By: Whitmire S.B. No. 1065
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the granting of competitive parity for state banks in
1-2 interstate banking and branching; the examination of interstate
1-3 branches; and agency powers of state banks.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 342-305 is amended by adding the
1-6 following language:
1-7 Pursuant to Article XVI, Section 16(a), of the Texas
1-8 Constitution and Section 44(a)(2) of the Federal Deposit Insurance
1-9 Act (12 U.S.C. 1811 et seq.), any one or more state banks or
1-10 national banks domiciled in this state may merge or consolidate
1-11 with any other bank organized under the laws of another state and
1-12 domiciled outside of this state, irrespective of which bank will
1-13 result from the merger or consolidation, provided, however, that
1-14 any state bank or national bank domiciled in this state that
1-15 participates in such merger or consolidation shall have been
1-16 established and operated continuously as a bank for at least five
1-17 (5) years prior to the effective date of the merger or
1-18 consolidation.
1-19 The resulting bank of an interstate merger or consolidation
1-20 shall enjoy the same rights and privileges granted to state banks
1-21 and national banks domiciled in this state. The resulting bank
1-22 shall have the authority to establish branch offices in this state
1-23 on the same terms and conditions, and subject to the same
2-1 limitations, as a state bank and a national bank domiciled in this
2-2 state.
2-3 The activities of a resulting bank shall be governed by the
2-4 laws of the state in which the resulting bank is domiciled, except
2-5 that those state laws listed in Section 5155 of the Revised
2-6 Statutes (12 U.S.C. 36(f)(1)(A)) shall apply to a resulting bank
2-7 operating in this state regardless of where the bank is domiciled.
2-8 The resulting bank of an interstate merger or consolidation that is
2-9 domiciled outside of this state shall appoint the Banking
2-10 Commissioner as its agent for service of process within this state.
2-11 The examination of a resulting bank operating in this state
2-12 shall be conducted by the Banking Commissioner in cooperation with
2-13 the primary state banking regulator of the state in which the
2-14 resulting bank is domiciled, if other than this state. The Banking
2-15 Commissioner shall notify the primary state banking regulator of
2-16 the state in which the resulting bank is domiciled in advance of
2-17 all examinations, share information derived from such examinations
2-18 and, upon request, allow joint examinations by the Department of
2-19 Banking and the primary state banking regulator of the state in
2-20 which the resulting bank is domiciled.
2-21 In enforcing state laws against a resulting bank under this
2-22 Section, the Banking Commissioner shall notify the primary state
2-23 banking regulator of the state in which the resulting bank is
2-24 domiciled, if other than the state, of any enforcement action and
2-25 request assistance, if necessary, in the prosecution of the
3-1 enforcement action.
3-2 The Banking Commissioner may enter into cooperative
3-3 agreements with the primary state banking regulator of the state in
3-4 which the resulting bank is domiciled for the purpose of
3-5 establishing uniform examination and supervisory policies and
3-6 procedures, including, but not limited to, the coordination of
3-7 personnel, and the assessment of examination fees and expenses.
3-8 SECTION 2. ARTICLE 342-306 is amended to read as follows:
3-9 Art. 342-306. Reorganization-Incorporation to take over
3-10 business of other banks or state or federal savings banks or
3-11 savings and loan associations-Trust powers.
3-12 A state bank may be incorporated to take over the business of
3-13 any incorporated bank or banks, state or national, or of any state
3-14 or federal savings bank or state or federal savings and loan
3-15 association, organized under the laws of this state or any other
3-16 state, as a step in the reorganization of such institution or
3-17 institutions, (which institution or institutions, whether one or
3-18 more, will be hereafter referred to as the "reorganizing
3-19 institution"), and shall, subject to the provisions of this
3-20 article, be authorized to purchase assets from the reorganizing
3-21 institution and as consideration therefore, assume all liabilities,
3-22 known or unknown, of the reorganizing institution, other than its
3-23 liability to stockholders as such. (the remainder of this Section
3-24 is not amended.)
3-25 SECTION 3. Article 342-307 is amended to read as follows:
4-1 Article 342-307. Purchase of assets of another bank or state
4-2 or federal savings bank or savings and loans association -
4-3 Disbursing agent.
4-4 Any state bank may, with the consent of the Banking
4-5 Commissioner, purchase the whole or any part of the assets of any
4-6 other state bank or of any national bank domiciled in this state,
4-7 or of a state or federal savings bank or state or federal savings
4-8 and loan association, organized under the laws of this state or any
4-9 other state, and may hold the purchase price and any additional
4-10 funds delivered to it by the selling institution in trust for or as
4-11 a deposit to the credit of the selling institutions. Any
4-12 acquisition of all or substantially all of the assets of a bank
4-13 shall be deemed a merger with such bank and subject to the
4-14 provisions of Section 342-305. (the remainder of this Section is
4-15 not amended.)
4-16 SECTION 4. Article 342-309 is amended by adding the
4-17 following language:
4-18 Pursuant to Article XVI, Section 16(a), of the Texas
4-19 Constitution and Section 44(a)(2) of the Federal Deposit Insurance
4-20 Act (12 U.S.C. 1811 et seq.), a state bank may merge, reorganize or
4-21 consolidate with any other bank organized under the laws of another
4-22 state and domiciled outside of this state irrespective of which
4-23 bank will result from the merger, reorganization or consolidation,
4-24 provided, however, that any state bank that participates in such
4-25 merger, reorganization or consolidation shall have been established
5-1 and operated continuously as a bank for at least five (5) years
5-2 prior to the effective date of the merger, reorganization or
5-3 consolidation.
5-4 The resulting bank of an interstate merger, reorganization or
5-5 consolidation shall enjoy the same rights and privileges granted to
5-6 state banks and national banks domiciled in this state. The
5-7 resulting bank shall have the authority to establish branch offices
5-8 in this state on the same terms and conditions, and subject to the
5-9 same limitations, as a state bank and a national bank domiciled in
5-10 this state.
5-11 The activities of a resulting bank shall be governed by the
5-12 laws of the state in which the resulting bank is domiciled, except
5-13 that those state laws listed in Section 5155 of the Revised
5-14 Statutes (12 U.S.C. 36(f)(1)(A)) shall apply to a resulting bank
5-15 operating in this state regardless of where the bank is domiciled.
5-16 The resulting bank of an interstate merger, reorganization or
5-17 consolidation that is domiciled outside of this state shall appoint
5-18 the Banking Commissioner as its agent for service of process within
5-19 this state.
5-20 The examination of a resulting bank operating as a bank in
5-21 this state shall be conducted by the Banking Commissioner in
5-22 cooperation with the primary state banking regulator of the state
5-23 in which the resulting bank is domiciled, if other than this state.
5-24 The Banking Commissioner shall notify the primary state banking
5-25 regulator of the state in which the resulting bank is domiciled in
6-1 advance of all examinations, share information derived from such
6-2 examinations and, upon request, allow joint examinations by the
6-3 Department of Banking and the primary state banking regulator of
6-4 the state in which the resulting bank is domiciled.
6-5 In enforcing state laws against a resulting bank under this
6-6 Section, the Banking Commissioner shall notify the primary state
6-7 banking regulator of the state in which the resulting bank is
6-8 domiciled, if other than this state, of any enforcement action and
6-9 request assistance, if necessary, in the prosecution of the
6-10 enforcement action.
6-11 The Banking Commissioner may enter into cooperative
6-12 agreements with the primary state banking regulator of the state in
6-13 which the resulting bank is domiciled for the purpose of
6-14 establishing uniform examination and supervisory policies and
6-15 procedures, including, but not limited to, the coordination of
6-16 personnel, and the assessment of examination fees and expenses.
6-17 SECTION 5. Article 342-903 is amended by adding the
6-18 following new language:
6-19 A state bank may establish branch offices in other states
6-20 with the prior written approval of the Banking Commissioner, in
6-21 accordance with regulations promulgated by the Finance Commission,
6-22 and subject to the laws of the state in which the branch is to be
6-23 located.
6-24 Any bank organized under the laws of another state or a
6-25 national bank domiciled in another state may establish branch
7-1 offices in this state with the prior written approval of the
7-2 Banking Commissioner, provided, however, that the Banking
7-3 Commissioner may approve an application to establish a branch
7-4 office by a bank organized under the laws of another state or of a
7-5 national bank domiciled in another state only if the establishment
7-6 of the branch results solely from a conversion to, or merger or
7-7 consolidation with, either a state bank or a national bank
7-8 domiciled in this state that has been established and operated
7-9 continuously as a bank for at least five (5) years prior to the
7-10 application for establishment of the branch office.
7-11 Branch offices established by banks organized under the laws
7-12 of other states and national banks domiciled in other states shall
7-13 enjoy the same rights and privileges granted to branch offices of
7-14 state banks and national banks domiciled in this state.
7-15 The examination of a branch office established by a bank
7-16 organized under the laws of another state shall be conducted by the
7-17 Banking Commissioner in cooperation with the primary state banking
7-18 regulator of the state in which the bank is domiciled, if other
7-19 than this state. The Banking Commissioner shall notify the primary
7-20 state banking regulator of the state in which the bank is domiciled
7-21 in advance of all examinations, share information derived from such
7-22 examinations and, upon request, allow joint examinations by the
7-23 Department of Banking and the primary state banking regulator of
7-24 the state in which the bank is domiciled.
7-25 The Banking Commissioner may enter into cooperative
8-1 agreements with the primary state banking regulator of the state in
8-2 which the bank is domiciled for the purpose of establishing uniform
8-3 examination and supervisory policies and procedures for the
8-4 examination of branch offices, including, but not limited to, the
8-5 coordination of personnel, and the assessment of examination fees
8-6 and charges.
8-7 SECTION 6. The Texas Banking Code is amended by adding the
8-8 following new article:
8-9 Article 342-917. Affiliated Bank Agency Powers.
8-10 (a) AUTHORITY TO ACT AS AGENT. - A state bank may act as an
8-11 agent of another bank, whether such bank is organized under the
8-12 laws of another state or is a national bank domiciled in another
8-13 state, provided that, all of the outstanding voting shares of the
8-14 state bank are owned by the same bank holding company that owns all
8-15 of the outstanding voting shares of such bank organized under the
8-16 laws of another state or the national bank domiciled in another
8-17 state. The agency described herein is limited to the following
8-18 activities:
8-19 (i) the receipt of deposits,
8-20 (ii) the renewal of time deposits,
8-21 (iii) the closing of loans,
8-22 (iv) the servicing of loans, and
8-23 (v) the receipt of payments of loans and
8-24 other extensions of credit.
8-25 The conduct of any activity authorized by this section shall not be
9-1 deemed to constitute the establishment of a branch office.
9-2 (b) AUTHORITY TO OPERATE THROUGH AFFILIATE AGENTS. - Any
9-3 state bank may appoint as its agent a bank organized under the laws
9-4 of another state or a national bank domiciled in another state,
9-5 provided that, all of the outstanding voting shares of the state
9-6 bank are owned by the same bank holding company that owns all of
9-7 the outstanding voting shares of such bank organized under the laws
9-8 of another state or the national bank domiciled in another state.
9-9 The agency described herein is limited to the following activities:
9-10 (i) the receipt of deposits,
9-11 (ii) the renewal of time deposits,
9-12 (iii) the closing of loans,
9-13 (iv) the servicing of loans, and
9-14 (v) the receipt of payments of loans and
9-15 other extensions of credit.
9-16 The conduct of any activity authorized by this section shall not be
9-17 deemed to constitute the establishment of a branch office.
9-18 SECTION 7. This Act takes effect on June 1, 1997, provided
9-19 that no legislation prohibiting the activities contained herein is
9-20 enacted by the Texas Legislature and becomes effective prior to
9-21 that date. If such legislation is enacted and becomes effective
9-22 prior to June 1, 1997, this Act shall have no effect.
9-23 SECTION 8. The importance of this legislation and the
9-24 crowded condition of the calendars in both houses create an
9-25 emergency and an imperative public necessity that the
10-1 constitutional rule requiring bills to be read on three several
10-2 days in each house be suspended, and this rule is hereby suspended,
10-3 and that this Act take effect and be in force from and after its
10-4 passage, and it is so enacted.