By Raymond H.B. No. 2857 74R8024 CLG-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to certain lending services provided by banks and 1-3 branches; providing a penalty. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Chapter V, The Texas Banking Code (Article 1-6 342-501 et seq., Vernon's Texas Civil Statutes), is amended by 1-7 adding Article 15 to read as follows: 1-8 Art. 15. LENDING SERVICES OF CERTAIN BANKS AND BRANCHES. 1-9 (a) In this article: 1-10 (1) "Branch" means a place of business of a bank or of 1-11 an out-of-state bank that receives applications for loans other 1-12 than the bank's or out-of-state bank's main office. 1-13 (2) "Out-of-state bank" means a bank that is: 1-14 (A) a national bank having its main office in a 1-15 state other than this state; or 1-16 (B) a state-chartered bank chartered by a state 1-17 other than this state. 1-18 (3) "Rural community" means a municipality in or the 1-19 unincorporated area of a nonmetropolitan county as defined by the 1-20 United States Census Bureau in its most recent federal census. 1-21 (b) At least two percent of the total outstanding amount of 1-22 loans made to borrowers in this state by or through each bank and 1-23 out-of-state bank and each branch of a bank or out-of-state bank 1-24 shall be in loans to: 2-1 (1) individuals residing in a rural community of this 2-2 state; 2-3 (2) businesses having their principal places of 2-4 business in a rural community of this state; or 2-5 (3) businesses or other entities for purposes of 2-6 investing in a rural community of this state. 2-7 (c) Not later than the 30th day after the last day of each 2-8 calendar quarter each bank and out-of-state bank shall file with 2-9 the Banking Commissioner a report in the form the Banking 2-10 Commissioner by rule prescribes that includes for each bank or 2-11 out-of-state bank and each branch of the bank or out-of-state bank 2-12 located in this state: 2-13 (1) the total outstanding amount of loans made to 2-14 borrowers in this state by or through the bank, out-of-state bank, 2-15 or branch; 2-16 (2) the total outstanding amount of those loans made 2-17 by or through the bank, out-of-state bank, or branch to each 2-18 category of borrowers described by Subsection (b); and 2-19 (3) the name of each borrower, by category, described 2-20 by Subsection (b). 2-21 (d) The Banking Commissioner may perform investigations 2-22 necessary to determine whether this article is being violated. 2-23 (e) A bank or out-of-state bank that violates this article 2-24 is liable to the state for a civil penalty in an amount not to 2-25 exceed $1,000 for each day of the violation. The attorney general 2-26 may sue to collect the penalty and on request of the Banking 2-27 Commissioner shall sue to collect the penalty. 3-1 (f) If federal law prohibits a national bank that has its 3-2 main office in a state other than this state from having to comply 3-3 with the requirements of this section, this section has no effect. 3-4 SECTION 2. This Act takes effect only if a branch of an 3-5 out-of-state bank is authorized to operate in this state. 3-6 SECTION 3. This Act takes effect September 1, 1995, and 3-7 applies only to a loan made on or after the effective date of this 3-8 Act. A loan made before the effective date of this Act is governed 3-9 by the law in effect when the loan was made, and that law is 3-10 continued in effect for that purpose. 3-11 SECTION 4. The importance of this legislation and the 3-12 crowded condition of the calendars in both houses create an 3-13 emergency and an imperative public necessity that the 3-14 constitutional rule requiring bills to be read on three several 3-15 days in each house be suspended, and this rule is hereby suspended.