SRC-JFA S.B. 1599 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1599
By: Ellis
Economic Development
6-3-97
As Filed


DIGEST 

Currently, state law does not require a financial institution to provide
all consumers the opportunity to open a checking account.  Escalating fees
and the closing of many full-service banks may limit consumers' access to
checking accounts.  Such limited access would force some consumers to rely
on alternative financial transactions such as check cashing services.
This bill would require the Finance Commission of Texas to promulgate
rules for the establishment of a consumer checking account that all
financial institutions would make available to consumers.    

PURPOSE

As proposed, S.B. 1599 requires the Financial Commission of Texas to
promulgate rules for the establishment of a consumer checking account that
all financial institutions would make available to consumers.   

RULEMAKING AUTHORITY

Rulemaking authority is granted to the Finance Commission of Texas in
SECTION 2 (Section 3(a), Article 353, V.T.C.S.) of this bill.  

SECTION BY SECTION ANALYSIS

SECTION 1. Sets forth the legislative findings relating to checking
accounts for low-income consumers.   

SECTION 2. Amends Title 16, V.T.C.S., by adding Article 353, as follows: 

Art. 353.  CONSUMER CHECKING ACCOUNT

Sec. 1.  DEFINITIONS.  Defines "commission," "commissioner," "financial
institution," and "regular checking account."   

Sec. 2.  CONSUMER CHECKING ACCOUNT REQUIRED.  Requires each financial
institution that offers a checking account to the public to offer a
consumer checking account to the public.   

Sec. 3.  FORM OF ACCOUNT.  Requires the Finance Commission of Texas
(commission), by rule, to establish the required terms of a consumer
checking account.  Sets forth the required parameters of the rules.
Requires the commission, in adopting the rules, to ensure that a financial
institution is not required to receive less gross income from consumer
checking accounts than it costs the financial institution to provide those
accounts.  Requires a financial institution, on request of the banking
commissioner of Texas (commissioner), to provide information necessary to
enable the commission to carry out this subsection.   

Sec. 4.  ALTERNATIVE FORM OF ACCOUNT.  Authorizes the commissioner, on
request of a financial institution, to approve as a consumer checking
account an account that does not meet the requirements of rules adopted
under Section 3 if the commissioner determines that the account satisfies
the purposes of a consumer checking account described by Section 3(a)(1).
Requires the commissioner, by a certain date, to send to the financial
institution a  written notice that either approves the request; or
disapproves the request and states the reasons for disapproval. 

Sec. 5.  CONSIDERATION OF EXISTING ACCOUNTS.  Requires the commission and
the commissioner to consider the terms of existing low-cost personal
checking accounts available in this state. 

Sec. 6.  PARITY WITH OTHER ACCOUNTS.  Requires a financial institution to
offer each of its products and services to a holder of a consumer checking
account on the same basis that it offers the product or service to a
holder of a regular checking account.  Prohibits a financial institution
from performing certain actions.   

Sec. 7.  OPENING ACCOUNT; SERVICES PROVIDED AT EACH LOCATION.  Requires a
financial institution to provide certain services.  Authorizes the
financial institution to require that an applicant for a consumer checking
account provide the financial institution with the same information
required of an applicant for a regular savings account. 

Sec. 8.  GROUNDS FOR CLOSING OR DENYING ACCOUNT.  Authorizes a financial
institution to close a consumer checking account under certain conditions
and to close or refuse to open a consumer checking account under certain
conditions.  Prohibits a financial institution from requiring, as a
condition of opening or maintaining a consumer checking account, that the
applicant or account holder hold any other account with that or any other
financial institution.  

Sec. 9.  PUBLIC NOTICE OF ACCOUNT.  Requires each financial institution
required to offer a consumer checking account to provide notice at each of
its locations of the main features and limitations of a consumer checking
account by posting a copy of the notice in a conspicuous public area of
the location; and making printed copies of the notice available to the
public.  

Sec. 10.  INJUNCTIONS.  Requires the attorney general, on request of the
commissioner, to bring an action to enjoin a violation of this article. 

SECTION 3. Requires the commission to adopt rules under Article 353,
V.T.C.S., as added by this Act, before January 1, 1998.   

SECTION 4. Emergency clause.
  Effective date: upon passage.