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Senate Bill 1165 |
Senate Author: Carona |
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Effective: 5-28-11 |
House Sponsor: Truitt |
Senate Bill 1165 amends provisions of the Finance Code relating to the enforcement powers of the banking commissioner of Texas. Current law establishes the grounds for an order by the commissioner to remove a person from office or employment in a state bank or state trust company or to prohibit a controlling shareholder or other person participating in the affairs of a state bank or state trust company from further participation. The bill expands those grounds to include making, or causing to be made, false entries in the institution's records and to include an action prejudicial to the interests of the institution's creditors or shareholders as well as of the institution's depositors; makes the grounds for removal applicable as grounds for prohibiting a person from office or employment in a state bank or state trust company; and makes all such removal and prohibition orders applicable also to office, employment, and participation in any other entity chartered, registered, permitted, or licensed by the commissioner. The bill authorizes the commissioner to prescribe the duration of the order, probate the order, or impose other conditions on the order. The bill also requires each proposed prohibition or removal order and each emergency cease-and-desist, prohibition, or removal order to state the duration of the order. The bill clarifies the prohibition in a final removal or prohibition order against serving as an employee of any entity chartered or licensed by the commissioner to prohibit service specifically as an employee with financial responsibility of any other entity chartered, registered, permitted, or licensed by the commissioner and establishes a procedure by which a person who is subject to a prohibition or removal order may apply to be released from the order after the expiration of 10 years from the date of issuance.
Current law authorizes the banking commissioner to initiate an administrative penalty proceeding against a bank or state trust company, refer the matter to the attorney general for enforcement, or pursue other appropriate action if the commissioner reasonably believes that a bank, state trust company, or person has violated a final and enforceable order issued by the commissioner. Senate Bill 1165 extends that authority to allow the commissioner to take such action on the basis of a violation of applicable state law that exposed or could have exposed the bank or the bank's depositors, creditors, or shareholders to harm and to initiate an administrative penalty proceeding against a person besides a state bank or trust company. The bill revises the applicable notice requirements, sets out certain factors to be considered in determining the amount of any penalty to be imposed, and caps the amount of the penalty imposed on an institution and on an individual. The bill authorizes the banking commissioner to release a final order imposing such an administrative penalty or information regarding the existence of the order to the public if the banking commissioner concludes that the release would enhance effective enforcement of the order.