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.