Texas Finance Code 273.301 – Required Purchase of Securities
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(a) The corporation, acting on the direction of the board under the plan of operation, may require a member association to purchase by a certain date preferred stock, a certificate of participation, or another type of security issued by the corporation that accrues interest or pays a dividend at a specified rate or a variable rate determined by a specific method of computation.
(b) The commissioner may defer in whole or in part a purchase required by Subsection (a) if the commissioner believes the purchase would endanger the ability of the member association to maintain its solvency.
Terms Used In Texas Finance Code 273.301
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Variable Rate: Having a "variable" rate means that the APR changes from time to time based on fluctuations in an external rate, normally the Prime Rate. This external rate is known as the "index." If the index changes, the variable rate normally changes. Also see Fixed Rate.