EX GENERAL A~JSTIN. TEXAR 78711 June 11, 1969 The Honorable W. Sale Lewis Opinion Woo.M- 414 Savings and Loan Commissioner of Texas Re: Whether a wholly owned Austin, Texas 7871.1. Texas Corporationand subsidiaryof a parent Savings and Loan Asso- ciation may acquire out- standing shares of the Permanent Reserve Fund Stock of another Texas Savings and Loan Asso- Dear Mr. Lewlsr ciatlon. In your recent letter you requested this office's opinion as to whether a wholly owned Texas corporationand subsidiaryof 'aparent Savings and Loan Associationmay acquire outstanding shares of the permanent reserve fund stock of another Texas Savings end LoanAssociation. We understand that Oak Cliff Savings and Loan Association is a state chartered Permanent Reserve Fund Stock Association governe~dby the Texas Savings and Loan Act. The 8.8 Corpora- tion is a corporationchartered under the Texas Business Corp- oration Act. Fort Worth Savings end Loan Association is a state chartered Permanent Reserve Fund Stock Association governed by the Texas Savings and Loan Act. The 8.8 Corporation Is a wholly owned subsidiaryof Oak Cliff Savings and Loan Association. Article &2a, Section 5.11 of the Texas Savings and Loan Act, Vernon's Civil Statutes,provides for the in- vestment power of savings and loan associationsand sets out specific investments,and further provides that every associa- tion shall have power to invest in such other securitiesor obligationswhich the Commissionermay approve and place on a published list. The Savings and Loan Commissionerof Texas entered an order, dated October 17, 1968, granting authority to Oak Cliff Savings and Loan Associationto Invest in The 8.8 Corporation. The 8.8 Corporationentered into a contract to acquire a minimum of 200,000 shares of the outstandingpermanent re- serve fund stock of Fort Worth Savings and Loan Association. Article 2.02 (7) of the Texas Bustness CorporationAct, Vernon's Civil Statutes, provides that each corporation shall have power: -2062- Honorable W. Sale Lewis, page 2 (M-414) "To purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, employ, mortgage, lend, pledge, sell or otherwise dispose of, and otherwise use and deal in and with, shares or other Interests in, or obligationsof, other domestic or foreign corporations,associa- tions, partnerships,or individuals,or direct or indirect obligationsof the United States or of any other government, state, territory,government district, or municipality,or of any Instrumentality thereof." Accordingly,The 8.8 Corporationhas the power to acquire the outstanding shares'ofpermanent reserve fund stock of Fort Worth Savings and Loan Association. Article 852a, Sectlonll.01 of the Texas Savings and Loan Act, Vernon's Civil Statutes, provides as follows: "Savings associations,the officers, employ- ees, or agents, savings accounts and the permanent reserve fund stock thereof, and the sale, issuance, or offering of savings accounts and permanent reserve fund stock of any associationor Federal savings and loan associationare hereby exempted from all provisions of law of this state, other than this Act, which provide for supervision, registrationor regulation In connection with the sale, issuance or offering of securities,and the sale, issuance or offer- ing of any such accounts or stock shall be legal without any action or approval what- soever on the part of any official, other than the Commissioner,authorized to license, regulate or supervise the sale, issuance or offering of securities." There are no provisions In the Texas Savings and Loan Act which regulate or supervise the sale, issuance or offering of securitiesother than Section 11.01 and Section 10.03 which requires approval by the Savings and Loan Comm- issioner of any plan of reorganization,merger, or consoli- dation with another associationor Federal assocfation. Accordingly,The 8.8 Corporationmay acquire outstanding shares of the permanent reserve fund stock of Fort Worth -2063- . - Honorable W. Sale Lewis, page 3 (M-414) fund stock of Fort Worth Savings and Loan Association. SUMMARY ------- The 8.8 Corporationmay acquire outstanding shares of the permanent reserve fund stock of Fort Worth Savings and Loan Association. C FORD C. MARTIN A General of Texas Prepared by Ray McGregor Assistant Attorney General APPROVED: OPIWION COMMITTEE Kerns Taylor, Chairman George Kelton, Vice-Chairman Robert C. Crouch Sam McDaniel Ralph Rash Vince Taylor W. V. Geppert Staff Legal Assistant Hawthorne Phillips Executive Assistant - 2064 -