SECTION 14.11. Lien on Depository Account

(a) Without the need of any further agreement or pledge, the depository has a lien on each depository account owned by a depository account holder to secure any fees, charges, or other obligations owed or that may become owed to the depository in connection with any of the depository account holder's depository accounts.

(b) On default in the payment or in the satisfaction of a depository account holder's obligation, the depository, without notice to or consent of the depository account holder, may, to the extent necessary to pay or satisfy the obligation, plus any applicable fees:

(1) transfer on the depository's books all or part of the balance of a depository account;

(2) liquidate all or part of the balance of a depository account; or

(3) suspend withdrawal privileges for all or part of a depository account.

(c) To be recognized by the depository, a pledge to a third party by a depository account holder of the holder’s rights, interest, and entitlements in and to a depository account must be made on a form prescribed by the depository. A pledge made to a third party in this manner is subject to any lien of the depository on a depository account for unpaid fees, charges, or other obligations of the depository account holder, irrespective of whether the depository's lien was created before or after the pledge to a third party was made or perfected.

(d) On the satisfaction of other requirements of law with respect to the perfection and enforcement of a pledge of that type, and subject to a lien of the depository and any applicable fees, the depository may liquidate all or part of the balance of a depository account to the extent necessary to pay or satisfy the pledge, plus any applicable fees.

(e) If the depository liquidates all or part of a depository account to pay or satisfy a lien of the depository or a pledge under this section, the depository shall only liquidate the minimum amount of precious metal as is available in the depository account to pay or satisfy the lien or pledge, as determined by reference to the exchange rates applicable at the time of the liquidation. Upon liquidation, the depository shall apply the proceeds to satisfy the lien or pledge and shall refund to the depository account holder any amount in excess of the amount required to pay or satisfy the lien or pledge. The depository shall not be obligated to a depository account holder for any difference between the official exchange rate at the time a request for liquidation was received and the proceeds actually received upon liquidation after satisfaction of any unpaid fees.

(f) The depository may require that a secured party seeking to enforce a pledge under this section provide information as is reasonably necessary to ensure that a delivery of precious metals under this section is made in accordance with applicable law and policies established by the depository.

Source Note: The provisions of this §14.11 adopted to be effective December 27, 2017, 42 TexReg 7411