Words and terms used in this subchapter that are defined in
Texas Finance Code, Chapter 342, have the same meanings as defined
in Chapter 342. The following words and terms, when used in this subchapter,
will have the following meanings, unless the context clearly indicates
otherwise.
(1) Net assets--The total value of acceptable assets
used or designated as readily available for use in the business, less
liabilities, other than those liabilities secured by unacceptable
assets. Unacceptable assets include, but are not limited to, goodwill,
unpaid stock subscriptions, lines of credit, notes receivable from
an owner, property subject to the claim of homestead or other property
exemption, and encumbered real or personal property to the extent
of the encumbrance. Generally, assets are available for use if they
are readily convertible to cash within 10 business days. Debt that
is either unsecured or secured by current assets may be subordinated
to the net asset requirement pursuant to an agreement of the parties
providing that the creditor forfeits its security priority and any
rights it may have to current assets in the amount of $25,000. Debt
subject to such a subordination agreement would not be an applicable
liability for purposes of calculating net assets.
(2) Principal party--An adult individual with a substantial
relationship to the proposed lending business of the applicant. The
following individuals are principal parties:
(A) a proprietor;
(B) general partners;
(C) officers of privately held corporations, to include
the chief executive officer or president, the chief operating officer
or vice president of operations, the chief financial officer or treasurer,
and those with substantial responsibility for lending operations or
compliance with Texas Finance Code, Chapter 342;
(D) directors of privately held corporations;
(E) individuals associated with publicly held corporations
designated by the applicant as follows:
(i) officers as provided by subparagraph (C) of this
paragraph (as if the corporation were privately held); or
(ii) three officers or similar employees with significant
involvement in the corporation's activities governed by Texas Finance
Code, Chapter 342. One of the persons designated must be responsible
for assembling and providing the information required on behalf of
the applicant and must sign the application for the applicant;
(F) voting members of a limited liability company;
(G) trustees and executors; and
(H) individuals designated as principal parties where
necessary to fairly assess the applicant's financial responsibility,
experience, character, general fitness, and sufficiency to command
the confidence of the public and warrant the belief that the business
will be operated lawfully and fairly as required by the commissioner.
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Source Note: The provisions of this §83.301 adopted to be effective January 4, 2007, 31 TexReg 10765; amended to be effective November 4, 2010, 35 TexReg 9698; amended to be effective July 10, 2014, 39 TexReg 5142; amended to be effective September 8, 2016, 41 TexReg 6676; amended to be effective May 12, 2022, 47 TexReg 2738 |