By Giddings, Brimer                                   H.B. No. 3006
       74R4970 DWS-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to a residence requirement for a bank director.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Chapter I, The Texas Banking Code (Article
    1-5  342-101 et seq., Vernon's Texas Civil Statutes), is amended by
    1-6  adding Article 2A to read as follows:
    1-7        Art. 2A.  LOCAL AREA.  For the purposes of this Act, a bank's
    1-8  local area is its local community, as delineated under federal
    1-9  regulations adopted under the Community Reinvestment Act of 1977
   1-10  (12 U.S.C. Sec. 2901 et seq.), except that if the bank is not
   1-11  subject to those regulations or if the bank's local community is
   1-12  determined by its effective lending territory, the bank's local
   1-13  area is the area that would be the bank's local community under
   1-14  those regulations, excluding the regulations relating to effective
   1-15  lending territory.  Each bank shall file with the banking
   1-16  commissioner a statement of its local area in the manner and form
   1-17  prescribed by the banking commissioner.
   1-18        SECTION 2.  Sections 1 and 2, Article 4, Chapter IV, The
   1-19  Texas Banking Code (Article 342-404, Vernon's Texas Civil
   1-20  Statutes), are amended to read as follows:
   1-21        Sec. 1.  A State bank shall have not less than five (5) nor
   1-22  more than twenty-five (25) directors, the majority of whom shall be
   1-23  residents of the bank's local area <State of Texas>.
   1-24        Sec. 2.  If the bank is owned or controlled, directly or
    2-1  indirectly, by an out-of-state bank holding company, directors who
    2-2  are employees or officers or spouses of employees or officers of
    2-3  the out-of-state bank holding company, or an affiliate of the
    2-4  out-of-state bank holding company, other than the bank, shall not
    2-5  be counted as residents of the bank's local area <State of Texas>
    2-6  for the purpose of Section 1 of this article.  For the purposes of
    2-7  this section, "affiliate" means a person or entity, other than the
    2-8  bank, that directly, or indirectly through one or more
    2-9  intermediaries, controls, is controlled by, or is under common
   2-10  control with the out-of-state bank holding company.
   2-11        SECTION 3.  Section 4, Article 12, Chapter IX, The Texas
   2-12  Banking Code (Article 342-912, Vernon's Texas Civil Statutes), is
   2-13  amended to read as follows:
   2-14        Sec. 4.  APPLICATION AND FILINGS BY OUT-OF-STATE BANK HOLDING
   2-15  COMPANY SEEKING ACQUISITION.  An out-of-state bank holding company
   2-16  that seeks to take an action specified in Section 1 of this article
   2-17  for which a copy of the application must be filed with the banking
   2-18  commissioner shall also file with the banking commissioner, when it
   2-19  delivers the application: (1)  evidence that the out-of-state bank
   2-20  holding company is authorized to take the action under Article 16
   2-21  of this chapter;
   2-22              (2)  evidence that the out-of-state bank holding
   2-23  company and each state bank, national bank in this state, and bank
   2-24  holding company being acquired will, after the acquisition, comply
   2-25  with applicable capital adequacy guidelines, and that the
   2-26  consolidated equity capital condition of these banks in this state
   2-27  during the first three years after being acquired will be
    3-1  maintained at least at the level existing immediately prior to the
    3-2  acquisition less the consolidated net loss of these banks, if any;
    3-3              (3)  agreements, subject to any contrary provision of
    3-4  applicable federal law, that while the out-of-state bank holding
    3-5  company directly or indirectly owns or controls any national bank
    3-6  in this state, a majority of the directors of each national bank
    3-7  shall be residents of the bank's local area <State of Texas>,
    3-8  except that directors who are employees or officers or spouses of
    3-9  employees or officers of the bank, out-of-state bank holding
   3-10  company, or an affiliate of the bank or out-of-state bank holding
   3-11  company may not be counted as residents of the bank's local area
   3-12  <State of Texas> for the purpose of this subdivision; and
   3-13              (4)  an agreement to provide such additional
   3-14  information as may be required by rules promulgated by the banking
   3-15  commissioner.
   3-16        SECTION 4.  Before September 1, 1996:
   3-17              (1)  each out-of-state bank holding company required to
   3-18  submit an agreement under Section 4(3), Article 12, Chapter IX, The
   3-19  Texas Banking Code (Article 342-912, Vernon's Texas Civil
   3-20  Statutes), shall:
   3-21                    (A)  submit to the banking commissioner an
   3-22  amended agreement complying with that subdivision, as amended by
   3-23  this Act; and
   3-24                    (B)  comply with the amended agreement; and
   3-25              (2)  each state bank shall conform its board of
   3-26  directors to the requirements of Article 4, Chapter IV, The Texas
   3-27  Banking Code (Article 342-404, Vernon's Texas Civil Statutes), as
    4-1  amended by this Act.
    4-2        SECTION 5.  This Act takes effect September 1, 1995.
    4-3        SECTION 6.  The importance of this legislation and the
    4-4  crowded condition of the calendars in both houses create an
    4-5  emergency and an imperative public necessity that the
    4-6  constitutional rule requiring bills to be read on three several
    4-7  days in each house be suspended, and this rule is hereby suspended.