2005 Texas Finance Code CHAPTER 94. LOANS AND INVESTMENTS

FINANCE CODE

CHAPTER 94. LOANS AND INVESTMENTS

SUBCHAPTER A. LIMITATIONS ON LOANS


	§ 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, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 2001, 77th Leg., ch. 867, § 53, eff. Sept. 1, 2001.


	§ 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, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 2001, 77th Leg., ch. 867, § 54, eff. Sept. 1, 2001.

SUBCHAPTER B. LOAN EXPENSES


	§ 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, § 1, eff. Sept. 1, 1997.                   


	§ 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, § 1, eff. Sept. 1, 1997.                   


	§ 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, § 1, eff. Sept. 1, 1997.                   


	§ 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, § 1, eff. Sept. 1, 1997.                   

SUBCHAPTER C. LOAN PAYMENTS


	§ 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, § 1, eff. Sept. 1, 1997.                   


	§ 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, § 1, eff. Sept. 1, 1997.                   

SUBCHAPTER D. CHARGES RELATING TO REAL PROPERTY LOANS


	§ 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;  or
		(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, § 1, eff. Sept. 1, 1997.                   


	§ 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, § 1, eff. Sept. 1, 1997.                   


	§ 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.
	(c)  A savings bank may:                                                       
		(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, § 1, eff. Sept. 1, 1997.                   


	§ 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, § 1, eff. Sept. 1, 1997.                   

SUBCHAPTER E. INVESTMENT IN LOCAL SERVICE AREA


	§ 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, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 2005, 79th Leg., ch. 1018, § 5.18, eff. Sept. 1, 2005.


	§ 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, § 1, eff. Sept. 1, 1997.                   


	§ 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, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 2001, 77th Leg., ch. 867, § 55, eff. Sept. 1, 2001.


	§ 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, § 1, eff. Sept. 1, 1997.                   

SUBCHAPTER F. INVESTMENT IN EQUITY SECURITIES


	§ 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, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 2001, 77th Leg., ch. 867, § 56, eff. Sept. 1, 2001.


	§ 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;  or
		(2)  a service corporation, an operating subsidiary, or 
a finance subsidiary of the savings bank.

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


	§ 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, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 2001, 77th Leg., ch. 867, § 57, eff. Sept. 1, 2001.

SUBCHAPTER G. INVESTMENT IN SUBSIDIARIES


	§ 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, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 2001, 77th Leg., ch. 867, § 58, eff. Sept. 1, 2001.


	§ 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, § 1, eff. Sept. 1, 1997.                   


	§ 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, § 1, eff. Sept. 1, 1997.                   


	§ 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, § 1, eff. Sept. 1, 1997.  Amended 
by Acts 2001, 77th Leg., ch. 867, § 59, eff. Sept. 1, 2001.

SUBCHAPTER H. PROPERTY OF SAVINGS BANK


	§ 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, § 1, eff. Sept. 1, 1997.                   


	§ 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, § 1, eff. Sept. 1, 1997.                   


	§ 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, § 1, eff. Sept. 1, 1997.