RESTRICTED CAPITAL

(a) The banking commissioner may not issue a charter to a state trust company having restricted capital of less than $2 million. (b) The banking commissioner may, on a case-by-case basis, require additional restricted capital for a proposed or existing state trust company if the banking commissioner finds the condition and operations of the existing state trust company or the proposed scope or type of operations of the proposed state trust company requires additional restricted capital to protect the safety and soundness of the state trust company. The safety and soundness factors to be considered by the banking commissioner in the exercise of discretion include: (1) the nature and type of business the state trust company conducts; (2) the nature and degree of liquidity in assets held in a corporate capacity; (3) the amount, type, and depository of fiduciary assets that the state trust company manages; (4) the complexity of the state trust company's fiduciary duties and degree of discretion undertaken; (5) the competence and experience of the state trust company's management; (6) the extent and adequacy of internal controls maintained by the state trust company; (7) the presence or absence of annual unqualified audits by an independent certified public accountant; (8) the reasonableness of the state trust company's business plans for retaining or acquiring additional restricted capital; and (9) the existence and adequacy of insurance obtained or held by the state trust company to protect its clients, beneficiaries, and grantors. (c) The effective date of an order under Subsection (b) must be stated in the order and must be on or after the 21st day after the date the order is mailed or delivered. Unless the state trust company requests a hearing before the banking commissioner in writing before the effective date of the order, the order takes effect and is final and nonappealable. This subsection does not prohibit an application to reduce capital requirements of an existing state trust company under Subsection (e) or under Section 182.011. (d) Subject to Subsection (e) and Section 182.011, a state trust company to which the banking commissioner issues a charter shall at all times maintain restricted capital in at least the amount required under Subsection (a) and in any additional amount the banking commissioner requires under Subsection (b). (e) Notwithstanding Subsection (a), on application, the banking commissioner may, on a case-by-case basis in the exercise of discretion, reduce the amount of minimum restricted capital required for a state trust company in a manner consistent with protecting the state trust company's safety and soundness. In making a determination under this subsection, the banking commissioner shall consider the factors listed by Subsection (b).