(a) Forms. If a state bank wants to establish and operate a branch office in this state or an interstate branch office pursuant to Finance Code, §32.203 and §203.001(a), then a branch application must be completed and filed on forms prescribed by the department. An application for an interstate branch must also provide information regarding applicable host state law and evidence of compliance with the law. Eligible banks may file an expedited application pursuant to §15.3 of this title (relating to Expedited Filings).
(b) Filing. The banking commissioner will issue a written notice as required by §15.4 of this title (relating to Required Information and Abandoned Filings) informing the applicant either that all filing fees have been paid and the application is complete and accepted for filing, or that the application is deficient and specific additional information is required.
(c) Public notice.
  (1) Within 14 days prior to or 14 days after the initial submission of its application, the applicant must publish notice of the application, as required by §15.5 of this title (relating to Public Notice), in the community of the proposed branch.
  (2) The notice must comply with the content requirement of §15.5(b) of this title and include the proposed location of the branch or service area.
  (3) With respect to an application to establish an interstate branch office pursuant to Finance Code, §32.203 and §203.001(a), the applicant must inform the department of the publication requirements in the host state for the banking commissioner to determine, pursuant to §15.5(e) of this title, whether those requirements satisfy the publication requirements of this subsection.
(d) Public comment and protest. For 14 days after publication of notice, or longer if the banking commissioner allows more time for good cause shown, the public may submit written comments or protests regarding the application. There is no fee or cost for submitting a comment, but persons commenting are not entitled to further notice of or participation in the branch application proceedings. Each protesting party has the rights and responsibilities set forth in subsections (f) and (g) of this section.
(e) Criteria for branch approval: "Significant supervisory or regulatory concerns."
  (1) To determine whether there are significant supervisory concerns regarding a proposed branch, the banking commissioner will consider the financial condition of the applicant, the financial effect of the branch on the applicant, the management abilities of the applicant, and the history and prospects of the applicant and its affiliates regarding fulfillment of responsibilities to regulatory agencies and to the public, including, but not limited to, the responsibility of the applicant to meet the credit needs of its entire community pursuant to the Community Reinvestment Act (CRA), 12 United States Code, §2901 et seq. An application will ordinarily be denied if the applicant is in less than satisfactory financial condition as of its most recent examination or has a less than satisfactory rating regarding compliance with CRA.
  (2) To determine whether there are significant regulatory concerns regarding a proposed branch, the banking commissioner will consider the need to maintain a sound banking system. The banking commissioner will follow the principles that the marketplace normally is the best regulator of economic activity, and that healthy competition promotes a sound and more efficient banking system that serves customers well. Accordingly, absent significant supervisory concerns, the general policy of the banking commissioner is to approve applications to establish and operate branches, provided that approval would not otherwise violate the provisions of federal or state law (including any requirements for federal banking agency approval).
  (3) In determining whether there are significant supervisory or regulatory concerns as set forth in paragraphs (1) and (2) of this subsection, the banking commissioner will consider written material in the record, including the application, comments on file, protests on file, and any replies of the applicant, the department's files as they relate to the current financial condition of the applicant, and any data that the banking commissioner may properly officially notice. Specifically, the banking commissioner will approve a branch if:
    (A) the department's files do not indicate significant regulatory concerns as they relate to the current financial condition of the applicant, including but not limited to its capital, asset quality, management, earnings and liquidity (these files are confidential pursuant to the Finance Code, Chapter 31, Subchapter D, and rules adopted pursuant to the Finance Code, are not open or available to either the applicant or a protesting party or to the public);
    (B) the costs of establishing the proposed branch office, including costs of purchasing or leasing the branch site, necessary furnishings, staffing and equipment and the effect of these costs do not significantly affect the operations of the applicant as a whole;
    (C) the projected earnings appear reasonable and sufficient to support expenses attributable to the branch without jeopardizing the safety and soundness of the applicant;
    (D) the depth and quality of management of the applicant and the proposed branch is sufficient to justify a belief that the bank will operate in compliance with the Finance Code;
    (E) the bank has demonstrated compliance with CRA as determined by the rating assigned in the applicant's most recent CRA evaluation;
    (F) the applicant has demonstrated a responsiveness to recommendations made in past state and federal bank examination reports and the applicant has generally been operated in substantial compliance with all applicable state and federal laws; and
    (G) the banking commissioner, in the exercise of discretion, determines there are no areas of general supervisory concern.
  (4) The banking commissioner will direct the department to assemble, evaluate, and make a recommendation regarding all relevant documentation and data as set forth in this subsection within 30 days after the application is complete and accepted for filing, or expiration of the period for filing a comment, protest, response or reply, whichever is the last to occur. If a hearing is granted pursuant to subsection (g) of this section, then the banking commissioner will request the administrative law judge for the Finance Commission of Texas (administrative law judge) to discharge this function through the hearings process. Portions of the assembled record that are confidential pursuant to the Finance Code, Chapter 31, Subchapter D, must be segregated and clearly marked as confidential.
  (5) If no hearing is granted, the banking commissioner will either approve, conditionally approve, or deny the application on or before the 30th day after receipt of the department's recommendation.
(f) Protest.
  (1) A person may initiate a protest by submitting a written notice of intent to protest the application with the department within the time period allowed by subsection (d) of this section, accompanied by the filing fee required by §15.2 of this title (relating to Filing and Investigation Fees). If the protest is untimely, the filing fee will be returned to the protesting party. If the protest is timely, the department will notify the applicant of the protest and mail or deliver a complete copy of the non-confidential sections of the application to the protesting party on or before the 14th day after receipt of the protest or the application, whichever occurs later.
  (2) A protesting party must file a detailed protest responding to each substantive statement contained in the non-confidential sections of the application within 20 days after the protesting party receives the application from the department. The protesting party's response must indicate whether each substantive statement is admitted or denied. The applicant must file a written reply to the protesting party's detailed response on or before the tenth day after the response is filed. Both the protesting party's response and the applicant's reply must be verified by affidavit and certify that a copy was served upon the opposing party. When applicable, statements in the response and in the reply may be supported by references to data available in sources of which official notice may properly be taken. Comments received by the department and any replies of the applicant to the comments will be made available to the protesting party.
  (3) The banking commissioner may extend any time period set forth in this subsection for good cause shown. Good cause includes, but is not limited to, failure of the department to furnish required documentation, forms or information within a reasonable time to permit its effective use by the recipient, or failure of a party to timely serve a filed document on an opposing party. The date a document is actually received by the department is its filing date and not the date it is mailed. Failure to timely file a required document is considered an abandonment of the application or protest, as applicable. Cont'd...