Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 5 - OFFICE OF CONSUMER CREDIT COMMISSIONER › Chapter 83 - REGULATED LENDERS AND CREDIT ACCESS BUSINESSES › Subchapter A - RULES FOR REGULATED LENDERS › Division 3 - APPLICATION PROCEDURES › Section 83.301 - Definitions

Current through Reg. 49, No. 28; July 12, 2024
Words and terms used in this subchapter that are defined
						in Texas Finance Code, Chapter 342, have the same meanings as defined in
						Chapter 342. The following words and terms, when used in this subchapter, will
						have the following meanings, unless the context clearly indicates
						otherwise.
(1) Net assets--The total
					 value of acceptable assets used or designated as readily available for use in
					 the business, less liabilities, other than those liabilities secured by
					 unacceptable assets. Unacceptable assets include, but are not limited to,
					 goodwill, unpaid stock subscriptions, lines of credit, notes receivable from an
					 owner, property subject to the claim of homestead or other property exemption,
					 and encumbered real or personal property to the extent of the encumbrance.
					 Generally, assets are available for use if they are readily convertible to cash
					 within 10 business days. Debt that is either unsecured or secured by current
					 assets may be subordinated to the net asset requirement pursuant to an
					 agreement of the parties providing that the creditor forfeits its security
					 priority and any rights it may have to current assets in the amount of $25,000.
					 Debt subject to such a subordination agreement would not be an applicable
					 liability for purposes of calculating net assets.
(2) Principal party--An adult individual with
					 a substantial relationship to the proposed lending business of the applicant.
					 The following individuals are principal parties:
(A) a proprietor;
(B) general partners;
(C) officers of privately held corporations,
					 to include the chief executive officer or president, the chief operating
					 officer or vice president of operations, the chief financial officer or
					 treasurer, and those with substantial responsibility for lending operations or
					 compliance with Texas Finance Code, Chapter 342;
(D) directors of privately held
					 corporations;
(E) individuals
					 associated with publicly held corporations designated by the applicant as
					 follows:
(i) officers as provided by
					 subparagraph (C) of this paragraph (as if the corporation were privately held);
					 or
(ii) three officers or similar
					 employees with significant involvement in the corporation's activities governed
					 by Texas Finance Code, Chapter 342. One of the persons designated must be
					 responsible for assembling and providing the information required on behalf of
					 the applicant and must sign the application for the applicant;
(F) voting members of a limited
					 liability company;
(G) trustees and
					 executors; and
(H) individuals
					 designated as principal parties where necessary to fairly assess the
					 applicant's financial responsibility, experience, character, general fitness,
					 and sufficiency to command the confidence of the public and warrant the belief
					 that the business will be operated lawfully and fairly as required by the
					 commissioner.