BILL ANALYSIS
H.B. 1020
By: Oliveira
2-15-95
Committee Report (Amended)
BACKGROUND
The Texas Savings Bank Act was passed during the 73rd Session of
the Texas Legislature. The bill created a new type of financial
institution, the state-chartered savings bank. The new institution
is required to invest at least fifteen percent in local community
loans as well as local-service-area deposits in residential
mortgage loans, home improvement loans, interim residential
construction loans, home improvement loans, mortgage-backed
securities secured by loans from the savings bank's local service
area. There has been some difficulty in implementing the act due
to difficulties in interpreting the Act in conjunction with other
statutes like the Savings and Loan Act.
PURPOSE
The purpose of this bill is to provide technical and clarifying
amendments to the Texas Savings Bank Act which was passed during
the last legislative session. These revisions are aimed at
clarifying hearings, appeals, and confidentiality procedures, the
definition of a financial institution, and the roles local
supervision and the Finance Commission play in regulating these
financial institutions. The bill also amends other sections of the
Texas Savings Bank Act to alleviate confusion between other
statutes and the Texas Savings Bank Act.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill grants additional
rulemaking authority to the Savings and Loan Commissioner in
Sections 8 and 9 of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 1.03(1) of the Texas Savings Bank
Act, Article 489e VTCS, to correct references to the Administrative
Procedures Act and Section 1.03(15) to include state and national
credit unions within the definition of a "financial institution."
SECTION 2. Amends Section 2.05(a)(5) of the Texas Savings Bank
Act to clarify that financial information submitted by an officer
of a savings bank applying for incorporation is subject to the same
confidential treatment as similar information provided by directors
and incorporators.
SECTION 3. Amends Section 2.10 of the Texas Savings Bank Act to
establish the same hearing and appeals process for incorporation of
a savings bank that exists for other corporate transactions (e.g.
reorganization, merger and consolidation) under the Act.
SECTION 4. Adds a new Section 2.15 of the Texas Savings Bank
Act which provides a preference for local community control in
considering multiple applications for a new savings bank or a new
branch in a given location.
SECTION 5. Amends Section 3.07 of the Texas Savings Bank Act by
strengthening the commissioner's discretion regarding publication
of notice of a change of control application; permitting the
commissioner to approve a change of control without a hearing; and
allowing an applicant to request a public hearing upon receipt of
a notice that the commissioner intends to deny the application.
SECTION 6. Amends Section 4.08 of the Texas Savings Bank Act to
clarify that, except as expressly provided in the Act or
regulations promulgated by the commissioner and the finance
commission, the confidentiality section of the Act incorporates
facts and information related to shareholders, participants,
officer, directors, etc. obtained through application, examination
or otherwise. The amendment also clarifies circumstances and
requirements under which examination reports and other information
may be released by a savings bank or obtained under subpoena.
SECTION 7. Amends Section 6.03(a) of the Texas Savings Bank Act
to remove the requirement that a director for a savings bank be a
citizen of the United States.
SECTION 8. Amends Section 7.01 of the Texas Savings Bank Act to
provide the finance commission with authority to modify the powers
of a savings bank to accommodate or take advantage of changing
technologies and assure the ability of the institution to be
responsive to the public need.
SECTION 9. Amends Section 7.05 Texas Savings Bank Act to allow
the finance commission to promulgate rules for new forms of savings
bank facilities that may emerge in other segments of the financial
industry.
SECTION 10. Amends Section 7.10 of the Texas Savings Bank
Act to authorize exclusion of a savings bank's investment in
operating subsidiaries from its calculation of investments in
subsidiaries for purposes of the limitation of this section. This
change provides consistency with federal regulations applicable to
savings associations.
SECTION 11. Amends Section 8.02 of the Texas Savings Bank
Act to modify the liquidity calculation to an average daily
deposits base similar to that used by other financial institution
regulators.
SECTION 12. Amends Section 12.12 of the Texas Savings Bank
Act to make other state laws applicable to corporations,
associations, or other organizations incorporated or organized
under the Texas Savings and Loan Act also applicable to savings
banks.
SECTION 13. Establishes the effective date of the
provisions of this act and requires the commissioner to establish
rules for compliance with savings bank liquidity rules and
limitations on investment in bank premises.
SECTION 14. Suspends the constitutional rule requiring
bills to be read on three several days in each house.
EXPLANATION OF AMENDMENTS
Committee Amendment #1 amends Section 1 of the bill regarding the
definition of "financial institution" by striking state or federal
credit union from the definition.
SUMMARY OF COMMITTEE ACTION
The Committee convened in a public hearing on February 20, 1995 to
consider HB 1020. The Chair laid out HB 1020.
The following person testified in favor of the bill: Rep.
Oliveira.
The following person testified neutrally on the bill: James
Pledger.
Rep. Carona offered committee amendment #1 which was adopted
without objection. Rep. Oliveira closed. HB 1020 was left pending
before the committee.
The Committee convened in a public hearing on March 1, 1995 to
consider HB 1020. The Chair called up HB 1020 which was pending
before the Committee. The motion to report HB 1020 favorably as
amended with the recommendation that it do pass and be printed
prevailed by the following vote: 6 Ayes, 0 Nays, 0 PNV, 3 Absent.