| (3) The banking commissioner may grant one or more
additional extensions of time for disposing of OREO if the banking
commissioner finds that the state bank has made a good faith effort
to dispose of the OREO or that disposal of the OREO would be detrimental
to the safety and soundness of the state bank.
(g) Disposition Efforts; Documentation. A state bank
must make diligent and ongoing efforts to dispose of OREO and must
maintain documentation adequate to reflect those efforts. Such documentation
must be available for inspection by the banking commissioner.
(h) Disposition of OREO. A state bank may dispose of
OREO by:
(1) selling the OREO in a transaction that qualifies
as a sale under regulatory accounting principles;
(2) selling the OREO pursuant to a land contract or
contract for deed;
(3) retaining the OREO for its own use as a bank facility,
subject to the approval of the banking commissioner, including residential
OREO retained for the purpose of providing temporary housing for employees
if:
(A) the bank has two or more locations of sufficient
distance that overnight travel is required in connection with business
at either location; and
(B) the board has certified that the cost of purchasing
and maintaining the property is reasonable in comparison to other
options for temporarily housing employees;
(4) transferring the OREO to a majority-owned subsidiary
in compliance with 12 C.F.R. §362.4(b)(5)(i);
(5) transferring the OREO for market value to an affiliate,
subject to the Finance Code, §33.109, and applicable federal
law, including 12 U.S.C. §§371c, 371c - 1, and 1828(j);
(6) if the OREO is a master lease, obtaining a coterminous
sublease or an assignment of a coterminous sublease, provided that
if the bank acquires or obtains assignment of a non-coterminous sublease,
the holding period during which the master lease must be divested
is suspended for the duration of the sublease and will commence running
again upon termination of the sublease; or
(7) entering into a transaction that does not qualify
for disposal under paragraphs (1) - (5) of this section; provided
that its obligation to dispose of the OREO is not met until the bank
receives or accumulates from the purchaser an amount in cash, principal
and interest payments, and private mortgage insurance totaling 10%
of the sales price, as measured in accordance with regulatory accounting
principles.
(i) Accounting for OREO. Investment in OREO, and disposition
of OREO, must be accounted for in accordance with regulatory accounting
principles.
|
| Source Note: The provisions of this §12.91 adopted to be effective March 1, 1996, 21 TexReg 1527; amended to be effective November 13, 1997, 22 TexReg 10954; amended to be effective July 10, 2003, 28 TexReg 5149; amended to be effective September 6, 2007, 32 TexReg 5655; amended to be effective November 7, 2013, 38 TexReg 7687; amended to be effective January 5, 2017, 41 TexReg 10562; amended to be effective September 10, 2020, 45 TexReg 6228 |
