H.B. No. 1020
1-1 AN ACT
1-2 relating to the regulation of savings banks.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 1.03(1), Texas Savings Bank Act (Article
1-5 489e, Vernon's Texas Civil Statutes), is amended to read as
1-6 follows:
1-7 (1) "Administrative procedure act" means Chapter 2001,
1-8 Government Code <the Administrative Procedure and Texas Register
1-9 Act (Article 6252-13a, Vernon's Texas Civil Statutes)>.
1-10 SECTION 2. Section 2.05(a), Texas Savings Bank Act (Article
1-11 489e, Vernon's Texas Civil Statutes), is amended to read as
1-12 follows:
1-13 (a) An application to incorporate a savings bank must be in
1-14 a form specified by the commissioner, signed by each incorporator,
1-15 and submitted to the commissioner with the filing fee. An
1-16 application consists of:
1-17 (1) two copies of the proposed articles of
1-18 incorporation setting forth the name of the savings bank, the site
1-19 of the principal office, and the names and addresses of the initial
1-20 directors;
1-21 (2) two copies of the bylaws under which the savings
1-22 bank proposes to operate;
1-23 (3) statements, exhibits, maps, and other data
1-24 sufficiently detailed and comprehensive to enable the commissioner
2-1 to make findings under Section 2.11 of this Act;
2-2 (4) other information relating to the proposed savings
2-3 bank and its operation required by the rules of the commissioner
2-4 and the finance commission; and
2-5 (5) financial information about the applicants,
2-6 incorporators, directors, officers, or stockholders required by the
2-7 rules of the commissioner and the finance commission.
2-8 SECTION 3. Section 2.10, Texas Savings Bank Act (Article
2-9 489e, Vernon's Texas Civil Statutes), is amended by amending
2-10 Subsection (a) and adding Subsection (c) to read as follows:
2-11 (a) When a complete application to incorporate as defined by
2-12 rules adopted by the commissioner and the finance commission is
2-13 filed, the commissioner shall issue public notice of the
2-14 application and shall give any interested party an opportunity to
2-15 appear, present evidence, and be heard for or against the
2-16 application. A hearing officer designated by the commissioner
2-17 shall hold the hearing. A hearing is not required if:
2-18 (1) no party provides written notice to the
2-19 commissioner, before the 11th day after the date of publication of
2-20 the notice of application, of the party's intention to appear and
2-21 present evidence at the hearing; and
2-22 (2) the commissioner finds that the application
2-23 complies with all statutory requirements for approval.
2-24 (c) Not later than the 30th day after the date of the
2-25 completion of a hearing, the commissioner shall enter a final order
2-26 approving or denying the application. An applicant may appeal a
2-27 final order to a district court of Travis County with the
3-1 commissioner as defendant. A party to the action in the district
3-2 court of Travis County may appeal to the appellate court having
3-3 jurisdiction of the cause. The appeal is immediately returnable to
3-4 the appellate court having jurisdiction of the cause, and that
3-5 action has precedence in that appellate court over all causes of a
3-6 different character pending in that court. The commissioner is not
3-7 required to give an appeal bond in a cause arising under this
3-8 section. Filing an appeal under this section does not stay an
3-9 order of the commissioner.
3-10 SECTION 4. Chapter 2, Texas Savings Bank Act (Article 489e,
3-11 Vernon's Texas Civil Statutes), is amended by adding Section 2.15
3-12 to read as follows:
3-13 Sec. 2.15. PREFERENCE FOR LOCAL CONTROL. If more than one
3-14 application to incorporate a new savings bank or establish an
3-15 additional office of an existing savings bank in the same community
3-16 is before the commissioner at the same time, the commissioner may
3-17 give additional weight to the application having the greater degree
3-18 of control vested in or held by residents of the community.
3-19 SECTION 5. Sections 3.07(c) and (g), Texas Savings Bank Act
3-20 (Article 489e, Vernon's Texas Civil Statutes), are amended to read
3-21 as follows:
3-22 (c) The applicant shall pay a filing fee when the applicant
3-23 files an application. A proposal to acquire voting securities of a
3-24 savings bank subject to this section may be made by an individual,
3-25 two or more individuals acting in concert, any type of partnership,
3-26 corporation, syndicate, trust, or any other organization, or any
3-27 combination of those individuals or entities. The information
4-1 required by the commissioner may be required of each member of the
4-2 group, as directed by the commissioner. Notice of the application,
4-3 its date of filing, and the identity of all parties to the
4-4 application shall be submitted to the Texas Register by the
4-5 commissioner on receipt of the application for publication in the
4-6 next issue of the Texas Register following the date the information
4-7 is received, except that the commissioner may waive the requirement
4-8 that a notice be published or permit delay of the publication if
4-9 the commissioner determines that the waiver or delay is in the
4-10 public interest. Information obtained by the commissioner under
4-11 this section, other than published information, is confidential and
4-12 may not be disclosed by the commissioner or any officer or employee
4-13 of the Savings and Loan Department of Texas, except nothing in this
4-14 section prohibits the commissioner from disclosing, on request, the
4-15 identity of the actual or beneficial owner of any savings bank
4-16 chartered under this Act, and the information that would have been
4-17 contained in a published notice that the commissioner waived
4-18 becomes public information under Chapter 552, Government Code, on
4-19 the 34th day after the date the application is filed. The
4-20 commissioner, in the commissioner's discretion and if the
4-21 commissioner deems it necessary or proper in the enforcement of the
4-22 laws of any state or the United States and in the best interest of
4-23 the public, may also divulge information to any appropriate banking
4-24 agency or any appropriate governmental department, agency, or
4-25 instrumentality of this state, another state, or the United States.
4-26 (g) Not later than the 60th day after the date of the filing
4-27 of the application, the commissioner shall approve the application
5-1 without a hearing or notify the proposed transferee in writing of
5-2 the commissioner's intent to deny the application based on the
5-3 requirements of this section. The notice must state the grounds
5-4 for denial. The proposed transferee may file a written request for
5-5 hearing on the application before the 31st day after the date the
5-6 notice of intent to deny is mailed to the proposed transferee. The
5-7 commissioner may immediately enter an order denying the application
5-8 if a hearing is not timely requested, and the order is final and
5-9 nonappealable. If the proposed transferee requests a hearing
5-10 <When the commissioner determines that an application for approval
5-11 of change of control is complete>, the commissioner shall issue
5-12 public notice of the application and shall give any interested
5-13 party an opportunity to appear, present evidence, and be heard for
5-14 or against the application. A hearing officer designated by the
5-15 commissioner shall hold the hearing. After the <A hearing is not
5-16 required if no party provides written notice to the commissioner,
5-17 within 10 days of the date of publication of the notice of
5-18 application, of intention to appear and present evidence at the
5-19 hearing and if the commissioner finds that the application complies
5-20 with all statutory requirements for approval within 30 days after
5-21 the date of the completion of a> hearing, the commissioner shall
5-22 enter a final order either approving or denying the application.
5-23 An applicant may appeal a final order to a district court of Travis
5-24 County with the commissioner as defendant. Either party to the
5-25 action may appeal from the district court of Travis County to the
5-26 appellate court having jurisdiction of the cause. The appeal is at
5-27 once returnable to the appellate court having jurisdiction of the
6-1 cause, and that action has precedence in that appellate court over
6-2 all causes of a different character pending in that court. The
6-3 commissioner is not required to give any appeal bond in any cause
6-4 arising under this section. Filing an appeal under this section
6-5 does not stay an order of the commissioner.
6-6 SECTION 6. Section 4.02, Texas Savings Bank Act (Article
6-7 489e, Vernon's Texas Civil Statutes), is amended to read as
6-8 follows:
6-9 Sec. 4.02. Annual Independent Audit Required. (a) Each
6-10 savings bank shall obtain within 90 days after the date of the
6-11 close of each of its fiscal years an audit by an independent
6-12 accounting firm that is a member of the American Institute of
6-13 Certified Public Accountants or its successor. Copies of the audit
6-14 together with all correspondence reasonably related to the audit
6-15 shall be provided to the commissioner. The commissioner and the
6-16 finance commission may adopt rules as necessary to implement this
6-17 section.
6-18 (b) An audit under this section is not required if the
6-19 savings bank:
6-20 (1) received at its most recent examination a
6-21 composite rating of 1 or 2 on the CAMEL financial institution
6-22 rating scale; or
6-23 (2) had at the beginning of its current fiscal year
6-24 consolidated assets of $500 million or less.
6-25 SECTION 7. Section 4.08, Texas Savings Bank Act (Article
6-26 489e, Vernon's Texas Civil Statutes), is amended to read as
6-27 follows:
7-1 Sec. 4.08. CONFIDENTIALITY. (a) Except as otherwise
7-2 provided by this Act or rules adopted under this Act, the <The>
7-3 commissioner and any examiner, supervisor, conservator, liquidator,
7-4 inspector, deputy, assistant clerk, or other employee of the
7-5 Savings and Loan Department of Texas appointed or acting under this
7-6 Act shall keep confidential any facts or information regarding a
7-7 financial institution or a shareholder, participant, officer,
7-8 director, manager, affiliate, or service provider of a financial
7-9 institution, other than a public statement or a public portion of a
7-10 call report or profit and loss statement, regardless of whether the
7-11 facts or information is obtained through application, examination,
7-12 or otherwise. All related files and records of the department are
7-13 confidential and may not be disclosed <savings bank obtained in
7-14 the course of an examination or by reason of the individual's
7-15 official position, unless the public duty of the person requires
7-16 otherwise>. A person who violates this section or wilfully makes a
7-17 false official report on the condition of a financial institution
7-18 <savings bank> shall be removed from office or further employment
7-19 with the Savings and Loan Department of Texas.
7-20 (b) A report of an examination made to the commissioner is
7-21 confidential and not for public record or inspection, except that
7-22 the commissioner for good reason may make the report public.
7-23 (c) This section does not prevent the proper exchange of
7-24 information relating to savings banks and the business of savings
7-25 banks with the representatives of regulatory authorities of other
7-26 states or to any other department, agency, or instrumentality of
7-27 this state, another state, or the United States if the commissioner
8-1 determines the disclosure necessary or proper for the enforcement
8-2 of the laws of this state, another state, or the United States.
8-3 (d) Unless otherwise provided by this Act, this section does
8-4 not apply to facts, information, or reports of investigations
8-5 obtained or made by the commissioner or the commissioner's staff in
8-6 connection with an application for charter or a hearing held by the
8-7 commissioner under this Act, and those facts, information, or
8-8 reports may be included in the record of the appropriate hearing.
8-9 (e) The commissioner shall report promptly to the finance
8-10 commission when a supervisory order is issued under Chapter 5 of
8-11 this Act. The commissioner shall furnish information about a
8-12 savings bank or person as the finance commission may require in
8-13 executive session, and all information discussed in the executive
8-14 session is confidential.
8-15 (f) Confidential information that is provided to a financial
8-16 institution or an affiliate or service provider of a financial
8-17 institution, whether in the form of a report of examination or
8-18 otherwise, is the confidential property of the department. Unless
8-19 approved in writing by the commissioner or authorized by rules
8-20 adopted under this section, the information may not be made public
8-21 or disclosed in any manner by the recipient, or by an officer,
8-22 director, manager, employee, or agent of the recipient, to a person
8-23 not officially connected to the recipient as officer, director,
8-24 employee, attorney, auditor, or independent auditor.
8-25 (g) Discovery of confidential information under subpoena or
8-26 other legal process from a person subject to this section must
8-27 comply with rules adopted under this Act. The rules may restrict
9-1 release of confidential information to that portion directly
9-2 relevant to the legal dispute involved and may require that a
9-3 protective order, in the form and under circumstances specified by
9-4 the rules, be issued by a court of competent jurisdiction before
9-5 release of confidential information.
9-6 (h) Notwithstanding any other law, the commissioner may
9-7 refuse to release any information or record in the custody of the
9-8 department if the commissioner believes release of the information
9-9 or record might jeopardize an investigation of possibly unlawful
9-10 activities.
9-11 SECTION 8. Section 6.03(a), Texas Savings Bank Act (Article
9-12 489e, Vernon's Texas Civil Statutes), is amended to read as
9-13 follows:
9-14 (a) A person may not be a member of the board of directors
9-15 of a savings bank if the person:
9-16 (1) <is not a citizen of the United States;>
9-17 <(2)> is not at least 18 years of age;
9-18 (2) <(3)> has been adjudicated bankrupt or convicted
9-19 of a criminal offense involving dishonesty or breach of trust,
9-20 unless given prior written approval to be a member of the board by
9-21 the commissioner;
9-22 (3) <(4)> has a final judgment entered against the
9-23 person for a sum of money that has remained unsatisfied or
9-24 unsecured for more than six months after the date of the judgment's
9-25 entry, unless the commissioner gives the person prior written
9-26 approval to be a member of the board or unless the judgment was
9-27 satisfied of record more than one year before the date of the
10-1 election; or
10-2 (4) <(5)> is a director, officer, or employee of
10-3 another savings bank, unless given the prior written approval to
10-4 be a member of the board by the commissioner.
10-5 SECTION 9. Section 7.01, Texas Savings Bank Act (Article
10-6 489e, Vernon's Texas Civil Statutes), is amended to read as
10-7 follows:
10-8 Sec. 7.01. GENERAL CORPORATE POWERS. (a) Each savings bank
10-9 has the powers authorized by this Act and other rights, privileges,
10-10 and powers as may be incidental to or reasonably necessary for the
10-11 accomplishment of the objects and purposes of the savings bank.
10-12 Subject to the prior approval of the commissioner, a savings bank
10-13 may engage in business as a savings bank in any state or territory
10-14 of the United States to the extent permitted by the laws of that
10-15 state or territory, either directly or through ownership of another
10-16 savings bank incorporated under the laws of another state.
10-17 (b) The finance commission by rule may expand savings bank
10-18 powers to accommodate or take advantage of changing technology and
10-19 enable state savings banks to respond to the needs of and
10-20 convenience demanded by consumers and businesses through
10-21 on-premises and off-premises operations, except that the finance
10-22 commission may not authorize state savings banks to offer financial
10-23 services prohibited to state savings banks by laws of this state
10-24 other than this Act. In adopting any rules under this subsection,
10-25 the finance commission shall consider the need to:
10-26 (1) promote a stable financial institution
10-27 environment;
11-1 (2) provide the public with convenient, safe, and
11-2 competitive financial services; and
11-3 (3) allow for economic development within the state.
11-4 SECTION 10. Section 7.05, Texas Savings Bank Act (Article
11-5 489e, Vernon's Texas Civil Statutes), is amended to read as
11-6 follows:
11-7 Sec. 7.05. INVESTMENT IN BANKING PREMISES. (a) Without
11-8 prior approval of the commissioner, a <A> savings bank may invest
11-9 not more than an amount equal to its regulatory capital in real
11-10 estate, buildings, and related facilities, including parking, and
11-11 in leasehold improvements for rented facilities for use by the
11-12 savings bank as its banking premises.
11-13 (b) The finance commission by rule adopted under Section
11-14 7.01(b) of this Act may approve a new form of savings bank facility
11-15 or authorize the commissioner to approve a new form of savings bank
11-16 facility if the commissioner does not have a significant
11-17 supervisory or regulatory concern regarding the proposed facility.
11-18 SECTION 11. Section 7.09, Texas Savings Bank Act (Article
11-19 489e, Vernon's Texas Civil Statutes), is amended to read as
11-20 follows:
11-21 Sec. 7.09. COMMERCIAL LOANS. Subject to the rules of the
11-22 commissioner and the finance commission, a savings bank may lend
11-23 and invest not more than 40 <15> percent of its total assets in
11-24 commercial loans. A commercial loan is a non-real-estate loan for
11-25 business, commercial, corporate, or agricultural purposes.
11-26 SECTION 12. Section 7.10(b), Texas Savings Bank Act (Article
11-27 489e, Vernon's Texas Civil Statutes), is amended to read as
12-1 follows:
12-2 (b) A savings bank may not make any investment in a
12-3 subsidiary corporation if its aggregate investments in subsidiaries
12-4 would exceed 10 percent of its total assets, excluding amounts
12-5 invested in a subsidiary corporation the activities of which are
12-6 limited to activities that could be conducted directly by the
12-7 parent savings bank.
12-8 SECTION 13. Section 8.02, Texas Savings Bank Act (Article
12-9 489e, Vernon's Texas Civil Statutes), is amended to read as
12-10 follows:
12-11 Sec. 8.02. LIQUIDITY. Unless approved in advance by the
12-12 commissioner, a savings bank shall maintain a minimum of 10 percent
12-13 of an amount equal to its average daily deposits for the most
12-14 recently completed calendar quarter <assets> in cash, balances in a
12-15 federal reserve bank or passed through a federal home loan bank or
12-16 another depository institution to a federal reserve bank under the
12-17 Federal Reserve Act (12 U.S.C. Section 221 et seq.), or other
12-18 readily marketable investments, including unencumbered federal
12-19 government sponsored enterprises securities, as allowed by rules
12-20 adopted by the commissioner and the finance commission.
12-21 SECTION 14. Section 11.07, Texas Savings Bank Act (Article
12-22 489e, Vernon's Texas Civil Statutes), is amended by adding
12-23 Subsection (f) to read as follows:
12-24 (f) A foreign savings and loan association may merge with a
12-25 domestic savings bank under this section as if the foreign savings
12-26 and loan association were a foreign savings bank. If the surviving
12-27 institution is the foreign savings and loan association, the
13-1 commissioner shall issue and deliver to the foreign savings and
13-2 loan association a certificate of authority under Subsection (e) of
13-3 this section to do business in this state. In this section,
13-4 "foreign savings and loan association" means a savings and loan
13-5 association whose principal office is located outside this state
13-6 and that has been organized under the laws of a state or territory
13-7 of the United States other than this state or under the laws of the
13-8 United States.
13-9 SECTION 15. Section 12.12(a), Texas Savings Bank Act
13-10 (Article 489e, Vernon's Texas Civil Statutes), is amended to read
13-11 as follows:
13-12 (a) Except as provided in Subsection (b) of this section, a
13-13 reference in statutes of this state, including Title 79, Revised
13-14 Statutes (Article 5069-1.01 et seq., Vernon's Texas Civil
13-15 Statutes), the Government Code, and the Local Government Code or in
13-16 a rule adopted under the statutes to a "savings and loan
13-17 association," "savings and loan," or "association" in the context
13-18 of a savings and loan association, or to a corporation,
13-19 association, or other organization incorporated or organized under
13-20 the Texas Savings and Loan Act (Article 852a, Vernon's Texas Civil
13-21 Statutes), is also a reference to a savings bank, as defined in
13-22 this Act.
13-23 SECTION 16. (a) The changes made by this Act to the
13-24 procedures applicable to a proceeding before the savings and loan
13-25 commissioner apply only to a proceeding initiated on or after the
13-26 effective date of this Act. A proceeding initiated before the
13-27 effective date of this Act is governed by the law in effect when
14-1 the proceeding was initiated, and that law is continued in effect
14-2 for that purpose.
14-3 (b) The savings and loan commissioner shall by rule
14-4 prescribe the manner and period in which a savings bank that on the
14-5 effective date of this Act does not comply with Section 7.05 or
14-6 8.02, Texas Savings Bank Act (Article 489e, Vernon's Texas Civil
14-7 Statutes), as amended by this Act, shall come into compliance with
14-8 that section.
14-9 SECTION 17. The importance of this legislation and the
14-10 crowded condition of the calendars in both houses create an
14-11 emergency and an imperative public necessity that the
14-12 constitutional rule requiring bills to be read on three several
14-13 days in each house be suspended, and this rule is hereby suspended,
14-14 and that this Act take effect and be in force from and after its
14-15 passage, and it is so enacted.