery or by registered or certified mail, return receipt requested.
(b)  The determination letter may be issued in connection with the issuance of a cease and desist, removal, or prohibition order under this subchapter or an order of supervision or conservatorship under Subchapter B.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 185 - Enforcement Actions › Subchapter A. Enforcement Orders › Section 185.002. Cease and Desist Order

Sec. 185.002.  CEASE AND DESIST ORDER.  (a)  The banking commissioner has grounds to issue a cease and desist order to an officer, employee, director, manager, or managing participant of a state trust company, or the state trust company itself acting through an authorized person, if the banking commissioner determines from examination or other credible evidence that the state trust company or person directly or indirectly has:
(1)  violated this subtitle or another applicable law or rule;
(2)  engaged in a breach of trust or other fiduciary duty;
(3)  refused to submit to examination or examination under oath;
(4)  conducted business in an unsafe or unsound manner;  or
(5)  violated a condition of the state trust company's charter or an agreement between the state trust company or the person and the banking commissioner or the department.
(b)  If the banking commissioner has grounds for action under Subsection (a) and finds that an order to cease and desist from a violation or other conduct described by Subsection (a) appears to be necessary and in the best interest of a state trust company involved and its clients, creditors, and shareholders or participants, the banking commissioner may serve a proposed cease and desist order on the state trust company and each person who committed or participated in the violation.  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 the order;  and
(3)  state the effective date of the order, which may not be earlier than the 21st day after the date the order is mailed or delivered.
(b-1)  A proposed cease and desist order may require an officer, employee, director, manager, or managing participant of a state trust company, or the state trust company itself acting through an authorized person, to cease or desist from a violation or other practice or to take affirmative action to correct the conditions resulting from a violation or other practice, including the payment of restitution or other action that the banking commissioner determines is appropriate.
(c)  The order takes effect if the state trust company or 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 state trust company or person.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2015, 84th Leg., R.S., Ch. 422 (H.B. 3555), Sec. 10, eff. September 1, 2015.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 185 - Enforcement Actions › Subchapter A. Enforcement Orders › Section 185.004. Hearing on Proposed Order

Sec. 185.004.  HEARING ON PROPOSED ORDER.  (a)  A requested hearing on a proposed order shall be held not later than the 30th day after the date the first request for a hearing on the order was received by the banking commissioner unless the parties agree to a later hearing date.  Not later than the 11th day before the date of the hearing, each party shall be given written notice by personal delivery or by registered or certified mail, return receipt requested, of the date set by the banking commissioner for the hearing.  At the hearing, the banking commissioner has the burden of proof, and each person against whom the order is directed may cross-examine witnesses and present evidence to show why the order should not be issued.
(b)  After the hearing, the banking commissioner shall issue or decline to issue the order.  The order may be modified as necessary to conform to the findings at the hearing and to require the board to take necessary affirmative action to correct the conditions cited in the order.
(c)  An order issued under this section is immediately final for purposes of enforcement and appeal.  The order may be appealed as provided by Sections 181.202 and 181.204.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 20 (S.B. 614), Sec. 25, eff. September 1, 2019.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 185 - Enforcement Actions › Subchapter A. Enforcement Orders › Section 185.005. Emergency Order

Sec. 185.005.  EMERGENCY ORDER.  (a)  If the banking commissioner believes that immediate action is needed to prevent immediate and irreparable harm to the state trust company and its clients, creditors, and shareholders or participants, the banking commissioner may issue one or more cease and desist, removal, or prohibition orders as emergency orders to become effective immediately on service without prior notice or hearing.  Service must be by personal delivery or by registered or certified mail, return receipt requested.
(b)  In each emergency order the banking commissioner shall notify the state trust company and any person against whom the emergency order is directed of:
(1)  the specific conduct requiring the order;
(2)  the citation of each statute or rule alleged to have been violated;
(3)  the immediate and irreparable harm alleged to be threatened;
(4)  the duration of the order, including whether the duration of the order is perpetual; and
(5)  the right to a hearing.
(c)  Unless a person against whom the order is directed requests a hearing in writing before the 11th day after the date the order is served on the person, the order is final and nonappealable as to that person.
(d)  A hearing requested under Subsection (c) must be:
(1)  given priority over all other matters pending before the banking commissioner;  and
(2)  held not later than the 20th day after the date the hearing is requested unless the parties agree to a later hearing date.
(e)  After the hearing, the banking commissioner may affirm, modify, or set aside in whole or part the emergency order.  An order affirming or modifying the order is immediately final for purposes of enforcement and appeal.  The order may be appealed as provided by Sections 181.202 and 181.204.
(f)  An emergency order continues in effect unless the order is stayed by the banking commissioner.  The banking commissioner may impose any condition before granting a stay of the emergency order.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 183 (S.B. 1165), Sec. 10, eff. May 28, 2011.
Acts 2019, 86th Leg., R.S., Ch. 20 (S.B. 614), Sec. 26, eff. September 1, 2019.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 185 - Enforcement Actions › Subchapter A. Enforcement Orders › Section 185.006. Copy of Letter or Order in State Trust Company Records

Sec. 185.006.  COPY OF LETTER OR ORDER IN STATE TRUST COMPANY RECORDS.  A copy of any determination letter, proposed order, emergency order, or final order issued by the banking commissioner under this subchapter shall be immediately brought to the attention of the board of the affected state trust company, regardless of whether the state trust company is a party, and filed in the minutes of the board.  Each director, manager, or managing participant shall immediately certify to the banking commissioner in writing that the certifying person has read and understood the determination letter, proposed order, emergency order, or final order.  The required certification may not be considered an admission of a person in a subsequent legal or administrative proceeding.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 185 - Enforcement Actions › Subchapter A. Enforcement Orders › Section 185.007. Effect of Final Removal or Prohibition Order

Sec. 185.007.  EFFECT OF FINAL REMOVAL OR PROHIBITION ORDER.  (a)  Except as provided by other law, without the prior written approval of the banking commissioner, a person subject to a final and enforceable removal or prohibition order issued by the banking commissioner, or by another state, federal, or foreign financial institution regulatory agency, may not:
(1)  serve as a director, officer, or employee of a state trust company, state bank, or holding company of a state bank, or as a director, officer, or employee with financial responsibility of any other entity chartered, registered, permitted, or licensed by the banking commissioner under the laws of this state while the order is in effect;
(2)  directly or indirectly participate in any manner in the management of such an entity;
(3)  directly or indirectly vote for a director of such an entity; or
(4)  solicit, procure, transfer, attempt to transfer, vote, or attempt to vote a proxy, consent, or authorization with respect to voting rights in such an entity.
(b)  The person subject to the order remains entitled to receive dividends or a share of profits, return of contribution, or other distributive benefit from an entity identified in Subsection (a)(1) with respect to voting securities in the entity owned by the person.
(c)  If voting securities of an entity identified in Subsection (a)(1) cannot be voted under this section, the voting securities are considered to be authorized but unissued for purposes of determining the procedures for and results of the affected vote.
(d)  Participants of a limited trust association in which a participant has been finally removed or prohibited from participation in the state trust company's affairs under this subchapter shall elect a board of managers.
(e)  This section and Section 185.008 do not prohibit a removal or prohibition order that has indefinite duration or that by its terms is perpetual.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.  Amended by Acts 2001, 77th Leg., ch. 412, Sec. 3.10, eff. Sept. 1, 2001;  Acts 2001, 77th Leg., ch. 1420, Sec. 6.018(a), eff. Sept. 1, 2001.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 183 (S.B. 1165), Sec. 11, eff. May 28, 2011.
Acts 2017, 85th Leg., R.S., Ch. 599 (S.B. 1401), Sec. 15, eff. September 1, 2017.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 185 - Enforcement Actions › Subchapter A. Enforcement Orders › Section 185.0071. Application for Release From Final Removal or Prohibition Order

Sec. 185.0071.  APPLICATION FOR RELEASE FROM FINAL REMOVAL OR PROHIBITION ORDER.  (a)  After the expiration of 10 years from the date of issuance, a person who is subject to a prohibition or removal order issued under this subchapter, regardless of the order's stated duration or date of issuance, may apply to the banking commissioner to be released from the order.
(b)  The application must be made under oath and in the form required by the banking commissioner.  The application must be accompanied by any required fees.
(c)  The banking commissioner, in the exercise of discretion, may approve or deny an application filed under this section.
(d)  The banking commissioner's decision under Subsection (c) is final and not appealable.
Added by Acts 2011, 82nd Leg., R.S., Ch. 183 (S.B. 1165), Sec. 12, eff. May 28, 2011.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 185 - Enforcement Actions › Subchapter A. Enforcement Orders › Section 185.008. Limitation on Action

Sec. 185.008.  LIMITATION ON ACTION.  The banking commissioner may not initiate an enforcement action under this subchapter later than the fifth anniversary of the date the banking commissioner discovered or reasonably should have discovered the conduct involved.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle F - Trust Companies › Chapter 185 - Enforcement Actions › Subchapter A. Enforcement Orders › Section 185.009. Enforcement by Commissioner

Sec. 185.009.  ENFORCEMENT BY COMMISSIONER.  (a)  If the banking commissioner reasonably believes that a state trust company or other person has violated any of the following, the banking commissioner may take any action authorized under Subsection (a-1):
(1)  this subtitle or rules enacted under this subtitle and, as a result of that violation, exposed or could have exposed the state trust company or its clients, creditors, shareholders, or participants to harm;
(2)  other applicable law of this state and, as a result of that violation, exposed or could have exposed the state trust company or its clients, creditors, shareholders, or participants to harm; or
(3)  a final order issued by the banking commissioner.
(a-1)  The banking commissioner may:
(1)  initiate administrative penalty proceedings against the state trust company or other person, as applicable, in accordance with Sections 185.010 and 185.011;
(2)  refer the matter to the attorney general for enforcement by injunction or other available remedy; or
(3)  pursue any other action the banking commissioner considers appropriate under applicable law.
(b)  If the attorney general prevails in an action brought under Subsection (a-1)(2), the attorney general is entitled to recover reasonable attorney's fees from a state trust company or person committing the violation.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 183 (S.B. 1165), Sec. 13, eff. May 28, 2011.