Texas Finance Code - Section 32.502. Conversion Of Financial Institution Into State Bank
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§ 32.502. CONVERSION OF FINANCIAL INSTITUTION INTO STATE
BANK. (a) A financial institution, as that term is defined by
Section 201.101, may apply to the banking commissioner for
conversion into a state bank on a form prescribed by the banking
commissioner and accompanied by any required fee if the institution
follows the procedures prescribed by the laws of the United States,
this state, another state, or another country governing the exit of
the financial institution for the purpose of conversion into a
state bank from the regulatory system applicable before the
conversion. A banking association or limited banking association
may convert its organizational form under this section.
(b) A financial institution applying to convert into a state
bank may receive a certificate of authority to do business as a
state bank if the banking commissioner finds that:
(1) the financial institution is not engaging in a
pattern or practice of unsafe and unsound banking practices;
(2) the financial institution has adequate
capitalization for a state bank to engage in business at the same
locations as the financial institution is engaged in business
before the conversion;
(3) the financial institution can be expected to
operate profitably after the conversion;
(4) the officers, directors, managers, and managing
participants of the financial institution as a group have
sufficient banking experience, ability, standing, competence,
trustworthiness, and integrity to justify a belief that the
financial institution will operate as a state bank in compliance
with law;
(5) each principal shareholder or participant has
sufficient experience, ability, standing, competence,
trustworthiness, and integrity to justify a belief that the
financial institution will be free from improper or unlawful
influence or interference with respect to the financial
institution's operation as a state bank in compliance with law; and
(6) if the converting financial institution did not
have general depository powers and the state bank will have those
powers, the factors set forth in Section 32.003(b) are satisfied.
(c) The banking commissioner may:
(1) request additional information considered
necessary to an informed decision under this section;
(2) perform an examination of the converting financial
institution at the expense of the converting financial institution;
and
(3) require that examination fees be paid before a
certificate of authority is issued.
(d) In connection with the application, the converting
financial institution must:
(1) submit a statement of the law governing the exit of
the financial institution from the regulatory system applicable
before the conversion and the terms of the transition into a state
bank; and
(2) demonstrate that all applicable law has been fully
satisfied.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 344, § 2.010, eff. Sept. 1, 1999.
Section: 32.401 32.402 32.403 32.404 32.405 32.406 32.501 32.502 33.001 33.002 33.003 33.004 33.005 33.006 33.007
Last modified: August 10, 2007
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