Previously chartered in Texas, United Texas Bank announced it has received approval from the office of the Comptroller of the Currency, in a decision dated May 15, to convert to a nationally chartered bank. The bank, a subsidiary of United Texas Bank Financial Holding Co., is controlled by Dallas businessman Scott Beck, whose Beck Ventures is behind redevelopment plans at the old Valley View mall site.
The conversion changes United Texas Bank's primary regulator from the Texas Department of Banking to the federal OCC. The bank, which has about $1 billion in assets, is still under an enforcement order from the Texas Department of Banking and the Federal Reserve Board, which complicated the the conversion. Regulators issued a cease-and-desist order in 2024 for "significant deficiencies" identified in United Texas Bank's corporate governance and oversight related to risk management and compliance with anti-money laundering regulations, including the Bank Secrecy Act. The order came with a compliance plan overhauling the bank's governance and compliance processes.
Converting a bank charter while under an enforcement action was made more difficult with 2010's Dodd-Frank Act, passed in response to the 2008 financial crisis to prevent a repeat of the crisis and promote stability on Wall Street. Michael Barr, one of the seven-member Federal Reserve board of governors, was the lone objection to United Texas Bank's request to convert. Barr cited a passage in the Dodd-Frank Act that says the OCC, "may not approve the conversion of a State bank ... to a national bank association ... during any period in which [the bank] is subject to a cease and desist order ... with respect to a significant supervisory matter." The section is designed to limit so-called "charter shopping" to avoid robust supervision, he said in a statement.
"Any request for a statutory exception should be viewed in light of these objectives and should rarely be granted unless there are compelling reasons to do so," he said. "I do not believe the request for this charter conversion has made a compelling argument. The issues raised by the public enforcement action include quite serious problems regarding the bank's anti-money laundering and terrorist financing practices."
The OCC's approval is conditioned upon the bank entering into a consent order with "substantively similar" provisions as the existing cease and desist. It is also contingent on the Texas Department of Banking and Federal Reserve Board not objecting to a "a plan to address the significant supervisory matter in a manner that is consistent with the safe and sound operation of [United Texas Bank]," according to the agency's decision. Neither body objected.
"UTB’s approval reflects the OCC’s rigorous evaluation of the bank’s 40-year operating record, the strength of its compliance and [Bank Secrecy Act/anti-money laundering] infrastructure, its correspondent banking franchise, and the competence and experience of its management team," United Texas Bank's release said. "The bank has addressed its current regulatory actions and these upgrades will be fully validated by the OCC later this year."
As part of the conversion, United Texas Bank is now authorized to create a comprehensive trust department, which the bank said allows it to expand its capabilities to include "traditional financial securities, digital asset custody, and stablecoin."
"This conversion is the foundation of an entirely new kind of bank. For 40 years, United Texas Bank has served its clients with discipline and institutional integrity. Today, we bring that legacy together with the most advanced digital banking infrastructure in the country," Beck said in the release. "UTB is ready to serve the foreign financial institutions, digital asset firms, and AI-native enterprises that will define the next era of global finance."