1-1 By: Oliveira (Senate Sponsor - Sibley) H.B. No. 1020
1-2 (In the Senate - Received from the House March 30, 1995;
1-3 April 3, 1995, read first time and referred to Committee on
1-4 Economic Development; May 22, 1995, reported adversely, with
1-5 favorable Committee Substitute by the following vote: Yeas 10,
1-6 Nays 0; May 22, 1995, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 1020 By: Sibley
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the regulation of savings banks.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 1.03(1), Texas Savings Bank Act (Article
1-13 489e, Vernon's Texas Civil Statutes), is amended to read as
1-14 follows:
1-15 (1) "Administrative procedure act" means Chapter 2001,
1-16 Government Code <the Administrative Procedure and Texas Register
1-17 Act (Article 6252-13a, Vernon's Texas Civil Statutes)>.
1-18 SECTION 2. Section 2.05(a), Texas Savings Bank Act (Article
1-19 489e, Vernon's Texas Civil Statutes), is amended to read as
1-20 follows:
1-21 (a) An application to incorporate a savings bank must be in
1-22 a form specified by the commissioner, signed by each incorporator,
1-23 and submitted to the commissioner with the filing fee. An
1-24 application consists of:
1-25 (1) two copies of the proposed articles of
1-26 incorporation setting forth the name of the savings bank, the site
1-27 of the principal office, and the names and addresses of the initial
1-28 directors;
1-29 (2) two copies of the bylaws under which the savings
1-30 bank proposes to operate;
1-31 (3) statements, exhibits, maps, and other data
1-32 sufficiently detailed and comprehensive to enable the commissioner
1-33 to make findings under Section 2.11 of this Act;
1-34 (4) other information relating to the proposed savings
1-35 bank and its operation required by the rules of the commissioner
1-36 and the finance commission; and
1-37 (5) financial information about the applicants,
1-38 incorporators, directors, officers, or stockholders required by the
1-39 rules of the commissioner and the finance commission.
1-40 SECTION 3. Section 2.10, Texas Savings Bank Act (Article
1-41 489e, Vernon's Texas Civil Statutes), is amended by amending
1-42 Subsection (a) and adding Subsection (c) to read as follows:
1-43 (a) When a complete application to incorporate as defined by
1-44 rules adopted by the commissioner and the finance commission is
1-45 filed, the commissioner shall issue public notice of the
1-46 application and shall give any interested party an opportunity to
1-47 appear, present evidence, and be heard for or against the
1-48 application. A hearing officer designated by the commissioner
1-49 shall hold the hearing. A hearing is not required if:
1-50 (1) no party provides written notice to the
1-51 commissioner, before the 11th day after the date of publication of
1-52 the notice of application, of the party's intention to appear and
1-53 present evidence at the hearing; and
1-54 (2) the commissioner finds that the application
1-55 complies with all statutory requirements for approval.
1-56 (c) Not later than the 30th day after the date of the
1-57 completion of a hearing, the commissioner shall enter a final order
1-58 approving or denying the application. An applicant may appeal a
1-59 final order to a district court of Travis County with the
1-60 commissioner as defendant. A party to the action in the district
1-61 court of Travis County may appeal to the appellate court having
1-62 jurisdiction of the cause. The appeal is immediately returnable to
1-63 the appellate court having jurisdiction of the cause, and that
1-64 action has precedence in that appellate court over all causes of a
1-65 different character pending in that court. The commissioner is not
1-66 required to give an appeal bond in a cause arising under this
1-67 section. Filing an appeal under this section does not stay an
1-68 order of the commissioner.
2-1 SECTION 4. Chapter 2, Texas Savings Bank Act (Article 489e,
2-2 Vernon's Texas Civil Statutes), is amended by adding Section 2.15
2-3 to read as follows:
2-4 Sec. 2.15. PREFERENCE FOR LOCAL CONTROL. If more than one
2-5 application to incorporate a new savings bank or establish an
2-6 additional office of an existing savings bank in the same community
2-7 is before the commissioner at the same time, the commissioner may
2-8 give additional weight to the application having the greater degree
2-9 of control vested in or held by residents of the community.
2-10 SECTION 5. Sections 3.07(c) and (g), Texas Savings Bank Act
2-11 (Article 489e, Vernon's Texas Civil Statutes), are amended to read
2-12 as follows:
2-13 (c) The applicant shall pay a filing fee when the applicant
2-14 files an application. A proposal to acquire voting securities of a
2-15 savings bank subject to this section may be made by an individual,
2-16 two or more individuals acting in concert, any type of partnership,
2-17 corporation, syndicate, trust, or any other organization, or any
2-18 combination of those individuals or entities. The information
2-19 required by the commissioner may be required of each member of the
2-20 group, as directed by the commissioner. Notice of the application,
2-21 its date of filing, and the identity of all parties to the
2-22 application shall be submitted to the Texas Register by the
2-23 commissioner on receipt of the application for publication in the
2-24 next issue of the Texas Register following the date the information
2-25 is received, except that the commissioner may waive the requirement
2-26 that a notice be published or permit delay of the publication if
2-27 the commissioner determines that the waiver or delay is in the
2-28 public interest. Information obtained by the commissioner under
2-29 this section, other than published information, is confidential and
2-30 may not be disclosed by the commissioner or any officer or employee
2-31 of the Savings and Loan Department of Texas, except nothing in this
2-32 section prohibits the commissioner from disclosing, on request, the
2-33 identity of the actual or beneficial owner of any savings bank
2-34 chartered under this Act, and the information that would have been
2-35 contained in a published notice that the commissioner waived
2-36 becomes public information under Chapter 552, Government Code, on
2-37 the 34th day after the date the application is filed. The
2-38 commissioner, in the commissioner's discretion and if the
2-39 commissioner deems it necessary or proper in the enforcement of the
2-40 laws of any state or the United States and in the best interest of
2-41 the public, may also divulge information to any appropriate banking
2-42 agency or any appropriate governmental department, agency, or
2-43 instrumentality of this state, another state, or the United States.
2-44 (g) Not later than the 60th day after the date of the filing
2-45 of the application, the commissioner shall approve the application
2-46 without a hearing or notify the proposed transferee in writing of
2-47 the commissioner's intent to deny the application based on the
2-48 requirements of this section. The notice must state the grounds
2-49 for denial. The proposed transferee may file a written request for
2-50 hearing on the application before the 31st day after the date the
2-51 notice of intent to deny is mailed to the proposed transferee. The
2-52 commissioner may immediately enter an order denying the application
2-53 if a hearing is not timely requested, and the order is final and
2-54 nonappealable. If the proposed transferee requests a hearing
2-55 <When the commissioner determines that an application for approval
2-56 of change of control is complete>, the commissioner shall issue
2-57 public notice of the application and shall give any interested
2-58 party an opportunity to appear, present evidence, and be heard for
2-59 or against the application. A hearing officer designated by the
2-60 commissioner shall hold the hearing. After the <A hearing is not
2-61 required if no party provides written notice to the commissioner,
2-62 within 10 days of the date of publication of the notice of
2-63 application, of intention to appear and present evidence at the
2-64 hearing and if the commissioner finds that the application complies
2-65 with all statutory requirements for approval within 30 days after
2-66 the date of the completion of a> hearing, the commissioner shall
2-67 enter a final order either approving or denying the application.
2-68 An applicant may appeal a final order to a district court of Travis
2-69 County with the commissioner as defendant. Either party to the
2-70 action may appeal from the district court of Travis County to the
3-1 appellate court having jurisdiction of the cause. The appeal is at
3-2 once returnable to the appellate court having jurisdiction of the
3-3 cause, and that action has precedence in that appellate court over
3-4 all causes of a different character pending in that court. The
3-5 commissioner is not required to give any appeal bond in any cause
3-6 arising under this section. Filing an appeal under this section
3-7 does not stay an order of the commissioner.
3-8 SECTION 6. Section 4.02, Texas Savings Bank Act (Article
3-9 489e, Vernon's Texas Civil Statutes), is amended to read as
3-10 follows:
3-11 Sec. 4.02. Annual Independent Audit Required. (a) Each
3-12 savings bank shall obtain within 90 days after the date of the
3-13 close of each of its fiscal years an audit by an independent
3-14 accounting firm that is a member of the American Institute of
3-15 Certified Public Accountants or its successor. Copies of the audit
3-16 together with all correspondence reasonably related to the audit
3-17 shall be provided to the commissioner. The commissioner and the
3-18 finance commission may adopt rules as necessary to implement this
3-19 section.
3-20 (b) An audit under this section is not required if the
3-21 savings bank:
3-22 (1) received at its most recent examination a
3-23 composite rating of 1 or 2 on the CAMEL financial institution
3-24 rating scale; or
3-25 (2) had at the beginning of its current fiscal year
3-26 consolidated assets of $500 million or less.
3-27 SECTION 7. Section 4.08, Texas Savings Bank Act (Article
3-28 489e, Vernon's Texas Civil Statutes), is amended to read as
3-29 follows:
3-30 Sec. 4.08. CONFIDENTIALITY. (a) Except as otherwise
3-31 provided by this Act or rules adopted under this Act, the <The>
3-32 commissioner and any examiner, supervisor, conservator, liquidator,
3-33 inspector, deputy, assistant clerk, or other employee of the
3-34 Savings and Loan Department of Texas appointed or acting under this
3-35 Act shall keep confidential any facts or information regarding a
3-36 financial institution or a shareholder, participant, officer,
3-37 director, manager, affiliate, or service provider of a financial
3-38 institution, other than a public statement or a public portion of a
3-39 call report or profit and loss statement, regardless of whether the
3-40 facts or information is obtained through application, examination,
3-41 or otherwise. All related files and records of the department are
3-42 confidential and may not be disclosed <savings bank obtained in
3-43 the course of an examination or by reason of the individual's
3-44 official position, unless the public duty of the person requires
3-45 otherwise>. A person who violates this section or wilfully makes a
3-46 false official report on the condition of a financial institution
3-47 <savings bank> shall be removed from office or further employment
3-48 with the Savings and Loan Department of Texas.
3-49 (b) A report of an examination made to the commissioner is
3-50 confidential and not for public record or inspection, except that
3-51 the commissioner for good reason may make the report public.
3-52 (c) This section does not prevent the proper exchange of
3-53 information relating to savings banks and the business of savings
3-54 banks with the representatives of regulatory authorities of other
3-55 states or to any other department, agency, or instrumentality of
3-56 this state, another state, or the United States if the commissioner
3-57 determines the disclosure necessary or proper for the enforcement
3-58 of the laws of this state, another state, or the United States.
3-59 (d) Unless otherwise provided by this Act, this section does
3-60 not apply to facts, information, or reports of investigations
3-61 obtained or made by the commissioner or the commissioner's staff in
3-62 connection with an application for charter or a hearing held by the
3-63 commissioner under this Act, and those facts, information, or
3-64 reports may be included in the record of the appropriate hearing.
3-65 (e) The commissioner shall report promptly to the finance
3-66 commission when a supervisory order is issued under Chapter 5 of
3-67 this Act. The commissioner shall furnish information about a
3-68 savings bank or person as the finance commission may require in
3-69 executive session, and all information discussed in the executive
3-70 session is confidential.
4-1 (f) Confidential information that is provided to a financial
4-2 institution or an affiliate or service provider of a financial
4-3 institution, whether in the form of a report of examination or
4-4 otherwise, is the confidential property of the department. Unless
4-5 approved in writing by the commissioner or authorized by rules
4-6 adopted under this section, the information may not be made public
4-7 or disclosed in any manner by the recipient, or by an officer,
4-8 director, manager, employee, or agent of the recipient, to a person
4-9 not officially connected to the recipient as officer, director,
4-10 employee, attorney, auditor, or independent auditor.
4-11 (g) Discovery of confidential information under subpoena or
4-12 other legal process from a person subject to this section must
4-13 comply with rules adopted under this Act. The rules may restrict
4-14 release of confidential information to that portion directly
4-15 relevant to the legal dispute involved and may require that a
4-16 protective order, in the form and under circumstances specified by
4-17 the rules, be issued by a court of competent jurisdiction before
4-18 release of confidential information.
4-19 (h) Notwithstanding any other law, the commissioner may
4-20 refuse to release any information or record in the custody of the
4-21 department if the commissioner believes release of the information
4-22 or record might jeopardize an investigation of possibly unlawful
4-23 activities.
4-24 SECTION 8. Section 6.03(a), Texas Savings Bank Act (Article
4-25 489e, Vernon's Texas Civil Statutes), is amended to read as
4-26 follows:
4-27 (a) A person may not be a member of the board of directors
4-28 of a savings bank if the person:
4-29 (1) <is not a citizen of the United States;>
4-30 <(2)> is not at least 18 years of age;
4-31 (2) <(3)> has been adjudicated bankrupt or convicted
4-32 of a criminal offense involving dishonesty or breach of trust,
4-33 unless given prior written approval to be a member of the board by
4-34 the commissioner;
4-35 (3) <(4)> has a final judgment entered against the
4-36 person for a sum of money that has remained unsatisfied or
4-37 unsecured for more than six months after the date of the judgment's
4-38 entry, unless the commissioner gives the person prior written
4-39 approval to be a member of the board or unless the judgment was
4-40 satisfied of record more than one year before the date of the
4-41 election; or
4-42 (4) <(5)> is a director, officer, or employee of
4-43 another savings bank, unless given the prior written approval to
4-44 be a member of the board by the commissioner.
4-45 SECTION 9. Section 7.01, Texas Savings Bank Act (Article
4-46 489e, Vernon's Texas Civil Statutes), is amended to read as
4-47 follows:
4-48 Sec. 7.01. GENERAL CORPORATE POWERS. (a) Each savings bank
4-49 has the powers authorized by this Act and other rights, privileges,
4-50 and powers as may be incidental to or reasonably necessary for the
4-51 accomplishment of the objects and purposes of the savings bank.
4-52 Subject to the prior approval of the commissioner, a savings bank
4-53 may engage in business as a savings bank in any state or territory
4-54 of the United States to the extent permitted by the laws of that
4-55 state or territory, either directly or through ownership of another
4-56 savings bank incorporated under the laws of another state.
4-57 (b) The finance commission by rule may expand savings bank
4-58 powers to accommodate or take advantage of changing technology and
4-59 enable state savings banks to respond to the needs of and
4-60 convenience demanded by consumers and businesses through
4-61 on-premises and off-premises operations, except that the finance
4-62 commission may not authorize state savings banks to offer financial
4-63 services prohibited to state savings banks by laws of this state
4-64 other than this Act. In adopting any rules under this subsection,
4-65 the finance commission shall consider the need to:
4-66 (1) promote a stable financial institution
4-67 environment;
4-68 (2) provide the public with convenient, safe, and
4-69 competitive financial services; and
4-70 (3) allow for economic development within the state.
5-1 SECTION 10. Section 7.05, Texas Savings Bank Act (Article
5-2 489e, Vernon's Texas Civil Statutes), is amended to read as
5-3 follows:
5-4 Sec. 7.05. INVESTMENT IN BANKING PREMISES. (a) Without
5-5 prior approval of the commissioner, a <A> savings bank may invest
5-6 not more than an amount equal to its regulatory capital in real
5-7 estate, buildings, and related facilities, including parking, and
5-8 in leasehold improvements for rented facilities for use by the
5-9 savings bank as its banking premises.
5-10 (b) The finance commission by rule adopted under Section
5-11 7.01(b) of this Act may approve a new form of savings bank facility
5-12 or authorize the commissioner to approve a new form of savings bank
5-13 facility if the commissioner does not have a significant
5-14 supervisory or regulatory concern regarding the proposed facility.
5-15 SECTION 11. Section 7.09, Texas Savings Bank Act (Article
5-16 489e, Vernon's Texas Civil Statutes), is amended to read as
5-17 follows:
5-18 Sec. 7.09. COMMERCIAL LOANS. Subject to the rules of the
5-19 commissioner and the finance commission, a savings bank may lend
5-20 and invest not more than 40 <15> percent of its total assets in
5-21 commercial loans. A commercial loan is a non-real-estate loan for
5-22 business, commercial, corporate, or agricultural purposes.
5-23 SECTION 12. Section 7.10(b), Texas Savings Bank Act (Article
5-24 489e, Vernon's Texas Civil Statutes), is amended to read as
5-25 follows:
5-26 (b) A savings bank may not make any investment in a
5-27 subsidiary corporation if its aggregate investments in subsidiaries
5-28 would exceed 10 percent of its total assets, excluding amounts
5-29 invested in a subsidiary corporation the activities of which are
5-30 limited to activities that could be conducted directly by the
5-31 parent savings bank.
5-32 SECTION 13. Section 8.02, Texas Savings Bank Act (Article
5-33 489e, Vernon's Texas Civil Statutes), is amended to read as
5-34 follows:
5-35 Sec. 8.02. LIQUIDITY. Unless approved in advance by the
5-36 commissioner, a savings bank shall maintain a minimum of 10 percent
5-37 of an amount equal to its average daily deposits for the most
5-38 recently completed calendar quarter <assets> in cash, balances in a
5-39 federal reserve bank or passed through a federal home loan bank or
5-40 another depository institution to a federal reserve bank under the
5-41 Federal Reserve Act (12 U.S.C. Section 221 et seq.), or other
5-42 readily marketable investments, including unencumbered federal
5-43 government sponsored enterprises securities, as allowed by rules
5-44 adopted by the commissioner and the finance commission.
5-45 SECTION 14. Section 11.07, Texas Savings Bank Act (Article
5-46 489e, Vernon's Texas Civil Statutes), is amended by adding
5-47 Subsection (f) to read as follows:
5-48 (f) A foreign savings and loan association may merge with a
5-49 domestic savings bank under this section as if the foreign savings
5-50 and loan association were a foreign savings bank. If the surviving
5-51 institution is the foreign savings and loan association, the
5-52 commissioner shall issue and deliver to the foreign savings and
5-53 loan association a certificate of authority under Subsection (e) of
5-54 this section to do business in this state. In this section,
5-55 "foreign savings and loan association" means a savings and loan
5-56 association whose principal office is located outside this state
5-57 and that has been organized under the laws of a state or territory
5-58 of the United States other than this state or under the laws of the
5-59 United States.
5-60 SECTION 15. Section 12.12(a), Texas Savings Bank Act
5-61 (Article 489e, Vernon's Texas Civil Statutes), is amended to read
5-62 as follows:
5-63 (a) Except as provided in Subsection (b) of this section, a
5-64 reference in statutes of this state, including Title 79, Revised
5-65 Statutes (Article 5069-1.01 et seq., Vernon's Texas Civil
5-66 Statutes), the Government Code, and the Local Government Code or in
5-67 a rule adopted under the statutes to a "savings and loan
5-68 association," "savings and loan," or "association" in the context
5-69 of a savings and loan association, or to a corporation,
5-70 association, or other organization incorporated or organized under
6-1 the Texas Savings and Loan Act (Article 852a, Vernon's Texas Civil
6-2 Statutes), is also a reference to a savings bank, as defined in
6-3 this Act.
6-4 SECTION 16. (a) The changes made by this Act to the
6-5 procedures applicable to a proceeding before the savings and loan
6-6 commissioner apply only to a proceeding initiated on or after the
6-7 effective date of this Act. A proceeding initiated before the
6-8 effective date of this Act is governed by the law in effect when
6-9 the proceeding was initiated, and that law is continued in effect
6-10 for that purpose.
6-11 (b) The savings and loan commissioner shall by rule
6-12 prescribe the manner and period in which a savings bank that on the
6-13 effective date of this Act does not comply with Section 7.05 or
6-14 8.02, Texas Savings Bank Act (Article 489e, Vernon's Texas Civil
6-15 Statutes), as amended by this Act, shall come into compliance with
6-16 that section.
6-17 SECTION 17. The importance of this legislation and the
6-18 crowded condition of the calendars in both houses create an
6-19 emergency and an imperative public necessity that the
6-20 constitutional rule requiring bills to be read on three several
6-21 days in each house be suspended, and this rule is hereby suspended,
6-22 and that this Act take effect and be in force from and after its
6-23 passage, and it is so enacted.
6-24 * * * * *