Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 1 - FINANCE COMMISSION OF TEXAS › Chapter 3 - STATE BANK REGULATION › Subchapter B - GENERAL › Section 3.22 - Sale or Lease Agreements with an Officer, Director, or Principal Shareholder of the Bank or of an Affiliate of the Bank

Current through Reg. 49, No. 28; July 12, 2024
(a) Agreement in writing. A sale or lease
				  agreement between a state bank and an officer, director, or principal
				  shareholder of the bank or of an affiliate of the bank must be in writing.
				  Existing verbal agreements must be reduced to writing and approved by the
				  board.
(b) Terms of agreement. A
				  sale or lease agreement between a state bank and an officer, director, or
				  principal shareholder of the bank or of an affiliate of the bank must comply
				  with applicable laws and regulations, be consistent with prudent and sound
				  banking principles, and have terms and rates that are substantially equivalent
				  to or more favorable to the bank than those prevailing at the time for
				  comparable transactions with or involving nonaffiliated parties.
(c) Board action. All proposed transactions
				  subject to Finance Code, §
										RSA
				  33.109, must be considered and voted upon by
				  the board. Under Finance Code, §
										RSA
				  33.109(a), without the prior
				  approval of a disinterested majority of the board, or the transaction at issue
				  must be submitted for prior approval of the banking commissioner. For purposes
				  of this section, approval of a disinterested majority of the board is obtained
				  in the manner specified by the Texas Business Organizations Code, §
										RSA
				  21.418, with respect to a banking
				  association, or §101.255, with respect to a limited banking
				  association.
(d) Application for
				  approval. If a sale or lease agreement requires the written approval of the
				  banking commissioner prior to consummating, renewing, or extending a sale or
				  lease agreement, a written request for approval must be submitted to the
				  banking commissioner at least 60 days prior to the proposed effective date of
				  the sale or lease agreement and must include the following information:
(1) a copy of the proposed sale or lease
				  agreement;
(2) a complete
				  description of the personal or real property to be sold or leased;
(3) a full disclosure of all existing
				  transactions and/or relationships, whether direct or indirect, between the
				  state bank and the parties involved;
(4) in the case of a lease agreement
				  involving real property, a copy of the minutes of the board meeting reflecting
				  an analysis of the information contained in this subsection;
(5) a certified copy of a board resolution
				  approving the transaction and indicating those directors voting or abstaining,
				  as the case may be, and either:
(A) evidence
				  that the transaction received the approval of a disinterested majority of the
				  board; or
(B) a statement
				  explaining the reasons the approval of a disinterested majority of the board
				  could not be obtained;
(6) copies of appropriate supporting
				  documentation, including analysis of comparable terms and rates for the real or
				  personal property to be sold or leased;
(7) in the case of a lease agreement,
				  evidence demonstrating that the state bank will account for the lease in
				  accordance with Financial Accounting Standards Board Accounting Standards
				  Codification Topic 842, Leases; and
(8) other information which the banking
				  commissioner may request.