BILL ANALYSIS
H.B. 1291
By: Giddings
03-10-95
Committee Report (Unamended)
BACKGROUND
The House Committee on Small Business Access to Capital in its
Interim Report to the 74th Legislature, recommended that banks be
required to disclose on a quarterly basis their loans made to small
businesses, historically underutilized businesses as well as loans
made in agricultural areas. In addition, banks would have to
disclose the number of loans made within the community in which
they collect deposits for the purposes of community redevelopment.
PURPOSE
The bill requires banks to make reports on lending applications and
loans made in specified areas. The Banking Commissioner is given
authority to make necessary rules for implementation. The attorney
general and local prosecutors are given authority to bring civil
suit to impose fines for non-compliance.
RULEMAKING AUTHORITY
This bill grants rulemaking authority to the Banking Commissioner
in Section 1 (Subsection 3) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Title 16 Revised Statutes, by adding Article 349
as follows:
ARTICLE 349. REPORTS BY BANKS.
Sec. 1 Article 349, DEFINITIONS. Defines "Bank", "Branch
office", "Historically underutilized business" and "small
business".
Sec. 2 Article 349, REPORT REQUIRED. Requires banks to report
quarterly to the BankingCommissioner lending activities for the
preceding calendar quarter. Banks must provide separate
information for each bank location and branch office in the state.
Report must include number and total dollar amounts of completed
applications for loans involving agriculture, small businesses,
development or redevelopment, and historically underutilized
businesses. Report must also include number and total dollar
amount of loans made for each of the above categories and number
and total dollar amount of all loans made.
Sec. 3 Article 349, BANKING COMMISSIONER DUTIES; FORM OF
REPORT. The Banking Commissioner is given administration of this
article and the authority to prescribe the form of the report. The
Commissioner may also adopt other rules for administration of this
article.
Sec. 4 Article 349, AVAILABILITY OF REPORT; PUBLIC NOTICE.
Requires banks to make the report available to the public during
regular business hours for inspection and copying at each location
and branch. Must be available no later than 30 days after the
report is filed with the banking commissioner. Report must remain
available for five years. Banks must post notice that the report
is available and allows banks to charge a reasonable fee for
copying.
Sec. 5 Article 349, CIVIL PENALTY. Provides for a penalty of
$500 per day paid to the state if banks violate this article or any
rules adopted under this article. Allows the prosecuting attorney
in the county where the violation occurs or the Attorney General to
bring suit to recover the penalty.
Sec. 6 Article 349, APPLICATION OF ARTICLE. Negates
application to state or private banks of a provision of this
article if a federal regulatory agency with primary supervisory
responsibility determines that provision does not apply to a
federally chartered bank.
SECTION 2. Requires the first report under this article to cover
the first calendar quarter of 1996 and be filed no later than April
30, 1996.
SECTION 3. Effective date of Act.
SECTION 4. Emergency clause.
SUMMARY OF COMMITTEE ACTION
The committee considered HB 1291 in a public hearing on March 13,
1995.
The following person testified in favor of the bill:
David Pinkus representing Small Business United of Texas.
The following person testified against the bill:
John M. Heasley representing the Texas Bankers Association.
The following person testified neutrally on the bill:
Catherine A. Ghiglieri representing the Texas Deaprtment of
Banking.
The bill was left pending.
The committee considered HB 1291 in a public hearing on April 24,
1995.
The bill was reported favorably without amendments, with the
recommendation that it do pass and be printed by a record vote of:
5 Ayes, 1 Nay, 0 PNV, 4 Absent.