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Texas Finance Code - Section 92.155. Conflicts Of Interest

Legal Research Home > Texas Lawyer > Finance Code > Texas Finance Code - Section 92.155. Conflicts Of Interest

§ 92.155. CONFLICTS OF INTEREST.  (a) Except as the 
finance commission by rule provides, a director or officer may not:
		(1)  receive directly or indirectly a commission on or 
benefit from a loan made by the savings bank;
		(2)  pay for services rendered to a borrower from the 
savings bank in connection with a loan;
		(3)  direct or require a borrower on a mortgage to 
negotiate an insurance policy on the mortgage property through a 
particular insurance company;
		(4)  attempt to divert to a particular insurance broker 
the business of borrowers from the savings bank;
		(5)  refuse to accept an insurance policy on the 
mortgaged property because the policy was not negotiated through a 
particular insurance broker;
		(6)  become an obligor, including an endorser, surety, 
or guarantor, on a loan made by the savings bank;
		(7)  borrow or use, individually or as agent or partner 
of another, directly or indirectly, money of the savings bank;
		(8)  become the owner of real property on which the 
savings bank holds a mortgage unless the loan is fully secured by:
			(A)  a first-lien mortgage on property that:                                 
				(i)  is to be occupied as the director's or 
officer's primary residence;  and
				(ii)  is specifically approved in writing by 
the board;  or               
			(B)  a deposit maintained by the officer or 
director with the savings bank;  or
		(9)  engage in any other activity the finance 
commission by rule prohibits. 
	(b)  Except as the finance commission by rule provides, a 
savings bank may not make a loan to a corporation in which:
		(1)  a director or officer of the savings bank holds 
stock, options, or warrants to purchase stock in the amount of five 
percent or more of the outstanding stock;  or
		(2)  the directors of the savings bank together hold 
stock, options, or warrants to purchase stock in the amount of five 
percent or more of the outstanding stock.
	(c)  A deposit with a banking corporation is a loan for 
purposes of this section.
	(d)  This section does not prohibit a savings bank from:                       
		(1)  making a loan to a religious corporation, club, or 
other membership corporation of which one or more directors or 
officers are members but in which they have no financial interest;  
or
		(2)  making a loan to or purchasing a guaranteed 
mortgage from a stock corporation if:
			(A)  a director does not own more than 15 percent 
of the corporation's capital stock;  and
			(B)  the total amount of the corporation's capital 
stock owned by all directors of the savings bank is less than 25 
percent.

Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 2001, 77th Leg., ch. 867, § 42, eff. Sept. 1, 2001.

Last modified: August 10, 2007