Current through Reg. 49, No. 38; September 20, 2024
(a) Forms. If a state bank wants to establish
and operate a branch office in this state or an interstate branch office
pursuant to Finance Code, §
RSA 32.203 and
§
RSA
203.001(a), then a branch
application must be completed and filed on forms prescribed by the department.
An application for an interstate branch must also provide information regarding
applicable host state law and evidence of compliance with the law. Eligible
banks may file an expedited application pursuant to §
RSA 15.3 of
this title (relating to Expedited Filings).
(b) Filing. The banking commissioner will
issue a written notice as required by §
RSA
15.4 of this title (relating to Required
Information and Abandoned Filings) informing the applicant either that all
filing fees have been paid and the application is complete and accepted for
filing, or that the application is deficient and specific additional
information is required.
(c) Public
notice.
(1) Within 14 days prior to or 14
days after the initial submission of its application, the applicant must
publish notice of the application, as required by §
RSA 15.5 of this
title (relating to Public Notice), in the community of the proposed
branch.
(2) The notice must comply
with the content requirement of §
RSA
15.5(b) of this title and
include the proposed location of the branch or service area.
(3) With respect to an application to
establish an interstate branch office pursuant to Finance Code, §
RSA 32.203 and
§
RSA
203.001(a), the applicant
must inform the department of the publication requirements in the host state
for the banking commissioner to determine, pursuant to §
RSA
15.5(e) of this title,
whether those requirements satisfy the publication requirements of this
subsection.
(d) Public
comment and protest. For 14 days after publication of notice, or longer if the
banking commissioner allows more time for good cause shown, the public may
submit written comments or protests regarding the application. There is no fee
or cost for submitting a comment, but persons commenting are not entitled to
further notice of or participation in the branch application proceedings. Each
protesting party has the rights and responsibilities set forth in subsections
(f) and (g) of this section.
(e)
Criteria for branch approval: "Significant supervisory or regulatory concerns."
(1) To determine whether there are
significant supervisory concerns regarding a proposed branch, the banking
commissioner will consider the financial condition of the applicant, the
financial effect of the branch on the applicant, the management abilities of
the applicant, and the history and prospects of the applicant and its
affiliates regarding fulfillment of responsibilities to regulatory agencies and
to the public, including, but not limited to, the responsibility of the
applicant to meet the credit needs of its entire community pursuant to the
Community Reinvestment Act (CRA),
RSA
2901 et seq. An application will ordinarily
be denied if the applicant is in less than satisfactory financial condition as
of its most recent examination or has a less than satisfactory rating regarding
compliance with CRA.
(2) To
determine whether there are significant regulatory concerns regarding a
proposed branch, the banking commissioner will consider the need to maintain a
sound banking system. The banking commissioner will follow the principles that
the marketplace normally is the best regulator of economic activity, and that
healthy competition promotes a sound and more efficient banking system that
serves customers well. Accordingly, absent significant supervisory concerns,
the general policy of the banking commissioner is to approve applications to
establish and operate branches, provided that approval would not otherwise
violate the provisions of federal or state law (including any requirements for
federal banking agency approval).
(3) In determining whether there are
significant supervisory or regulatory concerns as set forth in paragraphs (1)
and (2) of this subsection, the banking commissioner will consider written
material in the record, including the application, comments on file, protests
on file, and any replies of the applicant, the department's files as they
relate to the current financial condition of the applicant, and any data that
the banking commissioner may properly officially notice. Specifically, the
banking commissioner will approve a branch if:
(A) the department's files do not indicate
significant regulatory concerns as they relate to the current financial
condition of the applicant, including but not limited to its capital, asset
quality, management, earnings and liquidity (these files are confidential
pursuant to the Finance Code, Chapter 31, Subchapter D, and rules adopted
pursuant to the Finance Code, are not open or available to either the applicant
or a protesting party or to the public);
(B) the costs of establishing the proposed
branch office, including costs of purchasing or leasing the branch site,
necessary furnishings, staffing and equipment and the effect of these costs do
not significantly affect the operations of the applicant as a whole;
(C) the projected earnings appear reasonable
and sufficient to support expenses attributable to the branch without
jeopardizing the safety and soundness of the applicant;
(D) the depth and quality of management of
the applicant and the proposed branch is sufficient to justify a belief that
the bank will operate in compliance with the Finance Code;
(E) the bank has demonstrated compliance with
CRA as determined by the rating assigned in the applicant's most recent CRA
evaluation;
(F) the applicant has
demonstrated a responsiveness to recommendations made in past state and federal
bank examination reports and the applicant has generally been operated in
substantial compliance with all applicable state and federal laws;
and
(G) the banking commissioner,
in the exercise of discretion, determines there are no areas of general
supervisory concern.
(4)
The banking commissioner will direct the department to assemble, evaluate, and
make a recommendation regarding all relevant documentation and data as set
forth in this subsection within 30 days after the application is complete and
accepted for filing, or expiration of the period for filing a comment, protest,
response or reply, whichever is the last to occur. If a hearing is granted
pursuant to subsection (g) of this section, then the banking commissioner will
request the administrative law judge for the Finance Commission of Texas
(administrative law judge) to discharge this function through the hearings
process. Portions of the assembled record that are confidential pursuant to the
Finance Code, Chapter 31, Subchapter D, must be segregated and clearly marked
as confidential.
(5) If no hearing
is granted, the banking commissioner will either approve, conditionally
approve, or deny the application on or before the 30th day after receipt of the
department's recommendation.
(f) Protest.
(1) A person may initiate a protest by
submitting a written notice of intent to protest the application with the
department within the time period allowed by subsection (d) of this section,
accompanied by the filing fee required by §
RSA
15.2 of this title (relating to Filing and
Investigation Fees). If the protest is untimely, the filing fee will be
returned to the protesting party. If the protest is timely, the department will
notify the applicant of the protest and mail or deliver a complete copy of the
non-confidential sections of the application to the protesting party on or
before the 14th day after receipt of the protest or the application, whichever
occurs later.
(2) A protesting
party must file a detailed protest responding to each substantive statement
contained in the non-confidential sections of the application within 20 days
after the protesting party receives the application from the department. The
protesting party's response must indicate whether each substantive statement is
admitted or denied. The applicant must file a written reply to the protesting
party's detailed response on or before the tenth day after the response is
filed. Both the protesting party's response and the applicant's reply must be
verified by affidavit and certify that a copy was served upon the opposing
party. When applicable, statements in the response and in the reply may be
supported by references to data available in sources of which official notice
may properly be taken. Comments received by the department and any replies of
the applicant to the comments will be made available to the protesting
party.
(3) The banking commissioner
may extend any time period set forth in this subsection for good cause shown.
Good cause includes, but is not limited to, failure of the department to
furnish required documentation, forms or information within a reasonable time
to permit its effective use by the recipient, or failure of a party to timely
serve a filed document on an opposing party. The date a document is actually
received by the department is its filing date and not the date it is mailed.
Failure to timely file a required document is considered an abandonment of the
application or protest, as applicable. Rule 21a, Texas Rules of Civil
Procedure, will govern methods and manner of authorized service and the
computation of time periods under this subsection.
(g) Hearing.
(1) Pursuant to the Finance Code, §
RSA 32.203, the
banking commissioner may not be compelled to hold a hearing prior to granting
or denying approval to establish a branch.
(2) In the exercise of discretion, the
banking commissioner may consider granting a hearing on a branch application at
the request of either the applicant or a protesting party. The banking
commissioner may order a hearing even if no hearing has been requested by the
parties. A party requesting a hearing must indicate with specificity the issues
involved that cannot be determined on the basis of the record compiled pursuant
to subsection (e) of this section and why the issues cannot be so determined.
The request for hearing and the banking commissioner's decision with regard to
granting a hearing will be made a part of the record.
(3) If a hearing is not requested or if a
request for hearing is denied, the banking commissioner will consider the
application in the manner set forth in and solely on the basis of the written
record established pursuant to subsection (e) of this section.
(4) The administrative law judge will enter
appropriate order(s) and conduct a hearing within 30 days after the date a
hearing is granted, or as soon thereafter as is reasonably possible, under
Chapter 9 of this title (relating to Rules of Procedure for Contested Case
Hearings, Appeals, and Rulemakings) and the Administrative Procedure Act (Texas
Government Code, Chapter 2001). The administrative law judge may require
submission of written and prefiled testimony. Evidence will not be received on
matters not in dispute. The administrative law judge will not consider issues
or evidence that are not relevant to the standards set forth in subsection (e)
of this section or that are not supported by the application, response, or
reply.
(5) A proposal for decision,
exceptions and replies to the proposal for decision, the final decision of the
banking commissioner, and motions for rehearing are governed by Chapter 9 of
this title.
(h) Beginning
operations. Any activity approved pursuant to this section must commence within
18 months from the date of approval unless the banking commissioner extends
that date in writing. Approval will automatically expire 18 months from the
date of approval if no extension is granted.
(i) Emergency branches. The banking
commissioner may authorize banks to establish temporary branch locations in the
event of an emergency as defined by the Finance Code, §
RSA 37.001. The
procedures set forth in subsections (c), (d), (f) and (g) of this section do
not apply to:
(1) situations in which the
banking commissioner has authorized a temporary branch location because of an
emergency; or
(2) branch
applications made as a part of a transaction for the purpose of assuming all or
a portion of the assets and liabilities of any financial institution deemed by
the banking commissioner to be in hazardous condition.
(j) Branch relocation. A bank may relocate a
branch within a one-mile radius by submitting a completed written notice on a
form prescribed by the banking commissioner and tendering the required filing
fee pursuant to §
RSA
15.2 of this title. A bank may relocate the
branch beginning on the 31st day after the date the banking commissioner
receives the bank's notice or immediately after the banking commissioner
notifies the bank in writing that the required notice is complete.
(k) Closing a branch. Before closing an
approved branch, a bank must comply with the notice requirements of federal
law, and provide the department with a copy of the branch closing notice filed
with the appropriate federal banking regulator simultaneously with its filing.
Once a bank closes a branch the bank cannot reopen the branch except upon
application for a new branch in compliance with this section.
