reglab/statecodes huggingface dataset:
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 33 - Ownership and Management of State Bank › Subchapter B. Board and Officers › Section 33.109. Transactions With Management and Affiliates

Sec. 33.109.  TRANSACTIONS WITH MANAGEMENT AND AFFILIATES.  (a)  Without the prior approval of a disinterested majority of the board recorded in the minutes or, if a disinterested majority cannot be obtained, the prior written approval of the banking commissioner, a state bank may not directly or indirectly:
(1)  sell or lease an asset of the bank to an officer, director, or principal shareholder of the bank or of an affiliate of the bank; or
(2)  purchase or lease an asset in which an officer, director, or principal shareholder of the bank or of an affiliate of the bank has an interest.
(b)  An officer or director of the bank who knowingly participates in or permits a violation of this section commits an offense.  An offense under this subsection is a felony of the third degree.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.  Amended by Acts 2001, 77th Leg., ch. 412, Sec. 2.11, eff. Sept. 1, 2001.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 30, eff. September 1, 2007.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 33 - Ownership and Management of State Bank › Subchapter C. Limited Banking Association › Section 33.201. Liability of Participants and Managers

Sec. 33.201.  LIABILITY OF PARTICIPANTS AND MANAGERS.  (a)  A participant or manager of a limited banking association is not liable for a debt, obligation, or liability of the limited banking association, including a debt, obligation, or liability under a judgment, decree, or order of court.  A participant or a manager of a limited banking association is not a proper party to a proceeding by or against a limited banking association unless the object of the proceeding is to enforce a participant's or manager's right against or liability to a limited banking association.
(b)  Repealed by Acts 2007, 80th Leg., R.S., Ch. 237, Sec. 80, eff. September 1, 2007.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 31, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 80, eff. September 1, 2007.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 33 - Ownership and Management of State Bank › Subchapter C. Limited Banking Association › Section 33.204. Management of Limited Banking Association

Sec. 33.204.  MANAGEMENT OF LIMITED BANKING ASSOCIATION.  (a)  Management of a limited banking association is vested in a board of managers elected by the participants as prescribed by the bylaws.
(b)  A board of managers operates in substantially the same manner as, and has substantially the same rights, powers, privileges, duties, and responsibilities, as a board of directors of a banking association, and a manager must meet the qualifications for a director under Section 33.103.
(c)  The certificate of formation, bylaws, and participation agreement of a limited banking association may use "director" instead of "manager" and "board" instead of "board of managers."
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 32, eff. September 1, 2007.
Acts 2013, 83rd Leg., R.S., Ch. 575 (S.B. 804), Sec. 11, eff. June 14, 2013.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 33 - Ownership and Management of State Bank › Subchapter C. Limited Banking Association › Section 33.206. Interest in Limited Banking Association; Transferability of Interest

Sec. 33.206.  INTEREST IN LIMITED BANKING ASSOCIATION;  TRANSFERABILITY OF INTEREST.  (a)  The interest of a participant in a limited banking association is the personal property of the participant and may be transferred as provided by the bylaws or the participation agreement.
(b)  The bylaws or the participation agreement may not require the consent of any other participant in order for a participant to transfer participation shares, including voting rights.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 33, eff. September 1, 2007.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 33 - Ownership and Management of State Bank › Subchapter C. Limited Banking Association › Section 33.208. Dissolution

Sec. 33.208.  DISSOLUTION.  The bylaws or the participation agreement may not require automatic termination, dissolution, or suspension of the limited banking association on the death, disability, bankruptcy, expulsion, or withdrawal of a participant, or on the happening of any other event other than the passage of time.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 34, eff. September 1, 2007.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 33 - Ownership and Management of State Bank › Subchapter C. Limited Banking Association › Section 33.209. Allocation of Profits and Losses

Sec. 33.209.  ALLOCATION OF PROFITS AND LOSSES.  The profits and losses of a limited banking 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.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 575 (S.B. 804), Sec. 12, eff. June 14, 2013.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 33 - Ownership and Management of State Bank › Subchapter C. Limited Banking Association › Section 33.210. Distributions

Sec. 33.210.  DISTRIBUTIONS.  Subject to Section 32.103, distributions of cash or other assets of a limited banking 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.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 575 (S.B. 804), Sec. 13, eff. June 14, 2013.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 33 - Ownership and Management of State Bank › Subchapter C. Limited Banking Association › Section 33.211. Application of Other Provisions to Limited Banking Associations

Sec. 33.211.  APPLICATION OF OTHER PROVISIONS TO LIMITED BANKING ASSOCIATIONS.  For purposes of the provisions of Subtitle A and this subtitle other than this subchapter, as the context requires:
(1)  a manager is considered to be a director and the board of managers is considered to be the board of directors;
(2)   a participant is considered to be a shareholder;
(3)  a participation share is considered to be a share; and
(4)  a distribution is considered to be a dividend.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 35, eff. September 1, 2007.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter A. Acquisition and Ownership of Bank Facilities and Other Real Property › Section 34.001. Definition

Sec. 34.001.  DEFINITION.  In this subchapter, "bank facility" means real property, including an improvement, that a state bank owns or leases, to the extent the lease or the leasehold improvement is capitalized, for the purpose of:
(1)  providing space for bank employees to perform their duties and for bank employees and customers to park;
(2)  conducting bank business, including meeting the reasonable needs and convenience of the public and the bank's customers, computer operations, document and other item processing, maintenance and storage of foreclosed collateral pending disposal, and record retention and storage;
(3)  holding, improving, and occupying as an incident to future expansion of the bank's facilities;  or
(4)  conducting another activity authorized by rules adopted under this subtitle.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter A. Acquisition and Ownership of Bank Facilities and Other Real Property › Section 34.002. Investment in Bank Facilities

Sec. 34.002.  INVESTMENT IN BANK FACILITIES.  (a)  Without the prior written approval of the banking commissioner, a state bank may not directly or indirectly invest an amount in excess of its unimpaired capital and surplus in bank facilities, furniture, fixtures, and equipment.  Except as otherwise provided by rules adopted under this subtitle, in computing this limitation the bank:
(1)  shall include:
(A)  its direct investment in bank facilities;
(B)  an investment in equity or investment securities of a company holding title to a facility used by the bank for a purpose specified by Section 34.001;
(C)  a loan made by the bank to or on the security of equity or investment securities issued by a company holding title to a facility used by the bank; and
(D)  any indebtedness incurred on bank facilities by a company:
(i)  that holds title to the facility;
(ii)  that is an affiliate of the bank; and
(iii)  in which the bank 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 a lease of a facility from the company holding title to the facility is capitalized on the books of the bank.
(b)  Real property acquired for the purposes described by Section 34.001(3) and not improved and occupied by the bank ceases to be a bank 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 bank.
(c)  A bank shall comply with regulatory accounting principles in accounting for its investment in and depreciation of bank facilities, furniture, fixtures, and equipment.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 110 (H.B. 2007), Sec. 3, eff. September 1, 2007.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter A. Acquisition and Ownership of Bank Facilities and Other Real Property › Section 34.003. Other Real Property

Sec. 34.003.  OTHER REAL PROPERTY.  (a)  A state bank may not acquire 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 bank 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 bank shall dispose of real property subject to this section 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 bank facility; or
(3)  ceases to be a bank facility as provided by Section 34.002(b).
(d)  The banking commissioner on application may grant one or more extensions of time for disposing of real property if the banking commissioner determines that:
(1)  the bank has made a good faith effort to dispose of the real property;  or
(2)  disposal of the real property would be detrimental to the bank.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 940 (H.B. 1664), Sec. 7, eff. June 14, 2013.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter A. Acquisition and Ownership of Bank Facilities and Other Real Property › Section 34.004. Retention of Nonparticipating Royalty Interests

Sec. 34.004.  RETENTION OF NONPARTICIPATING ROYALTY INTERESTS.  (a)  Notwithstanding Section 34.003(a), a state bank may hold nonparticipating royalty interests if:
(1)  the state bank acquires the interest pursuant to Section 34.003(a)(3) or retains the interest in a sale of property acquired under that section;
(2)  the interest is nonparticipating due to the fact the interest:
(A)  is nonpossessory;
(B)  does not bear executive rights, the right of ingress and egress, the right to receive bonus payments, or the right to receive delay rentals; and
(C)  is accordingly not subject to expenses of exploration, development, production, operation, maintenance, or abandonment, or other expenses associated with extracting and marketing the minerals subject to the interest;
(3)  the interest is reasonably valued on the books of the state bank for not more than a nominal amount, and the aggregate amount of earnings from such interests is separately disclosed in the annual financial statements of the state bank;
(4)  the state bank does not make any new investments relating to the interests without the approval of the banking commissioner; and
(5)  the banking commissioner determines that the possession of such interests is not inconsistent with the safety and soundness of the state bank.
(b)  The banking commissioner may order a state bank that holds nonparticipating royalty interests to divest such interests at any time if the banking commissioner determines that continued ownership of such interests is detrimental to the state bank.
(c)  Subject to compliance with this section, nonparticipating royalty interests are not considered to be real property for purposes of this subtitle.
Added by Acts 2007, 80th Leg., R.S., Ch. 110 (H.B. 2007), Sec. 4, eff. September 1, 2007.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 940 (H.B. 1664), Sec. 8, eff. June 14, 2013.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter B. Investments › Section 34.102. Transaction in Bank Shares

Sec. 34.102.  TRANSACTION IN BANK SHARES.  (a)  A state bank may not acquire a lien by pledge or otherwise on its own shares, or otherwise purchase or acquire title to its own shares, except:
(1)  as necessary to avoid or minimize a loss on a loan or investment previously made in good faith; or
(2)  as provided by Subsection (b).
(b)  With the prior written approval of the banking commissioner or as permitted by rules adopted under this subtitle, a state bank may acquire title to its own shares and hold those shares as treasury stock.  Treasury stock acquired under this subsection is not considered an equity investment.
(c)  If a state bank acquires a lien on or title to its own shares under this section, the lien may not by its original terms extend for more than two years.  Except with the prior written approval of the banking commissioner, the bank may not hold title to its own shares for more than one year.
(d)  A state bank may make loans on the collateral security of securities issued by an affiliate, if the loan is subject to and in compliance with the provisions of Sections 23A and 23B, Federal Reserve Act (12 U.S.C. Sections 371c and 371c-1), as amended, applicable to nonmember insured state banks by virtue of Section 18(j)(1), Federal Deposit Insurance Act (12 U.S.C. Section 1828(j)(1)), as amended.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.  Amended by Acts 2001, 77th Leg., ch. 412, Sec. 2.12, eff. Sept. 1, 2001.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 36, eff. September 1, 2007.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter B. Investments › Section 34.104. Mutual Funds

Sec. 34.104.  MUTUAL FUNDS.  (a)  A state bank may invest for its own account in equity securities of an investment company registered under the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.) and the Securities Act of 1933 (15 U.S.C. Section 77a et seq.) if the portfolio of the investment company consists wholly of investments in which the bank could invest directly for its own account.
(b)  If the portfolio of an investment company described by Subsection (a) consists wholly of investments in which the bank could invest directly without limitation, the bank may invest in the investment company without limitation.
(c)  The bank may invest not more than an amount equal to 15 percent of the bank's unimpaired capital and surplus in an investment company described by Subsection (a) the portfolio of which contains an investment or obligation in which the bank could not invest directly without limitation under this chapter.
(d)  A state bank that invests in an investment company as provided by Subsection (c) shall periodically determine that its pro rata share of any security in the portfolio of the investment company combined with the bank's pro rata share of that security held by all other investment companies in which the bank has invested and with the bank's own direct investment and loan holdings is not in excess of applicable investment and lending limitations.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 110 (H.B. 2007), Sec. 7, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 37, eff. September 1, 2007.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter B. Investments › Section 34.106. Investments to Promote Community Development

Sec. 34.106.  INVESTMENTS TO PROMOTE COMMUNITY DEVELOPMENT.  (a)  A state bank may make investments of a predominantly civic, community, or public nature, including investments providing housing, services, or jobs or promoting the welfare of low-income and moderate-income communities or families.
(b)  The bank may make the investments directly or by purchasing equity securities in an entity primarily engaged in making those investments.  The bank may not make an investment that would expose the bank to unlimited liability.
(c)  A bank may serve as a community partner and make investments in a community partnership, as those terms are defined by the Riegle Community Development and Regulatory Improvement Act of 1994 (Pub. L. 103-325).
(d)  A bank's aggregate investments under this section may not exceed an amount equal to 15 percent of the bank's unimpaired capital and surplus.
(e)  Notwithstanding any other law, a bank's exposure to a single project or entity described by this section, including all investments, loans, and commitments for loans, may not exceed 25 percent of the bank's unimpaired capital and surplus without the prior authorization of the banking commissioner in response to a written application.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.  Amended by Acts 2001, 77th Leg., ch. 412, Sec. 2.13, eff. Sept. 1, 2001.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 4 (S.B. 726), Sec. 1, eff. September 1, 2019.
Acts 2019, 86th Leg., R.S., Ch. 4 (S.B. 726), Sec. 2, eff. September 1, 2019.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter B. Investments › Section 34.107. Engaging in Commerce Prohibited

Sec. 34.107.  ENGAGING IN COMMERCE PROHIBITED.  (a)  A state bank may not buy, sell, or otherwise deal in goods in trade or commerce or own or operate a business not part of the business of banking except:
(1)  as necessary to avoid or minimize a loss on a loan or investment previously made in good faith;  or
(2)  as otherwise provided by this subtitle or rules adopted under this subtitle.
(b)  Engaging in an approved activity, directly or through a subsidiary, that is a financial activity or incidental or complementary to a financial activity, whether as principal or agent, is not considered to be engaging in commerce.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.  Amended by Acts 2001, 77th Leg., ch. 528, Sec. 11, eff. Sept. 1, 2001.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter C. Loans › Section 34.202. Violation of Lending Limit

Sec. 34.202.  VIOLATION OF LENDING LIMIT.  (a)  An officer, director, or employee of a state bank who approves or participates in the approval of a loan with actual knowledge that the loan violates Section 34.201 is jointly and severally liable to the bank for the lesser of the amount by which the loan exceeded applicable lending limits or the bank's actual loss.  The person remains liable for that amount until the loan and all prior indebtedness of the borrower to the bank have been fully repaid.
(b)  The bank may initiate a proceeding to collect an amount due under this section at any time before the fourth anniversary of the date the borrower defaults on the subject loan or any prior indebtedness.
(c)  A person who is liable for and pays amounts to the bank under this section is entitled to an assignment of the bank's claim against the borrower to the extent of the payments.
(d)  For purposes of this section, an officer, director, or employee of a state bank is presumed to know the amount of the bank's lending limit under Section 34.201(a) and the amount of the borrower's aggregate outstanding indebtedness to the bank immediately before a new loan or extension of credit to that borrower.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 39, eff. September 1, 2007.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter C. Loans › Section 34.203. Loan Expenses and Fees

Sec. 34.203.  LOAN EXPENSES AND FEES.  (a)  A bank may require a borrower to pay all reasonable expenses and fees incurred in connection with the making, closing, disbursing, extending, readjusting, or renewing of a loan, regardless of whether those expenses or fees are paid to third parties.  A fee charged by the bank under this section may not exceed the cost the bank reasonably expects to incur in connection with the transaction to which the fee relates.  Payment for those expenses may be:
(1)  collected by the bank from the borrower and:
(A)  retained by the bank;  or
(B)  paid to a person rendering services for which a charge has been made;  or
(2)  paid directly by the borrower to a third party to whom they are payable.
(b)  This section does not authorize the bank to charge its borrower for payment of fees and expenses to an officer or director of the bank for services rendered in the person's capacity as an officer or director.
(c)  A bank may charge a penalty for prepayment or late payment.  Only one penalty may be charged by the bank on each past due payment.  Unless otherwise agreed in writing, prepayment of principal must be applied on the final installment of the note or other obligation until that installment is fully paid, and further prepayments must be applied on installments in the inverse order of their maturity.
(d)  Fees and expenses charged and collected as provided by this section are not considered a part of the interest or compensation charged by the bank for the use, forbearance, or detention of money.
(e)  To the extent of any conflict between this section and a provision of Subtitle B, Title 4, the provision of Subtitle B, Title 4, prevails.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 40, eff. September 1, 2007.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter C. Loans › Section 34.204. Lease Financing Transaction

Sec. 34.204.  LEASE FINANCING TRANSACTION.  (a)  Subject to rules adopted under this subtitle, a state bank may, directly or indirectly through an operating subsidiary, provide the equivalent of a financing transaction by acting as lessor under a lease for the benefit of a customer.
(b)  Without the written approval of the banking commissioner to continue holding property acquired for leasing purposes under this subsection, the bank may not hold personal property more than six months or real property more than two years after the date of expiration of the original or any extended or renewed lease period agreed to by the customer for whom the property was acquired or by a subsequent lessee.
(c)  A rental payment received by the bank 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 34.201 and 34.202.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.  Amended by Acts 2001, 77th Leg., ch. 528, Sec. 13, eff. Sept. 1, 2001.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter D. Deposits › Section 34.301. Nature of Deposit Contract

Sec. 34.301.  NATURE OF DEPOSIT CONTRACT.  (a)  A deposit contract between a bank and an account holder is considered a contract in writing for all purposes and may be evidenced by one or more agreements, deposit tickets, signature cards, or notices as provided by Section 34.302, or by other documentation as provided by law.
(b)  A cause of action for denial of deposit liability on a deposit contract without a maturity date does not accrue until the bank has denied liability and given notice of the denial to the account holder.  A bank that provides an account statement or passbook to the account holder is considered to have denied liability and given the notice as to any amount not shown on the statement or passbook.
(c)  To the extent provided by Section 4.102(c), Business & Commerce Code, the laws of this state govern a deposit contract between a bank and a consumer account holder if the branch or separate office of the bank that accepts the deposit contract is located in this state.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.  Amended by Acts 1999, 76th Leg., ch. 344, Sec. 2.012, eff. Sept. 1, 1999.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter D. Deposits › Section 34.302. Amendment of Deposit Contract

Sec. 34.302.  AMENDMENT OF DEPOSIT CONTRACT.  (a)  A bank and its account holder may amend the deposit contract by agreement or as permitted by Subsection (b) or other law.
(b)  A bank may amend a deposit contract by mailing a written notice of the amendment to the account holder, separately or as an enclosure with or part of the account holder's statement of account or passbook.  The notice must include the text and effective date of the amendment.  The bank is required to deliver the notice to only one of the account holders of a deposit account that has more than one account holder.  The effective date may not be earlier than the 30th day after the date of mailing the notice unless the amendment:
(1)  is made to comply with a statute or rule that authorizes an earlier effective date;
(2)  does not reduce the interest rate on the account or otherwise adversely affect the account holder;  or
(3)  is made for a reason relating to security of an account.
(c)  Except for a disclosure required to be made under Section 34.303 or the Truth in Savings Act (12 U.S.C. Section 4301 et seq.) or other federal law, before renewal of an account a notice of amendment is not required under Subsection (b) for:
(1)  a change in the interest rate on a variable-rate account, including a money market or negotiable order of withdrawal account;
(2)  a change in a term for a time account with a maturity of one month or less if the deposit contract authorizes the change in the term;  or
(3)  a change contemplated and permitted by the original contract.
(d)  An amendment under Subsection (b) may reduce the rate of interest or eliminate interest on an account without a maturity date.
(e)  Amendment of a deposit contract made in compliance with this section is not a violation of the Deceptive Trade Practices-Consumer Protection Act (Section 17.41 et seq., Business & Commerce Code).
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter D. Deposits › Section 34.303. Fees; Disclosures

Sec. 34.303.  FEES;  DISCLOSURES.  (a)  Except as otherwise provided by law, a bank may charge an account holder a fee, service charge, or penalty relating to service or activity of a deposit account, including a fee for an overdraft, insufficient fund check, or stop payment order.
(b)  Except as otherwise provided by the Truth in Savings Act (12 U.S.C. Section 4301 et seq.) or other federal law, a bank shall disclose the amount of each fee, charge, or penalty related to an account or, if the amount of a fee, charge, or penalty cannot be stated, the method of computing the fee, charge, or penalty.  The disclosure must be made by written notice delivered or mailed to each customer opening an account not later than the 10th business day after the date the account is opened.  A bank that increases or adds a new fee, charge, or penalty shall give notice of the change to each affected account holder in the manner provided by Section 34.302(b) for notice of an amendment of a deposit contract.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter D. Deposits › Section 34.304. Securing Deposits

Sec. 34.304.  SECURING DEPOSITS.  (a)  A state bank may not create a lien on its assets or secure the repayment of a deposit except as authorized or required by this section, rules adopted under this subtitle, or other law.
(b)  A state bank may pledge its assets to secure a deposit of:
(1)  any state or an agency, political subdivision, or instrumentality of any state;
(2)  the United States or an agency or instrumentality of the United States;
(3)  any federally recognized Indian tribe;  or
(4)  another entity to the same extent and subject to the same limitations as may be authorized by the law of this state or of the United States for any other depository institution doing business in this state.
(c)  This section does not prohibit the pledge of assets to secure the repayment of money borrowed or the purchase of excess deposit insurance from a private insurance company.
(d)  An act, deed, conveyance, pledge, or contract in violation of this section is void.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 110 (H.B. 2007), Sec. 11, eff. September 1, 2007.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter D. Deposits › Section 34.305. Deposit Account of Minor

Sec. 34.305.  DEPOSIT ACCOUNT OF MINOR.  (a)  Except as otherwise provided by this section, a bank lawfully doing business in this state may enter into a deposit account with a minor as the sole and absolute owner of the account and may pay checks and withdrawals and otherwise act with respect to the account on the order of the minor.  A payment or delivery of rights to a minor who holds a deposit account evidenced by an acquittance signed by the minor discharges the bank to the extent of the payment made or rights delivered.
(b)  The disabilities of minority of a minor who is the sole and absolute owner of the deposit account are removed for the limited purpose of enabling:
(1)  the minor to enter into a depository contract with the bank;  and
(2)  the bank to enforce the contract against the minor, including collection of an overdraft or account fee and submission of account history to an account reporting agency or credit reporting bureau.
(c)  A parent or legal guardian of a minor may deny the minor's authority to control, transfer, draft on, or make a withdrawal from the minor's deposit account by notifying the bank in writing.  On receipt of the notice by the bank, the minor may not control, transfer, draft on, or make a withdrawal from the account during minority except with the joinder of a parent or legal guardian of the minor.
(d)  If a minor with a deposit account dies, the acquittance of the minor's parent or legal guardian discharges the liability of the bank to the extent of the acquittance, except that the aggregate discharges under this subsection may not exceed $3,000.
(e)  Subsection (a) does not authorize a loan to the minor by the bank, whether on pledge of the minor's savings account or otherwise, or bind the minor to repay a loan made except as provided by Subsection (b) or other law or unless the depository institution has obtained the express consent and joinder of a parent or legal guardian of the minor.  This subsection does not apply to an inadvertent extension of credit because of an overdraft from insufficient funds, a returned check or deposit, or another shortage in a depository account resulting from normal banking operations.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 34 - Investments, Loans, and Deposits › Subchapter D. Deposits › Section 34.307. Right of Set-Off

Sec. 34.307.  RIGHT OF SET-OFF.  (a)  Except as otherwise provided by the Truth in Lending Act (15 U.S.C. Section 1601 et seq.) or other federal law, a bank has a right of set-off, without further agreement or action, against all accounts owned by a depositor to whom or on whose behalf the bank has made an advance of money by loan, overdraft, or otherwise if the bank has previously disclosed this right to the depositor.  If the depositor defaults in the repayment or satisfaction of the obligation, the bank, without notice to or consent of the depositor, may set off or cancel on its books all or part of the accounts owned by the depositor and apply the value of the accounts in payment of and to the extent of the obligation.
(b)  For purposes of this section, a default occurs when an obligor has failed to make a payment as provided by the terms of the loan or other credit obligation and a grace period provided for by the agreement or law has expired.  An obligation is not required to be accelerated or matured for a default to authorize set-off of the depositor's obligation against the defaulted payment.
(c)  A bank may not exercise its right of set-off under this section against an account unless the account is due the depositor in the same capacity as the defaulted credit obligation.  A trust account for which a depositor is trustee, including a trustee under a certificate of trust delivered under Section 34.306(b), is not subject to the right of set-off under this section unless the trust relationship is solely evidenced by the account card as provided by Subchapter B, Chapter 111, and Chapters 112 and 113, Estates Code.
(d)  This section does not limit the exercise of another right of set-off, including a right under contract or common law.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2015, 84th Leg., R.S., Ch. 1236 (S.B. 1296), Sec. 20.009, eff. September 1, 2015.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 35 - Enforcement Actions › Subchapter A. Enforcement Orders: Banks and Management › Section 35.0001. Applicability to Bank Subsidiaries

Sec. 35.0001.  APPLICABILITY TO BANK SUBSIDIARIES.  This subchapter applies to a subsidiary of a state bank, a present or former officer, director, 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 bank, a present or former officer, director, or employee of a state bank, or a controlling shareholder or other person participating in the affairs of a state bank.
Added by Acts 2015, 84th Leg., R.S., Ch. 422 (H.B. 3555), Sec. 3, eff. September 1, 2015.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 35 - Enforcement Actions › Subchapter A. Enforcement Orders: Banks and Management › Section 35.001. Determination Letter

Sec. 35.001.  DETERMINATION LETTER.  (a)  If the banking commissioner determines from examination or other credible evidence that a state bank is in a condition that may warrant the issuance of an enforcement order under this chapter, the banking commissioner may notify the bank in writing of the determination, the requirements the bank 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.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 35 - Enforcement Actions › Subchapter A. Enforcement Orders: Banks and Management › Section 35.002. Cease and Desist Order

Sec. 35.002.  CEASE AND DESIST ORDER.  (a)  The banking commissioner has grounds to issue a cease and desist order to a current or former officer, employee, or director of a state bank, or the bank itself acting through an authorized person, if the banking commissioner determines from examination or other credible evidence that the bank or person directly or indirectly has:
(1)  violated this subtitle or another applicable law;
(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 bank's charter or an agreement between the bank 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 appears to be necessary and in the best interest of the bank involved and its depositors, creditors, and shareholders, the banking commissioner may serve a proposed cease and desist order on the bank and each person who committed or participated in the action.  The proposed 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 proposed order; and
(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.
(b-1)  A proposed cease and desist order may require an officer, employee, or director of a state bank, or the bank 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 bank or person against whom the proposed 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 bank or person.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 41, eff. September 1, 2007.
Acts 2015, 84th Leg., R.S., Ch. 422 (H.B. 3555), Sec. 4, eff. September 1, 2015.
Acts 2023, 88th Leg., R.S., Ch. 989 (H.B. 3574), Sec. 6, eff. June 18, 2023.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 35 - Enforcement Actions › Subchapter A. Enforcement Orders: Banks and Management › Section 35.004. Hearing on Proposed Order

Sec. 35.004.  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 department 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 department has the burden of proof and each person against whom the proposed order is directed may cross-examine and present evidence to show why the proposed order should not be issued.
(b)  After the hearing, the banking commissioner shall issue or decline to issue the proposed order.  The proposed 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 31.202 and 31.204.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 20 (S.B. 614), Sec. 15, eff. September 1, 2019.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 35 - Enforcement Actions › Subchapter A. Enforcement Orders: Banks and Management › Section 35.005. Emergency Order

Sec. 35.005.  EMERGENCY ORDER.  (a)  If the banking commissioner believes that immediate action is necessary to prevent immediate and irreparable harm to the bank and its depositors, creditors, and shareholders, 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 bank and any person against whom the emergency order is directed of:
(1)  the specific conduct requiring the order;
(2)  the citation of each law 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 emergency order is directed requests a hearing in writing before the 11th day after the date it is served on the person, the emergency 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 that it 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 emergency order is immediately final for purposes of enforcement and appeal.  The order may be appealed as provided by Sections 31.202 and 31.204.
(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.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 43, eff. September 1, 2007.
Acts 2011, 82nd Leg., R.S., Ch. 183 (S.B. 1165), Sec. 2, eff. May 28, 2011.
Acts 2019, 86th Leg., R.S., Ch. 20 (S.B. 614), Sec. 16, eff. September 1, 2019.
2023 Texas Statutes › Finance Code › Title 3 - Financial Institutions and Businesses › Subtitle A - Banks › Chapter 35 - Enforcement Actions › Subchapter A. Enforcement Orders: Banks and Management › Section 35.006. Copy of Letter or Order in Bank Records

Sec. 35.006.  COPY OF LETTER OR ORDER IN BANK RECORDS.  A copy of a 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 bank, regardless of whether the bank is a party, and filed in the minutes of the board.  Each director 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.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 237 (H.B. 1962), Sec. 44, eff. September 1, 2007.