BWM C.S.H.B. 3168 75(R)BILL ANALYSIS FINANCIAL INSTITUTIONS C.S.H.B. 3168 By: Driver 4-15-97 Committee Report (Substituted) BACKGROUND The holder of a dishonored check written on a business checking account may be unable to locate the person who wrote the check if the name of the business owner is not on the check, the address on the check is not a physical address, or the business owner or business has moved from the address on the check. If the financial institution that returned the check has any of this information, it is unclear in current law whether or not they can provide this information to the holder of the dishonored check. PURPOSE As proposed, House Bill 3168 would require a financial institution to maintain certain information on all business checking accounts, including the name, home address, and driver's license number of the business owner and the physical address of the business. It would require the financial institution to provide this information to the person to whom they returned a dishonored check written on the business account. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 16, Revised Statutes, by adding Article 353, entitled "Business Checking Accounts," with the following sections. Sec. 1. Defines "business," "business checking account," and "financial institution." Sec. 2. Requires financial institution to require, as a condition of opening or maintaining a business checking account, that the applicant or account holder provide certain information. Requires annual request of customer to update this information. Sec. 3. Requires financial institution to not withhold this information to a person to whom the financial institution has returned a dishonored check issued on the business checking account. Provides for procedure of request and releases financial institution from liability in complying with this section. Allows for a reasonable research fee to be assessed. SECTION 2. Effective date of September 1, 1997, and applies to a business checking account held on or after that date. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The Committee Substitute to HB 3168 specifies that the address required of sole proprietorships must be the physical address of the business. Furthermore, the Substitute requires of corporations that both a copy of the certificate of incorporation and assumed name certificate, if any, are to be required by the financial institution to open the checking account, rather than one or the other as required in the original bill. The Substitute also requires the financial institution to annually request updated information rather than requiring financial institution to update each year as found in the original bill. The Substitute adds a requirement that a holder of a bad check must request any information in writing, that the bank cannot unreasonably withhold properly requested information, and that the bank may charge a reasonable research fee. Furthermore, the Substitute releases the bank from liability in conforming with this requirement.