By Ellis, et al. S.B. No. 1599
75R3032 DWS-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a checking account for low-income consumers.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. The legislature finds that:
1-5 (1) it is in the interest of the residents of this
1-6 state to make checking accounts available to as many residents of
1-7 this state as possible;
1-8 (2) checking accounts provide an efficient way to pay
1-9 bills, a means to protect money from theft, and a way for
1-10 low-income consumers to build experience, credit history, and
1-11 relationships with mainstream financial services;
1-12 (3) without affordable checking accounts, many
1-13 residents of this state must rely on higher-cost, inefficient, and
1-14 unsafe alternatives;
1-15 (4) barriers exist that make checking accounts less
1-16 accessible, including high initial or continuing balance
1-17 requirements and excessive monthly and other fees necessary to
1-18 maintain an account; and
1-19 (5) it is appropriate to require the Finance
1-20 Commission of Texas to establish minimum requirements for financial
1-21 institutions doing business in this state to offer consumer
1-22 checking accounts that will aid low-income consumers to establish
1-23 checking accounts.
1-24 SECTION 2. Title 16, Revised Statutes, is amended by adding
2-1 Article 353 to read as follows:
2-2 Art. 353. CONSUMER CHECKING ACCOUNT
2-3 Sec. 1. DEFINITIONS. In this article:
2-4 (1) "Commission" means the Finance Commission of
2-5 Texas.
2-6 (2) "Commissioner" means the Banking Commissioner of
2-7 Texas.
2-8 (3) "Financial institution" means a state or national
2-9 bank, state or federal savings and loan association, state or
2-10 federal savings bank, or state or federal credit union doing
2-11 business in this state.
2-12 (4) "Regular checking account" means the type of
2-13 checking account held by the most customers at a financial
2-14 institution.
2-15 Sec. 2. CONSUMER CHECKING ACCOUNT REQUIRED. Each financial
2-16 institution that offers a checking account to the public shall
2-17 offer a consumer checking account to the public.
2-18 Sec. 3. FORM OF ACCOUNT. (a) The commission by rule shall
2-19 establish the required terms of a consumer checking account. The
2-20 rules must:
2-21 (1) be designed to make the account available for use
2-22 by low-income persons primarily for personal, family, or household
2-23 purposes;
2-24 (2) establish:
2-25 (A) the initial deposit that may be required to
2-26 open the account;
2-27 (B) the minimum balance that may be required to
3-1 maintain the account;
3-2 (C) the minimum number of checks that the
3-3 financial institution must permit the account holder to draw within
3-4 a certain period without additional charge;
3-5 (D) the minimum number of withdrawals that the
3-6 financial institution must permit the account holder to make by a
3-7 means other than check within a certain period without additional
3-8 charge;
3-9 (E) the minimum number of deposits that the
3-10 financial institution must permit the account holder to make within
3-11 a certain period without additional charge; and
3-12 (F) the maximum amount of any charge relating to
3-13 the account; and
3-14 (3) require the financial institution to provide the
3-15 holder of the account periodic account statements.
3-16 (b) In adopting rules under this section, the commission
3-17 shall ensure that a financial institution is not required to
3-18 receive less gross income from consumer checking accounts than it
3-19 costs the financial institution to provide those accounts. On
3-20 request of the commissioner, a financial institution shall provide
3-21 information necessary to enable the commission to carry out this
3-22 subsection.
3-23 Sec. 4. ALTERNATIVE FORM OF ACCOUNT. (a) On request of a
3-24 financial institution, the commissioner may approve as a consumer
3-25 checking account an account that does not meet the requirements of
3-26 rules adopted under Section 3 if the commissioner determines that
3-27 the account satisfies the purposes of a consumer checking account
4-1 described by Section 3(a)(1).
4-2 (b) Not later than the 30th day after the day on which a
4-3 financial institution submits a request under this section, the
4-4 commissioner shall send to the financial institution a written
4-5 notice that:
4-6 (1) approves the request; or
4-7 (2) disapproves the request and states the reasons for
4-8 the disapproval.
4-9 Sec. 5. CONSIDERATION OF EXISTING ACCOUNTS. The commission,
4-10 in adopting rules under Section 3, and the commissioner, in
4-11 considering a request under Section 4, shall consider the terms of
4-12 existing low-cost personal checking accounts available in this
4-13 state.
4-14 Sec. 6. PARITY WITH OTHER ACCOUNTS. (a) Except as otherwise
4-15 provided by this article or rules adopted under this article, a
4-16 financial institution shall offer each of its products and services
4-17 to a holder of a consumer checking account on the same basis that
4-18 it offers the product or service to a holder of a regular checking
4-19 account.
4-20 (b) A financial institution may not:
4-21 (1) give a holder of a consumer checking account less
4-22 access to mail or electronic banking services, including direct
4-23 deposit services, than it gives to a holder of a regular checking
4-24 account; or
4-25 (2) charge a holder of a consumer checking account an
4-26 amount for a service that is greater than the amount charged for
4-27 the service to a holder of a regular checking account.
5-1 Sec. 7. OPENING ACCOUNT; SERVICES PROVIDED AT EACH LOCATION.
5-2 (a) A financial institution shall:
5-3 (1) provide for the opening of a consumer checking
5-4 account at each location at which it opens a regular checking
5-5 account; and
5-6 (2) provide services related to a consumer checking
5-7 account at each location at which it provides services related to a
5-8 regular savings account.
5-9 (b) The financial institution may require that an applicant
5-10 for a consumer checking account provide the financial institution
5-11 with the same information required of an applicant for a regular
5-12 savings account.
5-13 Sec. 8. GROUNDS FOR CLOSING OR DENYING ACCOUNT. (a) A
5-14 financial institution may:
5-15 (1) close a consumer checking account for fraudulent
5-16 activity or overdrafts under the same standards the financial
5-17 institution applies to a regular checking account; and
5-18 (2) close or refuse to open a consumer checking
5-19 account if the applicant or account holder:
5-20 (A) has a consumer checking account or regular
5-21 checking account at another financial institution; or
5-22 (B) intentionally makes a material
5-23 misrepresentation in information provided to the financial
5-24 institution to open the account.
5-25 (b) A financial institution may not require, as a condition
5-26 of opening or maintaining a consumer checking account, that the
5-27 applicant or account holder hold any other account with that or any
6-1 other financial institution, including a credit card account.
6-2 Sec. 9. PUBLIC NOTICE OF ACCOUNT. Each financial
6-3 institution required to offer a consumer checking account shall
6-4 provide notice at each of its locations of the main features and
6-5 limitations of a consumer checking account by:
6-6 (1) posting a copy of the notice in a conspicuous
6-7 public area of the location; and
6-8 (2) making printed copies of the notice available to
6-9 the public.
6-10 Sec. 10. INJUNCTION. On request of the commissioner, the
6-11 attorney general shall bring an action to enjoin a violation of
6-12 this article.
6-13 SECTION 3. The Finance Commission of Texas shall adopt rules
6-14 under Article 353, Revised Statutes, as added by this Act, before
6-15 January 1, 1998.
6-16 SECTION 4. The importance of this legislation and the
6-17 crowded condition of the calendars in both houses create an
6-18 emergency and an imperative public necessity that the
6-19 constitutional rule requiring bills to be read on three several
6-20 days in each house be suspended, and this rule is hereby suspended,
6-21 and that this Act take effect and be in force from and after its
6-22 passage, and it is so enacted.