(a) The depository institution will submit a completed application and required documents, with original signatures as required. The application must include a statement:
  (1) of the amount of the applicant's paid capital stock and permanent surplus, if any;
  (2) of the applicant's condition according to the most recent financial statement on the date the application is submitted;
  (3) that the applicant will maintain a separate, accurate, and complete records relating to a pledge of collateral, a deposit of public funds, and a transaction related to a pledge of collateral;
  (4) that the applicant will provide, upon request, the comptroller or a public entity information or confirmation regarding a deposit of public funds or a pledge of collateral; and
  (5) that the applicant will provide such other information as the comptroller or public entity may require to verify the condition of the depository institution.
(b) The depository institution must also meet the following conditions before being approved to participate in the pooled collateral program:
  (1) the applicant must maintain its main office or a branch office in Texas;
  (2) the applicant shall submit a binding collateral security agreement for each public entity, with original signatures as required, using a form provided or approved by the comptroller;
  (3) each related public entity must be eligible for participation in the pooled collateral program;
  (4) the applicant shall provide for the collateral securities to be held by a custodian trustee in trust for the benefit of the pooled collateral program;
  (5) the applicant's named custodian trustee qualifies under Government Code, §2257.104(c) or §2257.041(d)
  (6) the comptroller and custodian trustee have executed a custodian trust agreement when the custodian trustee is qualified to act under Government Code, §2257.041(d)(1) or (5); and
  (7) the applicant must meet the requirements in Government Code, Chapter 2257, this chapter, or other applicable law.
(c) In addition to the foregoing requirements for approval to participate in the pooled collateral program, if the applicant has previously participated in the pooled collateral program the comptroller may refuse to approve its participation in the pooled collateral program for:
  (1) failure to maintain compliance with Government Code, Chapter 2257, this chapter, or other applicable law;
  (2) failure to remedy a violation of Government Code, Chapter 2257 and this chapter within a reasonable time after receiving written notice of the violation;
  (3) audit or examination findings that include noncompliance with Government Code, Chapter 2257 and this chapter;
  (4) failure to comply with the terms of the collateral security agreement; or
  (5) failure to provide information requested by the comptroller, which information the comptroller considers necessary to evaluate compliance with Government Code, Chapter 2257 and this chapter, and for the benefit of the pooled collateral program.
(d) The comptroller may approve those applicants that are acceptable and may reject those whose management or condition, in the opinion of the comptroller, does not warrant the placing of public funds in their possession or do not meet the requirements of this chapter. The comptroller may consider financial indicators that concern capital adequacy, asset quality, earnings and liquidity.

Source Note: The provisions of this §4.105 adopted to be effective October 19, 2010, 35 TexReg 9345