Ask Reggi Your Question Now
Can you summarize Tex. Fin. Section 183.109?
BOARD AND OFFICERS > TRANSACTIONS WITH MANAGEMENT AND AFFILIATES.
Short Summary
This section of the Texas Statutes governs transactions between state trust companies and their management and affiliates. Without prior approval from a disinterested majority of the board or the banking commissioner, a state trust company may not sell or lease assets to its officers, directors, managers, managing participants, principal shareholders or participants, or affiliates. Similarly, the state trust company may not purchase or lease assets in which these individuals or affiliates have an interest. Additionally, the state trust company may not extend credit to these individuals or affiliates, subject to certain exceptions. Lease transactions involving real property require prior written approval from the banking commissioner. Violations of this section are considered a felony of the third degree. The finance commission has the authority to establish additional rules, limits, requirements, or exemptions for specific categories of transactions.
Whom does it apply to?
State trust companies and their officers, directors, managers, managing participants, principal shareholders or participants, and affiliates
What does it govern?
Transactions with management and affiliates
What are exemptions?
Lease transactions involving real property require prior written approval of the banking commissioner, but subsidiaries of state trust companies are not considered affiliates for this purpose.
What are the Penalties?
Knowingly participating in or permitting a violation of this section is a felony of the third degree.
Jurisdiction
Texas