Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 1 - FINANCE COMMISSION OF TEXAS › Chapter 3 - STATE BANK REGULATION › Subchapter E - BANKING HOUSE AND OTHER FACILITIES › Section 3.91 - Loan Production Offices

Current through Reg. 49, No. 28; July 12, 2024
(a) Loan production
				  activities. A Texas state bank may, to the extent authorized by its board of
				  directors, engage in loan production activities at a site other than the home
				  office or a branch of the bank, and may use the services of, and compensate,
				  persons not employed by the bank in its loan production activities. Subject to
				  the requirements of subsection (b) of this section, the bank or its operating
				  subsidiary may establish a loan production office (LPO) at which an employee or
				  agent of the bank or of its operating subsidiary accepts loan applications,
				  provided that the loan is made at the home office or a branch of the bank or at
				  an office of the operating subsidiary located on the premises of, or contiguous
				  to, the home office or branch of the bank. A LPO is not a branch within the
				  meaning of Finance Code, §
										RSA
				  31.002(a)(8), so long as it
				  does not engage the public in the business of banking as defined by Finance
				  Code, §
										RSA
				  31.002(a)(4), including
				  making loans, receiving deposits, and paying withdrawals, drafts, or checks.
				  All such deposit or withdrawal activity must be performed by the state bank
				  customer in person at the home office or a branch, or by mail, electronic
				  transfer, or similar transfer method with the home office or a
				  branch.
(b) Required information.
				  Pursuant to Finance Code, §
										RSA
				  32.204(b), a Texas state
				  bank shall notify the banking commissioner of its intent to establish a new
				  LPO. The banking commissioner must be notified in writing before the 31st day
				  preceding the date of establishment of the LPO, except that the banking
				  commissioner in the exercise of discretion may waive or shorten the period. The
				  written notification must include the physical address of the planned LPO, a
				  list of the specific activities to be performed at the planned LPO, the
				  anticipated date for the establishment of the LPO, and other information which
				  the banking commissioner may reasonably request.
(c) Relocation or closure of a LPO. A Texas
				  state bank which seeks to relocate or close an established LPO, shall notify
				  the banking commissioner in writing before the fifth day preceding the date of
				  the planned relocation or closure of the LPO. The written notification must
				  include the physical address of the relocated or closed LPO, the anticipated
				  date for the closure or relocation of the LPO, and other information which the
				  banking commissioner may reasonably request.
(d) Exemption: temporary LPO. Subsections (b)
				  and (c) of this section do not apply to a LPO which operates for less than a
				  total of 21 days in any one 12-month period. Instead, state banks shall
				  register the location of a temporary LPO with the banking commissioner no later
				  than the tenth day after such office is opened. As a part of such notice, the
				  bank may indicate the anticipated repeated use of such office through the year.
				  For example, a temporary LPO in a convention or exposition hall used in
				  connection with trade shows may be registered once each year with an estimate
				  of usage throughout the year.
(e)
				  Transactions with management and affiliates. A state bank establishing a LPO
				  involving the purchase or lease of personal or real property from an officer,
				  director, manager, managing participant, or principal shareholder or
				  participant of the bank or an affiliate of the bank, must comply with the
				  provisions of the Finance Code, §
										RSA
				  33.109, and §
										RSA
				  3.22 of this title (relating to Sale or Lease
				  Agreements with an Officer, Director, or Principal Shareholder of the Bank or
				  of an Affiliate of the Bank).
(f)
				  Out-of-state banks. A bank not domiciled or primarily located in this state
				  must comply with the provisions of the Finance Code, Chapter 201, Subchapter B
				  (§§201.101 et seq.), to establish a LPO in this state.
(g) Foreign bank LPOs. A banking corporation
				  or association incorporated or organized under the laws of a jurisdiction other
				  than the United States or a state, territory, commonwealth, or other political
				  subdivision of the United States, must comply with the provisions of the
				  Finance Code, Chapter 201, Subchapter B (§§201.101 et seq.), and
				  Finance Code, Chapter 204, to establish an LPO, unless the LPO will be an
				  office of a Federal branch regulated by the Office of the Comptroller of the
				  Currency (OCC). In the latter case, the Federal branch must comply with
				  subsection (h) of this section.
(h)
				  Federal branch LPO. A Federal branch may establish an LPO in this state by
				  complying with the provisions of Finance Code, Chapter 201, Subchapter B
				  (§§201.101 et seq.), and by notifying the banking commissioner of its
				  intent to establish the LPO.
(1) The Federal
				  branch shall notify the banking commissioner in writing on or before the 31st
				  day preceding the date of establishment of the LPO, except that the banking
				  commissioner may waive or shorten the period if the banking commissioner does
				  not have a significant supervisory or regulatory concern regarding the Federal
				  branch or its planned LPO. The written notification must include the physical
				  address of the planned LPO, a list of the specific activities to be performed
				  at the planned LPO, the anticipated date for the establishment of the LPO,
				  documentation evidencing the approval of the OCC, and such other information as
				  the banking commissioner may reasonably request.
(2) To relocate or close an existing LPO in
				  this state, a Federal branch shall notify the banking commissioner in writing
				  on or before the tenth day following the date of the relocation or closure of
				  the LPO. The written notification must include the physical address of the LPO,
				  the date for its closure or relocation, documentation evidencing the approval
				  or acquiescence of the OCC, and such other information as the banking
				  commissioner may reasonably request.
(3) An LPO of a Federal branch established in
				  compliance with this section is not subject to examination by the banking
				  commissioner under, or subject to any fee imposed by, Finance Code, Chapter
				  204.