CHAPTER 273. SAVINGS AND LOAN SUPPLEMENTAL FUND ACT

State Codes and Statutes

Statutes > Texas > Finance-code > Title-3-financial-institutions-and-businesses > Chapter-273-savings-and-loan-supplemental-fund-act

FINANCE CODE

TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES

SUBTITLE Z. MISCELLANEOUS PROVISIONS RELATING TO FINANCIAL

INSTITUTIONS AND BUSINESSES

CHAPTER 273. SAVINGS AND LOAN SUPPLEMENTAL FUND ACT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 273.001. SHORT TITLE. This chapter may be cited as the

Texas Savings and Loan Supplemental Fund Act.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.002. PURPOSES; LIBERAL CONSTRUCTION. (a) The purposes

of this chapter are to:

(1) establish a fund in this state to aid the commissioner in

maintaining the solvency of associations that contribute to the

fund; and

(2) safeguard the public interest and promote public confidence

in domestic associations doing business in this state by making

the fund available to the commissioner to be used to:

(A) protect and rehabilitate the assets of member associations;

and

(B) maintain the solvency of member associations.

(b) This chapter shall be liberally construed to effect its

purposes.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.003. DEFINITIONS. In this chapter:

(1) "Board" means the board of directors of the corporation.

(2) "Commissioner" means the savings and mortgage lending

commissioner.

(3) "Corporation" means the Texas Savings and Loan Supplemental

Fund Corporation.

(4) "Domestic association" means a savings and loan association

that is organized under the laws of this state.

(5) "Member association" means a domestic association that is a

member in good standing of the corporation.

(6) "Member association under conservatorship" means a member

association that is subject to a conservatorship order of the

commissioner.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

921, Sec. 6.059, eff. September 1, 2007.

Sec. 273.004. EXEMPTION FROM SECURITIES ACT. (a) A security

issued by the corporation under this chapter is not considered a

"security" under The Securities Act (Article 581-1 et seq.,

Vernon's Texas Civil Statutes).

(b) A person authorized by and acting on behalf of the

corporation is exempt from the registration and licensing

provisions of The Securities Act (Article 581-1 et seq., Vernon's

Texas Civil Statutes) with respect to that person's participation

in a sale or other transaction involving a security of the

corporation.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.005. SECURITY OF CORPORATION CONSIDERED AUTHORIZED

INVESTMENT OF SAVINGS AND LOAN ASSOCIATION. A security of the

corporation held by a member association is considered an

authorized investment of a savings and loan association under

state law.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER B. ORGANIZATION OF CORPORATION

Sec. 273.101. CREATION OF AND MEMBERSHIP IN CORPORATION. (a)

The Texas Savings and Loan Supplemental Fund Corporation is a

nonprofit legal entity that is supervised by the commissioner.

(b) A domestic association is eligible to be a member of the

corporation if the association:

(1) is insured by the Federal Deposit Insurance Corporation; and

(2) meets the membership standards adopted by the board and

approved by the commissioner as part of the Texas Savings and

Loan Supplemental Fund Corporation's plan of operation.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.102. BOARD OF DIRECTORS. (a) The board shall exercise

the powers and manage the business and affairs of the

corporation.

(b) The board consists of:

(1) the members of the Finance Commission of Texas; and

(2) six members elected by the member associations at an annual

meeting.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.103. EXECUTIVE COMMITTEE. (a) The plan of operation

of the corporation may authorize the board to create an executive

committee consisting of three or more directors.

(b) An act of the executive committee is as effective as an act

of the board if the act is authorized by the plan of operation

and is within the authority delegated to the committee.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.104. TERM. (a) An elected director serves a two-year

term and continues to serve until a successor has been elected

and qualified.

(b) Of the original board who represent the member associations,

three directors shall be elected for two-year terms, and the

other three directors shall be elected for one-year terms.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.105. BOARD OFFICERS AND PERSONNEL. (a) At the first

board meeting after each directors' election, the board shall

elect from its membership a presiding officer.

(b) The board may appoint other officers and employees as the

board considers appropriate.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.106. VACANCY. (a) The office of a director becomes

vacant on the death, resignation, or removal of the director.

(b) A resignation must be presented to the commissioner or the

board's presiding officer.

the unexpired term by majority vote of the remaining directors.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.107. REMOVAL OF BOARD MEMBER. The board may remove an

elected director from office by a two-thirds majority vote at a

meeting called for that express purpose because the director has

failed to:

(1) maintain the standards for directors specified in the plan

of operation; or

(2) perform any required duty.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.108. CONFLICT OF INTEREST. A director may not vote or

act on a decision intended to directly and specifically affect an

association in which the director has a direct interest.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.109. COMPENSATION; REIMBURSEMENT FOR EXPENSES. A

director may not receive compensation for serving on the board

but is entitled to reimbursement for actual expenses incurred in

performing duties as a director.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.110. MEETINGS. (a) A regular meeting of the board

shall be held as determined by the board.

(b) A special meeting of the board may be called by:

(1) the presiding officer;

(2) any three directors; or

(3) the commissioner.

given to each director and the commissioner at the time and in

the manner specified in the plan of operation.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.111. QUORUM; VOTING. (a) A quorum of the board

consists of not less than a majority of all directors, except

that:

(1) less than a majority of all directors may adjourn from time

to time; and

(2) a majority of directors holding office constitutes a quorum

for filling a vacancy on the board.

(b) Each member association is entitled to one vote on a matter

at a meeting of the member associations, including the election

of directors. The vote must be cast by a delegate authorized to

act by that association.

or approve a question to be voted on by the directors.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER C. OPERATION OF CORPORATION

Sec. 273.201. PLAN OF OPERATION; AMENDMENT. (a) After the

directors have been selected and taken office, the board shall

submit to the commissioner a plan of operation the board finds

necessary and suitable to assure the fair, reasonable, and

equitable administration of the corporation. The plan must:

(1) contain explicit standards for admission to and retention of

membership in the corporation;

(2) establish procedures for handling the assets of the

corporation;

(3) establish the amount and method of reimbursing directors;

(4) establish a regular place and time for board meetings;

(5) establish procedures for keeping records of financial

transactions of the board, the corporation, and the corporation's

agents;

(6) establish additional procedures for issuing securities of

the corporation under Subchapter D;

(7) subject to the limits prescribed by Section 273.305(c),

establish a maximum amount that may be spent on behalf of a

member association for the purposes of this chapter; and

(8) contain any other provision necessary or proper to execute

the powers and duties of the corporation.

(b) A member association shall comply with the plan.

to the commissioner.

(d) The plan or an amendment to the plan takes effect on the

commissioner's written approval of the plan or amendment.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.202. TEMPORARY PLAN OF OPERATION. (a) The

commissioner shall prepare and adopt a temporary plan of

operation for organization of the corporation until the initial

board is selected. The plan must include standards for membership

in the corporation.

(b) The temporary plan remains in effect until the plan is:

(1) modified by the commissioner; or

(2) superseded by a plan of operation that is approved by the

commissioner.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.203. POWERS OF CORPORATION. The corporation may,

consistent with the purposes of this chapter, exercise the powers

of a nonprofit corporation created under the laws of this state,

including the power to:

(1) enter into a contract;

(2) sue and be sued;

(3) purchase, hold, lease, receive, use, encumber, transfer,

lend, advance, or otherwise dispose of money or other property of

any kind, or of any interest in money or other property;

(4) take the capital stock and assets of a borrowing member

association as collateral securing any loan it makes to that

association;

(5) hold or dispose of in any manner any collateral described by

Subdivision (4) acquired as a result of default in the payment of

a loan;

(6) declare and pay a dividend or interest on a security issued

under this chapter;

(7) borrow money; and

(8) perform any other necessary act to enable the corporation to

effectively promote and carry out its purposes.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.204. CONDITIONS UNDER WHICH CORPORATION MAY EXERCISE

POWERS AND DUTIES. The corporation may not exercise a power or

perform a duty under Section 273.203 or 273.205 or Subchapter E

until the Office of Thrift Supervision and the Federal Deposit

Insurance Corporation have:

(1) officially recognized that the corporation in exercising

that power or performing that duty will reduce and minimize the

liability of the Federal Deposit Insurance Corporation; and

(2) taken any necessary action to permit member associations to

use without restraint all of the operational power the member

associations have under the laws of this state, including rules

of the Finance Commission of Texas.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2001, 77th Leg., ch. 867, Sec. 95, eff. Sept. 1,

2001.

Sec. 273.205. CONSIDERATION FOR ASSISTANCE. In consideration

for assistance provided to a member association under this

chapter, the corporation shall receive:

(1) an equity interest in the association; or

(2) other compensation acceptable to the board from the

association or another corporate entity that is a party to the

transaction in which the assistance is rendered.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.206. CANCELLATION OF MEMBERSHIP. The board may cancel

the membership of a member association that fails to purchase

securities as required by Section 273.301 by the 10th banking day

after the purchase date set by the board.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.207. REDEMPTION OF SECURITIES. (a) A member

association that surrenders its membership, becomes ineligible

for membership, or has its membership canceled may present any

security of the corporation it holds for redemption. The

corporation may defer redemption for not longer than three years

and shall continue to pay interest or a dividend required under

the terms of a security until the security is redeemed.

(b) When the balance of the administrative account exceeds 20

percent of the balance of the primary account, the corporation

may begin a redemption plan of securities issued by the

corporation.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.208. IMMUNITY FROM LIABILITY. The following persons

are not liable for an act or failure to act in the exercise of

the person's powers or performance of the person's duties under

this chapter:

(1) a member association;

(2) the corporation;

(3) a director;

(4) the commissioner or the commissioner's representative; and

(5) an agent or employee of the corporation or a member

association.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.209. LIMITATION ON ADVERTISEMENT AND PROMOTION. A

member association may advertise or use for promotional purposes

the fact that its assets are protected under this chapter only to

the extent and in the manner permitted by the plan of operation.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.210. DISSOLUTION. (a) The corporation may be

dissolved on:

(1) approval of the commissioner;

(2) unanimous approval of the board; and

(3) approval of two-thirds of the member associations.

(b) The corporation may be dissolved if member associations are

required to contribute to any fund similar to the corporation's

primary account, other than a fund in which member associations

pay premiums to the Federal Deposit Insurance Corporation for

insurance of accounts.

for dissolution.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.211. EFFECT OF DISSOLUTION. (a) On dissolution, money

in the primary account shall be used to redeem all securities

issued by the corporation and held by a member association. If

money in the primary account is insufficient to redeem the

securities, the administrative account may be used.

(b) On dissolution, the earnings of the corporation accrue to

this state and may not be distributed to any other person.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER D. PRIMARY AND ADMINISTRATIVE ACCOUNTS; ISSUANCE OF

SECURITIES

Sec. 273.301. REQUIRED PURCHASE OF SECURITIES. (a) The

corporation, acting on the direction of the board under the plan

of operation, may require a member association to purchase by a

certain date preferred stock, a certificate of participation, or

another type of security issued by the corporation that accrues

interest or pays a dividend at a specified rate or a variable

rate determined by a specific method of computation.

(b) The commissioner may defer in whole or in part a purchase

required by Subsection (a) if the commissioner believes the

purchase would endanger the ability of the member association to

maintain its solvency.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.302. AMOUNT OF SECURITY PURCHASE. The aggregate amount

of securities of any type a member association may be required to

purchase under Section 273.301 may not exceed an amount equal to

two percent of the total assets of the association as shown on

the association's annual statement filed with the commissioner as

required by law for the calendar year preceding the date of the

required purchase.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.303. PRIMARY ACCOUNT. (a) Money from the sale of the

corporation's securities constitutes the primary account of the

corporation.

(b) Money in the primary account may be invested in:

(1) a certificate of deposit or other interest-bearing account

in a savings and loan association or commercial bank domiciled in

this state; or

(2) securities that:

(A) will mature in not longer than five years;

(B) are issued by the United States government, this state, or a

municipality or other governmental entity of this state; and

credit of the issuer.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.304. ADMINISTRATIVE ACCOUNT. The corporation shall

establish an administrative account in which the corporation

shall deposit earnings, including interest, on the investment of

money in the primary account.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.305. AUTHORIZED EXPENDITURES. (a) The corporation may

spend money from the administrative account for the usual

business operations of the corporation.

(b) On the commissioner's request, the corporation shall use

money in the administrative account or primary account to:

(1) aid a member association under conservatorship; and

(2) rehabilitate a member association placed under

conservatorship as authorized by law and minimize the chance the

association will be liquidated.

Subsection (b)(1) may not exceed the lesser of:

(1) 10 percent of the balance of the primary account; or

(2) 20 percent of the association's assets.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.306. FORM AND TERMS OF SECURITY ISSUE. The board shall

determine the form and terms of, and any other matter not covered

by this chapter relating to, each security issue under this

subchapter.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.307. ALLOCATION OF SECURITY ISSUE. The corporation

shall allocate each security issue under Section 273.301 ratably

among the member associations based on the ratio of each

association's total assets on December 31 of the year preceding

the date on which the securities are purchased to the total

assets of all member associations on that date.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.308. LIMITATION ON ISSUANCE OF SECURITIES. When the

balance of the administrative account reaches the greater of $50

million or five percent of the balance of the primary account,

the corporation shall stop issuing securities until the balance

of the administrative account is less than $50 million or five

percent of the balance of the primary account, as appropriate.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER E. ASSISTANCE PROVIDED TO MEMBER ASSOCIATIONS UNDER

CONSERVATORSHIP

Sec. 273.401. GENERAL ASSISTANCE. On the commissioner's request

and under the commissioner's instruction, the corporation shall

assist in the merger, consolidation, conservation,

rehabilitation, or supervision of a member association under

conservatorship.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.402. ASSISTANCE IN TRANSFERRING OR DISPOSING OF

PROPERTY. The corporation shall make or issue to the appropriate

person, with the commissioner's approval, a guaranty or other

form of written assurance that is reasonably necessary to

facilitate the transfer or other disposition of all or part of

the property of a member association under conservatorship.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.403. ADVANCE OF MONEY. (a) The corporation shall

advance money on terms the board may establish to directly aid or

to provide special services for a member association under

conservatorship so the association may continue to operate and

maintain solvency.

(b) The corporation may charge interest on the money it advances

under this section.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.404. PURCHASE OF INTEREST IN ASSETS. (a) The

corporation shall purchase from a member association under

conservatorship an interest in the association's assets at a

price agreed to by the conservator and the board, regardless of

whether the price exceeds the market value of the purchased

assets.

(b) A purchase must be made on the terms the board determines.

The commissioner must approve the terms of the purchase in

writing.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.405. PROCEDURE FOR MERGER, SALE OF CONTROL OF, OR SALE

OF ASSETS. A merger, sale of control, or sale of any of the

assets of a member association under conservatorship in aid of

which money from an account under this chapter has been advanced

may be accomplished in the form and by the procedure the board

and the commissioner consider appropriate.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER F. ADMINISTRATIVE PROVISIONS

Sec. 273.501. ANNUAL FINANCIAL STATEMENT. (a) Not later than

April 1 of each year, the board shall submit to the commissioner

an audited financial statement for the preceding calendar year,

prepared in accordance with consistently applied generally

accepted accounting principles.

(b) An independent certified public accountant must certify the

financial statement.

information.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.502. EFFECT OF MEMBERSHIP. In regulating a savings and

loan association, the commissioner may not give preferential

treatment to or discriminate against that association solely

because that association is or is not a member of the

corporation.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.503. AMOUNT TO BE SPENT BEFORE CERTIFICATION OF

INSOLVENCY OF MEMBER ASSOCIATION. The commissioner must spend

the amount prescribed by Section 273.201(a)(7) before certifying

a member association to be insolvent.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 273.504. FEE AND TAX EXEMPTION. The corporation is exempt

from fees and taxes imposed by this state or a political

subdivision of this state, except a tax imposed on real property.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

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