Texas Finance Code - Section 34.101. Securities
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§ 34.101. SECURITIES. (a) A state bank may purchase and
sell securities without recourse solely on the order and for the
account of a customer.
(b) Except as otherwise provided by this subtitle or rules
adopted under this subtitle, a state bank may not:
(1) underwrite an issue of securities; or
(2) invest its money in equity securities except as
necessary to avoid or minimize a loss on a loan or investment
previously made in good faith.
(c) A state bank may purchase investment securities for its
own account under limitations and restrictions prescribed by rules
adopted under this subtitle. Except as otherwise provided by this
section, the amount of the investment securities of any one obligor
or maker held by the bank for its own account may not exceed an
amount equal to the lesser of 15 percent of the bank's capital and
certified surplus or the bank's total equity capital. The banking
commissioner may authorize investments in excess of this limitation
on written application if the banking commissioner determines that:
(1) the excess investment is not prohibited by other
applicable law; and
(2) the safety and soundness of the requesting state
bank is not adversely affected.
(d) Notwithstanding Subsections (a)-(c), a state bank may,
without limit and subject to the exercise of prudent banking
judgment, deal in, underwrite, or purchase for its own account:
(1) bonds and other legally created general
obligations of a state, an agency or political subdivision of a
state, the United States, or an instrumentality of the United
States;
(2) obligations that this state, an agency or
political subdivision of this state, the United States, or an
instrumentality of the United States has unconditionally agreed to
purchase, insure, or guarantee;
(3) securities that are offered and sold under 15
U.S.C. Section 77d(5);
(4) mortgage related securities or small business
related securities, as those terms are defined by 15 U.S.C. Section
78c(a);
(5) mortgages, obligations, or other securities that
are or ever have been sold by the Federal Home Loan Mortgage
Corporation under 12 U.S.C. Sections 1434 and 1455;
(6) obligations, participation, or other instruments
of or issued by the Federal National Mortgage Association or the
Government National Mortgage Association;
(7) obligations issued by the Federal Agricultural
Mortgage Corporation, the Federal Farm Credit Banks Funding
Corporation, or a Federal Home Loan Bank;
(8) obligations of the Federal Financing Bank or the
Environmental Financing Authority;
(9) obligations or other instruments or securities of
the Student Loan Marketing Association;
(10) qualified Canadian government obligations, as
defined by 12 U.S.C. Section 24; or
(11) if the state bank is well capitalized, as defined
by Section 38, Federal Deposit Insurance Act (12 U.S.C. Section
1831o), obligations, including limited obligation bonds, revenue
bonds, and obligations that satisfy the requirements of 26 U.S.C.
Section 142(b)(1), issued by or on behalf of a state or a political
subdivision of a state, including a municipal corporate
instrumentality of one or more states or a public agency or
authority of a state or political subdivision of a state.
(e) Notwithstanding Subsections (a) and (b), subject to the
exercise of prudent banking judgment, a state bank may deal in,
underwrite, or purchase for its own account, including for purposes
of Subsection (c) obligations as to which the bank is under
commitment, the following:
(1) obligations issued by a development bank,
corporation, or other entity created by international agreement if
the United States is a member and a capital stock shareholder;
(2) obligations issued by a state or political
subdivision or an agency of a state or political subdivision for
housing, university, or dormitory purposes, that are at the time
eligible for purchase by a state bank for its own account; or
(3) bonds, notes, and other obligations issued by the
Tennessee Valley Authority or by the United States Postal Service.
(f) A state bank may not invest more than an amount equal to
the lesser of 25 percent of the bank's capital and certified surplus
or the bank's total equity capital in investment grade adjustable
rate preferred stock and money market (auction rate) preferred
stock.
(g) A state bank may deposit money in a federally insured
financial institution, a Federal Reserve Bank, or a Federal Home
Loan Bank without limitation.
(h) The finance commission may adopt rules to administer and
carry out this section, including rules to:
(1) define or further define terms used by this
section;
(2) establish limits, requirements, or exemptions
other than those specified by this section for particular classes
or categories of securities; and
(3) limit or expand investment authority for state
banks for particular classes or categories of securities.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 528, § 9, eff. Sept. 1, 2001.
Section: 33.208 33.209 33.210 33.211 34.001 34.002 34.003 34.101 34.102 34.103 34.104 34.105 34.106 34.107 34.201
Last modified: August 10, 2007
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