By: Turner S.B. No. 252
A BILL TO BE ENTITLED
AN ACT
1-1 relating to interstate banking and branching in Texas.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Article 342-305 is amended by adding the
1-4 following new section:
1-5 Pursuant to Section 44(a)(2) of the Federal Deposit Insurance
1-6 Act (12 U.S.C. 1811 et seq.), a merger transaction involving
1-7 (a) either:
1-8 (1) a state chartered bank chartered in this State; or
1-9 (2) a national bank, the main office of which is
1-10 located in this state, and
1-11 (b) an out-of-state bank is expressly prohibited.
1-12 For the purposes of this Act, the following definition shall
1-13 apply:
1-14 (a) Out-of-state bank means:
1-15 (1) with respect to a national bank, a bank, the main
1-16 office of which is located in a state other than this state.
1-17 (2) with respect to a state chartered bank, a bank
1-18 which is chartered by a state other than this state.
1-19 SECTION 2. Article 342-306 is amended to read as follows:
1-20 Art. 342-306. Reorganization--Incorporation to take over
1-21 business of other banks or state or federal savings banks or
1-22 savings and loan associations--Trust powers. A state bank may be
1-23 incorporated to take over the business of any incorporated bank or
2-1 banks, state or national, or of any state or federal savings bank
2-2 or state or federal savings and loan association, as a step in the
2-3 reorganization of such institution or institutions, (which
2-4 institution or institutions, whether one or more, will be hereafter
2-5 referred to as the "reorganizing institution"), and shall, subject
2-6 to the provisions of this article, be authorized to purchase assets
2-7 from the reorganizing institution and as consideration therefor,
2-8 assume all liabilities, known or unknown, of the reorganizing
2-9 institution, other than its liability to stockholders as such.
2-10 Notwithstanding the foregoing, no state bank may be
2-11 incorporated to take over the business of a commercial bank the
2-12 main office of which is located in a state other than this state or
2-13 which is chartered by a state other than this state.
2-14 (The remainder of this section is unchanged.)
2-15 SECTION 3. Article 342-307 is amended to read as follows:
2-16 Art. 342-307. Purchase of assets of another bank or state or
2-17 federal savings bank or savings and loan association--Disbursing
2-18 agent. Any state bank may, with the consent of the Banking
2-19 Commissioner, purchase the whole or any part of the assets of any
2-20 other state bank or of any national bank domiciled in this State,
2-21 or of a state or federal savings bank or state or federal savings
2-22 and loan association, and may hold the purchase price and any
2-23 additional funds delivered to it by the selling institution in
2-24 trust for or as a deposit to the credit of the selling institution.
2-25 However, this provision shall not apply if the selling institution
3-1 is chartered by another state or has its main office located in
3-2 another state. The purchasing bank may act as agent of the selling
3-3 institution in disbursing the funds so held in trust or on deposit
3-4 by paying the depositors and creditors of the selling institution,
3-5 provided that if the purchasing bank acts under written contract of
3-6 agency which specifically names each depositor and creditor and the
3-7 amount to be paid each, and if such agency is confined to the
3-8 purely ministerial act of paying such depositors and creditors the
3-9 amounts due them as determined by the selling institution and
3-10 reflected in the contract of agency and involves no discretionary
3-11 duties or authority other than the identification of the depositors
3-12 and creditors named, and if such contract is approved by the
3-13 Banking Commissioner, then the purchasing bank may rely upon such
3-14 contract of agency and the instructions included therein, and shall
3-15 not be in any way liable or responsible for any error made by the
3-16 selling institution in determining its liabilities, the depositors
3-17 and creditors to whom such liabilities are due, or the amounts due
3-18 such depositors and creditors; nor liable or in any way responsible
3-19 for any preference which may result from the payments made pursuant
3-20 to such contract of agency and the instructions included therein.
3-21 Further provided that, in event the selling institution should, at
3-22 any time after such sale of assets, be closed and come into the
3-23 hands of the Banking Commissioner or into the hands of a receiver,
3-24 then the purchasing bank shall pay to the Banking Commissioner as
3-25 statutory liquidator or to the receiver of such state or national
4-1 institution the balance of the funds held by it in trust or on
4-2 deposit for the selling institution, not theretofore paid to the
4-3 depositors and creditors of the selling institution, and shall
4-4 thereupon stand discharged of any and all liabilities, obligations
4-5 or responsibilities to the selling institution, its receiver, the
4-6 Banking Commissioner as its statutory liquidator, or to the
4-7 depositors, creditors or stockholders thereof. Provided further
4-8 that payment to any depositor or creditor of the selling
4-9 institution of the amount to be paid him under the terms of the
4-10 contract of agency may be effected by the purchasing bank opening
4-11 an account in the name of such depositor or creditor, crediting
4-12 such account with the amount to be paid the depositor or creditor
4-13 under the terms of such agency contract, and mailing a duplicate
4-14 deposit ticket evidencing such credit to such depositor or creditor
4-15 at his address as reflected by the records of the selling
4-16 institution, or delivering it to him personally, and the relation
4-17 of debtor to creditor shall thereupon arise between the purchasing
4-18 bank and such depositors and creditors to the extent and only to
4-19 the extent of the credit reflected by such deposit tickets.
4-20 Further provided, that if any such depositor or creditor checks
4-21 upon the credit so created, or if he does not within sixty (60)
4-22 days of the mailing or the personal delivery of such deposit ticket
4-23 protest the transaction and demand payment from the selling
4-24 institution, he shall be deemed to have ratified the transaction
4-25 and to the extent of the credit so created to have accepted the
5-1 obligation of the purchasing bank as reflected by said deposit
5-2 ticket in satisfaction of the obligation of the selling
5-3 institution, and the obligation of the selling institution to the
5-4 extent of such credit shall be deemed paid and satisfied within the
5-5 meaning of this article.
5-6 SECTION 4. Article 342-309 is amended by adding the
5-7 following language:
5-8 Pursuant to Section 44(a)(2) of the Federal Deposit Insurance
5-9 Act (12 U.S.C. 1811 et seq.), a merger transaction involving
5-10 (a) either:
5-11 (1) a state chartered bank chartered in this State; or
5-12 (2) a national bank, the main office of which is
5-13 located in this state, and
5-14 (b) an out-of-state bank is expressly prohibited.
5-15 For the purposes of this Act, the following definition shall
5-16 apply:
5-17 (a) Out-of-state means:
5-18 (1) with respect to a national bank, a bank, the main
5-19 office of which is located in a state other than this state.
5-20 (2) with respect to a state chartered bank, a bank
5-21 which is chartered by a state other than this state.
5-22 SECTION 5. Article 342-903 is amended by adding the
5-23 following:
5-24 Sec. 4. An out-of-state bank may not acquire branch
5-25 facilities in this state whether by de novo activity or by
6-1 acquisition of an existing facility through merger, consolidation,
6-2 purchase, or otherwise. ("Out-of-state bank" is defined to mean,
6-3 with respect to a national bank, a bank, the main office of which
6-4 is located in a state other than this state, and, with respect to a
6-5 state-chartered bank, a bank which is chartered by a state other
6-6 than this state.)
6-7 SECTION 6. Article 342-912 is repealed and replaced with the
6-8 following new Article 342-912:
6-9 ACQUISITION OF BANK OR BANK HOLDING COMPANY. (a) Any bank
6-10 or bank holding company that seeks to directly or indirectly
6-11 acquire or acquire control of a bank located in this state, or of a
6-12 bank holding company that controls a bank in this state, and that
6-13 submits an application for approval to the Board of Governors of
6-14 the Federal Reserve System pursuant to Section 3 of the Bank
6-15 Holding Company Act of 1956 (12 U.S.C. Sec. 1842), shall submit a
6-16 copy of the application and any additional Community Reinvestment
6-17 Act information required to the banking commissioner at the same
6-18 time the application is submitted to the board of governors.
6-19 (b) The banking commissioner, on receipt of the notice
6-20 prescribed by Subsection 3(b) of the Bank Holding Company Act of
6-21 1956 (12 U.S.C. Sec. 1842(b)), shall respond in writing within the
6-22 time limit prescribed by that subsection. The banking commissioner
6-23 shall comment with respect to:
6-24 (1) the views and recommendations of the banking
6-25 commissioner concerning the application; and
7-1 (2) the opinion of the banking commissioner regarding
7-2 whether the application evidences compliance with the provisions of
7-3 the Community Reinvestment Act of 1977, as amended (12 U.S.C. Sec.
7-4 2901 et seq.).
7-5 (c) If the proposed acquisition is of a state bank or a bank
7-6 holding company controlling a state bank and the banking
7-7 commissioner opposes the application in the response, the banking
7-8 commissioner shall appear at the hearing held pursuant to
7-9 Subsection 3(b) of the Bank Holding Company Act of 1956 (12 U.S.C.
7-10 Sec. 1842(b)) and present evidence at the hearing regarding the
7-11 reasons the application should be denied.
7-12 (d) If the proposed acquisition is of a national bank or a
7-13 bank holding company controlling a national bank and the banking
7-14 commissioner opposes the application in the response, the banking
7-15 commissioner shall request that a hearing be held pursuant to
7-16 Subsection 3(b) of the Bank Holding Company Act of 1956 (12 U.S.C.
7-17 Sec. 1842(b)). If the board of governors should grant the request,
7-18 the banking commissioner shall appear and present evidence at the
7-19 hearing regarding the reasons the application should be denied.
7-20 (e) If the board of governors approves an application that
7-21 the banking commissioner opposed, the banking commissioner may
7-22 acquiesce in the decision or seek to overturn the decision on
7-23 appeal, with the assistance of the attorney general, in accordance
7-24 with the provisions of Section 9 of the Bank Holding Company Act of
7-25 1956 (12 U.S.C. Sec. 1848).
8-1 COMMUNITY REINVESTMENT CRITERIA. In deriving an opinion
8-2 regarding a bank's compliance with the provisions of the Community
8-3 Reinvestment Act of 1977 (12 U.S.C. Sec. 2901 et seq.) for purposes
8-4 of Section 342-912, the banking commissioner is encouraged to
8-5 consider, to the extent available data permits, whether the
8-6 acquisition will result in:
8-7 (1) continued and increased extension of credit or
8-8 direct or indirect investment in projects or programs designed to
8-9 develop or redevelop areas in which persons with low or moderate
8-10 incomes reside, and designed to meet the credit needs of those low
8-11 or moderate income areas or that primarily benefit persons of low
8-12 and moderate income, as long as those investments are consistent
8-13 with sound banking practices, policies, and procedures, except that
8-14 personal installment loans, loans made to purchase, or loans
8-15 secured by an automobile are not considered qualifying community
8-16 reinvestment;
8-17 (2) continued and increased investments in
8-18 governmental insured, guaranteed, subsidized, or otherwise
8-19 sponsored programs for housing, small farms, or businesses that
8-20 address the needs of the low and moderate income areas;
8-21 (3) continued and increased investments in residential
8-22 mortgage loans, home improvement loans, housing rehabilitation
8-23 loans, and small business or small farm loans originated in low and
8-24 moderate income areas, or the purchase of such loans originated in
8-25 low and moderate income areas;
9-1 (4) continued and increased investments for the
9-2 preservation or revitalization of urban or rural communities in low
9-3 and moderate income areas;
9-4 (5) continued investments in the obligations of state
9-5 and local governmental entities, priority to be given where
9-6 possible to those entities located in the local community or local
9-7 trade area of each bank; and
9-8 (6) any diminution of reasonable availability of
9-9 banking services to all segments of the public and economy of this
9-10 state, with special emphasis on economic development and the
9-11 financing of enterprises to increase employment opportunities.
9-12 OTHER APPLICABLE REQUIREMENTS. Notwithstanding any other
9-13 law, a bank or bank holding company may not acquire control of, or
9-14 acquire all or substantially all of the assets of, a bank located
9-15 in this state, or of a bank holding company that controls a bank in
9-16 this state, if the acquiring bank or bank holding company, together
9-17 with all of its insured depository institution affiliates,
9-18 controls, or after consummation of the acquisition would control,
9-19 more than 20 percent of the total amount of deposits of insured
9-20 depository institutions located in this state as reported in the
9-21 most recently available reports of condition or similar reports
9-22 filed with state or federal authorities. For purposes of this
9-23 subsection, the terms "deposit" and "insured depository
9-24 institution" have the same meanings as in Section 3 of the Federal
9-25 Deposit Insurance Act (12 U.S.C. Sec. 1813).
10-1 SECTION 7. Article 342-916 is repealed in its entirety and
10-2 replaced by the following:
10-3 ADDITIONAL REQUIREMENTS APPLICABLE TO OUT-OF-STATE BANK
10-4 HOLDING COMPANIES. (a) An out-of-state bank holding company may
10-5 not engage in an acquisition specified in Article 342-912 unless
10-6 each bank located in this state that would, on consummation of the
10-7 acquisition, be controlled, directly or indirectly, by the
10-8 out-of-state bank holding company, has existed and continuously
10-9 operated as a bank for a period of at least five years.
10-10 (b) A bank that is the successor as a result of merger or
10-11 acquisition of all or substantially all of the assets of a prior
10-12 bank is considered to have been in existence and continuously
10-13 operated for purposes of this section during the period of its
10-14 existence and continuous operation as a bank and during the period
10-15 of existence and continuous operation of the prior bank. A bank
10-16 effecting a purchase and assumption, merger, or similar transaction
10-17 with or supervised by the Federal Deposit Insurance Corporation is
10-18 considered to have been in existence and continuously operated for
10-19 purposes of this section during the existence and continuous
10-20 operation of the bank with respect to which the transaction was
10-21 consummated.
10-22 (c) For purposes of this section, a bank holding company is
10-23 considered an out-of-state bank holding company if at the moment it
10-24 first seeks to acquire a national or state bank domiciled in Texas
10-25 it holds one or more national or state chartered banks which is
11-1 domiciled in a state other than Texas.
11-2 SECTION 8. Article 342-913 is repealed in its entirety and
11-3 replaced by the following:
11-4 ACQUISITION OF NONBANKING INSTITUTION BY A BANK HOLDING
11-5 COMPANY. (a) A bank holding company doing business in this state
11-6 that submits an application or notice to the Board of Governors of
11-7 the Federal Reserve System regarding an acquisition or activity
11-8 regulated by Section 4 of the Bank Holding Company Act of 1956 (12
11-9 U.S.C. Sec. 1843) shall submit a copy of the application or notice
11-10 to the banking commissioner at the same time the application or
11-11 notice is submitted to the board of governors, and shall submit
11-12 such other information as may reasonably be requested by the
11-13 banking commissioner to determine the manner in which the
11-14 acquisition or activity will directly or indirectly affect
11-15 residents of this state, including any remote or contingent effect.
11-16 (b) The banking commissioner may convene a public hearing
11-17 regarding the application and its effect on this state, whether or
11-18 not requested to do so by any person, pursuant to this subtitle.
11-19 The banking commissioner shall convene a hearing if the bank
11-20 holding company requests a hearing in writing at the time it
11-21 transmits the application or notice to the banking commissioner.
11-22 The application or activity is considered approved if the banking
11-23 commissioner does not act under this subsection on or before the
11-24 31st day after the application or notice is filed.
11-25 (c) On or before the 31st day after the hearing is closed,
12-1 the banking commissioner may issue an order disapproving the
12-2 acquisition or activity based on a finding that the acquisition or
12-3 activity would be detrimental to the public interest as a result of
12-4 probable adverse effects such as undue concentration of resources,
12-5 decreased or unfair competition, conflicts of interest, or unsound
12-6 banking practices, and shall otherwise approve the application or
12-7 activity. A final order of the banking commissioner may be
12-8 appealed in the manner provided by this title.
12-9 ENFORCEMENT. The banking commissioner has jurisdiction to
12-10 bring an enforcement proceeding under this subtitle against a bank
12-11 holding company that knowingly violates or participates in the
12-12 violation of a provision of this subtitle, an agreement filed with
12-13 the banking commissioner under this subchapter, or a regulation or
12-14 order issued by the banking commissioner or the finance commission
12-15 under this subtitle, as if the bank holding company was a state
12-16 bank.
12-17 SECTION 9. The importance of this legislation and the
12-18 crowded condition of the calendars in both houses create an
12-19 emergency and an imperative public necessity that the
12-20 constitutional rule requiring bills to be read on three several
12-21 days in each house be suspended, and this rule is hereby suspended,
12-22 and that this Act take effect and be in force from and after its
12-23 passage, and it is so enacted.