By Marchant, Patterson, Brimer, Berlanga H.B. No. 889
74R3314 DWS-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to interstate banking, branch banking, and bank holding
1-3 companies.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 2, Chapter I, The Texas Banking Code
1-6 (Article 342-102, Vernon's Texas Civil Statutes), is amended by
1-7 adding Subdivision (28) to read as follows:
1-8 (28) "Out-of-state bank"--A bank that is:
1-9 (A) a national bank having its main office in a
1-10 state other than this state; or
1-11 (B) a state-chartered bank chartered by a state
1-12 other than this state.
1-13 SECTION 2. Chapter III, The Texas Banking Code (Article
1-14 342-301 et seq., Vernon's Texas Civil Statutes), is amended by
1-15 adding Article 5A to read as follows:
1-16 Art. 5A. INTERSTATE MERGER OR ACQUISITION PROHIBITED.
1-17 Notwithstanding any other provision of this code and pursuant to
1-18 Section 44(a)(2), Federal Deposit Insurance Act (12 U.S.C. Section
1-19 1811 et seq.):
1-20 (1) a state bank or a national bank having its main
1-21 office in this state may not merge with an out-of-state bank;
1-22 (2) a state bank may not be incorporated to take over
1-23 the business of an out-of-state bank; and
1-24 (3) a state bank may not purchase the whole or any
2-1 part of the assets of an out-of-state bank.
2-2 SECTION 3. Article 3, Chapter IX, The Texas Banking Code
2-3 (Article 342-903, Vernon's Texas Civil Statutes), is amended by
2-4 adding Section 4 to read as follows:
2-5 Sec. 4. An out-of-state bank may not:
2-6 (1) establish a de novo branch facility in this state;
2-7 or
2-8 (2) acquire a branch facility in this state by merger,
2-9 consolidation, purchase, or other means.
2-10 SECTION 4. Chapter IX, The Texas Banking Code (Article
2-11 342-901 et seq., Vernon's Texas Civil Statutes), is amended by
2-12 adding Articles 18, 19, 20, and 21 to read as follows:
2-13 Art. 18. ACQUISITION OF BANK OR BANK HOLDING COMPANY
2-14 Sec. 1. (a) A bank or bank holding company that seeks to
2-15 directly or indirectly acquire or acquire control of a bank located
2-16 in this state, or of a bank holding company that controls a bank in
2-17 this state, and that submits an application for approval to the
2-18 Board of Governors of the Federal Reserve System as provided by
2-19 Section 3, Bank Holding Company Act of 1956 (12 U.S.C. Section
2-20 1842), shall submit a copy of the application and any required
2-21 additional Community Reinvestment Act information to the banking
2-22 commissioner when the application is submitted to the board of
2-23 governors.
2-24 (b) The banking commissioner, on receipt of the notice
2-25 prescribed by Subsection 3(b), Bank Holding Company Act of 1956 (12
2-26 U.S.C. Section 1842(b)), shall state in writing within the period
2-27 prescribed by that subsection:
3-1 (1) the views and recommendations of the banking
3-2 commissioner concerning the application; and
3-3 (2) the opinion of the banking commissioner regarding
3-4 whether the application evidences compliance with the Community
3-5 Reinvestment Act of 1977 (12 U.S.C. Section 2901 et seq.), except
3-6 that the banking commissioner is not required to disapprove the
3-7 application solely because of that opinion.
3-8 (c) If the proposed acquisition is of a state bank or a bank
3-9 holding company controlling a state bank and the banking
3-10 commissioner disapproves the application in the response, the
3-11 banking commissioner shall appear at the hearing held as provided
3-12 by Subsection 3(b), Bank Holding Company Act of 1956 (12 U.S.C.
3-13 Section 1842(b)) and present evidence at the hearing regarding the
3-14 reasons the application should be denied.
3-15 (d) If the proposed acquisition is of a national bank or a
3-16 bank holding company controlling a national bank and the banking
3-17 commissioner opposes the application in the response, the banking
3-18 commissioner shall request that a hearing be held as provided by
3-19 Subsection 3(b), Bank Holding Company Act of 1956 (12 U.S.C.
3-20 Section 1842(b)). If the board of governors grants the request,
3-21 the banking commissioner shall appear and present evidence at the
3-22 hearing regarding the reasons the application should be denied.
3-23 (e) If the board of governors approves an application that
3-24 the banking commissioner opposed, the banking commissioner may
3-25 accept the decision or seek to overturn the decision on appeal,
3-26 with the assistance of the attorney general, as provided by Section
3-27 9, Bank Holding Company Act of 1956 (12 U.S.C. Section 1848).
4-1 Sec. 2. In deriving an opinion regarding a bank's compliance
4-2 with the Community Reinvestment Act of 1977 (12 U.S.C. Section 2901
4-3 et seq.) for purposes of Section 1 of this article, the banking
4-4 commissioner shall consider, to the extent available data permits,
4-5 whether the acquisition will result in:
4-6 (1) continued and increased extension of credit, or
4-7 direct or indirect investment in projects or programs, to develop
4-8 or redevelop areas in which persons with low or moderate incomes
4-9 reside, to meet the credit needs of low or moderate income areas,
4-10 or to otherwise benefit primarily persons of low and moderate
4-11 income, in a manner consistent with sound banking practices,
4-12 policies, and procedures, except that personal installment loans,
4-13 loans made to purchase, or loans secured by an automobile are not
4-14 qualifying community reinvestment;
4-15 (2) continued and increased investment in government
4-16 insured, guaranteed, subsidized, or otherwise sponsored programs
4-17 for housing, small farms, or businesses that address the needs of
4-18 the low and moderate income areas;
4-19 (3) continued and increased investment in or purchase
4-20 of residential mortgage loans, home improvement loans, housing
4-21 rehabilitation loans, and small business or small farm loans
4-22 originated in low and moderate income areas;
4-23 (4) continued and increased investment for the
4-24 preservation or revitalization of urban or rural communities in low
4-25 and moderate income areas;
4-26 (5) continued investment in the obligations of state
4-27 and local governmental entities and the giving of priority, to the
5-1 extent possible, to investments in entities located in the local
5-2 community or local trade area of each bank;
5-3 (6) diminution of reasonable availability of banking
5-4 services to all segments of the public and economy of this state;
5-5 and
5-6 (7) increased economic development and the financing
5-7 of enterprises to increase employment opportunities.
5-8 Sec. 3. Notwithstanding any other law, a bank or bank
5-9 holding company may not acquire control of or acquire all or
5-10 substantially all of the assets of a bank located in this state or
5-11 of a bank holding company that controls a bank in this state, if
5-12 the acquiring bank or bank holding company and all of its insured
5-13 depository institution affiliates control, or after consummation of
5-14 the acquisition would control, more than 20 percent of the total
5-15 amount of deposits of insured depository institutions located in
5-16 this state as reported in the most recently available reports of
5-17 condition or similar reports filed with state or federal
5-18 authorities. For purposes of this section, "deposit" and "insured
5-19 depository institution" have the meanings assigned by Section 3,
5-20 Federal Deposit Insurance Act (12 U.S.C. Section 1813).
5-21 Art. 19. ADDITIONAL REQUIREMENTS APPLICABLE TO OUT-OF-STATE
5-22 BANK HOLDING COMPANIES. (a) An out-of-state bank holding company
5-23 may not engage in an acquisition specified by Article 12 of this
5-24 chapter unless each bank in this state that would on consummation
5-25 of the acquisition be directly or indirectly controlled by the
5-26 out-of-state bank holding company has existed and continuously
5-27 operated as a bank at least five years.
6-1 (b) For purposes of this section:
6-2 (1) a bank that is the successor as a result of merger
6-3 or acquisition of all or substantially all of the assets of a prior
6-4 bank is considered to have been in existence and continuously
6-5 operated during the period of its existence and continuous
6-6 operation as the successor and during the period of existence and
6-7 continuous operation of the prior bank;
6-8 (2) a bank effecting a purchase and assumption,
6-9 merger, or similar transaction with or supervised by the Federal
6-10 Deposit Insurance Corporation or its successor is considered to
6-11 have been in existence and continuously operated during the
6-12 existence and continuous operation of the bank with respect to
6-13 which the transaction was consummated; and
6-14 (3) a bank holding company is considered an
6-15 out-of-state bank holding company at all times after it becomes an
6-16 out-of-state bank holding company unless the banking commissioner
6-17 determines otherwise.
6-18 Art. 20. ACQUISITION OF NONBANKING INSTITUTION BY A BANK
6-19 HOLDING COMPANY. (a) A bank holding company doing business in
6-20 this state that submits an application or notice to the Board of
6-21 Governors of the Federal Reserve System regarding an acquisition or
6-22 activity regulated by Section 4, Bank Holding Company Act of 1956
6-23 (12 U.S.C. Section 1843), shall submit a copy of the application or
6-24 notice to the banking commissioner when the application or notice
6-25 is submitted to the board of governors. The bank holding company
6-26 shall submit other information reasonably requested by the banking
6-27 commissioner to determine the acquisition's or activity's direct or
7-1 indirect effect on residents of this state, including any remote or
7-2 contingent effect.
7-3 (b) The banking commissioner may hold a public hearing
7-4 regarding the application and its effect on this state, regardless
7-5 of whether requested to do so by a person, as provided by this Act.
7-6 The banking commissioner shall convene a hearing if the bank
7-7 holding company requests a hearing in writing when it submits the
7-8 application or notice to the banking commissioner. The application
7-9 or activity is considered approved if the banking commissioner does
7-10 not hold a hearing under this subsection on or before the 31st day
7-11 after the date the application or notice is filed.
7-12 (c) On or before the 31st day after the hearing is closed,
7-13 the banking commissioner shall:
7-14 (1) issue an order disapproving the acquisition or
7-15 activity if the banking commissioner finds that the acquisition or
7-16 activity would be detrimental to the public interest as a result of
7-17 probable adverse effects, including undue concentration of
7-18 resources, decreased or unfair competition, conflicts of interest,
7-19 or unsound banking practices; or
7-20 (2) approve the application or activity.
7-21 (d) A final order of the banking commissioner may be
7-22 appealed in the manner provided by this title.
7-23 Art. 21. ENFORCEMENT AGAINST BANK HOLDING COMPANY. The
7-24 banking commissioner may bring an enforcement proceeding under this
7-25 Act against a bank holding company that knowingly violates or
7-26 participates in the violation of this Act, an agreement filed with
7-27 the banking commissioner under this chapter, or a rule or order
8-1 issued by the banking commissioner or the finance commission under
8-2 this Act, as if the bank holding company was a state bank.
8-3 SECTION 5. The following articles of Chapter IX, The Texas
8-4 Banking Code (Article 342-901 et seq., Vernon's Texas Civil
8-5 Statutes), are repealed:
8-6 (1) Article 12 (Article 342-912, Vernon's Texas Civil
8-7 Statutes);
8-8 (2) Article 13 (Article 342-913, Vernon's Texas Civil
8-9 Statutes);
8-10 (3) Article 14 (Article 342-914, Vernon's Texas Civil
8-11 Statutes); and
8-12 (4) Article 16 (Article 342-916, Vernon's Texas Civil
8-13 Statutes).
8-14 SECTION 6. The importance of this legislation and the
8-15 crowded condition of the calendars in both houses create an
8-16 emergency and an imperative public necessity that the
8-17 constitutional rule requiring bills to be read on three several
8-18 days in each house be suspended, and this rule is hereby suspended,
8-19 and that this Act take effect and be in force from and after its
8-20 passage, and it is so enacted.