FINANCE CODE
CHAPTER 182. POWERS, ORGANIZATION, AND FINANCIAL REQUIREMENTS
SUBCHAPTER A. ORGANIZATION AND POWERS IN GENERAL
§ 182.001. ORGANIZATION AND GENERAL POWERS OF STATE
TRUST COMPANY. (a) Subject to Subsection (g) and the other
provisions of this chapter, one or more persons may organize and
charter a state trust company as a state trust association or a
limited trust association.
(b) A state trust company may engage in the trust business
by:
(1) acting as trustee under a written agreement;
(2) receiving money and other property in its capacity
as trustee for investment in real or personal property;
(3) acting as trustee and performing the fiduciary
duties committed or transferred to it by order of a court;
(4) acting as executor, administrator, or trustee of
the estate of a deceased person;
(5) acting as a custodian, guardian, conservator, or
trustee for a minor or incapacitated person;
(6) acting as a successor fiduciary to a trust
institution or other fiduciary;
(7) receiving for safekeeping personal property;
(8) acting as custodian, assignee, transfer agent,
escrow agent, registrar, or receiver;
(9) acting as investment advisor, agent, or attorney
in fact according to an applicable agreement;
(10) with the prior written approval of the banking
commissioner and to the extent consistent with applicable fiduciary
principles, engaging in a financial activity or an activity
incidental or complementary to a financial activity, directly or
through a subsidiary;
(11) exercising additional powers expressly conferred
by rule of the finance commission; and
(12) exercising any incidental power that is
reasonably necessary to enable it to fully exercise the powers
expressly conferred according to commonly accepted fiduciary
customs and usages.
(c) For purposes of other state law, a trust association is
considered a corporation and a limited trust association is
considered a limited liability company. To the extent consistent
with this subtitle, a trust association may exercise the powers of a
Texas business corporation and a limited trust association may
exercise the powers of a Texas limited liability company as
reasonably necessary to enable exercise of specific powers under
this subtitle.
(d) A state trust company may contribute to a community fund
or to a charitable, philanthropic, or benevolent instrumentality
conducive to public welfare an amount that the state trust
company's board considers appropriate and in the interests of the
state trust company.
(e) Subject to Section 184.301, a state trust company may
deposit trust funds with itself.
(f) A state trust company insured by the Federal Deposit
Insurance Corporation may receive and pay deposits, with or without
interest, made by the United States, the state, a county, or a
municipality.
(g) In the exercise of discretion consistent with the
purposes of this subtitle, the banking commissioner may require a
state trust company to conduct an otherwise authorized activity
through a subsidiary.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 528, § 20, eff. Sept.
1, 2001; Acts 2001, 77th Leg., ch. 1420, § 6.008(a), eff. Sept.
1, 2001.
§ 182.002. ARTICLES OF ASSOCIATION OF STATE TRUST
COMPANY. (a) The articles of association of a state trust company
must be signed and acknowledged by each organizer and must contain:
(1) the name of the state trust company, subject to
Subsection (b);
(2) the period of the state trust company's duration,
which may be perpetual;
(3) the powers of the state trust company, which may be
stated as:
(A) all powers granted to a state trust company
in this state; or
(B) a list of the specific powers that the state
trust company chooses and is authorized to exercise;
(4) the aggregate number of shares, or participation
shares in the case of a limited trust association, that the state
trust company will be authorized to issue, and the number of classes
of shares or participation shares, which may be one or more;
(5) if the shares or participation shares are to be
divided into classes:
(A) the designation of each class and statement
of the preferences, limitations, and relative rights of the shares
or participation shares of each class, which in the case of a
limited trust association may be more fully set forth in the
participation agreement;
(B) the number of shares or participation shares
of each class; and
(C) a statement of the par value of the shares or
participation shares of each class or that the shares or
participation shares are to be without par value;
(6) any provision limiting or denying to shareholders
or participants the preemptive right to acquire additional or
treasury shares or participation shares of the state trust company;
(7) any provision granting the right of shareholders
or participants to cumulative voting in the election of directors
or managers;
(8) the aggregate amount of consideration to be
received for all shares or participation shares initially issued by
the state trust company and a statement that:
(A) all authorized shares or participation
shares have been subscribed; and
(B) all subscriptions received provide for the
consideration to be fully paid in cash before issuance of the
charter;
(9) any provision consistent with law that the
organizers elect to set forth in the articles of association for the
regulation of the internal affairs of the state trust company or
that is otherwise required by this subtitle to be set forth in the
articles of association;
(10) the street address of the state trust company's
home office; and
(11) either:
(A) the number of directors or managers
constituting the initial board and the names and street addresses
of the persons who are to serve as directors or managers until the
first annual meeting of shareholders or participants or until
successor directors or managers have been elected and qualified;
or
(B) the statement described by Subsection (c).
(b) The banking commissioner may determine that a proposed
state trust company name is potentially misleading to the public
and require the organizers to select a different name.
(c) The organizers of a limited trust association that will
have not fewer than five or more than 25 participants may include in
the articles of association a statement that management is vested
in a board composed of all participants, with management authority
vested in each participant in proportion to the participant's
contribution to capital as adjusted from time to time to properly
reflect any additional contribution, and the names and street
addresses of the persons who are to be the initial managing
participants.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.003. APPLICATION FOR STATE TRUST COMPANY CHARTER;
STANDARDS FOR APPROVAL. (a) An application for a state trust
company charter must be made under oath and in the form required by
the banking commissioner. The application must be supported by
information, records, and opinions of counsel that the banking
commissioner requires. The application must be accompanied by all
charter fees and deposits required by statute or rule.
(b) The banking commissioner shall grant a state trust
company charter only on proof satisfactory to the banking
commissioner that public convenience and advantage will be promoted
by the establishment of the state trust company. In determining
whether public convenience and advantage will be promoted, the
banking commissioner shall consider the convenience of the public
to be served and whether:
(1) the organizational and capital structure and
amount of initial capitalization is adequate for the business and
location;
(2) the anticipated volume and nature of business
indicates a reasonable probability of success and profitability
based on the market sought to be served;
(3) the proposed officers, directors, and managers, or
managing participants, as a group have sufficient fiduciary
experience, ability, standing, competence, trustworthiness, and
integrity to justify a belief that the state trust company will
operate in compliance with law and that success of the state trust
company is probable;
(4) each principal shareholder or participant has
sufficient experience, ability, standing, competence,
trustworthiness, and integrity to justify a belief that the state
trust company will be free from improper or unlawful influence or
interference with respect to the state trust company's operation in
compliance with law; and
(5) the organizers are acting in good faith.
(c) The organizers bear the burden of proof to establish
that public convenience and advantage will be promoted by the
establishment of the state trust company. The failure of an
applicant to furnish required information, opinions of counsel, and
other material, or the required fee, is considered an abandonment
of the application.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.004. NOTICE AND INVESTIGATION OF CHARTER
APPLICATION. (a) The organizers shall solicit comments and
protests by publishing notice of the application, its date of
filing, and the identity of the organizers, in the form and
frequency specified by the banking commissioner, in a newspaper of
general circulation in the county where the initial home office of
the proposed state trust company is to be located, or in another
publication or location as directed by the banking commissioner.
The banking commissioner may require the organizers to publish the
notice at other locations reasonably necessary to solicit the views
of potentially affected persons.
(b) At the expense of the organizers, the banking
commissioner shall thoroughly investigate the application and
inquire fully into the identity and character of each proposed
director, manager, officer, managing participant, and principal
shareholder or participant. The banking commissioner shall prepare
a written report of the investigation, and any person, other than a
person protesting under Section 182.005, may request a copy of the
nonconfidential portions of the application and written report as
provided by Chapter 552, Government Code.
(c) Rules adopted under this subtitle may specify the
confidential or nonconfidential character of information obtained
by the department under this section. Except as provided by
Subchapter D, Chapter 181, or in rules regarding confidential
information, the financial statement of a proposed officer,
director, manager, or managing participant is confidential and not
subject to public disclosure.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 412, § 3.07, eff.
Sept. 1, 2001.
§ 182.005. PROTEST; HEARING; DECISION ON CHARTER
APPLICATION. (a) Any person may file a protest of an application
with the banking commissioner.
(b) If a protest of the application is not filed on or before
the 15th day after the last date the notice was published under
Section 182.004, the banking commissioner may immediately
determine whether all of the necessary conditions set forth in
Section 182.003(b) have been established, based on the application
and investigation. The banking commissioner shall approve the
application for charter or set the charter application for hearing.
(c) If a protest of the application is timely filed,
accompanied by the fees and deposits required by statute or rule, or
if the banking commissioner sets a hearing, the banking
commissioner shall conduct a public hearing and as many prehearing
conferences and opportunities for discovery as the banking
commissioner considers advisable and consistent with governing
statutes and rules. A person protesting the application is
entitled to the confidential portions of the application under a
protective order that restricts the use of confidential information
to the charter proceedings.
(d) Based on the record of the hearing, the banking
commissioner shall determine whether all of the necessary
conditions set forth in Section 182.003(b) have been established
and shall enter an order granting or denying the charter.
(e) The banking commissioner may make approval of any
application conditional. The banking commissioner shall include
any conditions in the order granting the charter.
(f) Chapter 2001, Government Code, does not apply to a
charter application filed for the purpose of assuming all or any
portion of the assets, liabilities, and accounts of a trust
institution considered by the banking commissioner to be in
hazardous condition.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, § 6.009(a),
eff. Sept. 1, 2001.
§ 182.006. ISSUANCE OF CHARTER. A state trust company
may not engage in the trust business until it receives its charter
from the banking commissioner. The banking commissioner may not
deliver the charter until the state trust company has:
(1) received cash in at least the full amount of
restricted capital from subscriptions for the issuance of shares or
participation shares;
(2) elected or qualified the initial officers and
directors or managers, as appropriate, named in the application for
charter or other officers and directors or managers approved by the
banking commissioner; and
(3) complied with all other requirements of this
subtitle relating to the organization of the state trust company.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.007. DEADLINE TO BEGIN BUSINESS. If a state trust
company does not open and engage in the trust business within six
months after the date it receives its charter or conditional
approval of application for charter, the banking commissioner may
revoke the charter or cancel the conditional approval of
application for charter without judicial action.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.008. RESTRICTED CAPITAL. (a) The banking
commissioner may not issue a charter to a state trust company having
restricted capital of less than $1 million.
(b) The banking commissioner may, on a case-by-case basis,
require additional restricted capital for a proposed or existing
state trust company if the banking commissioner finds the condition
and operations of the existing state trust company or the proposed
scope or type of operations of the proposed state trust company
requires additional restricted capital to protect the safety and
soundness of the state trust company. The safety and soundness
factors to be considered by the banking commissioner in the
exercise of discretion include:
(1) the nature and type of business the state trust
company conducts;
(2) the nature and degree of liquidity in assets held
in a corporate capacity;
(3) the amount, type, and depository of fiduciary
assets that the state trust company manages;
(4) the complexity of the state trust company's
fiduciary duties and degree of discretion undertaken;
(5) the competence and experience of the state trust
company's management;
(6) the extent and adequacy of internal controls
maintained by the state trust company;
(7) the presence or absence of annual unqualified
audits by an independent certified public accountant;
(8) the reasonableness of the state trust company's
business plans for retaining or acquiring additional restricted
capital; and
(9) the existence and adequacy of insurance obtained
or held by the state trust company to protect its clients,
beneficiaries, and grantors.
(c) The effective date of an order under Subsection (b) must
be stated in the order and must be on or after the 21st day after the
date the order is mailed or delivered. Unless the state trust
company requests a hearing before the banking commissioner in
writing before the effective date of the order, the order takes
effect and is final and nonappealable. This subsection does not
prohibit an application to reduce capital requirements of an
existing state trust company under Subsection (e) or under Section
182.011.
(d) Subject to Subsection (e) and Section 182.011, a state
trust company to which the banking commissioner issues a charter
shall at all times maintain restricted capital in at least the
amount required under Subsection (a) and in any additional amount
the banking commissioner requires under Subsection (b).
(e) Notwithstanding Subsection (a), on application, the
banking commissioner may, on a case-by-case basis in the exercise
of discretion, reduce the amount of minimum restricted capital
required for a state trust company in a manner consistent with
protecting the state trust company's safety and soundness. In
making a determination under this subsection, the banking
commissioner shall consider the factors listed by Subsection (b).
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.009. APPLICATION OF GENERAL CORPORATE
LAW. (a) The Texas Business Corporation Act and the Texas
Miscellaneous Corporation Laws Act (Article 1302-1.01 et seq.,
Vernon's Texas Civil Statutes) are incorporated into this chapter
and apply to a trust association, and the Texas Limited Liability
Company Act (Article 1528n, Vernon's Texas Civil Statutes) applies
to a limited trust association, as if they were part of this
subtitle to the extent not inconsistent with this subtitle or the
proper business of a state trust company, except that:
(1) a reference to the secretary of state means the
banking commissioner unless the context requires otherwise; and
(2) the right of shareholders or participants to
cumulative voting in the election of directors or managers exists
only if granted by the state trust company's articles of
association.
(b) Unless expressly authorized by this subtitle or a rule
of the finance commission, a state trust company may not take an
action authorized by a law listed under Subsection (a) regarding
its corporate status, capital structure, or a matter of corporate
governance, of the type for which a law listed under Subsection (a)
would require a filing with the secretary of state if the state
trust company were a business corporation or a limited liability
company, without submitting the filing to the banking commissioner
for prior written approval of the action.
(c) The finance commission may adopt rules to alter or
supplement the procedures and requirements of the laws listed by
Subsection (a) applicable to an action taken under this chapter by a
state trust company.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 528, § 21, eff. Sept.
1, 2001.
§ 182.010. PARITY. (a) A state trust company has the
same rights and privileges with respect to the exercise of
fiduciary powers that are or may be granted to a trust institution
that maintains its principal office or a branch or trust office in
this state, except that this section may not be used by a state
trust company to:
(1) diminish its otherwise applicable fiduciary
duties to a client under the laws of this state; or
(2) avoid otherwise applicable consumer protection
laws of this state.
(b) A state trust company that intends to exercise a right
or privilege with respect to the exercise of fiduciary powers
granted to a trust institution described in Subsection (a) that is
not authorized for state trust companies under the statutes and
rules of this state other than under this section shall submit a
letter to the banking commissioner, describing in detail the
activity in which the state trust company intends to engage and the
specific authority for the trust institution described in
Subsection (a) to undertake the proposed activity. The state trust
company shall attach copies, if available, of relevant state and
federal law, including regulations and interpretive letters. The
state trust company may begin to perform the proposed activity
after the 30th day after the date the banking commissioner receives
the state trust company's letter unless the banking commissioner
specifies an earlier or later date or prohibits the activity. The
banking commissioner may prohibit the state trust company from
performing the activity only if the banking commissioner finds
that:
(1) a trust institution described in Subsection (a)
does not possess the specific right or privilege to perform the
activity the state trust company seeks to perform; or
(2) the performance of the activity by the state trust
company would adversely affect the safety and soundness of the
requesting state trust company.
(c) The banking commissioner may extend the 30-day period
under Subsection (b) if the banking commissioner determines that
the state trust company's letter raises issues requiring additional
information or additional time for analysis. If the 30-day period
is extended, the state trust company may perform the proposed
activity only on prior written approval by the banking
commissioner, except that the banking commissioner must approve or
prohibit the proposed activity or convene a hearing under Section
181.201 not later than the 60th day after the date the commissioner
receives the state trust company's letter. If a hearing is
convened, the banking commissioner must approve or prohibit the
proposed activity not later than the 30th day after the date the
hearing is completed.
(d) A state trust company that is denied the requested right
or privilege to engage in an activity by the banking commissioner
under this section may appeal as provided by Sections
181.202-181.204 or may resubmit a letter under this section with
additional information or authority relevant to the banking
commissioner's determination. A denial is immediately final for
purposes of appeal.
(e) The finance commission may adopt rules implementing the
method or manner in which a state trust company exercises specific
rights and privileges, including rules regarding the exercise of
rights and privileges that would be prohibited to state trust
companies under state law except as provided by this section. The
finance commission may not adopt rules under this subsection unless
it finds that:
(1) trust institutions described in Subsection (a)
possess the rights or privileges to perform activities the rules
would permit state trust companies to perform; and
(2) if the rights and privileges would be prohibited
to state trust companies under other state law, the rules contain
adequate safeguards and controls, consistent with safety and
soundness, to address the concern of the legislature evidenced by
the state law the rules would impact.
(f) The exercise of rights and privileges by a state trust
company in compliance with and in the manner authorized by this
section is not a violation of any statute of this state.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, § 6.010(a),
eff. Sept. 1, 2001.
§ 182.0105. FINANCIAL ACTIVITIES. (a) The finance
commission by rule may determine that an activity not otherwise
approved or authorized for state trust companies is:
(1) a financial activity;
(2) incidental to a financial activity; or
(3) complementary to a financial activity.
(b) In adopting a rule under Subsection (a), the finance
commission shall consider:
(1) the purposes of this subtitle and the
Gramm-Leach-Bliley Act (Pub. L. No. 106-102);
(2) changes or reasonably expected changes in the
marketplace in which state trust companies compete;
(3) changes or reasonably expected changes in the
technology for delivering fiduciary and financial services;
(4) whether the activity is necessary or appropriate
to allow a state trust company to:
(A) compete effectively with another company
seeking to provide fiduciary and financial services;
(B) efficiently deliver information and services
that are financial in nature through the use of technological
means, including an application necessary to protect the security
or efficacy of systems for the transmission of data or financial
transactions; or
(C) offer customers available or emerging
technological means for using fiduciary and financial services or
for the document imaging of data;
(5) whether the activity would violate applicable
fiduciary duties or otherwise pose a substantial risk to the safety
and soundness of a state trust company or the fiduciary and
financial system generally; and
(6) if otherwise determined to be permissible, whether
the conduct of the activity by a state trust company should be
qualified through the imposition of reasonable and necessary
conditions to protect the public and require appropriate regard for
safety and soundness of the trust company and the fiduciary and
financial system generally.
(c) A rule adopted by the finance commission under this
section does not alter or negate applicable licensing and
regulatory requirements administered by a functional regulatory
agency of this state, as defined by Section 31.303, including
licensing and regulatory requirements pertaining to:
(1) insurance activities;
(2) securities activities; and
(3) real estate development, marketing, and sales
activities.
Added by Acts 2001, 77th Leg., ch. 528, § 22, eff. Sept. 1, 2001.
§ 182.011. EXEMPTION FROM STATUTORY PROVISIONS FOR
CERTAIN STATE TRUST COMPANIES. (a) A state trust company may
request in writing that it be exempted from specified provisions of
this subtitle. The banking commissioner may grant the exemption in
whole or in part if the banking commissioner finds that the state
trust company does not transact business with the public. A state
trust company does not transact business with the public if it does
not make any sale, solicitation, arrangement, agreement, or
transaction to provide a trust or other business service, whether
or not for a fee, commission, or any other type of remuneration,
with:
(1) an individual who is not related within the fourth
degree of affinity or consanguinity to an individual who controls
the state trust company; or
(2) a sole proprietorship, partnership, joint
venture, association, trust, estate, business trust, or
corporation that is not wholly owned by one or more individuals
related within the fourth degree of affinity or consanguinity to an
individual who controls the state trust company.
(b) At the expense of a state trust company, the banking
commissioner may examine or investigate the state trust company in
connection with an application for an exemption. Unless the
application presents novel or unusual questions, the banking
commissioner shall approve the application for exemption or set the
application for hearing not later than the 61st day after the date
the banking commissioner considers the application complete and
accepted for filing. The banking commissioner may require the
submission of additional information as considered necessary to an
informed decision.
(c) An exemption granted under this section may be made
subject to conditions or limitations imposed by the banking
commissioner consistent with this subtitle.
(d) A state trust company that is or has been exempt from a
provision of this subtitle under this section or a predecessor
statute may not transact business with the public unless the
banking commissioner determines, as provided by Section 182.003,
that public convenience and advantage will be promoted by
permitting the state trust company to engage in the trust business
with the public.
(e) The finance commission may adopt rules:
(1) defining other circumstances under which a state
trust company may be exempted from a provision of this subtitle
because it does not transact business with the public;
(2) specifying the provisions of this subtitle that
are subject to an exemption request; and
(3) establishing procedures and requirements for
obtaining, maintaining, or revoking an exemption.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.012. APPLICATION FOR EXEMPTION. (a) A state
trust company requesting an exemption under Section 182.011 shall
file an application with the banking commissioner that includes:
(1) a nonrefundable application fee set by the finance
commission;
(2) a detailed sworn statement showing the state trust
company's assets and liabilities as of the end of the calendar month
preceding the filing of the application;
(3) a sworn statement of the reason for requesting the
exemption;
(4) a sworn statement that the state trust company is
not transacting business with the public and that the company will
not transact business with the public without the prior written
permission of the banking commissioner;
(5) the current street mailing address and telephone
number of the physical location in this state at which the state
trust company will maintain its books and records, with a sworn
statement that the address given is true and correct and is not a
United States Postal Service post office box or a private mail box,
postal box, or mail drop; and
(6) a list of the specific provisions of this subtitle
for which the request for an exemption is made.
(b) The banking commissioner may not approve an exemption
unless the application is completed as required by Subsection (a).
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.013. ANNUAL CERTIFICATION FOR EXEMPT STATE TRUST
COMPANY. (a) Before June 30 of each year, an exempt state trust
company shall file a certification on a form provided by the banking
commissioner that it is maintaining the conditions and limitations
of its exemption. The certification must be accompanied by a fee
set by the finance commission. The certification is not valid
unless it bears an acknowledgment stamped by the department.
(b) The department shall return a copy of the acknowledged
annual certification to the state trust company not later than the
30th day after the date the certification is filed. The state trust
company shall notify the department of any failure to return an
acknowledged copy of any annual certification within this period.
(c) The banking commissioner may examine or investigate the
state trust company periodically as necessary to verify the
certification.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.014. LIMITATION ON EFFECT OF EXEMPTION. (a) An
exempt state trust company shall comply with the home office
provisions of Section 182.202.
(b) The grant of an exemption to a state trust company does
not affect the state trust company's obligation to pay any
corporate franchise tax required by state law.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.015. CHANGE OF CONTROL OF EXEMPT STATE TRUST
COMPANY. Control of an exempt state trust company may not be sold
or transferred with exempt status. If control of an exempt state
trust company is transferred, the acquiring person must comply with
Sections 182.003, 182.004, 182.005, and 183.001 and the exempt
status of the state trust company automatically terminates on the
effective date of the transfer. The acquiring person must file a
separate application to obtain an exemption under Section 182.011.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.016. GROUNDS FOR REVOCATION OF EXEMPTION. The
banking commissioner may revoke an exemption of a state trust
company if the trust company:
(1) makes a false statement under oath on any document
required to be filed by this subtitle or finance commission rule;
(2) fails to submit to an examination as required by
Section 181.104;
(3) withholds requested information from the banking
commissioner; or
(4) violates any provision of this subtitle applicable
to an exempt state trust company.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.017. NOTICE AND EFFECT OF REVOCATION OF
EXEMPTION. (a) If the banking commissioner determines from
examination or other credible evidence that an exempt state trust
company has violated any of the requirements of this subchapter
relating to an exempt state trust company, the banking commissioner
may by personal delivery or registered or certified mail, return
receipt requested, notify the state trust company in writing that
the state trust company's exemption has been revoked. The notice
must state grounds for the revocation with reasonable certainty.
The notice must state its effective date, which may not be earlier
than the fifth day after the date the notification is mailed or
delivered.
(b) The revocation takes effect for the state trust company
if the state trust company does not request a hearing in writing
before the effective date. After taking effect the revocation is
final and nonappealable as to that state trust company, and the
state trust company is subject to all of the requirements and
provisions of this subtitle applicable to nonexempt state trust
companies.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.018. ACTION AFTER REVOCATION OF
EXEMPTION. (a) A state trust company must comply with all of the
provisions of Sections 182.003(b) and (c) not later than the fifth
day after the date the revocation of the exemption takes effect.
If, however, the banking commissioner determines at the time of
revocation that the state trust company has been engaging in or
attempting to engage in acts intended or designed to deceive or
defraud the public, the banking commissioner, in the banking
commissioner's sole discretion, may waive the compliance period
provided by this subsection.
(b) If within the period prescribed by Subsection (a) the
state trust company does not comply with all of the provisions of
this subtitle, including capitalization requirements determined by
the banking commissioner as necessary to assure the safety and
soundness of the state trust company, the banking commissioner may:
(1) institute any action or remedy prescribed by this
subtitle or any applicable rule; or
(2) refer the state trust company to the attorney
general for institution of a quo warranto proceeding to revoke the
state trust company's charter.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.019. PRIOR EXEMPTION. A state trust company that
was exempt under a predecessor to this subtitle is considered
exempt under this subtitle.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.020. FOREIGN CORPORATION EXERCISING TRUST
POWERS. (a) A foreign corporation may not conduct a trust
business in this state. A foreign corporation may control a state
trust company in this state if the state trust company is formed or
acquired and operated as provided by this subtitle and applicable
rules.
(b) A foreign corporation or other entity chartered or
domiciled in another jurisdiction as a trust company or depository
institution with trust powers may act as a trustee in this state
only as provided by Section 105A, Texas Probate Code.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.021. ACTIVITIES NOT REQUIRING CHARTER. Subject
to Subchapter C, Chapter 187, a company does not engage in the trust
business in a manner requiring a state charter by:
(1) acting in a manner authorized by law and in the
scope of authority as an agent of a trust institution;
(2) rendering a service customarily performed as an
attorney in a manner approved and authorized by the Supreme Court of
Texas or State Bar of Texas;
(3) acting as trustee under a deed of trust made only
as security for the payment of money or for the performance of
another act;
(4) conducting business as a trust institution if the
exercise of fiduciary powers in this state by the trust institution
is not otherwise prohibited by law;
(5) engaging in a business regulated by the Office of
Consumer Credit Commissioner, except as limited by rules adopted by
the finance commission;
(6) receiving and distributing rents and proceeds of
sale as a licensed real estate broker on behalf of a principal in a
manner authorized by the Texas Real Estate Commission;
(7) engaging in a securities transaction or providing
an investment advisory service as a licensed and registered dealer,
salesman, or advisor to the extent that the activity is regulated by
the State Securities Board or the Securities and Exchange
Commission;
(8) engaging in the sale and administration of an
insurance product by an insurance company or agent licensed by the
Texas Department of Insurance to the extent that the activity is
regulated by the Texas Department of Insurance;
(9) engaging in the lawful sale of prepaid funeral
benefits under a permit issued by the banking commissioner under
Chapter 154;
(10) engaging in the lawful business of a perpetual
care cemetery corporation under Chapter 712, Health and Safety
Code;
(11) engaging as a principal or agent in the lawful
sale of checks under a license issued by the banking commissioner
under Chapter 152;
(12) acting as trustee under a voting trust as
provided by Article 2.30, Texas Business Corporation Act;
(13) acting as trustee by a public, private, or
independent institution of higher education or a university system,
as defined by Section 61.003, Education Code, including an
affiliated foundation or corporation of such an institution or
system acting as trustee as provided by the Education Code;
(14) engaging in another activity expressly excluded
from the application of this subtitle by rule of the finance
commission;
(15) rendering services customarily performed by a
certified accountant in a manner authorized by the Texas State
Board of Public Accountancy;
(16) serving as trustee of a charitable trust as
provided by Article 2.31, Texas Non-Profit Corporation Act (Article
1396-2.31, Vernon's Texas Civil Statutes);
(17) performing escrow or settlement services if
licensed under Chapter 9, Insurance Code;
(18) acting as a qualified intermediary in a tax
deferred exchange under Section 1031, Internal Revenue Code of
1986, and applicable regulations; or
(19) providing permitted services at a trust
representative office established in this state pursuant to
Subchapter C, Chapter 187.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, § 6.011(a),
eff. Sept. 1, 2001.
§ 182.0211. CONFORMANCE WITH SECURITIES ACT. For the
purposes of Section 182.021(7), "salesman" includes " agent" and
"advisor" includes "investment adviser" or "investment adviser
representative."
Added by Acts 2001, 77th Leg., ch. 1091, § 4.03, eff. Sept. 1,
2001.
SUBCHAPTER B. AMENDMENT OF ARTICLES; CHANGES IN CAPITAL SURPLUS
§ 182.101. AMENDMENT OR RESTATEMENT OF STATE TRUST
COMPANY ARTICLES OF ASSOCIATION. (a) A state trust company that
has been granted a charter under Section 182.006 or a predecessor
statute may amend or restate its articles of association for any
lawful purpose, including the creation of authorized but unissued
shares or participation shares in one or more classes or series.
(b) An amendment authorizing the issuance of shares or
participation shares in series must contain:
(1) the designation of each series and a statement of
any variations in the preferences, limitations, and relative rights
among series to the extent that the preferences, limitations, and
relative rights are to be established in the articles of
association; and
(2) a statement of any authority to be vested in the
board to establish series and determine the preferences,
limitations, and relative rights of each series.
(c) A limited trust association may not amend its articles
of association to extend its period of existence for a perpetual
period or for any period of years, unless the period of existence is
expressly contingent on those events resulting in dissolution of
the trust association under Section 183.208.
(d) Amendment or restatement of the articles of association
of a state trust company and approval of the board and shareholders
or participants must be made or obtained in accordance with the
Texas Business Corporation Act for the amendment or restatement of
articles of incorporation, except as otherwise provided by this
subtitle or rules adopted under this subtitle. The original and one
copy of the articles of amendment or restated articles of
association must be filed with the banking commissioner for
approval. Unless the submission presents novel or unusual
questions, the banking commissioner shall approve or reject the
amendment or restatement not later than the 31st day after the date
the banking commissioner considers the submission informationally
complete and accepted for filing. The banking commissioner may
require the submission of additional information as considered
necessary to an informed decision to approve or reject any
amendment or restatement of articles of association under this
section.
(e) If the banking commissioner finds that the amendment or
restatement conforms to law and any conditions imposed by the
banking commissioner, and any required filing fee has been paid,
the banking commissioner shall:
(1) endorse the face of the original and copy with the
date of approval and the word "Approved";
(2) file the original in the department's records; and
(3) deliver a certified copy of the amendment or
restatement to the state trust company.
(f) An amendment or restatement, if approved, takes effect
on the date of approval, unless the amendment or restatement
provides for a different effective date.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.102. ESTABLISHING SERIES OF SHARES OR
PARTICIPATION SHARES. (a) If the articles of association
expressly give the board authority to establish series and
determine the preferences, limitations, and relative rights of each
series, the board may do so only on compliance with this section and
any rules adopted under this chapter.
(b) A series of shares or participation shares may be
established in the manner provided by the Texas Business
Corporation Act as if a state trust company were a domestic
corporation, but the shares or participation shares of the series
may not be issued and sold except on compliance with Section
182.103. The state trust company shall file the original and one
copy of the statement of action required by the Texas Business
Corporation Act with the banking commissioner.
(c) Unless the submission presents novel or unusual
questions, the banking commissioner shall approve or reject the
series not later than the 31st day after the date the banking
commissioner considers the submission informationally complete and
accepted for filing. The banking commissioner may require the
submission of additional information as considered necessary to an
informed decision.
(d) If the banking commissioner finds that the interests of
the clients and creditors of the state trust company will not be
adversely affected by the series, that the series otherwise
conforms to law and any conditions imposed by the banking
commissioner, and that any required filing fee has been paid, the
banking commissioner shall:
(1) endorse the face of the original and copy of the
statement with the date of approval and the word "Approved";
(2) file the original in the department's records; and
(3) deliver a certified copy of the statement to the
state trust company.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.103. CHANGE IN RESTRICTED CAPITAL. (a) A state
trust company may not reduce or increase its restricted capital
through dividend, redemption, issuance of shares or participation
shares, or otherwise without the prior approval of the banking
commissioner, except as permitted by this section or rules adopted
under this chapter.
(b) Unless otherwise restricted by rules, prior approval is
not required for an increase in restricted capital accomplished
through:
(1) issuance of shares of common stock or their
equivalent in participation shares for cash;
(2) declaration and payment of pro rata share
dividends as defined by the Texas Business Corporation Act; or
(3) adoption by the board of a resolution directing
that all or part of undivided profits be transferred to restricted
capital.
(c) Prior approval is not required for a decrease in
restricted capital caused by incurred losses in excess of undivided
profits.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.104. CAPITAL NOTES OR DEBENTURES. (a) With the
prior written approval of the banking commissioner, a state trust
company may at any time through action of its board, and without
requiring action of its shareholders or participants, issue and
sell its capital notes or debentures. The notes or debentures must
be subordinate to the claims of depositors and may be subordinate to
other claims, including the claims of other creditors or classes of
creditors or the shareholders or participants.
(b) Capital notes or debentures may be convertible into
shares or participation shares of any class or series. The issuance
and sale of convertible capital notes or debentures are subject to
satisfaction of preemptive rights, if any, to the extent provided
by law.
(c) Without the prior written approval of the banking
commissioner, a state trust company may not pay interest due or
principal repayable on outstanding capital notes or debentures when
the state trust company is in hazardous condition or insolvent, as
determined by the banking commissioner, or to the extent that
payment will cause the state trust company to be in hazardous
condition or insolvent.
(d) The amount of any outstanding capital notes or
debentures that meet the requirements of this section and that are
subordinated to unsecured creditors of the state trust company may
be included in equity capital of the state trust company for
purposes of determining hazardous condition or insolvency, and for
such other purposes provided by rules adopted under this subtitle.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.105. BOARD DESIGNATION OF CERTIFIED
SURPLUS. Periodically the board may vote to designate and record
in its minutes the amount of certified surplus. Except to absorb
losses in excess of undivided profits and uncertified surplus,
certified surplus may not be reduced without the prior written
approval of the banking commissioner.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
SUBCHAPTER C. STATE TRUST COMPANY OFFICES
§ 182.201. CONDUCT OF TRUST BUSINESS. A state trust
company may engage in the trust business at its home office and at
other locations as permitted by this subchapter.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.202. HOME OFFICE. (a) Each state trust company
must have and continuously maintain in this state a home office.
The home office must be a location at which the state trust company
does business and keeps its corporate books and records. At least
one executive officer must maintain an office at the home office.
(b) Each officer at the home office is an agent for service
of process for the state trust company.
(c) A state trust company may change its home office to any
location in this state, if the location that is the home office
before the change remains an office of the state trust company at
which the state trust company does business. To change the location
of its home office, the state trust company must file a written
notice with the banking commissioner setting forth the name of the
state trust company, the street address of its home office before
the change, the street address to which the home office is to be
changed, and a copy of the resolution adopted by the board
authorizing the change. The change of home office takes effect on
the 31st day after the date the banking commissioner receives the
notice.
(d) A relocation of a state trust company's home office may
not be made, and another action that would effect an abandonment of
the state trust company's initial home office may not be taken,
without the prior written approval of the banking commissioner.
The state trust company must establish to the satisfaction of the
banking commissioner that the abandonment is consistent with the
original determination of public convenience and advantage for the
establishment of a state trust company at that location.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.203. ADDITIONAL OFFICES. (a) A state trust
company may establish and maintain additional offices. To establish
an additional office, the state trust company must file a written
notice with the banking commissioner setting forth the name of the
state trust company, the street address of the proposed additional
office, a description of the activities proposed to be conducted at
the additional office, and a copy of the resolution adopted by the
board authorizing the additional office.
(b) A state trust company may not commence business at the
additional office before the 31st day after the date the banking
commissioner receives the notice, unless the banking commissioner
specifies an earlier or later date. The banking commissioner may
specify a later date on a determination that the written notice
raises issues that require additional information or additional
time for analysis. If a later date is specified, the state trust
company may establish the additional office only on prior written
approval by the banking commissioner. The banking commissioner may
deny permission to establish an additional office of the state
trust company if the banking commissioner has a significant
supervisory or regulatory concern regarding the proposed
additional office, the applicant, or an affiliate.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, § 6.012(a),
eff. Sept. 1, 2001.
SUBCHAPTER D. MERGER
§ 182.301. MERGER AUTHORITY. (a) Subject to this
subchapter and with the prior written approval of the banking
commissioner, a state trust company may merge with another person
to the same extent as a business corporation under the Texas
Business Corporation Act.
(b) Implementation of the plan of merger by the parties and
approval of the board, shareholders, participants, or owners of the
parties must be made or obtained as provided by the Texas Business
Corporation Act as if the state trust company were a domestic
corporation and all other parties to the merger were foreign
corporations and other entities, except as otherwise provided by
rules adopted under this chapter.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.302. MERGER APPLICATION; GROUNDS FOR
APPROVAL. (a) To apply for approval of a merger, the parties must
submit the original articles of merger, a number of copies of the
articles of merger equal to the number of surviving, new, and
acquiring entities, and an application in the form required by the
banking commissioner. The banking commissioner may require the
submission of additional information as considered necessary to an
informed decision.
(b) The banking commissioner shall investigate the
condition of the merging parties.
(c) The banking commissioner may approve the merger if:
(1) each resulting state trust company:
(A) has complied with the statutes and rules
relating to the organization of a state trust company; and
(B) will be solvent and have adequate
capitalization for its business and location;
(2) all obligations and liabilities of each trust
company that is a party to the merger have been properly discharged
or otherwise lawfully assumed or retained by a trust institution or
other fiduciary;
(3) each surviving, new, or acquiring person that is
not authorized to engage in the trust business will not engage in
the trust business and has complied with the laws of this state;
and
(4) all conditions imposed by the banking commissioner
have been satisfied or otherwise resolved.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, § 6.013(a),
eff. Sept. 1, 2001.
§ 182.303. APPROVAL OF BANKING COMMISSIONER. (a) If
the banking commissioner approves the merger and finds that all
required filing fees and investigative costs have been paid, the
banking commissioner shall:
(1) endorse the face of the original and each copy of
the articles of merger with the date of approval and the word
"Approved";
(2) file the original in the department's records; and
(3) deliver a certified copy of the articles of merger
to each surviving, new, or acquiring entity.
(b) A merger is effective on the date of approval, unless
the merger agreement provides and the banking commissioner consents
to a different effective date.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.304. RIGHTS OF DISSENTERS TO MERGER. A
shareholder, participant, or participant-transferee may dissent
from the merger to the extent and by following the procedure
provided by the Texas Business Corporation Act or rules adopted
under this subtitle.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
SUBCHAPTER E. PURCHASE OR SALE OF ASSETS
§ 182.401. AUTHORITY TO PURCHASE ASSETS OF ANOTHER TRUST
INSTITUTION. (a) A state trust company with the prior written
approval of the banking commissioner may purchase all or
substantially all of the assets of another trust institution,
including the right to control accounts established with the trust
institution.
(b) Except as otherwise expressly provided by this section
or another statute, the purchase of all or part of the assets of the
selling trust institution does not make the purchasing state trust
company responsible for any liability or obligation of the selling
trust institution that the purchasing state trust company does not
expressly assume.
(c) Except as otherwise provided by this subtitle, this
subchapter does not govern or prohibit the purchase by a state trust
company of all or part of the assets of a corporation or other
entity that is not a trust institution.
(d) To make a purchase under this section, an application in
the form required by the banking commissioner must be filed with the
banking commissioner. The banking commissioner shall investigate
the condition of the purchaser and seller and may require the
submission of additional information as considered necessary to
make an informed decision.
(e) The banking commissioner shall approve the purchase if:
(1) the purchasing state trust company:
(A) has complied with all applicable statutes and
rules; and
(B) will be solvent and have sufficient
capitalization for its business and location;
(2) all obligations and liabilities of each trust
institution that is a party to the purchase or sale of assets have
been properly discharged or otherwise lawfully assumed or retained
by a trust institution or other fiduciary;
(3) all conditions imposed by the banking commissioner
have been satisfied or otherwise resolved; and
(4) all fees and costs have been paid.
(f) A purchase is effective on the date of approval unless
the purchase agreement provides for and the banking commissioner
consents to a different effective date.
(g) The acquiring state trust company shall succeed by
operation of law to all of the rights, privileges, and obligations
of the selling trust institution under each account included in the
assets acquired.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, § 6.014(a),
eff. Sept. 1, 2001.
§ 182.402. AUTHORITY TO ACT AS DISBURSING
AGENT. (a) The purchasing state trust company may hold the
purchase price and any additional funds delivered to it by the
selling institution in trust for the selling institution and may
act as agent of the selling institution in disbursing those funds in
trust by paying the creditors of the selling institution.
(b) If the purchasing state trust company acts under written
contract of agency approved by the banking commissioner that
specifically names each creditor and the amount to be paid each, and
if the agency is limited to the purely ministerial act of paying
creditors the amounts due them as determined by the selling
institution and reflected in the contract of agency and does not
involve discretionary duties or authority other than the
identification of the creditors named, the purchasing trust
company:
(1) may rely on the contract of agency and the
instructions included in it; and
(2) is not responsible for:
(A) any error made by the selling institution in
determining its liabilities and creditors to whom the liabilities
are due or the amounts due the creditors; or
(B) any preference that results from the payments
made under the contract of agency and the instructions included in
it.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.403. LIQUIDATION OF SELLING INSTITUTION. If the
selling institution is at any time after the sale of assets
voluntarily or involuntarily closed for liquidation by a state or
federal regulatory agency, the purchasing state trust company shall
pay to the receiver of the selling institution the balance of the
money held by it in trust for the selling institution and not yet
paid to the creditors of the selling institution. Without further
action the purchasing state trust company is discharged of all
responsibilities to the selling institution, its receiver, or its
creditors, shareholders, participants, or
participant-transferees.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.404. PAYMENT TO CREDITORS. The purchasing state
trust company may pay a creditor of the selling institution the
amount to be paid the creditor under the terms of the contract of
agency by opening an agency account in the name of the creditor,
crediting the account with the amount to be paid the creditor under
the terms of the agency contract, and mailing or personally
delivering a duplicate ticket evidencing the credit to the creditor
at the creditor's address shown in the records of the selling
institution. The relationship between the purchasing state trust
company and the creditor is that of agent to creditor only to the
extent of the credit reflected by the ticket.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999.
§ 182.405. SALE OF ASSETS. (a) The board of a state
trust company, with the banking commissioner's approval, may cause
the state trust company to sell all or substantially all of its
assets, including the right to control accounts established with
the state trust company, without shareholder or participant
approval if:
(1) the banking commissioner finds that the interests
of the state trust company's clients, depositors, and creditors are
jeopardized because of the hazardous condition of the state trust
company and that the sale is in their best interest; and
(2) the Federal Deposit Insurance Corporation or its
successor approves the transaction, if the deposits of the state
trust company are insured.
(b) A sale under this section must include an assumption and
promise by the buyer to pay or otherwise discharge:
(1) all of a state trust company's liabilities to
clients and depositors;
(2) all of the state trust company's liabilities for
salaries of the state trust company's employees incurred before the
date of the sale;
(3) obligations incurred by the banking commissioner
arising out of the supervision or sale of the state trust company;
and
(4) fees and assessments due the department.
(c) This section does not limit the incidental power of a
state trust company to buy and sell assets in the ordinary course of
business.
(d) This section does not affect the banking commissioner's
right to take action under another law. The sale by a state trust
company of all or substantially all of its assets with shareholder
or participant approval is considered a voluntary dissolution and
liquidation and is governed by Subchapter B, Chapter 186.
(e) The acquiring trust institution shall succeed by
operation of law to all of the rights, privileges, and obligations
of the selling state trust company under each account included in
the assets acquired.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, § 6.015(a),
eff. Sept. 1, 2001.
SUBCHAPTER F. EXIT OF STATE TRUST COMPANY OR ENTRY OF ANOTHER TRUST
INSTITUTION
§ 182.501. MERGER OR CONVERSION OF STATE TRUST COMPANY
INTO ANOTHER TRUST INSTITUTION EXERCISING FIDUCIARY
POWERS. (a) Subject to Chapter 187, a state trust company may act
as necessary and to the extent permitted by the laws of the United
States, this state, another state, or another country to merge or
convert into another form of trust institution.
(b) The merger or conversion must be made and approval of
the state trust company's board, shareholders, or participants must
be obtained in accordance with the Texas Business Corporation Act
as if the state trust company were a domestic corporation and all
other parties to the transaction, if any, were foreign corporations
or other entities, except as may be otherwise provided by rule. For
purposes of this subsection, a conversion is considered a merger
into the successor trust institution.
(c) The state trust company does not cease to be a state
trust company subject to the supervision of the banking
commissioner unless:
(1) the banking commissioner has been given written
notice of the intention to merge or convert before the 31st day
before the date of the proposed transaction;
(2) the state trust company has published notice of
the transaction, in the form and frequency specified by the banking
commissioner, in:
(A) a newspaper of general circulation published
in the county of its home office or, if such a newspaper is not
published in the county, in an adjacent county; and
(B) other locations that the banking
commissioner considers appropriate;
(3) the state trust company has filed with the banking
commissioner:
(A) a copy of the application filed with the
successor regulatory authority, including a copy of each contract
evidencing or implementing the merger or conversion, or other
documents sufficient to show compliance with applicable law;
(B) a certified copy of all minutes of board
meetings and shareholder or participant meetings at which action
was taken regarding the merger or conversion; and
(C) a publisher's certificate showing
publication of the required notice;
(4) the banking commissioner determines that:
(A) all accounts and liabilities of the state
trust company are fully discharged, assumed, or otherwise retained
by the successor trust institution;
(B) any conditions imposed by the banking
commissioner for the protection of clients and creditors have been
met or otherwise resolved; and
(C) any required filing fees have been paid; and
(5) the state trust company has received a certificate
of authority to do business as the successor trust institution.
Added by Acts 1999, 76th Leg., ch. 62, § 7.16(a), eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, § 6.016(a),
eff. Sept. 1, 2001.
§ 182.502. CONVERSION OF TRUST INSTITUTION INTO STATE
TRUST COMPANY. (a) A trust institution may apply to the banking
commissioner for conversion into a state trust company on a form
prescribed by the banking commissioner and accompanied by any
required fee if the trust institution follows the procedures
prescribed by the laws of the United States, this state, another
state, or another country governing the exit of the trust
institution for the purpose of conversion into a state trust
company from the regulatory system applicable before the
conversion. A trust association or limited trust association may
convert its organizational form under this section.
(b) A trust institution applying to convert into a state
trust company may receive a certificate of authority to do business
as a state trust company if the banking commissioner finds that:
(1) the trust institution is not engaging in a pattern
or practice of unsafe and unsound fiduciary or banking practices;
(2) the trust institution has adequate capitalization
for a state trust company to act as a fiduciary at the same
locations as the trust institution is acting as a fiduciary before
the conversion;
(3) the trust institution can be expected to operate
profitably after the conversion;
(4) the officers and directors of the trust
institution as a group have sufficient banking experience, ability,
standing, competence, trustworthiness, and integrity to justify a
belief that the trust institution will operate as a state trust
company in compliance with law; and
(5) each principal shareholder has sufficient
experience, ability, standing, competence, trustworthiness, and
integrity to justify a belief that the trust institution will be
free from improper or unlawful influence or interference with
respect to the trust institution's operation as a state trust
company in compliance with law.
(c) The banking commissioner may:
(1) request additional information considered
necessary to make an informed decision under this section;
(2) perform an examination of the converting trust
institution at the expense of the converting trust institution;
and
(3) require that examination fees be paid before a
certificate of authority is issued.
(d) In connection with the application, the converting
trust institution must:
(1) submit a statement of the law governing the exit of
the trust institution from the regulatory system applicable before
the conversion and the terms of the transition into a state trust
company; and
(2) demonstrate that all applicable law has been fully
satisfied.
Added by Acts 2001, 77th Leg., ch. 1420, § 6.016(a), eff. Sept.
1, 2001.
