Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 5 - OFFICE OF CONSUMER CREDIT COMMISSIONER › Chapter 83 - REGULATED LENDERS AND CREDIT ACCESS BUSINESSES › Subchapter B - RULES FOR CREDIT ACCESS BUSINESSES › Division 3 - APPLICATION PROCEDURES › Section 83.3001 - Definitions

Current through Reg. 49, No. 28; July 12, 2024
Words and terms used in this chapter that are defined in
						Texas Finance Code, Chapter 393, have the same meanings as defined in Chapter
						393. 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) Parent entity--A direct owner of a
					 licensee or applicant.
(3)
					 Principal party--An adult individual with a substantial relationship to the
					 applicant by ownership of more than 10% of the applicant, or having control of
					 the proposed credit access 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 management responsibility for
					 credit access operations or compliance with Texas Finance Code, Chapter
					 393;
(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 393. 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) managers or 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.