CHAPTER 94. LOANS AND INVESTMENTS

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FINANCE CODE

TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES

SUBTITLE C. SAVINGS BANKS

CHAPTER 94. LOANS AND INVESTMENTS

SUBCHAPTER A. LIMITATIONS ON LOANS

Sec. 94.001. LOANS TO ONE BORROWER. (a) The finance commission

by rule may limit loans to one borrower. Those limits may not be

less restrictive than the limits imposed on savings associations

under Section 5(u), Home Owners' Loan Act (12 U.S.C. Section

1464(u)).

(b) A savings bank may not make loans to one borrower to a

greater extent than:

(1) permitted by rule adopted under Subsection (a); or

(2) a savings association is permitted under Section 5(u), Home

Owners' Loan Act (12 U.S.C. Section 1464(u)).

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

Amended by Acts 2001, 77th Leg., ch. 867, Sec. 53, eff. Sept. 1,

2001.

Sec. 94.002. COMMERCIAL LOANS. (a) Subject to rules adopted by

the finance commission, a savings bank may lend or invest not

more than 40 percent of the savings bank's total assets in

commercial loans.

(b) In this section, "commercial loan" means a loan that:

(1) is for business, commercial, corporate, or agricultural

purposes; and

(2) is not a real property loan.

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

Amended by Acts 2001, 77th Leg., ch. 867, Sec. 54, eff. Sept. 1,

2001.

SUBCHAPTER B. LOAN EXPENSES

Sec. 94.051. BORROWER PAYMENT OF LOAN EXPENSES. Subject to

Section 94.052, a savings bank may require a borrower to pay all

reasonable expenses incurred in connection with making, closing,

disbursing, extending, readjusting, or renewing a loan.

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

Sec. 94.052. CONSUMER LOANS. In the case of a consumer loan:

(1) a savings bank may charge a borrower the reasonable value of

services rendered in connection with making the loan; and

(2) an expense charged a borrower must be:

(A) necessary and proper for the protection of the lender; and

(B) actually incurred in connection with making the loan.

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

Sec. 94.053. COLLECTION OF LOAN EXPENSES. An expense payment

authorized by this subchapter may be:

(1) collected by the savings bank from the borrower and:

(A) retained by the savings bank; or

(B) paid to a person rendering a service for which a charge was

made, including an officer, director, or employee of the savings

bank rendering the service; or

(2) paid directly by the borrower to the person rendering the

service.

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

Sec. 94.054. CHARACTER OF LOAN EXPENSE PAYMENTS. An expense

payment authorized by this subchapter is not interest or

compensation charged by a savings bank for the loan of money.

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

SUBCHAPTER C. LOAN PAYMENTS

Sec. 94.101. PENALTY FOR PREPAYMENT OR LATE PAYMENT. A savings

bank may charge a penalty for a prepayment of or late payment on

a loan.

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

Sec. 94.102. APPLICATION OF PREPAYMENTS TO LOAN INSTALLMENTS.

Unless otherwise agreed in writing, a savings bank shall apply:

(1) a prepayment of principal to the final installment of the

obligation until the final installment is fully paid; and

(2) additional prepayments to installments in the inverse order

of their maturity.

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

SUBCHAPTER D. CHARGES RELATING TO REAL PROPERTY LOANS

Sec. 94.151. ADVANCES PAID BY SAVINGS BANK. (a) A savings bank

may pay taxes, assessments, insurance premiums, and similar

charges for the protection of the savings bank's interest in

property that secures a real property loan of the savings bank.

(b) A payment under Subsection (a) is an advance, and the

savings bank may:

(1) carry the payment on the savings bank's books as an asset of

the savings bank for which the savings bank may charge interest;

(2) add the payment to the unpaid balance of the loan to which

it applies as of the first day of the month in which the payment

is made.

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

Sec. 94.152. ADVANCES ARE LIEN ON PROPERTY. A payment under

Section 94.151 is a lien against the real property that secures

the loan for which it is made.

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

Sec. 94.153. PAYMENT OF ESTIMATED CHARGES BY BORROWER. (a) To

enable the savings bank to pay charges as they become due, a

savings bank may require a borrower to pay monthly in advance, in

addition to interest and principal, an amount equal to

one-twelfth of the estimated annual taxes, assessments, insurance

premiums, and other charges on the real property that secures a

loan.

(b) A savings bank may increase or decrease the amount of the

loan payment as necessary to meet the charges.

(1) carry the payments in trust in an account; or

(2) credit the payments to the indebtedness and advance the

money for charges as the charges become due.

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

Sec. 94.154. RECORD OF CHARGES. A savings bank shall keep a

record of the status of taxes, assessments, insurance premiums,

and other charges on real property that secures the savings

bank's loans.

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

SUBCHAPTER E. INVESTMENT IN LOCAL SERVICE AREA

Sec. 94.201. REQUIRED INVESTMENTS. A savings bank shall

maintain in the savings bank's portfolio not less than 15 percent

of the savings bank's deposits from its local service area

designated under Section 94.202 in:

(1) first and second lien residential mortgage loans, home

equity loans, or foreclosed residential mortgage loans originated

in the savings bank's local service area;

(2) home improvement loans;

(3) interim residential construction loans;

(4) mortgage-backed securities secured by loans in the savings

bank's local service area;

(5) loans for community reinvestment; and

(6) other loans made to customers in the savings bank's local

service area that meet the definition of qualified thrift assets

under Section 92.204.

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

Amended by:

Acts 2005, 79th Leg., Ch.

1018, Sec. 5.18, eff. September 1, 2005.

Sec. 94.202. DESIGNATION OF LOCAL SERVICE AREA. (a) The

commissioner shall designate a savings bank's local service area

at the time of application for incorporation as or conversion to

a savings bank.

(b) Unless the commissioner and the savings bank otherwise

agree, a savings bank may rely on designation of the local

service area for the duration of corporate existence as a savings

bank.

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

Sec. 94.203. RULES. The finance commission shall adopt rules to

implement this subchapter, including rules that define the

categories of loans and investments described by Section 94.201.

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

Amended by Acts 2001, 77th Leg., ch. 867, Sec. 55, eff. Sept. 1,

2001.

Sec. 94.204. WAIVERS. The commissioner, in accordance with

rules adopted under Section 94.203, may grant a limited-term

waiver from the requirements of Section 94.201 if quality loans

in the categories described in that section are not available in

a savings bank's local service area.

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

SUBCHAPTER F. INVESTMENT IN EQUITY SECURITIES

Sec. 94.251. LIMITATIONS ON INVESTMENT IN EQUITY SECURITIES.

(a) A savings bank or a subsidiary may not invest in an equity

security unless the security qualifies as an investment grade

security under rules adopted by the finance commission.

(b) A savings bank may not invest in an equity security unless

the security is an eligible investment for a federal savings and

loan association.

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

Amended by Acts 2001, 77th Leg., ch. 867, Sec. 56, eff. Sept. 1,

2001.

Sec. 94.252. INAPPLICABILITY OF LIMITATIONS. The limitations

under Section 94.251 do not apply to an equity security issued

by:

(1) a United States government-sponsored corporation, including

the Federal National Mortgage Association, the Federal Home Loan

Mortgage Corporation, and the Student Loan Marketing Association;

(2) a service corporation, an operating subsidiary, or a finance

subsidiary of the savings bank.

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

Sec. 94.253. RULES. The finance commission may adopt rules

necessary to implement this subchapter, including rules relating

to eligible investment criteria, investment diversification, and

resource management requirements.

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

Amended by Acts 2001, 77th Leg., ch. 867, Sec. 57, eff. Sept. 1,

2001.

SUBCHAPTER G. INVESTMENT IN SUBSIDIARIES

Sec. 94.301. AUTHORIZATION. With the prior consent of the

commissioner and subject to rules adopted by the finance

commission, a savings bank may invest in a subsidiary corporation

created under general corporation law.

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

Amended by Acts 2001, 77th Leg., ch. 867, Sec. 58, eff. Sept. 1,

2001.

Sec. 94.302. LIMITATION ON INVESTMENT IN SUBSIDIARIES. (a) A

savings bank may not invest in a subsidiary corporation if the

investment would cause the savings bank's aggregate investments

in subsidiaries to exceed an amount equal to 10 percent of the

savings bank's total assets.

(b) For the purposes of Subsection (a), a savings bank's

aggregate investment in subsidiaries does not include amounts

invested in a subsidiary corporation the activities of which are

limited to activities that could be conducted directly by the

parent savings bank.

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

Sec. 94.303. REGULATION AND EXAMINATION OF SUBSIDIARY. (a) The

commissioner may regulate and examine a subsidiary corporation in

which a savings bank invests under Section 94.301.

(b) The subsidiary corporation shall pay the cost of the

regulation and examination.

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

Sec. 94.304. RULES. The finance commission shall adopt rules on

permitted activities of a subsidiary corporation in which a

savings bank invests under Section 94.301.

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

Amended by Acts 2001, 77th Leg., ch. 867, Sec. 59, eff. Sept. 1,

2001.

SUBCHAPTER H. PROPERTY OF SAVINGS BANK

Sec. 94.351. INVESTMENT IN BANKING PREMISES. Without prior

approval of the commissioner, a savings bank may invest not more

than an amount equal to the savings bank's regulatory capital in

real property, including a building or related facility, a

parking facility, or leasehold improvements for a rented

facility, for use by the savings bank as its banking premises.

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

Sec. 94.352. FORM OF SAVINGS BANK FACILITY. The finance

commission by rule adopted under Section 93.002 may approve a new

form of savings bank facility or authorize the commissioner to

approve a new form of savings bank facility if the commissioner

does not have a significant supervisory or regulatory concern

regarding the proposed facility.

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

Sec. 94.353. RECORD OF CHARGES ON REAL AND PERSONAL PROPERTY. A

savings bank shall keep a record of the status of taxes,

assessments, insurance premiums, and other charges on all real

and personal property owned by the savings bank.

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

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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