By Romo H.B. No. 155
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the abolishment of the State Banking Board and the
1-3 transfer of the duties of the State Banking Board to the Banking
1-4 Commissioner.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 572.003(c), Government Code, is amended
1-7 to read as follows:
1-8 (c) The term means a member of:
1-9 (1) the Public Utility Commission of Texas;
1-10 (2) the Texas Department of Commerce;
1-11 (3) the Texas Natural Resource Conservation
1-12 Commission;
1-13 (4) the Texas Alcoholic Beverage Commission;
1-14 (5) The Finance Commission of Texas;
1-15 (6) the General Services Commission;
1-16 (7) the Texas Board of Criminal Justice;
1-17 (8) the board of trustees of the Employees Retirement
1-18 System of Texas;
1-19 (9) the Texas Transportation Commission;
1-20 (10) the Texas Workers' Compensation Commission;
1-21 (11) the State Board of Insurance;
1-22 (12) the Parks and Wildlife Commission;
1-23 (13) the Public Safety Commission;
1-24 (14) the Texas Ethics Commission;
2-1 (15) the State Securities Board;
2-2 (16) the Texas Water Development Board;
2-3 (17) the governing board of a public senior college or
2-4 university as defined by Section 61.003, Education Code, or of The
2-5 University of Texas Southwestern Medical Center at Dallas, The
2-6 University of Texas Medical Branch at Galveston, The University of
2-7 Texas Health Science Center at Houston, The University of Texas
2-8 Health Science Center at San Antonio, The University of Texas
2-9 System Cancer Center, The University of Texas Health Science Center
2-10 at Tyler, Texas College of Osteopathic Medicine, Texas Tech
2-11 University Health Sciences Center, Texas State Technical
2-12 Institute--Amarillo, Texas State Technical Institute--Harlingen,
2-13 Texas State Technical Institute--Sweetwater, or Texas State
2-14 Technical Institute--Waco;
2-15 (18) the Texas Higher Education Coordinating Board;
2-16 (19) the Texas Employment Commission;
2-17 (20) <the State Banking Board;>
2-18 <(21)> the board of trustees of the Teachers
2-19 Retirement System of Texas;
2-20 (21) <(22)> the Credit Union Commission;
2-21 (22) <(23)> the School Land Board;
2-22 (23) <(24)> the board of the Texas Department of
2-23 Housing and Community Affairs;
2-24 (24) <(25)> the Texas Racing Commission;
2-25 (25) <(26)> the State Board of Dental Examiners;
2-26 (26) <(27)> the Texas Board of Licensure for Nursing
2-27 Home Administrators;
3-1 (27) <(28)> the Texas State Board of Medical
3-2 Examiners;
3-3 (28) <(29)> the Board of Pardons and Paroles;
3-4 (29) <(30)> the State Board of Pharmacy;
3-5 (30) <(31)> the Department of Information Resources
3-6 governing board;
3-7 (31) <(32)> the Motor Vehicle Board;
3-8 (32) <(33)> the Texas Real Estate Commission;
3-9 (33) <(34)> the board of directors of the State Bar of
3-10 Texas;
3-11 (34) <(35)> the bond review board;
3-12 (35) <(36)> the Texas Board of Health;
3-13 (36) <(37)> the Texas Board of Mental Health and
3-14 Mental Retardation;
3-15 (37) <(38)> the Texas Board on Aging;
3-16 (38) <(39)> the Texas Board of Human Services;
3-17 (39) <(40)> the Texas Funeral Service Commission; or
3-18 (40) <(41)> the board of directors of a river
3-19 authority created under the Texas Constitution or a statute of this
3-20 state.
3-21 SECTION 2. Section 2001.223, Government Code, is amended to
3-22 read as follows:
3-23 Sec. 2001.223. EXCEPTIONS FROM DECLARATORY JUDGMENT, COURT
3-24 ENFORCEMENT, AND CONTESTED CASE PROVISIONS. Section 2001.038 and
3-25 Subchapters C through H do not apply to:
3-26 (1) the granting, payment, denial, or withdrawal of
3-27 financial or medical assistance or benefits under service programs
4-1 of the Texas Department of Human Services;
4-2 (2) action by the Banking Commissioner <or the State
4-3 Banking Board> regarding the issuance of a state bank charter for a
4-4 bank to assume the assets and liabilities of a state bank that the
4-5 commissioner determines to be in an unsafe condition as defined by
4-6 Section 1, Article 1a, Chapter VIII, The Texas Banking Code
4-7 (Article 342-801a, Vernon's Texas Civil Statutes);
4-8 (3) a hearing or interview conducted by the Board of
4-9 Pardons and Paroles or the pardons and paroles division of the
4-10 Texas Department of Criminal Justice relating to the grant,
4-11 rescission, or revocation of parole or other form of administrative
4-12 release; or
4-13 (4) the suspension, revocation, or termination of the
4-14 certification of a breath analysis operator or technical supervisor
4-15 under the rules of the Department of Public Safety.
4-16 SECTION 3. The chapter heading to Chapter I, The Texas
4-17 Banking Code (Article 342-101 et seq., Vernon's Texas Civil
4-18 Statutes), is amended to read as follows:
4-19 CHAPTER ONE--SCOPE OF ACT, DEFINITIONS, AND FINANCE
4-20 COMMISSION <AND STATE BANKING BOARD>
4-21 SECTION 4. Section 3, Article 6, Chapter I, The Texas
4-22 Banking Code (Article 342-106, Vernon's Texas Civil Statutes), is
4-23 amended to read as follows:
4-24 3. Members of the Finance Commission shall, subject to the
4-25 provisions of Article 7 of this Chapter, serve until their
4-26 successors are appointed and have qualified by taking oath in the
4-27 form prescribed by the <State> Banking Commissioner <Board>.
5-1 SECTION 5. Article 7, Chapter II, The Texas Banking Code
5-2 (Article 342-207, Vernon's Texas Civil Statutes), is amended to
5-3 read as follows:
5-4 Art. 7. Banking Commissioner--General Powers--Duties--
5-5 Liabilities of Banking Commissioner and Others--Defense by Attorney
5-6 General. (a) The Banking Commissioner shall supervise and shall
5-7 regulate, as provided in this Code, all state and private banks and
5-8 shall enforce the provisions of this Code in person or through the
5-9 Deputy Banking Commissioner, the Departmental Examiner or any
5-10 examiner.
5-11 (b) The Banking Commissioner, each member of the Finance
5-12 Commission, <each member of the State Banking Board,> the Deputy
5-13 Banking Commissioner, the Departmental Examiner, the Liquidating
5-14 Supervisor, each examiner, assistant examiner, and special agent,
5-15 and each other officer and employee of the State Banking Department
5-16 shall not be personally liable for damages occasioned by the
5-17 officer's or employee's <his> official acts or omissions except
5-18 when such acts or omissions are corrupt or malicious. The Attorney
5-19 General shall defend any action brought against any of the above
5-20 mentioned officers or employees by reason of the officer's or
5-21 employee's <his> official act or omission, whether or not at the
5-22 time of the institution of the action the defendant has terminated
5-23 the officer's or employee's <his> service with the Department.
5-24 (c) The Banking Commissioner shall hear and determine
5-25 applications for State banking charters.
5-26 (d) The Banking Commissioner shall adopt and publish rules
5-27 and procedural regulations as may be necessary to facilitate the
6-1 fair hearing and adjudication of charter applications.
6-2 SECTION 6. Section (a), Article 10, Chapter II, The Texas
6-3 Banking Code (Article 342-210, Vernon's Texas Civil Statutes), is
6-4 amended to read as follows:
6-5 (a) Subject to the provisions of Section 5 of Chapter 183 of
6-6 the Forty-fourth Legislature of Texas (1935), page 461 (Article
6-7 489b, Section 5), and any other statutory provision of this State,
6-8 all information obtained, either directly or indirectly, by the
6-9 Banking Department relative to the financial condition of any bank
6-10 or bank holding company other than call reports and profit and loss
6-11 statements, whether obtained through examination or otherwise,
6-12 except published statements, and all files and records of said
6-13 Department relative thereto shall be confidential, and shall not be
6-14 disclosed by the Banking Commissioner or any officer or employee of
6-15 said Department. Further provided that no such information shall
6-16 be divulged to any member of the Finance Commission, nor shall any
6-17 member of the Finance Commission be given access to such files and
6-18 records of the Banking Department; provided, however, that the
6-19 Banking Commissioner may disclose to the Finance Commission <or to
6-20 the State Banking Board> information, files and records pertinent
6-21 to any hearing or matter pending before such Commission <or such
6-22 Board>. Further provided that upon request, the Banking
6-23 Commissioner may disclose to a Federal Reserve Bank any information
6-24 relative to its members, and shall permit it access to any files
6-25 and records or reports relating to its members. Further provided
6-26 that the Banking Commissioner may, in the Banking Commissioner's
6-27 <his> discretion, if the Banking Commissioner <he> deems it
7-1 necessary or proper to the enforcement of the laws of this State,
7-2 another state, or the United States, and to the best interest of
7-3 the public, divulge such information to any other department of
7-4 this State, another state, or the National Government, or any
7-5 agency or instrumentality thereof.
7-6 SECTION 7. Article 4, Chapter III, The Texas Banking Code
7-7 (Article 342-304, Vernon's Texas Civil Statutes), is amended to
7-8 read as follows:
7-9 Art. 4. Certificate of authority--Posting--Revocation of
7-10 charter. No state bank may do business until it receives a
7-11 certificate of authority from the Banking Commissioner, which shall
7-12 not be delivered until it has elected the officers and directors or
7-13 managers, as appropriate, named in the application for charter or
7-14 other officers and directors or managers approved by the Banking
7-15 Commissioner; shall have adopted by-laws approved by the Banking
7-16 Commissioner; and shall have complied with all the other
7-17 requirements of this Code relative to the incorporation of state
7-18 banks.
7-19 If any state bank does not open and actually engage in
7-20 business within three months after the granting of its charter, or
7-21 conditional approval of application for charter, the Banking
7-22 Commissioner may <so inform the State Banking Board which may> in
7-23 the Banking Commissioner's <its> discretion forfeit the charter or
7-24 cancel the <its> conditional approval of application for charter,
7-25 without any judicial action.
7-26 Each state bank shall keep its certificate of authority
7-27 posted in its lobby at a point accessible to the public.
8-1 SECTION 8. Article 6, Chapter III, The Texas Banking Code
8-2 (Article 342-306, Vernon's Texas Civil Statutes), is amended to
8-3 read as follows:
8-4 Art. 6. Reorganization--Incorporation to take over business
8-5 of other banks or state or federal savings banks or savings and
8-6 loan associations--Trust powers. A state bank may be incorporated
8-7 to take over the business of any incorporated bank or banks, state
8-8 or national, or of any state or federal savings bank or state or
8-9 federal savings and loan association, as a step in the
8-10 reorganization of such institution or institutions, (which
8-11 institution or institutions, whether one or more, will be hereafter
8-12 referred to as the "reorganizing institution"), and shall, subject
8-13 to the provisions of this article, be authorized to purchase assets
8-14 from the reorganizing institution and as consideration therefor,
8-15 assume all liabilities, known or unknown, of the reorganizing
8-16 institution, other than its liability to stockholders as such.
8-17 Persons desiring to incorporate a state bank under the
8-18 provisions of this article shall proceed in the manner provided in
8-19 Article 31 and Article 63 of this Chapter, and in addition, shall
8-20 file with the Banking Commissioner:
8-21 (1) The proposed contract whereby the state bank is to
8-22 purchase the assets from and assume the liabilities of the
8-23 reorganizing institution, as above mentioned.
8-24 (2) Contracts, if any, whereby the proposed state bank
8-25 is to purchase for cash the whole or any part of the right of any
8-26 or all of the stockholders of the reorganizing institution to
8-27 receive liquidating dividends upon liquidation of the reorganizing
9-1 institution, which contracts shall expressly provide that they
9-2 shall be binding and effective only in event the reorganizing
9-3 institution is placed in voluntary liquidation within ten (10) days
9-4 of the granting of the application for the charter applied for.
9-5 Such contracts shall be executed on behalf of the proposed bank by
9-6 the persons applying for the charter.
9-7 If the Banking Commissioner, after investigation, determines
9-8 that the proposed bank, if incorporated, will, after its capital
9-9 has been paid in full and all contracts above mentioned finally
9-10 consummated, be solvent, its capital adequate and unimpaired, that
9-11 such reorganization is to the best interest of the reorganizing
9-12 institution, its depositors, creditors and stockholders and the
9-13 public in general, and that upon incorporation such bank will have
9-14 in all other respects complied with the law, the Commissioner shall
9-15 grant the application <recommend to the State Banking Board that
9-16 the charter be granted>.
9-17 The <If the State Banking Board concurs in the findings of
9-18 the Banking Commissioner, it shall grant the application, and the>
9-19 Banking Commissioner shall deliver a certified copy of the articles
9-20 of association in the manner provided in Article 31 and Article 63
9-21 of this chapter. Provided, however, that the Banking Commissioner
9-22 shall not deliver a certificate of authority until the contracts
9-23 above mentioned have been fully consummated, and the requirements
9-24 of Article 4 of this chapter have been met. The state bank so
9-25 incorporated shall be deemed a reorganization of the reorganizing
9-26 institution, and a continuation of such institution in entity and
9-27 identity, subject to all of its liabilities, obligations, duties
10-1 and relations, save and except its liability to stockholders as
10-2 such, and shall pay and perform each and every obligation, duty and
10-3 liability of the reorganizing institution in exactly the same
10-4 manner as the reorganizing institution was obligated to do; further
10-5 provided that if the reorganizing institution was at the time of
10-6 incorporation of the new state bank, named or acting as guardian,
10-7 trustee, executor, administrator or in any other fiduciary
10-8 capacity, such state bank shall, without the necessity of any
10-9 judicial action, or action by the creator of such trust, continue
10-10 the trusteeship or other fiduciary relation and perform all of the
10-11 duties and obligations of the reorganizing institution and exercise
10-12 all the powers and authority relative thereto; and neither the
10-13 reorganization of such institution, nor any liquidation of such
10-14 institution in connection therewith, shall be deemed a resignation
10-15 or refusal to act. The naming or designating by a testator or the
10-16 creator of a living trust of the reorganizing institution to act as
10-17 trustee, guardian, executor, or in any other fiduciary capacity
10-18 shall be considered the naming or designating of the bank resulting
10-19 from the reorganization.
10-20 The new state bank shall give notice of its assumption of the
10-21 liabilities of the reorganizing institution by publishing notice
10-22 thereof once each week for a period of two (2) weeks in some
10-23 newspaper of general circulation published in the county of its
10-24 domicile, or in event no such newspaper is published in said
10-25 county, then in a newspaper of general circulation published in an
10-26 adjacent county. The first notice shall be published within ten
10-27 (10) days after the delivery of the certificate of authority to
11-1 such bank.
11-2 SECTION 9. Article 10, Chapter III, The Texas Banking Code
11-3 (Article 342-310, Vernon's Texas Civil Statutes), is amended to
11-4 read as follows:
11-5 Art. 10. Conversion of national bank or state or federal
11-6 savings bank or savings and loan association into state bank. A
11-7 national bank, state or federal savings bank, or state or federal
11-8 savings and loan association located in this state which follows
11-9 the procedures prescribed by the laws of the United States or this
11-10 state to convert into a state bank, shall be granted a certificate
11-11 of incorporation in the state when the Banking Commissioner <State
11-12 Banking Board> finds that the institution meets the standards as to
11-13 location of office, capital structure and business experience of
11-14 officers and directors or managers, as appropriate, for the
11-15 incorporation of a state bank. In considering the application for
11-16 conversion from a national bank, state or federal savings bank, or
11-17 state or federal savings and loan association into a state bank the
11-18 Banking Commissioner <Board> shall consider and determine that the
11-19 new bank meets with all the requirements of a new state bank
11-20 applicant. The conversion is governed by this Article and not by
11-21 Article 9 of this chapter. Included also in the application of a
11-22 national bank for conversion and to be considered along with the
11-23 other information submitted shall be the terms of the transition
11-24 from a national bank into a state bank which shall also show that
11-25 the provisions of Public Law 706 of the 81st Congress of the United
11-26 States have been fully satisfied.
11-27 SECTION 10. Sections (a) and (b), Article 11, Chapter III,
12-1 The Texas Banking Code (Article 342-311, Vernon's Texas Civil
12-2 Statutes), are amended to read as follows:
12-3 (a) A state bank or trust company may change its domicile to
12-4 <one of its previously established branch locations on prior
12-5 written approval of the Banking Commissioner. A state bank or
12-6 trust company may change its domicile to> any other location on
12-7 prior approval of the <State> Banking Commissioner <Board>.
12-8 (b) Applications for a change of domicile subject to
12-9 approval of the <State> Banking Commissioner <Board> shall be
12-10 granted by the <State> Banking Commissioner <Board> only upon good
12-11 and sufficient proof that all the following conditions exist:
12-12 (1) a public necessity exists for the bank at the
12-13 proposed location;
12-14 (2) proposed capital structure is adequate;
12-15 (3) volume of business in the community where the bank
12-16 is to be located is such as to indicate profitable operation of the
12-17 bank at that location;
12-18 (4) the proposed officers and directors or managers,
12-19 as appropriate, have sufficient banking experience, ability, and
12-20 standing to render success of the bank probable; and
12-21 (5) the applicants are acting in good faith.
12-22 SECTION 11. Article 31, Chapter III, The Texas Banking Code
12-23 (Article 342-331, Vernon's Texas Civil Statutes), is amended to
12-24 read as follows:
12-25 Art. 31. Application for and granting of
12-26 charters--Approval. (a) Applications for a charter for a state
12-27 banking association shall be granted only upon good and sufficient
13-1 proof that all of the following conditions presently exist:
13-2 (1) a public necessity exists for the proposed bank;
13-3 (2) the proposed capital structure is adequate;
13-4 (3) the proposed bank's anticipated volume of business
13-5 is such as to indicate profitable operation;
13-6 (4) the proposed officers and directors have
13-7 sufficient banking experience, ability, and standing to render
13-8 success of the proposed bank probable; and
13-9 (5) the applicants are acting in good faith.
13-10 The burden to establish said conditions shall be upon the
13-11 applicants.
13-12 (b) Applicants desiring to incorporate a state banking
13-13 association shall file with the Banking Commissioner an application
13-14 for charter upon official forms prepared and prescribed by the
13-15 Banking Commissioner. All persons subscribing to the capital stock
13-16 of the proposed bank shall sign and verify under oath a statement
13-17 of such stock subscribed, and the statement shall truly report the
13-18 number of shares and the amount to be paid in consideration; the
13-19 names, identity, title, and address of any other persons who will
13-20 be beneficial owners of such stock or otherwise share an interest
13-21 or ownership in said stock, or who will pay any portion of the
13-22 consideration; whether said stock is to be pledged as security for
13-23 any loan; whether a loan has been committed or is intended for the
13-24 subscription and purchase of said stock, and if so, the name and
13-25 address of such person or corporation that is intended to loan
13-26 funds for said purchase; the names of any cosigners, guarantors,
13-27 partners or other persons liable for the repayment of any loan
14-1 financing the purchase of such stock. Provided, however, that the
14-2 verified statement of subscribers to stock shall be confidential
14-3 and privileged from public disclosure prior to the final
14-4 determination by the Banking Commissioner <Board> of the
14-5 application for a charter, unless the Banking Commissioner <Board>
14-6 shall find that public disclosure prior to public hearing and final
14-7 determination of the charter application is necessary to a full
14-8 development of the factual record.
14-9 (c) The Banking Commissioner shall require deposit of such
14-10 charter fees as are required by law and shall proceed to conduct a
14-11 thorough investigation of the application, the applicants and their
14-12 personnel, and the charter conditions alleged. The actual expense
14-13 of such investigation and report shall be paid by the applicants,
14-14 and the Banking Commissioner may require a deposit in an estimated
14-15 amount, the balance to be paid in full prior to hearing of the
14-16 application. A written report of the investigation shall be
14-17 <furnished to the State Banking Board and shall be> made available
14-18 to all interested parties at their request.
14-19 (d) Upon filing of the application, the Banking Commissioner
14-20 shall promptly set the time and place for public hearing of the
14-21 application for charter, giving the applicants reasonable notice
14-22 thereof. Before the 10th day preceding the day on which the
14-23 hearing is held, the Banking Commissioner shall publish notice of
14-24 the hearing in a newspaper of general circulation in the county
14-25 where the proposed bank is to be located. If a protest of the
14-26 application is not filed, the Banking Commissioner may cancel the
14-27 hearing, and if the Banking Commissioner does so, the Banking
15-1 Commissioner <Board> shall <vote to> determine whether the
15-2 necessary conditions set out in Section (a) of this article have
15-3 been established, based on the application. If the Banking
15-4 Commissioner denies <Board votes to deny> the application, the
15-5 Banking Commissioner shall notify the applicant and the applicant
15-6 may request a hearing on the application not later than the 30th
15-7 day after the date on which the notice is sent to the applicant.
15-8 After full and public hearing the Banking Commissioner <Board>
15-9 shall <vote and> determine whether the necessary conditions set out
15-10 in Section (a) above have been established. Should the Banking
15-11 Commissioner <Board, or a majority of the Board,> determine all of
15-12 the said conditions affirmatively, the application shall be
15-13 approved; if not, the application shall be denied. If approved,
15-14 and when the Banking Commissioner receives satisfactory evidence
15-15 that the capital has been paid in full in cash, the Banking
15-16 Commissioner shall deliver to the incorporators a certified copy of
15-17 the articles of association, and the bank shall come into corporate
15-18 existence. Provided, however, that the <State> Banking
15-19 Commissioner <Board> may make <its> approval of any application
15-20 conditional, and in such event shall set out such condition in the
15-21 resolution granting the charter, and the Banking Commissioner shall
15-22 not deliver the certified copy of the articles of association until
15-23 such condition has been met<, after which the Banking Commissioner
15-24 shall in writing inform the State Banking Board as to compliance
15-25 with such condition and delivery of the articles of association>.
15-26 (e) If the Banking Commissioner denies an application the
15-27 applicant may appeal the decision of the Banking Commissioner for
16-1 judicial review.
16-2 (f) Except as provided by Section (g) of this article,
16-3 judicial review of a decision of the Banking Commissioner regarding
16-4 an application for a charter is under the substantial evidence rule
16-5 and is instituted by filing a petition with a district court in
16-6 Travis County as provided by Section 2001.176, Government Code.
16-7 (g) The provisions of Chapter 2001, Government Code, <the
16-8 Administrative Procedure and Texas Register Act (Article 6252-13a,
16-9 Vernon's Texas Civil Statutes)> governing contested cases do not
16-10 apply to charter applications filed for the purpose of assuming the
16-11 assets and liabilities of any bank deemed by the Banking
16-12 Commissioner to be in an unsafe condition.
16-13 (h) <(f)> The financial statement of a proposed officer or
16-14 director filed under this article is confidential and not subject
16-15 to public disclosure.
16-16 SECTION 12. Article 32, Chapter III, The Texas Banking Code
16-17 (Article 342-332, Vernon's Texas Civil Statutes), is amended to
16-18 read as follows:
16-19 Art. 32. Amendment of articles of association--Rights of
16-20 stockholders upon increase in capital--Stock option plans. Subject
16-21 to the provisions of this code, any state banking association may
16-22 amend its articles of association for any lawful purpose.
16-23 If the owners of record of two-thirds of the capital stock,
16-24 at any regular meeting of stockholders, or any special meeting
16-25 called for that purpose, vote to amend the charter, the board of
16-26 directors shall prepare, execute in the manner provided for the
16-27 execution of articles of association, and file with the Banking
17-1 Commissioner an amendment to the articles of association. If the
17-2 Banking Commissioner finds that the amendment is not violative of
17-3 law and does not prejudice the interest of depositors and creditors
17-4 or the public, the Banking Commissioner <he> shall approve such
17-5 amendment and deliver to the bank a certified copy thereof, and
17-6 said amendment shall thereupon become effective; provided, however,
17-7 that if a state bank does not have the power to receive demand
17-8 deposits, no amendments of its articles of association adopting any
17-9 power provided under Section (a), (b), (c), (d), or (f) of Article
17-10 2 of this chapter and no amendment changing the domicile of any
17-11 state bank organized as a banking association shall be effective
17-12 until approved by the <State> Banking Commissioner <Board> in the
17-13 manner provided for the approval of an original application for
17-14 charter. Any state bank organized as a banking association may
17-15 amend its articles of association to extend its corporate existence
17-16 for a perpetual period or for any period of years.
17-17 Each stockholder of a state banking association shall be
17-18 entitled to the stockholder's <his> proportionate part of any
17-19 increase of stock effected out of surplus funds or undivided
17-20 profits, and shall be entitled to subscribe for the stockholder's
17-21 <his> proportionate share of any capital increase to be paid in
17-22 cash; provided, however, the bank may arrange for the disposition
17-23 of fractional shares by those entitled thereto or pay in cash the
17-24 fair value of fractions of a share as of the time when those
17-25 entitled to receive such fractions are determined. Each
17-26 stockholder or the stockholder's <his> assignee, in the event the
17-27 stockholder <he> elects to assign such rights of subscription,
18-1 shall subscribe for and pay the amount of such subscription to the
18-2 corporation within ten (10) days after the stockholders have
18-3 adopted such amendment, otherwise the board of directors may
18-4 allocate the unsubscribed or unpaid portion of the increase among
18-5 the other stockholders or otherwise as they deem to the best
18-6 interest of the bank.
18-7 With prior approval of the owners of record of two-thirds of
18-8 the capital stock, shares of stock in a bank, which are created by
18-9 a capital increase, may be allocated to and purchased by the bank
18-10 out of its surplus which is not certified or out of its undivided
18-11 profits to be held by the bank for fulfilling the requirements of
18-12 an officer or employee stock option or bonus plan, whereby officers
18-13 or employees, or both, of the bank are given options to purchase or
18-14 a bonus of shares of the bank's capital stock at a specified price,
18-15 subject to the following requirements and restrictions:
18-16 The number of shares so held shall not, at any time, exceed
18-17 five percent (5%) of the total number of shares outstanding in the
18-18 hands of other stockholders. Employee benefit plans, including
18-19 employee stock option plans, stock bonus plans, restricted stock
18-20 option or bonus plans, or any other plans, the sole purpose of
18-21 which is to compensate employees of the bank for services rendered
18-22 to the bank, authorized under this article, may not extend beyond a
18-23 period of ten (10) years from the date of issuance. No officer or
18-24 employee who owns or controls more than five percent (5%) of the
18-25 bank's capital stock shall be eligible to participate or to
18-26 continue participation in a stock option plan authorized by this
18-27 article.
19-1 SECTION 13. Article 63, Chapter III, The Texas Banking Code
19-2 (Article 342-363, Vernon's Texas Civil Statutes), is amended to
19-3 read as follows:
19-4 Art. 63. APPLICATION FOR AND GRANTING OF LIMITED BANKING
19-5 ASSOCIATION CHARTERS--APPROVAL. (a) Applications for a charter
19-6 for a limited banking association shall be granted only on good and
19-7 sufficient proof that all of the following conditions presently
19-8 exist:
19-9 (1) a public necessity exists for the proposed bank;
19-10 (2) the proposed capital structure is adequate;
19-11 (3) the proposed bank's anticipated volume of business
19-12 is such as to indicate profitable operation;
19-13 (4) the proposed officers and managers have sufficient
19-14 banking experience, ability, and standing to render success of the
19-15 proposed bank probable; and
19-16 (5) the applicants are acting in good faith.
19-17 The burden to establish those conditions shall be on the
19-18 applicants.
19-19 (b) Applicants desiring to organize a limited banking
19-20 association shall file with the Banking Commissioner an application
19-21 for charter on official forms prepared and prescribed by the
19-22 Banking Commissioner. All persons subscribing to the participation
19-23 shares of the limited banking association shall sign and verify
19-24 under oath a statement of the participation shares subscribed,
19-25 which statement shall truly report the number of shares and the
19-26 amount to be paid in consideration; the names, identity, title, and
19-27 address of any other persons who will be beneficial owners of the
20-1 participation shares or otherwise share an interest or ownership in
20-2 the participation shares, or who will pay any portion of the
20-3 consideration; whether the participation shares are to be pledged
20-4 as security for any loan; whether a loan has been committed or is
20-5 intended for the subscription and purchase of the participation
20-6 shares, and if so, the name and address of the person or
20-7 corporation that is intended to loan funds for the purchase; and
20-8 the names of any cosigners, guarantors, partners or other persons
20-9 liable for the repayment of any loan financing the purchase of the
20-10 participation shares. Provided, however, that the verified
20-11 statement of the participants is confidential and privileged from
20-12 public disclosure prior to the final determination by the Banking
20-13 Commissioner <Board> of the application for a charter, unless the
20-14 Banking Commissioner <Board> shall find that public disclosure
20-15 prior to the public hearing and final determination of the charter
20-16 application is necessary to a full development of the factual
20-17 records.
20-18 (c) The Banking Commissioner shall require deposit of the
20-19 charter fees required by law and shall proceed to conduct a
20-20 thorough investigation of the application, the applicants and their
20-21 personnel, and the charter conditions alleged. The actual expense
20-22 of the investigation and report shall be paid by the applicants,
20-23 and the Banking Commissioner may require a deposit in an estimated
20-24 amount, the balance to be paid in full prior to hearing of the
20-25 application. A written report of the investigation shall be
20-26 <furnished to the State Banking Board and shall be> made available
20-27 to all interested parties at their request.
21-1 (d) On filing of the application, the Banking Commissioner
21-2 shall promptly set the time and place for public hearing of the
21-3 application for charter, giving the applicants reasonable notice
21-4 thereof. Before the 10th day preceding the day on which the
21-5 hearing is held, the Banking Commissioner shall publish notice of
21-6 the hearing in a newspaper of general circulation in the county
21-7 where the proposed bank is to be located. If a protest of the
21-8 application is not filed, the Banking Commissioner may cancel the
21-9 hearing, and if the Banking Commissioner does so, the Banking
21-10 Commissioner <Board> shall <vote to> determine whether the
21-11 necessary conditions set out in Section (a) of this article have
21-12 been established, based on the application. If the Banking
21-13 Commissioner denies <Board votes to deny> the application, the
21-14 Banking Commissioner shall notify the applicant and the applicant
21-15 may request a hearing on the application not later than the 30th
21-16 day after the date on which the notice is sent to the applicant.
21-17 After full and public hearing the Banking Commissioner shall <Board
21-18 shall vote and> determine whether the necessary conditions set out
21-19 in Section (a) above have been established. Should the Banking
21-20 Commissioner <Board, or a majority of the Board,> determine all of
21-21 the conditions affirmatively, the application shall be approved; if
21-22 not, the application shall be denied. If approved, and when the
21-23 Banking Commissioner received satisfactory evidence that the
21-24 capital has been paid in full in cash, the Banking Commissioner
21-25 shall deliver to the organizers a certified copy of the articles of
21-26 association, and the limited banking association shall come into
21-27 existence. Provided, however, that the <State> Banking
22-1 Commissioner <Board> may make <its> approval of any application
22-2 conditional, and if so shall set out the condition in the
22-3 resolution granting the charter, and the Banking Commissioner shall
22-4 not deliver the certified copy of the articles of association until
22-5 the condition has been met<, after which the Banking Commissioner
22-6 shall in writing inform the State Banking Board as to compliance
22-7 with the condition and delivery of the articles of association>.
22-8 (e) If the Banking Commissioner denies an application the
22-9 applicant may appeal the decision of the Banking Commissioner for
22-10 judicial review.
22-11 (f) Except as provided by Section (g) of this article,
22-12 judicial review of a decision of the Banking Commissioner regarding
22-13 an application for a charter is under the substantial evidence rule
22-14 and is instituted by filing a petition with a district court in
22-15 Travis County as provided by Section 2001.176, Government Code.
22-16 (g) The provisions of Chapter 2001, Government Code, <the
22-17 Administrative Procedure and Texas Register Act (Article 6252-13a,
22-18 Vernon's Texas Civil Statutes)> governing contested cases do not
22-19 apply to charter applications filed for the purpose of assuming the
22-20 assets and liabilities of any bank deemed by the Banking
22-21 Commissioner to be in an unsafe condition.
22-22 (h) <(f)> The financial statement of a proposed officer or
22-23 manager filed under this article is confidential and not subject to
22-24 public disclosure.
22-25 SECTION 14. Section (b), Article 68, Chapter III, The Texas
22-26 Banking Code (Article 342-368, Vernon's Texas Civil Statutes), is
22-27 amended to read as follows:
23-1 (b) If the participants of the association holding
23-2 two-thirds of the participation shares, at any regular meeting of
23-3 participants, or any special meeting of participants called for
23-4 that purpose, vote to amend the charter, the board shall prepare,
23-5 execute in the manner provided for the execution of articles of
23-6 association, and file with the Banking Commissioner an amendment to
23-7 the articles of association. If the Banking Commissioner finds
23-8 that the amendment is not violative of law and does not prejudice
23-9 the interest of depositors and creditors or the public, the Banking
23-10 Commissioner shall approve the amendment and deliver to the bank a
23-11 certified copy of the amendment, and the amendment is then
23-12 effective; provided, however, that if a limited banking association
23-13 does not have the power to receive demand deposits, no amendments
23-14 of its articles of association adopting any power under Section
23-15 (a), (b), (c), (d), or (f) of Article 2 of this chapter and no
23-16 amendment changing the domicile of any limited banking association
23-17 shall be effective until approved by the <State> Banking
23-18 Commissioner <Board> in the manner provided for the approval of an
23-19 original application for charter. No limited banking association
23-20 may amend its articles of association to extend its period of
23-21 existence for a perpetual period or for any period of years unless
23-22 the period of existence is expressly contingent on those events
23-23 resulting in dissolution of the limited banking association
23-24 provided for in Article 71 of this chapter.
23-25 SECTION 15. Sections 5-8, and 12, Article 3a, Chapter IX,
23-26 The Texas Banking Code (Article 342-903a, Vernon's Texas Civil
23-27 Statutes), are amended to read as follows:
24-1 Sec. 5. On written complaint by a bank that is utilizing or
24-2 that seeks to utilize an unmanned teller machine that it is being
24-3 denied the use of the machine on a reasonable, nondiscriminatory
24-4 basis and that the machine is, therefore, not being operated in the
24-5 best interests of the public, the <State> Banking Commissioner
24-6 <Board> shall have jurisdiction to determine whether or not the
24-7 bank has been denied the right to utilize the machine under this
24-8 article. After a hearing conducted by the Banking Commissioner
24-9 <State Banking Board> in accordance with Chapter 2001, Government
24-10 Code <the Administrative Procedure and Texas Register Act, as
24-11 amended (Article 6252-13a, Vernon's Texas Civil Statutes)>, the
24-12 <State> Banking Commissioner <Board> may enter an order directing
24-13 compliance with this article and prescribing the manner and means
24-14 of complying with this article.
24-15 Sec. 6. In the event that operation of an unmanned teller
24-16 machine is to be discontinued, notice of intent to discontinue
24-17 shall be given to the <State> Banking Commissioner <Board> not less
24-18 than 60 days before the date on which operation of the machine is
24-19 to be discontinued, and a copy of that notice shall be sent to all
24-20 institutions using the machine. The <State> Banking Commissioner
24-21 <Board>, on complaint by an affected bank or on the Banking
24-22 Commissioner's <its> own motion, may delay the discontinuance of
24-23 operation of the unmanned teller machine for a period of not more
24-24 than 60 days past the proposed date of discontinuance if the
24-25 Banking Commissioner <it> finds that the banks sharing the unmanned
24-26 teller machine would be unfairly prejudiced by discontinuance on
24-27 the proposed date.
25-1 Sec. 7. Any person who violates this article or any order of
25-2 the <State> Banking Commissioner <Board> issued pursuant to this
25-3 article is subject to a civil penalty of not less than $50 nor more
25-4 than $1,000 for each day of violation and for each act of
25-5 violation. All civil penalties recovered under this article shall
25-6 be paid to the Banking Department under Article 12, Chapter I of
25-7 this code, as amended (Article 342-112, Vernon's Texas Civil
25-8 Statutes), for the use of the <State> Banking Commissioner <Board>
25-9 in enforcing this article.
25-10 Sec. 8. Whenever it appears that a person has violated or is
25-11 violating or is threatening to violate this article or any order of
25-12 the <State> Banking Commissioner <Board> issued pursuant to this
25-13 article, the <State> Banking Commissioner <Board> may cause a civil
25-14 suit to be instituted in a district court for injunctive relief to
25-15 restrain the person from continuing the violation or threat of
25-16 violation or for the assessment and recovery of the civil penalty
25-17 provided by this article, or for both injunctive relief and civil
25-18 penalty. At the request of the <State> Banking Commissioner
25-19 <Board>, the attorney general shall institute and conduct a suit in
25-20 the name of the state for injunctive relief or for the recovery and
25-21 receipt of a civil penalty, or for both injunctive relief and
25-22 penalty.
25-23 A suit for injunctive relief or recovery of a civil penalty
25-24 may be brought either in the county where the defendant resides, or
25-25 in the county where the violation or threat of violation occurs.
25-26 In any suit to enjoin a violation or threat of violation of this
25-27 article or of any order of the <State> Banking Commissioner
26-1 <Board>, the court may grant the <State> Banking Commissioner
26-2 <Board>, without bond or other undertaking, any prohibitory or
26-3 mandatory injunction as the facts may warrant, including temporary
26-4 restraining orders after notice and hearing, temporary injunctions,
26-5 and permanent injunctions.
26-6 Sec. 12. The legislature finds that the Congress of the
26-7 United States has amended the Consumer Protection Act, as amended
26-8 (15 U.S.C. 1601 et seq.), through passage of the Electronic Fund
26-9 Transfer Act and that the Consumer Protection Act is sufficiently
26-10 comprehensive to provide for the full and complete protection of
26-11 the rights of consumers using unmanned teller machines in this
26-12 state. The legislature further finds that it would not be in the
26-13 best interest of the public of this state to have separate
26-14 regulation of the consumer protection aspects of unmanned teller
26-15 machines by both the state and federal governments. To ensure the
26-16 continuing protection of consumers using the unmanned teller
26-17 machines authorized by this article, the <State> Banking
26-18 Commissioner <Board> and the attorney general are directed to make
26-19 a continuing study of the substantive and procedural provisions of
26-20 the Consumer Protection Act, of the regulations promulgated under
26-21 that Act, and of the effectiveness of enforcement of that Act in
26-22 this state and to report their findings and recommendations to the
26-23 legislature on or before June 30, 1981, and on the same date every
26-24 fourth year after 1981.
26-25 SECTION 16. Section 6, Article 3c, Chapter IX, The Texas
26-26 Banking Code (Article 342-903c, Vernon's Texas Civil Statutes), is
26-27 amended to read as follows:
27-1 Sec. 6. Compliance. On written complaint by a financial
27-2 institution that is utilizing or that seeks to utilize a system
27-3 that it is being denied the use of that system on a reasonable,
27-4 nondiscriminatory basis, the <State> Banking Commissioner <Board>
27-5 shall have jurisdiction to determine whether or not the financial
27-6 institution has been denied the right to utilize the system under
27-7 this article. The provisions of Sections 6 and 13, Article 3a,
27-8 Chapter IX, The Texas Banking Code of 1943, as amended (Article
27-9 342-903a, Vernon's Texas Civil Statutes), shall apply to this
27-10 article.
27-11 SECTION 17. Article 11.1, Chapter IX, The Texas Banking Code
27-12 (Article 342-911.1, Vernon's Texas Civil Statutes), is amended to
27-13 read as follows:
27-14 Art. 11.1. Appeals From Orders of <State Banking Board and>
27-15 Finance Commission. Any person, firm or corporation who is a party
27-16 to, or is necessarily aggrieved by, any final order, ruling or
27-17 judgment of the <State Banking Board or the> Finance Commission
27-18 shall have the right to appeal by filing a suit to set aside such
27-19 order, ruling or judgment in the District Court of Travis County,
27-20 Texas, within thirty (30) days following the date of rendition of
27-21 such order, ruling or judgment. Provided, that in such cases the
27-22 substantial evidence rule shall apply and govern the trial, as is
27-23 the common practice in cases of appeal from administrative orders
27-24 and as construed by the courts of this State. Pending final
27-25 judgment of the court the order shall remain in effect, unless
27-26 otherwise stayed or enjoined by the court upon proper application.
27-27 SECTION 18. Section 1, Article 1, Chapter XI, The Texas
28-1 Banking Code (Article 342-1101, Vernon's Texas Civil Statutes), is
28-2 amended by amending Subsection (b) and adding Subsections (c) and
28-3 (d) to read as follows:
28-4 (b) The <State> Banking Commissioner <Board> shall hear and
28-5 determine applications for state trust company charters.
28-6 (c) If the Banking Commissioner denies an application the
28-7 applicant may appeal the decision of the Banking Commissioner for
28-8 judicial review.
28-9 (d) Judicial review of a decision of the Banking
28-10 Commissioner regarding an application for a charter is under the
28-11 substantial evidence rule and is instituted by filing a petition
28-12 with a district court in Travis County as provided by Section
28-13 2001.176, Government Code.
28-14 SECTION 19. Section (a), Article 6, Chapter XI, The Texas
28-15 Banking Code (Article 342-1106, Vernon's Texas Civil Statutes), is
28-16 amended to read as follows:
28-17 (a) The <State> Banking Commissioner <Board> shall
28-18 promulgate and adopt such rules and procedural regulations as may
28-19 be necessary to facilitate the fair hearing and adjudication of
28-20 charter applications.
28-21 SECTION 20. Section 3, Chapter 496, Acts of the 44th
28-22 Legislature, 3rd Called Session, 1936 (Article 6243-23, Vernon's
28-23 Texas Civil Statutes), is amended to read as follows:
28-24 Sec. 3. Before the issuance of any such warrants, the
28-25 <State> Banking Commissioner <Board> shall, upon application by the
28-26 Old Age Assistance Commission, determine the rate of interest which
28-27 shall be paid on account of such warrants as authorized herein,
29-1 such interest rate never to exceed two and one-half (2-1/2) per
29-2 centum per annum.
29-3 SECTION 21. Section 3, Chapter 1, page 536, General Laws,
29-4 Acts of the 46th Legislature, 1939 (Article 6243-24, Vernon's Texas
29-5 Civil Statutes), is amended to read as follows:
29-6 Sec. 3. Before the issuance of any such warrants, the
29-7 <State> Banking Commissioner <Board> shall, upon application by the
29-8 Old Age Assistance Commission, determine the rate of interest which
29-9 shall be paid on account of such warrants as authorized herein,
29-10 such interest rate never to exceed two and one-half (2-1/2) per
29-11 centum per annum.
29-12 SECTION 22. Chapter 551, Government Code, does not require
29-13 the Banking Commissioner, in carrying out a power or duty of the
29-14 State Banking Board transferred to the commissioner by this Act, to
29-15 conduct an open meeting to deliberate a matter made confidential by
29-16 law.
29-17 SECTION 23. Article 15, Chapter I, The Texas Banking Code
29-18 (Article 342-115, Vernon's Texas Civil Statutes), is repealed.
29-19 SECTION 24. (a) On the effective date of this Act:
29-20 (1) the powers, duties, and obligations of the State
29-21 Banking Board are transferred to the Banking Commissioner;
29-22 (2) the State Banking Board shall transfer all
29-23 property and records in its custody to the Banking Commissioner;
29-24 and
29-25 (3) an employee of the State Banking Board becomes an
29-26 employee of the Texas Department of Banking.
29-27 (b) On the transfer of all property and records under
30-1 Subsection (a)(2) of this section, the State Banking Board is
30-2 abolished. On the abolishment of the State Banking Board, a rule,
30-3 form, policy, or order of the State Banking Board becomes a rule,
30-4 form, policy, or order of the Banking Commissioner.
30-5 SECTION 25. Except as provided by Section 26, this Act takes
30-6 effect September 1, 1995.
30-7 SECTION 26. This Act does not take effect if the 74th
30-8 Legislature, at its regular session, enacts legislation that
30-9 repeals Chapters I-X, The Texas Banking Code (Article 342-101 et
30-10 seq., Vernon's Texas Civil Statutes), and that legislation becomes
30-11 law.
30-12 SECTION 27. The importance of this legislation and the
30-13 crowded condition of the calendars in both houses create an
30-14 emergency and an imperative public necessity that the
30-15 constitutional rule requiring bills to be read on three several
30-16 days in each house be suspended, and this rule is hereby suspended.