Texas Register, Volume 48, Number 45, Pages 6497-6654, November 10, 2023 Page: 6,514

                                
(If) Non-cash collateral transactions. The credit
exposure arising from a securities borrowed transaction where the col-
lateral is other securities shall equal and remain fixed as the product
of the higher of the two haircuts associated with the two securities, as
determined by reference to Table 2 of this section, and the higher of
the two par values of the securities. Where more than one security is
provided as collateral, the applicable haircut is the higher of the haircut
associated with the security borrowed and the notional-weighted aver-
age of the haircuts associated with the securities provided as collateral.
Figure: 7 TAC 12.12(c)(1)(B)(iv)(II) (No change.)
(C) Basel collateral haircut method. A state bank may
calculate the credit exposure of a securities financing transaction in the
manner provided by 12 C.F.R. 324.132(b)(2)(i) and (ii) (or 12 CFR
217.132(b)(2)(i) and (ii) in the case of a bank that is a member of the
Federal Reserve System) [32(4)(2)(4) and (4) of the  a
adequacy gudie].
(2) Mandatory or alternative use of method. The commis-
sioner may in the exercise of discretion require or permit a state bank
to use a specific method or methods set forth in this subsection to cal-
culate the credit exposure arising from all securities financing transac-
tions, from any category of securities financing transactions, or from
a specific derivatives transaction if the commissioner finds in the ex-
ercise of discretion that such method is consistent with the safety and
soundness of the bank.
The agency certifies that legal counsel has reviewed the pro-
posal and found it to be within the state agency's legal authority
to adopt.
Filed with the Office of the Secretary of State on October 27,
2023.
TRD-202304042
Marcus Adams
Acting General Counsel
Texas Department of Banking
Earliest possible date of adoption: December 10, 2023
For further information, please call: (512) 475-1382
SUBCHAPTER B. LOANS

7 TAC 12.33

The Finance Commission of Texas (the commission), on behalf
of the Texas Department of Banking (the department), proposes
to amend Subchapter B of Chapter 12 of Title 7 of the Texas
Administrative Code, concerning loans and investments by state
banks. The amended rule is proposed to conform the rule to
changes in applicable Texas law.
Subchapter B of Chapter 12 governs lending by Texas state
banks. Section 12.33 of Subchapter B references the Uniform
Electronic Transactions Act, which is now in Chapter 322 of the
Texas Business and Commerce Code. This statutory reference
should be updated.
Jared Whitson, Director of Bank and Trust Supervision, has de-
termined that for the first five years the proposed amended rule
is in effect, there will be no foreseeable increases or reductions
in costs or other fiscal implications to state or local government
as a result of enforcing or administering the rule as amended.
Director Whitson has further determined that for the first five
years the proposed amended rules is in effect, the public benefit

anticipated from enforcing the rule is ensuring that the Finance
Code will be enforced for the benefit of borrowers and banks in
a manner that is consistent with applicable law.
Director Whitson has also determined that for the first five years
the proposed amended rule is in effect, the economic costs to
persons required to comply with the rule as proposed will be
unchanged from the costs required under this rule as it currently
exists.
In addition, Director Whitson has determined that for the first five
years the proposed amended rule is in effect, the rule will not:
create or eliminate a government program; require the creation
of new department employee positions or the elimination of exist-
ing agency employee positions; require an increase or decrease
in future legislative appropriations to the department; require an
increase or decrease in fees paid to the department; create a
new regulation; or increase or decrease the number of individu-
als subject to the rule's applicability.
Finally, Director Whitson has determined that there will be no ad-
verse economic effect on small businesses, micro-businesses,
or rural communities from the proposed amended rule and no
difference in the cost of compliance for these entities.
To be considered, comments on the proposed amendment must
be submitted to the department in writing no later than 5:00
p.m. on December 11, 2023. Comments should be addressed
to General Counsel, Texas Department of Banking, Legal Di-
vision, 2601 North Lamar Boulevard, Suite 300, Austin, Texas
78705-4294. Comments may also be submitted by email to
legal@dob.texas.gov.
This proposal is made under the authority of Finance Code
11.301 which authorizes the commission to adopt rules ap-
plicable to state banks, and Finance Code, 31.003, which
authorizes the commission to adopt rules necessary to preserve
or protect the safety and soundness of state banks.
This proposal affects the statutes administered and enforced by
the department's commissioner with respect to state banks, con-
tained in Finance Code, Subtitle A. No other statute is affected
by this proposal.
12.33. Debt Cancellation Contracts and Debt Suspension Agree-
ments.

(a) - (e) (No change.)
(f) Disclosures.
(1) Content of short form of disclosures. The short form
of disclosures required by this section must include the information
described in subparagraphs (A) through (F) of this paragraph that is
appropriate to the product offered. Short form disclosures made in a
form that is substantially similar to these disclosures will satisfy the
short form disclosure requirements of this subsection.
(A) This product is optional. "Your purchase of (prod-
uct name) is optional. Whether or not you purchase (product name)
will not affect your application for credit or the terms of any existing
credit agreement you have with the bank."
(B) Lump sum payment of fee (applicable if a bank of-
fers the option to pay the fee in a single payment, prohibited where the
debt subject to the contract is a residential mortgage loan). "You may
choose to pay the fee in a single lump sum or in monthly or quarterly
payments. Adding the lump sum of the fee to the amount you borrow
will increase the cost of (product name)."

48 TexReg 6514 November 10, 2023 Texas Register