(a) Purpose. This section describes the license application
requirements when a licensed entity transfers its license or ownership
of the entity. If a transfer of ownership occurs, the transferee must
submit either a license transfer application or a new license application
on transfer of ownership under this section.
(b) Definitions. The following words and terms, when
used in this section, will have the following meanings:
(1) License transfer--A sale, assignment, or transfer
of a credit access business license.
(2) Permission to operate--A temporary authorization
from the OCCC, allowing a transferee to operate under a transferor's
license while final approval is pending for a license transfer application
or a new license application on transfer of ownership.
(3) Transfer of ownership--Any purchase or acquisition
of control of a licensed entity (including acquisition by gift, devise,
or descent), or a substantial portion of a licensed entity's assets,
where a substantial change in management or control of the business
occurs. The term does not include a change in proportionate ownership
as defined in §83.3004 of this title (relating to Change in Form
or Proportionate Ownership). Transfer of ownership includes the following:
(A) an existing owner of a sole proprietorship relinquishes
that owner's entire interest in a license or an entirely new entity
has obtained an ownership interest in a sole proprietorship license;
(B) any purchase or acquisition of control of a licensed
general partnership, in which a partner relinquishes that owner's
entire interest or a new general partner obtains an ownership interest;
(C) any change in ownership of a licensed limited partnership
interest in which:
(i) a limited partner owning 10% or more relinquishes
that owner's entire interest;
(ii) a new limited partner obtains an ownership interest
of 10% or more;
(iii) a general partner relinquishes that owner's entire
interest; or
(iv) a new general partner obtains an ownership interest
(transfer of ownership occurs regardless of the percentage of ownership
exchanged of the general partner);
(D) any change in ownership of a licensed corporation
in which:
(i) a new stockholder obtains 10% or more of the outstanding
voting stock in a privately held corporation;
(ii) an existing stockholder owning 10% or more relinquishes
that owner's entire interest in a privately held corporation;
(iii) any purchase or acquisition of control of 51%
or more of a company that is the parent or controlling stockholder
of a licensed privately held corporation occurs; or
(iv) any stock ownership changes that result in a change
of control (i.e., 51% or more) for a licensed publicly held corporation
occur;
(E) any change in the membership interest of a licensed
limited liability company:
(i) in which a new member obtains an ownership interest
of 10% or more;
(ii) in which an existing member owning 10% or more
relinquishes that member's entire interest; or
(iii) in which a purchase or acquisition of control
of 51% or more of any company that is the parent or controlling member
of a licensed limited liability company occurs;
(F) any transfer of a substantial portion of the assets
of a licensed entity under which a new entity controls business at
a licensed location; and
(G) any other purchase or acquisition of control of
a licensed entity, or a substantial portion of a licensed entity's
assets, where a substantial change in management or control of the
business occurs.
(4) Transferee--The entity that controls business at
a licensed location after a transfer of ownership.
(5) Transferor--The licensed entity that controls business
at a licensed location before a transfer of ownership.
(c) License transfer approval. No credit access business
license may be sold, transferred, or assigned without the written
approval of the OCCC, as provided by Texas Finance Code, §393.620.
A license transfer is approved when the OCCC issues its final written
approval of a license transfer application.
(d) Timing. No later than 30 days after the event of
a transfer of ownership, the transferee must file a complete license
transfer application or new license application on transfer of ownership
in accordance with subsection (e). A transferee may file an application
before this date.
(e) Application requirements.
(1) Generally. This subsection describes the application
requirements for a license transfer application or a new license application
on transfer of ownership. A transferee must submit the application
in a format prescribed by the OCCC. The OCCC may accept prescribed
alternative formats to facilitate multistate uniformity of applications
or in order to accept approved electronic submissions. The transferee
must pay appropriate fees in connection with the application.
(2) Documentation of transfer of ownership. The application
must include documentation evidencing the transfer of ownership. The
documentation should include one or more of the following:
(A) a copy of the asset purchase agreement when only
the assets have been purchased;
(B) a copy of the purchase agreement or other evidence
relating to the acquisition of the equity interest of a licensee that
has been purchased or otherwise acquired;
(C) any document that transferred ownership by gift,
devise, or descent, such as a probated will or a court order; or
(D) any other documentation evidencing the transfer
event.
(3) Application information for new licensee. If the
transferee does not hold a credit access business license at the time
of the application, then the application must include the information
required for new license applications under §83.3002 of this
title (relating to Filing of New Application). The instructions in
§83.3002 of this title apply to these filings.
(4) Application information for transferee that holds
a license. If the transferee holds a credit access business license
at the time of the application, then the application must include
amendments to the transferee's original license application describing
the information that is unique to the transfer event, including disclosure
questions, owners and principal parties, and a new financial statement,
as provided in §83.3002 of this title. The instructions in §83.3002
of this title apply to these filings. The responsible person at the
new location must file a personal affidavit, personal questionnaire,
and employment history, if not previously filed. Other information
required by §83.3002 of this title need not be filed if the information
on file with the OCCC is current and valid.
(5) Request for permission to operate. The application
may include a request for permission to operate. The request must
be in writing and signed by the transferor and transferee. The request
must include all of the following:
(A) a statement by the transferor granting authority
to the transferee to operate under the transferor's license while
final approval of the application is pending;
(B) an acknowledgement that the transferor and transferee
each accept responsibility to any consumer and to the OCCC for any
acts performed under the license while the permission to operate is
in effect; and
(C) if the application is a new license application
on transfer of ownership, an acknowledgement that the transferor will
immediately surrender or inactivate its license if the OCCC approves
the application.
(f) Permission to operate. If the application described
by subsection (e) includes a request for permission to operate and
all required information, and the transferee has paid all fees required
for the application, then the OCCC may issue a permission to operate
to the transferee. A request for permission to operate may be denied
even if the application contains all of the required information.
The denial of a request for permission to operate does not create
a right to a hearing. If the OCCC grants a permission to operate,
the transferor must cease operating under the authority of the license.
Two companies may not simultaneously operate under a single license.
A permission to operate terminates if the OCCC denies an application
described by subsection (e).
(g) Transferee's authority to engage in business. If
a transferee has filed a complete application including a request
for permission to operate as described by subsection (e), by the deadline
described by subsection (d), then the transferee may engage in business
as a credit access business. However, the transferee must immediately
cease doing business if the OCCC denies the request for permission
to operate or denies the application. If the OCCC denies the application,
then the transferee has a right to a hearing on the denial, as provided
by §83.3007(d) of this title (relating Cont'd... |