By Marchant H.B. No. 2066
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to regulation of bank holding companies in an interstate
1-3 banking and branching environment, the authorization of interstate
1-4 operations of financial institutions in accordance with the
1-5 requirements of federal law, and the enhancement of state bank and
1-6 trust company charters for the interstate banking and branching
1-7 environment.
1-8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-9 ARTICLE 1. INTERSTATE BANKING AND BRANCHING
1-10 SECTION 1.001. Title 3, Finance Code, is amended by adding
1-11 Subtitle G to read as follows:
1-12 SUBTITLE G. BANK HOLDING COMPANIES; INTERSTATE BANK OPERATIONS
1-13 CHAPTER 201. GENERAL PROVISIONS
1-14 SUBCHAPTER A. GENERAL PROVISIONS
1-15 Sec. 201.001. SCOPE OF SUBTITLE. (a) This subtitle:
1-16 (1) sets forth the conditions under which a company
1-17 may acquire a Texas bank or a Texas bank holding company, pursuant
1-18 to the provisions of Chapter 202;
1-19 (2) permits interstate branching under the Interstate
1-20 Banking and Branching Efficiency Act pursuant to the provisions of
1-21 Chapter 203; and
1-22 (3) provides for state regulation of the participation
1-23 by foreign banks in the financial markets of this state, pursuant
1-24 to the provisions of Chapter 204.
2-1 (b) This subtitle is not intended to discriminate against
2-2 out-of-state banks and bank holding companies in a manner that
2-3 would violate the Interstate Banking and Branching Efficiency Act.
2-4 Sec. 201.002. DEFINITIONS. (a) Unless the context requires
2-5 otherwise, in this subtitle:
2-6 (1) "Acquire" means an act that results in direct or
2-7 indirect control by a company of a bank holding company or a bank,
2-8 including an act that causes:
2-9 (A) the company to merge with a bank holding
2-10 company or a bank;
2-11 (B) the company to assume direct or indirect
2-12 ownership or control of:
2-13 (i) more than 25 percent of any class of
2-14 voting shares of a bank holding company or a bank, if the acquiring
2-15 company was not a bank holding company before the acquisition;
2-16 (ii) more than five percent of any class
2-17 of voting shares of a bank holding company or a bank, if the
2-18 acquiring company was a bank holding company before the
2-19 acquisition; or
2-20 (iii) all or substantially all of the
2-21 assets of a bank holding company or a bank; or
2-22 (C) an application relating to control of a bank
2-23 holding company or bank to be filed with a federal bank supervisory
2-24 agency.
2-25 (2) "Affiliate" has the meaning assigned by Section
2-26 2(k), Bank Holding Company Act (12 U.S.C. Section 1841(k)).
2-27 (3) "Agency" when used in reference to an office of a
3-1 foreign bank, has the meaning assigned by Section 1(b)(1),
3-2 International Banking Act (12 U.S.C. Section 3101(1)).
3-3 (4) "Bank":
3-4 (A) for purposes of Chapter 202 and the laws of
3-5 this state as they relate to Chapter 202, has the meaning assigned
3-6 by Section 2(c), Bank Holding Company Act (12 U.S.C. Section
3-7 1841(c));
3-8 (B) for purposes of Chapter 203 and the laws of
3-9 this state as they relate to Chapter 203, has the meaning assigned
3-10 to the term "insured bank" by Section 3(h), Federal Deposit
3-11 Insurance Act (12 U.S.C. Section 1813(h)), except that the term
3-12 does not include a foreign bank unless it is organized under the
3-13 laws of a territory of the United States, Puerto Rico, Guam,
3-14 American Samoa, or the Virgin Islands and its deposits are insured
3-15 by the Federal Deposit Insurance Corporation; and
3-16 (C) for purposes of Chapter 204 and the laws of
3-17 this state as they relate to Chapter 204, has the meaning assigned
3-18 by Section 2(c), Bank Holding Company Act (12 U.S.C. Section
3-19 1841(c)), or Section 3(a)(1), Federal Deposit Insurance Act (12
3-20 U.S.C. Section 1813(a)(1)), except that the term does not include a
3-21 foreign bank or a branch or agency of a foreign bank.
3-22 (5) "Bank holding company" has the meaning assigned by
3-23 Section 2(a), Bank Holding Company Act (12 U.S.C. Section 1841(a)),
3-24 and includes a Texas bank holding company, an out-of-state bank
3-25 holding company, and a foreign bank holding company unless the
3-26 context requires otherwise.
3-27 (6) "Bank Holding Company Act" means the federal Bank
4-1 Holding Company Act of 1956 (12 U.S.C. Section 1841 et seq.), as
4-2 amended.
4-3 (7) "Bank supervisory agency" means any of the
4-4 following:
4-5 (A) an agency of another state with primary
4-6 responsibility for chartering and supervising banks;
4-7 (B) the Office of the Comptroller of the
4-8 Currency, the Federal Deposit Insurance Corporation, or the Board
4-9 of Governors of the Federal Reserve System, and any successor to
4-10 these agencies; or
4-11 (C) an agency of a country, including a colony,
4-12 dependency, possession, or political subdivision of a country,
4-13 other than the United States with primary responsibility for
4-14 chartering and supervising banks.
4-15 (8) "Branch" has the meaning assigned by Section
4-16 31.002(a), except that for purposes of Chapter 204 and the laws of
4-17 this state as they relate to Chapter 204 the term:
4-18 (A) with respect to an office of a foreign bank,
4-19 has the meaning assigned by Section 1(b)(3), International Banking
4-20 Act (12 U.S.C. Section 3101(3)); and
4-21 (B) with respect to an office of a bank as
4-22 defined by this section for the purposes of Chapter 204, has the
4-23 meaning assigned to the term "domestic branch" by Section 3(o),
4-24 Federal Deposit Insurance Act (12 U.S.C. Section 1813(o)).
4-25 (9) "Commissioner" has the meaning assigned to the
4-26 term "banking commissioner" by Section 31.002(a), except that for
4-27 purposes of Chapter 203 and the laws of this state as they relate
5-1 to Chapter 203, with respect to a state savings bank, the term
5-2 means the savings and loan commissioner of Texas.
5-3 (10) "Company" has the meaning assigned by Section
5-4 2(b), Bank Holding Company Act (12 U.S.C. Section 1841(b)), and
5-5 includes a bank holding company.
5-6 (11) "Control" shall be construed consistently with
5-7 Section 2(a)(2), Bank Holding Company Act (12 U.S.C. Section
5-8 1841(a)(2)), and regulations and interpretive rulings of the Board
5-9 of Governors of the Federal Reserve System.
5-10 (12) "De novo branch" means a branch of a bank located
5-11 in a host state that:
5-12 (A) is originally established by the bank as a
5-13 branch; and
5-14 (B) does not become a branch of the bank as a
5-15 result of:
5-16 (i) the acquisition of another bank or a
5-17 branch of another bank; or
5-18 (ii) the merger or conversion involving
5-19 the bank or branch.
5-20 (13) "Deposit" has the meaning assigned by Section
5-21 3(l), Federal Deposit Insurance Act (12 U.S.C. Section 1813(l)).
5-22 (14) "Depository institution" means an institution
5-23 included for any purpose within the definitions of "insured
5-24 depository institution" as assigned by Sections 3(c)(2) and
5-25 3(c)(3), Federal Deposit Insurance Act (12 U.S.C. Sections
5-26 1813(c)(2) and 1813(c)(3)).
5-27 (15) "Federal agency" means an agency of a foreign
6-1 bank that is licensed by the Comptroller of the Currency pursuant
6-2 to Section 4, International Banking Act (12 U.S.C. Section 3102).
6-3 (16) "Federal branch" means a branch of a foreign bank
6-4 that is licensed by the Comptroller of the Currency pursuant to
6-5 Section 4, International Banking Act (12 U.S.C. Section 3102).
6-6 (17) "Federal Deposit Insurance Act" means the Federal
6-7 Deposit Insurance Act (12 U.S.C. Section 1811 et seq.), as amended.
6-8 (18) "Foreign bank" has the meaning assigned by
6-9 Section 1(b)(7), International Banking Act (12 U.S.C. Section
6-10 3101(7)).
6-11 (19) "Foreign bank holding company" means a bank
6-12 holding company that is organized under the laws of a country other
6-13 than the United States or a territory or possession of the United
6-14 States.
6-15 (20) "Foreign person" means a natural or juridical
6-16 person who is a citizen or national of one or more countries,
6-17 including any colonies, dependencies, or possessions of the
6-18 countries, other than the United States.
6-19 (21) "Home state" means:
6-20 (A) with respect to a national bank, the state
6-21 in which the main office of the bank is located;
6-22 (B) with respect to a state bank, the state by
6-23 which the bank is chartered;
6-24 (C) with respect to a foreign bank, the state
6-25 determined to be the home state of the foreign bank under Section
6-26 5(c), International Banking Act (12 U.S.C. Section 3103(c)); and
6-27 (D) with respect to a bank holding company, the
7-1 state in which the total deposits of all bank subsidiaries of the
7-2 company are the largest on the later of July 1, 1966, or the date
7-3 on which the company became a bank holding company.
7-4 (22) "Home state regulator" means:
7-5 (A) with respect to an out-of-state bank holding
7-6 company, the bank supervisory agency of the home state of the bank
7-7 holding company; and
7-8 (B) with respect to an out-of-state state bank,
7-9 the bank supervisory agency of the state in which the bank is
7-10 chartered.
7-11 (23) "Host state" means:
7-12 (A) with respect to a bank, a state other than
7-13 the home state of the bank in which the bank maintains or seeks to
7-14 establish and maintain a branch; and
7-15 (B) with respect to a bank holding company, a
7-16 state other than the home state of the company in which the company
7-17 controls or seeks to control a bank subsidiary.
7-18 (24) "International Banking Act" means the federal
7-19 International Banking Act of 1978 (12 U.S.C. Section 3101 et seq.),
7-20 as amended.
7-21 (25) "Interstate Banking and Branching Efficiency Act"
7-22 means the federal Riegle-Neal Interstate Banking and Branching
7-23 Efficiency Act of 1994, Public Law No. 103-328, codified at various
7-24 sections of Title 12, United States Code.
7-25 (26) "Interstate branch" means a branch of a bank or a
7-26 branch of a foreign bank, as the context requires, established,
7-27 acquired, or retained pursuant to the Interstate Banking and
8-1 Branching Efficiency Act, outside the home state of the bank or
8-2 foreign bank. The term does not include, with respect to a foreign
8-3 bank, a limited branch as that term is defined by this section.
8-4 (27) "Interstate merger transaction" means:
8-5 (A) the merger of banks with different home
8-6 states and the conversion of branches of a bank involved in the
8-7 merger into branches of the resulting bank; or
8-8 (B) the purchase of all or substantially all of
8-9 the assets, including all or substantially all of the branches, of
8-10 a bank whose home state is different from the home state of the
8-11 acquiring bank.
8-12 (28) "Limited branch" means a branch of a foreign bank
8-13 that accepts only the deposits that would be permissible for a
8-14 corporation organized under Section 25A, Federal Reserve Act (12
8-15 U.S.C. Section 611 et seq.), in accordance with Section 5(a)(7),
8-16 International Banking Act (12 U.S.C. Section 3103(a)(7)).
8-17 (29) "Out-of-state bank" means a bank whose home state
8-18 is another state.
8-19 (30) "Out-of-state bank holding company" means a bank
8-20 holding company whose home state is another state.
8-21 (31) "Out-of-state foreign bank" means a foreign bank
8-22 whose home state is another state.
8-23 (32) "Out-of-state state bank" means a bank chartered
8-24 under the laws of another state.
8-25 (33) "Representative office" has the meaning assigned
8-26 by Section 1(b)(15), International Banking Act (12 U.S.C. Section
8-27 3101(15)).
9-1 (34) "Resulting bank" means a bank that results from
9-2 an interstate merger transaction.
9-3 (35) "State" means a state of the United States, the
9-4 District of Columbia, a territory of the United States, Puerto
9-5 Rico, Guam, American Samoa, the Trust Territory of the Pacific
9-6 Islands, the Virgin Islands, or the Northern Mariana Islands,
9-7 except that for purposes of Chapter 202 and the laws of this state
9-8 as they relate to Chapter 202 the term means a state, territory, or
9-9 other possession of the United States, including the District of
9-10 Columbia.
9-11 (36) "State bank" means a Texas state bank or an
9-12 out-of-state state bank, including an out-of-state state savings
9-13 bank.
9-14 (37) "State savings bank" has the meaning assigned to
9-15 the term "savings bank" by Section 3(g), Federal Deposit Insurance
9-16 Act (12 U.S.C. Section 1813(g)), and includes a savings bank
9-17 organized under Subtitle C or under similar laws of another state.
9-18 (38) "Subsidiary" has the meaning assigned by Section
9-19 2(d), Bank Holding Company Act (12 U.S.C. Section 1841(d)).
9-20 (39) "Texas bank" means a bank whose home state is
9-21 this state, except that for purposes of Chapter 202 and the laws of
9-22 this state as they relate to Chapter 202 the term means a Texas
9-23 state bank or a national bank organized under federal law with its
9-24 main office in this state.
9-25 (40) "Texas bank holding company" means a bank holding
9-26 company whose home state is this state and that is not controlled
9-27 by a bank holding company other than a Texas bank holding company.
10-1 (41) "Texas representative office" means a
10-2 representative office that is located in this state and registered
10-3 pursuant to Subchapter C, Chapter 204.
10-4 (42) "Texas state agency," means, when used in
10-5 reference to an office of a foreign bank, an agency of a foreign
10-6 bank that is located in this state and licensed pursuant to
10-7 Subchapter B, Chapter 204.
10-8 (43) "Texas state bank" means a bank that is organized
10-9 under Subtitle A.
10-10 (44) "Texas state branch," means, when used in
10-11 reference to an office of a foreign bank, a branch of a foreign
10-12 bank that is located in this state and licensed pursuant to
10-13 Subchapter B, Chapter 204.
10-14 (45) "United States" means:
10-15 (A) when used in a geographical sense, the
10-16 several states, the District of Columbia, Puerto Rico, Guam,
10-17 American Samoa, the American Virgin Islands, the Trust Territory of
10-18 the Pacific Islands, and other territories of the United States;
10-19 and
10-20 (B) when used in a political sense, the federal
10-21 government of the United States.
10-22 (b) The definitions provided by Section 31.002 apply to this
10-23 subtitle to the extent not inconsistent with this section and as
10-24 the context requires.
10-25 (c) The definitions shall be liberally construed to
10-26 accomplish the purposes of this subtitle.
10-27 (d) The finance commission by rule may adopt other
11-1 definitions to accomplish the purposes of this subtitle.
11-2 Sec. 201.003. RULES. (a) The finance commission may adopt
11-3 rules to accomplish the purposes of this subtitle, including rules
11-4 necessary or reasonable to:
11-5 (1) implement and clarify this subtitle in a manner
11-6 consistent with and to the extent permitted by applicable federal
11-7 law;
11-8 (2) preserve or protect the safety and soundness of
11-9 banking in this state;
11-10 (3) grant the same rights and privileges to Texas
11-11 state banks that are or may be granted to other depository
11-12 institutions;
11-13 (4) recover the cost of maintaining and operating the
11-14 department and the cost of enforcing this subtitle by imposing and
11-15 collecting ratable and equitable fees for supervision and
11-16 regulation, including fees for notices, applications, and
11-17 examinations; and
11-18 (5) facilitate the fair hearing and adjudication of
11-19 matters before the commissioner and the finance commission.
11-20 (b) In adopting rules, the finance commission shall consider
11-21 the need to:
11-22 (1) coordinate with applicable federal law;
11-23 (2) promote a stable banking environment;
11-24 (3) provide the public with convenient, safe, and
11-25 competitive banking services;
11-26 (4) preserve and promote the competitive parity of
11-27 Texas state banks with other depository institutions consistent
12-1 with the safety and soundness of Texas state banks and the Texas
12-2 state bank system; and
12-3 (5) allow for economic development in this state.
12-4 (c) The presence or absence in this subtitle of a specific
12-5 reference to rules regarding a particular subject does not enlarge
12-6 or diminish the rulemaking authority provided by this section.
12-7 Sec. 201.004. LAW APPLICABLE TO INTERSTATE BRANCHES. (a)
12-8 The laws of this state apply to an interstate branch located in
12-9 this state to the same extent the laws of this state would apply if
12-10 the branch in this state were a national bank with its main office
12-11 located in this state, except to the extent otherwise provided
12-12 under federal law.
12-13 (b) To the extent provided by Section 4.102(c), Business &
12-14 Commerce Code, the laws of this state govern a deposit contract
12-15 between a bank and a consumer account holder if the branch or
12-16 separate office of the bank that accepts the deposit contract is
12-17 located in this state.
12-18 (c) Without limiting Subsection (a), for purposes of the
12-19 laws of this state relating to authority to act as a fiduciary,
12-20 depository of public funds, or custodian of securities pledged to
12-21 secure public funds, or authority to engage in repurchase
12-22 transactions with public entities, a legally operating interstate
12-23 branch in this state is considered to be in, within, located in,
12-24 authorized to do business in, domiciled in, and chartered in this
12-25 state.
12-26 Sec. 201.005. COOPERATIVE AGREEMENTS; FEES. (a) To carry
12-27 out the purposes of this subtitle, to the extent permitted by
13-1 federal law, the commissioner may:
13-2 (1) enter into cooperative, coordinating, or
13-3 information sharing agreements with another bank supervisory agency
13-4 or an organization affiliated with or representing one or more bank
13-5 supervisory agencies;
13-6 (2) with respect to periodic examination or other
13-7 supervision or investigation, accept reports of examination or
13-8 investigation by, and reports submitted to, another bank
13-9 supervisory agency in lieu of conducting examinations or
13-10 investigations or receiving reports as might otherwise be required
13-11 or permissible under this subtitle;
13-12 (3) enter into contracts with another bank supervisory
13-13 agency having concurrent regulatory or supervisory jurisdiction to
13-14 engage the services of the agency for reasonable compensation to
13-15 assist in connection with the commissioner's performance of
13-16 official duties under this subtitle or other law, or to provide
13-17 services to the agency for reasonable compensation in connection
13-18 with the agency's performance of official duties under law, except
13-19 that Chapter 2254, Government Code, does not apply to the
13-20 contracts;
13-21 (4) enter into joint examinations or joint enforcement
13-22 actions with another bank supervisory agency having concurrent
13-23 regulatory or supervisory jurisdiction, except that the
13-24 commissioner may independently take action under Section 201.009 if
13-25 the commissioner determines that the action is necessary to carry
13-26 out the commissioner's responsibilities under this subtitle or to
13-27 enforce compliance with the laws of this state; and
14-1 (5) assess supervisory and examination fees to be paid
14-2 by a state bank, state savings bank, bank holding company, or
14-3 foreign bank in connection with the commissioner's performance of
14-4 duties under this subtitle.
14-5 (b) Supervisory or examination fees assessed by the
14-6 commissioner in accordance with this subtitle may be shared with
14-7 another bank supervisory agency or an organization affiliated with
14-8 or representing one or more bank supervisory agencies in accordance
14-9 with an agreement between the commissioner and the agency or
14-10 organization. The commissioner may also receive a portion of
14-11 supervisory or examination fees assessed by another bank
14-12 supervisory agency in accordance with an agreement between the
14-13 commissioner and the agency.
14-14 Sec. 201.006. ISSUANCE OF INTERPRETIVE STATEMENTS AND
14-15 OPINIONS. (a) To encourage the effective coordination and
14-16 implementation of home state laws and host state laws with respect
14-17 to interstate branching, the commissioner, directly or through the
14-18 deputy commissioner or a department attorney, may:
14-19 (1) issue interpretive statements containing matters
14-20 of general policy to guide the public and banks and bank holding
14-21 companies subject to this subtitle;
14-22 (2) amend or repeal a published interpretive statement
14-23 by issuing an amended statement or notice of repeal of a statement
14-24 and publishing the statement or notice;
14-25 (3) issue, in response to specific requests from the
14-26 public or the banking industry, opinions interpreting this subtitle
14-27 or determining the applicability of laws of this state to the
15-1 operation of interstate branches or other offices in this state by
15-2 out-of-state banks or in other states by Texas banks; and
15-3 (4) amend or repeal an opinion by issuing an amended
15-4 opinion or notice of repeal of an opinion, except that the
15-5 requesting party may rely on the original opinion if:
15-6 (A) all material facts were originally disclosed
15-7 to the commissioner;
15-8 (B) the safety and soundness of the affected
15-9 bank or bank holding company will not be affected by further
15-10 reliance on the original opinion; and
15-11 (C) the text and interpretation of relevant,
15-12 governing provisions of applicable home state, host state, and
15-13 federal law have not been changed by legislative or judicial
15-14 action.
15-15 (b) An interpretive statement or opinion may be disseminated
15-16 by newsletter, via electronic medium such as the internet, in a
15-17 volume of statutes or related materials published by the
15-18 commissioner or others, or by other means reasonably calculated to
15-19 notify persons affected by the interpretive statement or opinion.
15-20 An opinion may be disseminated to the public if the commissioner
15-21 determines that the opinion is useful for the general guidance and
15-22 convenience of the public or banks or bank holding companies. A
15-23 published opinion must be redacted to preserve the confidentiality
15-24 of the requesting party unless the requesting party consents to be
15-25 identified in the published opinion. Notice of an amended or
15-26 withdrawn statement or opinion must be disseminated in a
15-27 substantially similar manner as the affected statement or opinion
16-1 was originally disseminated.
16-2 (c) An interpretive statement or opinion issued under this
16-3 subtitle does not have the force of law and is not a rule for the
16-4 purposes of Chapter 2001, Government Code, unless adopted by the
16-5 finance commission as provided by Chapter 2001, Government Code.
16-6 An interpretive statement or opinion is an administrative
16-7 construction of this subtitle entitled to great weight if the
16-8 construction is reasonable and does not conflict with this
16-9 subtitle.
16-10 Sec. 201.007. CONFIDENTIALITY. Except as expressly provided
16-11 otherwise in this subtitle, confidentiality of information obtained
16-12 by the commissioner under this subtitle is governed by Subchapter
16-13 D, Chapter 31, or, with respect to a state savings bank, Subtitle
16-14 C, and may not be disclosed by the commissioner or an employee of
16-15 the commissioner's department except as provided by Subchapter D,
16-16 Chapter 31, or, with respect to a state savings bank, Subtitle C.
16-17 Sec. 201.008. NOTICE OF SUBSEQUENT EVENT. Each out-of-state
16-18 state bank that has established and maintains an interstate branch
16-19 in this state pursuant to this subtitle shall give written notice
16-20 to the commissioner, at least 30 days before the effective date of
16-21 the event, or in the case of an emergency transaction, within a
16-22 shorter period consistent with applicable state or federal law, of
16-23 a merger or other transaction that would cause a change of control
16-24 with respect to the bank or a bank holding company that controls
16-25 the bank, with the result that an application would be required to
16-26 be filed with the bank's home state regulator or a federal bank
16-27 supervisory agency, including an application filed pursuant to the
17-1 Change in Bank Control Act of 1978 (12 U.S.C. Section 1817(j)), as
17-2 amended, or the Bank Holding Company Act (12 U.S.C. Section 1841 et
17-3 seq.).
17-4 Sec. 201.009. ENFORCEMENT; APPEALS. (a) If the
17-5 commissioner determines that a bank holding company or a foreign
17-6 bank has violated this subtitle or other applicable law of this
17-7 state, the commissioner may take any enforcement action the
17-8 commissioner would be empowered to take if the bank holding company
17-9 or foreign bank were a Texas state bank, except that the
17-10 commissioner shall promptly give notice to the home state regulator
17-11 of each enforcement action taken against an out-of-state bank
17-12 holding company or foreign bank and, to the extent practicable,
17-13 shall consult and cooperate with the home state regulator in
17-14 pursuing and resolving the enforcement action. A bank holding
17-15 company or foreign bank may appeal a final order or other decision
17-16 of the commissioner under this subtitle as provided by Sections
17-17 31.202, 31.203, and 31.204.
17-18 (b) If the commissioner determines that an interstate branch
17-19 maintained by an out-of-state state bank in this state is being
17-20 operated in violation of a law of this state or in an unsafe and
17-21 unsound manner, the commissioner may take any enforcement action
17-22 the commissioner would be empowered to take if the branch were a
17-23 Texas state bank or state savings bank, as the case may be, except
17-24 that the commissioner shall promptly give notice to the home state
17-25 regulator of each enforcement action taken against an out-of-state
17-26 state bank and, to the extent practicable, shall consult and
17-27 cooperate with the home state regulator in pursuing and resolving
18-1 the enforcement action. An out-of-state state bank may appeal a
18-2 final order or other decision of the commissioner under this
18-3 subtitle as provided by Sections 31.202, 31.203, and 31.204, or as
18-4 provided under Subtitle C with respect to a state savings bank.
18-5 (c) Notwithstanding Subsections (a) and (b), the
18-6 commissioner may enforce the laws of this state against an entity
18-7 subject to this subtitle by appropriate action in the courts,
18-8 including an action for injunctive relief, if the banking
18-9 commissioner concludes the action is necessary or desirable.
18-10 Sec. 201.010. TAXATION. A bank subject to this subtitle is
18-11 subject to the franchise tax to the extent provided by Chapter 171,
18-12 Tax Code.
18-13 Sec. 201.011. SEVERABILITY. The provisions of this subtitle
18-14 or the applications of those provisions are severable as provided
18-15 by Section 311.032(c), Government Code.
18-16 (Sections 201.012-201.100 reserved for expansion
18-17 SUBCHAPTER B. REGISTRATION OF FINANCIAL INSTITUTIONS
18-18 Sec. 201.101. DEFINITIONS. In this subchapter:
18-19 (1) "Financial institution" means:
18-20 (A) a bank as defined for any purpose by Section
18-21 201.002(a)(4), whether chartered under the laws of this state,
18-22 another state, the United States, or another country, including a
18-23 state savings bank;
18-24 (B) a savings and loan association chartered
18-25 under Chapter 62 or similar laws of another state;
18-26 (C) a federal savings and loan association,
18-27 federal savings bank, or federal credit union;
19-1 (D) a credit union chartered under Chapter 122
19-2 or similar laws of another state; or
19-3 (E) a trust company chartered under the laws of
19-4 this state or another state.
19-5 (2) "Out-of-state financial institution" means a
19-6 financial institution that:
19-7 (A) is not chartered under the laws of this
19-8 state; and
19-9 (B) has its main or principal office in another
19-10 state or country.
19-11 (3) "Texas financial institution" means a financial
19-12 institution that:
19-13 (A) is chartered under the laws of this state or
19-14 under federal law; and
19-15 (B) has its main or principal office in this
19-16 state.
19-17 Sec. 201.102. REGISTRATION TO DO BUSINESS. An out-of-state
19-18 financial institution must file an application for registration
19-19 with the secretary of state, before operating a branch or other
19-20 office in this state, by complying with the law of this state
19-21 relating to foreign corporations doing business in this state,
19-22 notwithstanding a provision in that law that purports to limit or
19-23 prohibit its applicability to financial institutions.
19-24 Sec. 201.103. APPOINTMENT OF AGENT TO RECEIVE SERVICE OF
19-25 PROCESS. (a) A Texas financial institution may file in the office
19-26 of the secretary of state a statement appointing an agent
19-27 authorized to receive service of process.
20-1 (b) A statement appointing an agent must set forth:
20-2 (1) the name of the Texas financial institution;
20-3 (2) the federal tax identification number of the Texas
20-4 financial institution;
20-5 (3) the address, including the street address, of the
20-6 principal office of the Texas financial institution; and
20-7 (4) the name of the agent in this state authorized to
20-8 receive service of process and the agent's address, including the
20-9 street address, in this state.
20-10 (c) The agent named under Subsection (b) must be:
20-11 (1) an individual resident of this state;
20-12 (2) a domestic corporation, limited partnership,
20-13 partnership, limited liability company, professional association,
20-14 cooperative, or real estate investment trust; or
20-15 (3) a foreign entity registered with the secretary of
20-16 state to transact business in this state.
20-17 (d) A statement appointing an agent must be signed by an
20-18 officer of the Texas financial institution. The statement must
20-19 also be signed by the person appointed agent, who by signing
20-20 accepts the appointment. The appointed agent may resign by filing
20-21 a resignation in the office of the secretary of state and giving
20-22 notice to the Texas financial institution.
20-23 (e) The secretary of state shall collect for the use of the
20-24 state:
20-25 (1) a fee of $25 for indexing and filing the original
20-26 statement appointing an agent; and
20-27 (2) a fee of $15 for filing an amendment to or
21-1 cancellation of a statement appointing an agent.
21-2 (f) An amendment to a statement appointing an agent to
21-3 receive service of process must meet the requirements for execution
21-4 of an original statement.
21-5 (g) A statement appointing an agent may be canceled by
21-6 filing with the secretary of state a written notice of cancellation
21-7 executed by an officer of the Texas financial institution. A
21-8 notice of cancellation must contain:
21-9 (1) the name of the Texas financial institution;
21-10 (2) the federal tax identification number of the Texas
21-11 financial institution;
21-12 (3) the date of filing of the statement appointing the
21-13 agent; and
21-14 (4) the current street address of the principal office
21-15 of the Texas financial institution.
21-16 (h) Service of process on a registered agent appointed under
21-17 this section is an alternate method of service in addition to other
21-18 methods provided by law unless other law specifically requires
21-19 service to be made on the registered agent. A resignation or
21-20 notice of cancellation is effective immediately on acknowledgement
21-21 of filing by the secretary of state, and after the acknowledgement
21-22 the financial institution is subject to service of process as
21-23 otherwise provided by law.
21-24 (i) The secretary of state may adopt forms and procedural
21-25 rules for filing of documents under this section.
21-26 CHAPTER 202. BANK HOLDING COMPANIES
21-27 Sec. 202.001. ACQUISITION OF BANK OR BANK HOLDING COMPANY.
22-1 (a) A company intending to acquire a Texas bank holding company or
22-2 a Texas bank shall submit to the commissioner a copy of the
22-3 application for approval or notice submitted to the Board of
22-4 Governors of the Federal Reserve System under Section 3, Bank
22-5 Holding Company Act (12 U.S.C. Section 1842). The copy must be:
22-6 (1) submitted to the commissioner when the application
22-7 is submitted to the board of governors;
22-8 (2) accompanied by any additional information required
22-9 under Subsection (b); and
22-10 (3) accompanied by any filing fee required by law.
22-11 (b) An applicant or notificant that is an out-of-state bank
22-12 holding company shall provide satisfactory evidence to the
22-13 commissioner of compliance with or inapplicability of:
22-14 (1) the requirements of Section 202.003; and
22-15 (2) if the applicant or notificant is not incorporated
22-16 under the laws of this state, the laws of this state relating to
22-17 registration of foreign corporations to do business in this state.
22-18 (c) On receipt of the notice prescribed by Section 3(b),
22-19 Bank Holding Company Act (12 U.S.C. Section 1842(b)), the
22-20 commissioner shall state in writing within the period prescribed by
22-21 that subsection the commissioner's:
22-22 (1) views and recommendations concerning the proposed
22-23 transaction;
22-24 (2) opinion regarding whether the proposed transaction
22-25 complies with this chapter and the Interstate Banking and Branching
22-26 Efficiency Act; and
22-27 (3) opinion regarding whether the proposed transaction
23-1 complies with the Community Reinvestment Act of 1977 (12 U.S.C.
23-2 Section 2901 et seq.), as amended.
23-3 (d) The commissioner is not required to disapprove the
23-4 application or notice solely because of the opinion stated under
23-5 Subsection (c)(3).
23-6 (e) If the commissioner's response disapproves an
23-7 application for or notice of an acquisition of a Texas state bank
23-8 or a Texas bank holding company controlling a Texas state bank, the
23-9 commissioner may:
23-10 (1) appear at the hearing held as provided by Section
23-11 3(b), Bank Holding Company Act (12 U.S.C. Section 1842(b)); and
23-12 (2) present evidence at the hearing regarding the
23-13 reasons the application or notice should be denied.
23-14 (f) If the commissioner's response disapproves an
23-15 application for or notice of an acquisition other than as described
23-16 by Subsection (e), the commissioner may request that a hearing be
23-17 held as provided by Section 3(b), Bank Holding Company Act (12
23-18 U.S.C. Section 1842(b)). If the board of governors grants the
23-19 request, the commissioner shall appear and present evidence at the
23-20 hearing regarding the reasons the application or notice should be
23-21 denied.
23-22 (g) If the board of governors approves an application or
23-23 notice that the commissioner disapproved, the commissioner may
23-24 accept the decision or attempt to overturn the decision on appeal
23-25 as provided by Section 9, Bank Holding Company Act (12 U.S.C.
23-26 Section 1848).
23-27 Sec. 202.002. LIMITATION ON CONTROL OF DEPOSITS. (a) The
24-1 commissioner may not approve an acquisition if, on consummation of
24-2 the transaction, the applicant, including all depository
24-3 institution affiliates of the applicant, would control 20 percent
24-4 or more of the total amount of deposits in this state held by
24-5 depository institutions in this state.
24-6 (b) The commissioner may request and the applicant shall
24-7 provide supplemental information to the commissioner to aid in a
24-8 determination under this section, including information that is
24-9 more current than or in addition to information in the most
24-10 recently available summary of deposits, reports of condition, or
24-11 similar reports filed with or produced by state or federal
24-12 authorities.
24-13 Sec. 202.003. REQUIRED AGE OF ACQUIRED BANK. (a) An
24-14 out-of-state bank holding company may not make an acquisition under
24-15 this chapter if the Texas bank to be acquired, or any Texas bank
24-16 subsidiary of the bank holding company to be acquired, has not been
24-17 in existence and in continuous operation for at least five years as
24-18 of the effective date of acquisition.
24-19 (b) For purposes of this section:
24-20 (1) a bank that is the successor as a result of merger
24-21 or acquisition of all or substantially all of the assets of a prior
24-22 bank is considered to have been in existence and continuously
24-23 operated during the period of its existence and continuous
24-24 operation as a bank and during the period of existence and
24-25 continuous operation of the prior bank; and
24-26 (2) a bank effecting a purchase and assumption,
24-27 merger, or similar transaction with or supervised by the Federal
25-1 Deposit Insurance Corporation or its successor is considered to
25-2 have been in existence and continuously operated during the
25-3 existence and continuous operation of the bank with respect to
25-4 which the transaction was consummated.
25-5 Sec. 202.004. ACQUISITION OF NONBANKING INSTITUTION. (a) A
25-6 bank holding company doing business in this state that submits an
25-7 application or notice to the Board of Governors of the Federal
25-8 Reserve System regarding an acquisition or activity regulated by
25-9 Section 4, Bank Holding Company Act (12 U.S.C. Section 1843), that
25-10 involves or will involve an office location in this state shall
25-11 submit to the commissioner a copy of the application or notice when
25-12 the application or notice is submitted to the board of governors.
25-13 The bank holding company shall submit other information reasonably
25-14 requested by the commissioner to determine the manner in which the
25-15 acquisition or activity will directly or indirectly affect
25-16 residents of this state.
25-17 (b) To assist in determining whether to disapprove the
25-18 proposed acquisition or activity, the commissioner may hold a
25-19 public hearing as provided by Section 31.201, regardless of whether
25-20 requested to do so by a person, regarding the proposed acquisition
25-21 or activity and its effect on this state. The commissioner shall
25-22 convene a hearing if the bank holding company requests a hearing in
25-23 writing when it submits the application or notice to the
25-24 commissioner.
25-25 (c) The commissioner shall disapprove the proposed
25-26 acquisition or activity if the commissioner determines that the
25-27 acquisition or activity would be detrimental to the public interest
26-1 as a result of probable adverse effects, including undue
26-2 concentration of resources, decreased or unfair competition,
26-3 conflicts of interest, or unsound banking practices.
26-4 (d) If the commissioner determines to disapprove the
26-5 proposed acquisition or activity, the commissioner may prepare and
26-6 file a response to the application or notice with the board of
26-7 governors and may request that a hearing be held. If the board of
26-8 governors grants the request, the commissioner shall appear and
26-9 present evidence at the hearing regarding the reasons the proposed
26-10 acquisition or activity should be denied.
26-11 (e) If the board of governors approves a proposed
26-12 acquisition or activity that the commissioner disapproved, the
26-13 commissioner may accept the decision or seek to overturn the
26-14 decision on appeal as provided by Section 9, Bank Holding Company
26-15 Act (12 U.S.C. Section 1848).
26-16 Sec. 202.005. APPLICABLE LAWS. (a) The commissioner may:
26-17 (1) examine a bank holding company that controls a
26-18 Texas bank to the same extent as if the bank holding company were a
26-19 Texas state bank; and
26-20 (2) bring an enforcement proceeding under Chapter 35
26-21 against a bank holding company that violates or participates in a
26-22 violation of this subtitle, an agreement filed with the
26-23 commissioner under this chapter, or a rule adopted or order issued
26-24 by the commissioner or the finance commission under this subtitle,
26-25 as if the bank holding company were a Texas state bank.
26-26 (b) A Texas bank that is controlled by a bank holding
26-27 company that is not a Texas bank holding company shall be subject
27-1 to all laws of this state that are applicable to Texas banks that
27-2 are controlled by Texas bank holding companies.
27-3 CHAPTER 203. INTERSTATE BANK MERGERS AND BRANCHING
27-4 Sec. 203.001. INTERSTATE BRANCHING BY TEXAS STATE BANKS.
27-5 (a) With the prior approval of the commissioner, a Texas state
27-6 bank may establish and maintain a de novo branch or acquire a
27-7 branch in a state other than Texas pursuant to Section 32.203.
27-8 (b) With the prior approval of the commissioner, a Texas
27-9 state bank may establish, maintain, and operate one or more
27-10 branches in another state pursuant to an interstate merger
27-11 transaction in which the Texas state bank is the resulting bank.
27-12 Not later than the date on which the required application for the
27-13 interstate merger transaction is filed with the responsible federal
27-14 bank supervisory agency, the applicant Texas state bank shall file
27-15 an application on a form prescribed by the commissioner and pay the
27-16 fee prescribed by law. The applicant shall also comply with the
27-17 applicable provisions of Sections 32.301-32.303. The commissioner
27-18 shall approve the interstate merger transaction and the operation
27-19 of branches outside of this state by the Texas state bank if the
27-20 commissioner makes the findings required by Section 32.302(b). An
27-21 interstate merger transaction may be consummated only after the
27-22 applicant has received the commissioner's written approval.
27-23 Sec. 203.002. CONDITIONS FOR ENTRY BY DE NOVO BRANCHING.
27-24 (a) An out-of-state bank may establish a de novo branch in this
27-25 state if:
27-26 (1) the laws of the home state of the out-of-state
27-27 bank would permit a Texas bank to establish and maintain a de novo
28-1 branch in that state under substantially the same terms and
28-2 conditions as set forth in this subchapter;
28-3 (2) the out-of-state bank confirms in writing to the
28-4 commissioner that as long as it maintains a branch in this state,
28-5 it will comply with all applicable laws of this state;
28-6 (3) the applicant provides satisfactory evidence to
28-7 the commissioner of compliance with the applicable requirements of
28-8 Section 201.102; and
28-9 (4) the commissioner, acting on or before the 30th day
28-10 after the date the commissioner receives notice of an application
28-11 under Subsection (b), certifies to the responsible federal bank
28-12 supervisory agency that the requirements of this subchapter have
28-13 been met.
28-14 (b) An out-of-state bank desiring to establish and maintain
28-15 a de novo branch shall provide written notice of the proposed
28-16 transaction to the commissioner not later than the date on which
28-17 the bank applies to the responsible federal bank supervisory agency
28-18 for approval to establish the branch. The filing of the notice
28-19 must be accompanied by the filing fee, if any, prescribed by the
28-20 commissioner.
28-21 (c) A de novo branch may be established in this state
28-22 through the acquisition of a branch of an existing Texas bank if
28-23 the acquiring out-of-state bank complies with this section.
28-24 Sec. 203.003. ENTRY BY INTERSTATE MERGER TRANSACTION. (a)
28-25 Subject to Sections 203.004 and 203.005, one or more Texas banks
28-26 may enter into an interstate merger transaction with one or more
28-27 out-of-state banks under this chapter, and an out-of-state bank
29-1 resulting from the transaction may maintain and operate the
29-2 branches in this state of a Texas bank that participated in the
29-3 transaction. An out-of-state bank that will be the resulting bank
29-4 in the interstate merger transaction shall comply with Section
29-5 201.102.
29-6 (b) An out-of-state bank that will be the resulting bank
29-7 pursuant to an interstate merger transaction involving a Texas
29-8 state bank shall notify the commissioner of the proposed merger not
29-9 later than the date on which it files an application for an
29-10 interstate merger transaction with the responsible federal bank
29-11 supervisory agency, and shall submit a copy of that application to
29-12 the commissioner and pay the filing fee, if any, required by the
29-13 commissioner. A Texas state bank that is a party to the interstate
29-14 merger transaction shall comply with Chapter 32 and with other
29-15 applicable state and federal laws. An out-of-state bank that will
29-16 be the resulting bank in the interstate merger transaction shall
29-17 provide satisfactory evidence to the commissioner of compliance
29-18 with Section 201.102.
29-19 (c) An out-of-state bank that does not operate a branch in
29-20 this state may not establish and maintain a branch in this state
29-21 through the acquisition of a branch of an existing Texas bank
29-22 except as provided by Section 203.002.
29-23 Sec. 203.004. LIMITATION ON CONTROL OF DEPOSITS. (a) An
29-24 interstate merger transaction is not permitted if, on consummation
29-25 of the transaction, the resulting bank, including all depository
29-26 institution affiliates of the resulting bank, would control 20
29-27 percent or more of the total amount of deposits in this state held
30-1 by all depository institutions in this state.
30-2 (b) The commissioner may request and the applicant shall
30-3 provide supplemental information to the commissioner to aid in a
30-4 determination under this section, including information that is
30-5 more current than or in addition to information in the most
30-6 recently available summary of deposits, reports of condition, or
30-7 similar reports filed with or produced by state or federal
30-8 authorities.
30-9 Sec. 203.005. REQUIRED AGE OF ACQUIRED BANK. (a) An
30-10 out-of-state bank may not acquire a Texas bank in an interstate
30-11 merger transaction if the Texas bank has not been in existence and
30-12 in continuous operation for at least five years as of the effective
30-13 date of the interstate merger transaction. However, this section
30-14 does not apply if the acquiring out-of-state bank could establish a
30-15 de novo branch in this state pursuant to Section 203.002.
30-16 (b) For purposes of this section:
30-17 (1) a bank that is the successor as a result of merger
30-18 or acquisition of all or substantially all of the assets of a prior
30-19 bank is considered to have been in existence and continuously
30-20 operated during the period of its existence and continuous
30-21 operation as a bank and during the period of existence and
30-22 continuous operation of the prior bank; and
30-23 (2) a bank effecting a purchase and assumption,
30-24 merger, or similar transaction with or supervised by the Federal
30-25 Deposit Insurance Corporation or its successor is considered to
30-26 have been in existence and continuously operated during the
30-27 existence and continuous operation of the bank with respect to
31-1 which the transaction was consummated.
31-2 Sec. 203.006. ADDITIONAL BRANCHES. An out-of-state bank
31-3 that has established or acquired a branch in this state under this
31-4 chapter may establish or acquire additional branches in this state
31-5 to the same extent that a Texas state bank may establish or acquire
31-6 a branch in this state under applicable state and federal law.
31-7 Sec. 203.007. EXAMINATIONS; PERIODIC REPORTS. (a) The
31-8 banking commissioner may make examinations of a branch established
31-9 and maintained in this state pursuant to this chapter by an
31-10 out-of-state bank as the banking commissioner considers necessary
31-11 to determine whether the branch is being operated in compliance
31-12 with the laws of this state and in accordance with safe and sound
31-13 banking practices. Sections 31.105-31.107 or 96.054-96.057, as
31-14 appropriate, apply to the examinations.
31-15 (b) The commissioner may prescribe requirements for periodic
31-16 reports from an out-of-state bank that operates a branch in Texas
31-17 pursuant to this chapter. Reporting requirements prescribed by the
31-18 commissioner under this section must be:
31-19 (1) consistent with the reporting requirements
31-20 applicable to Texas state banks or state savings banks, as
31-21 appropriate; and
31-22 (2) appropriate to discharge the responsibilities of
31-23 the commissioner under this chapter.
31-24 CHAPTER 204. FOREIGN BANKS
31-25 SUBCHAPTER A. GENERAL PROVISIONS
31-26 Sec. 204.001. TRANSACTING BUSINESS. (a) A foreign bank may
31-27 not transact business in this state except to the extent permitted
32-1 by this chapter.
32-2 (b) Subsection (a) does not prohibit a foreign bank:
32-3 (1) from transacting business at a licensed federal
32-4 branch or agency in this state in accordance with federal law;
32-5 (2) that does not maintain a branch or agency in this
32-6 state or conduct business from an office or location in this state
32-7 from making unsecured loans in this state or loans secured by liens
32-8 on real or personal property located in this state, enforcing those
32-9 loans in this state, or transacting trust business in this state,
32-10 to the extent permitted by other law; or
32-11 (3) organized under the laws of a territory of the
32-12 United States, Puerto Rico, Guam, American Samoa, or the Virgin
32-13 Islands, the deposits of which are insured by the Federal Deposit
32-14 Insurance Corporation, from establishing and operating an
32-15 interstate branch in this state in its capacity as a state bank
32-16 pursuant to Chapter 203.
32-17 (c) For purposes of Subsection (a), a foreign bank is not
32-18 considered to be transacting business in this state merely because
32-19 a subsidiary or affiliate transacts business in this state,
32-20 including business that a depository institution subsidiary or
32-21 affiliate may lawfully conduct in this state as an agent for the
32-22 foreign bank to the extent authorized by the laws of this state.
32-23 Sec. 204.002. BOOKS, ACCOUNTS, AND RECORDS. Each Texas
32-24 state branch, agency, or representative office shall maintain and
32-25 make available appropriate books, accounts, and records reflecting:
32-26 (1) all transactions effected by or on behalf of the
32-27 office; and
33-1 (2) all other actions taken in this state by employees
33-2 of the foreign bank located in this state to effect transactions on
33-3 behalf of an office of the foreign bank located outside this state.
33-4 Sec. 204.003. EXAMINATION; FEES. (a) The commissioner may
33-5 make examinations of a Texas state branch, agency, or
33-6 representative office as the commissioner considers necessary to
33-7 determine whether the office is being operated in compliance with
33-8 the laws of this state and in accordance with safe and sound
33-9 banking practices. Sections 31.105-31.107 apply to the
33-10 examinations.
33-11 (b) A foreign bank that maintains a Texas state branch,
33-12 agency, or representative office shall pay fees to the commissioner
33-13 in accordance with Section 201.005 or rules adopted under this
33-14 subtitle.
33-15 Sec. 204.004. REPORTS. (a) A foreign bank doing business
33-16 in this state through a Texas state branch, agency, or
33-17 representative office shall make written reports to the
33-18 commissioner that:
33-19 (1) are in English;
33-20 (2) are submitted at the times and in the form
33-21 specified by the commissioner or by rules adopted under this
33-22 subtitle;
33-23 (3) are under oath of one of the foreign bank's
33-24 officers, managers, or agents transacting business in this state;
33-25 (4) show the amount of the foreign bank's assets and
33-26 liabilities, expressed in United States currency;
33-27 (5) with respect to a Texas state branch or agency,
34-1 show the amount of the branch or agency's assets and liabilities,
34-2 expressed in United States currency; and
34-3 (6) contain other information that the commissioner
34-4 requires.
34-5 (b) A license or registration of a foreign bank under this
34-6 chapter may be revoked or the foreign bank may be subject to an
34-7 enforcement action under Chapter 35 if the foreign bank fails to
34-8 make a report required under Subsection (a) or makes a material
34-9 false or misleading statement in the report.
34-10 Sec. 204.005. CHANGE OF CONTROL OF FOREIGN BANK. A foreign
34-11 bank licensed to establish and maintain a Texas state branch or
34-12 agency pursuant to Subchapter B, or which has registered a Texas
34-13 representative office pursuant to Subchapter C, shall file with the
34-14 commissioner a notice of change of control, in the form and
34-15 containing the information the commissioner requires, not later
34-16 than the 14th day after the date of a merger or other transaction
34-17 that results or will result in a change of control.
34-18 Sec. 204.006. OPERATIONS IN THIS STATE OF BANKS OWNED OR
34-19 CONTROLLED BY FOREIGN BANKS AND OTHER FOREIGN PERSONS. (a) Except
34-20 as provided in Subsection (b):
34-21 (1) the laws of this state governing the acquisition
34-22 or ownership of interests in Texas banks or out-of-state banks
34-23 seeking to establish and maintain interstate branches in this state
34-24 do not prohibit ownership of those institutions by, or otherwise
34-25 discriminate against, foreign banks or other foreign persons; and
34-26 (2) the laws of this state governing the powers and
34-27 activities of Texas banks and out-of-state banks maintaining
35-1 interstate branches in this state do not discriminate among those
35-2 banks on the basis of their ownership or control by foreign banks
35-3 or other foreign persons.
35-4 (b) Notwithstanding Subsection (a), the commissioner may
35-5 apply the laws of this state governing the ownership, control, or
35-6 operations of Texas banks, even if applicable specifically or
35-7 exclusively to foreign banks or other foreign persons, to the
35-8 extent those laws are determined by the commissioner to be:
35-9 (1) substantially equivalent to or consistent with the
35-10 standards or requirements governing the ownership, control, or
35-11 operations of Texas banks by foreign banks or other foreign persons
35-12 under applicable federal law; or
35-13 (2) otherwise consistent with the laws and policies of
35-14 the United States, including its international agreements governing
35-15 financial services.
35-16 Sec. 204.007. ESTABLISHMENT OF INTERSTATE BRANCH IN THIS
35-17 STATE BY AN OUT-OF-STATE FOREIGN BANK. (a) An out-of-state
35-18 foreign bank may establish an interstate Texas state branch in the
35-19 same manner as, and subject to the same criteria, standards,
35-20 conditions, requirements, and procedures applicable to, the
35-21 establishment of an interstate branch in this state by an
35-22 out-of-state bank having the same home state in the United States,
35-23 including by acquisition of or merger with a Texas bank, or
35-24 establishment of a de novo branch in the manner provided by Section
35-25 203.002, notwithstanding another law of this state to the contrary
35-26 other than Subsection (b).
35-27 (b) With respect to establishment of an initial interstate
36-1 Texas state branch and subsequent intrastate branches of an
36-2 out-of-state foreign bank, the commissioner:
36-3 (1) shall apply the same criteria, standards,
36-4 conditions, requirements, and procedures applicable under
36-5 Subchapter B to the establishment of an initial Texas state branch
36-6 and subsequent intrastate branches in this state;
36-7 (2) may apply other criteria, standards, conditions,
36-8 requirements, or provisions of the laws of this state that are
36-9 determined by the commissioner to be substantially equivalent to or
36-10 consistent with federal law generally applicable to the
36-11 establishment of a branch in the United States by a foreign bank or
36-12 specifically applicable to the establishment of a branch in the
36-13 United States by the applicant foreign bank; and
36-14 (3) may allow an out-of-state foreign bank to:
36-15 (A) acquire or merge with another foreign bank
36-16 maintaining a Texas branch or agency and after the acquisition or
36-17 merger continue the operations as its own;
36-18 (B) acquire or establish an interstate Texas
36-19 branch through another means not inconsistent with Section 5,
36-20 International Banking Act (12 U.S.C. Section 3103); or
36-21 (C) convert a state agency to a state branch as
36-22 provided by Section 204.008.
36-23 Sec. 204.008. CONVERSION OF EXISTING OFFICE. (a) For
36-24 purposes of this section, foreign bank offices in this state are
36-25 divided into classes and ranked in ascending order as:
36-26 (1) representative office;
36-27 (2) Texas state agency; and
37-1 (3) Texas state branch.
37-2 (b) A foreign bank may change a lower class office into a
37-3 higher class office by applying for the higher class office
37-4 pursuant to Section 204.101. On approval of the application to
37-5 establish the higher class office and after all conditions to the
37-6 approval have been fulfilled, the foreign bank may change the lower
37-7 class office into the higher class office and the commissioner
37-8 shall issue a license authorizing the bank to maintain the higher
37-9 class office. The foreign bank shall promptly surrender any
37-10 license or registration previously issued by the commissioner in
37-11 connection with the lower class office.
37-12 (c) A foreign bank may change a higher class office into a
37-13 lower class office by applying for approval to close the higher
37-14 class office pursuant to Section 204.115. On approval of the
37-15 application to close the higher class office and after conditions
37-16 precedent to the closing have been fulfilled, the foreign bank may
37-17 change the higher class office into the lower class office, and the
37-18 commissioner shall issue a license or registration authorizing the
37-19 bank to maintain the lower class office.
37-20 (Sections 204.009-204.100 reserved for expansion
37-21 SUBCHAPTER B. DIRECT BRANCH AND AGENCY OFFICES OF
37-22 FOREIGN BANKS
37-23 Sec. 204.101. APPLICATION TO ESTABLISH BRANCH OR AGENCY.
37-24 (a) A foreign bank that desires to establish and maintain a Texas
37-25 state branch or agency shall submit an application to the
37-26 commissioner. The application must:
37-27 (1) be accompanied by all application fees and
38-1 deposits required by applicable rules;
38-2 (2) be in the form specified by the commissioner;
38-3 (3) be subscribed and acknowledged by an officer of
38-4 the foreign bank;
38-5 (4) have attached:
38-6 (A) a complete copy of the foreign bank's
38-7 application to the Board of Governors of the Federal Reserve System
38-8 under Section 7(d), International Banking Act (12 U.S.C. Section
38-9 3105(d));
38-10 (B) an authenticated copy of the foreign bank's
38-11 articles of incorporation and bylaws or other constitutive
38-12 documents and, if the copy is in a language other than English, an
38-13 English translation of the document, under the oath of the
38-14 translator; and
38-15 (C) evidence of compliance with Section 201.102;
38-16 (5) be submitted when the federal application is
38-17 submitted to the board of governors; and
38-18 (6) include on its face or in accompanying documents:
38-19 (A) the name of the foreign bank;
38-20 (B) the street address where the principal
38-21 office of the Texas state branch or agency is to be located and, if
38-22 different, the Texas state branch or agency's mailing address;
38-23 (C) the name and qualifications of each officer
38-24 and director of the foreign bank who will have control of all or
38-25 part of the business and affairs of the Texas state branch or
38-26 agency;
38-27 (D) a detailed statement of the foreign bank's
39-1 financial condition as of a date not more than 360 days before the
39-2 date of the application; and
39-3 (E) other information that:
39-4 (i) is necessary to enable the
39-5 commissioner to make the findings listed in Section 204.103;
39-6 (ii) is required by rules adopted under
39-7 this subtitle; or
39-8 (iii) the commissioner reasonably
39-9 requests.
39-10 (b) The finance commission may adopt rules prescribing
39-11 abbreviated application procedures and standards applicable to
39-12 applications by foreign banks that have already established an
39-13 initial Texas state branch or agency to establish additional
39-14 intrastate branches or agencies.
39-15 Sec. 204.102. HEARING AND DECISION ON APPLICATION. (a)
39-16 After the application is complete and accepted for filing and all
39-17 required fees and deposits have been paid, the commissioner shall
39-18 determine from the application and the initial investigation
39-19 whether the conditions set forth by Section 204.103 have been
39-20 established. The commissioner shall approve the application or set
39-21 the application for hearing.
39-22 (b) If the commissioner sets the application for hearing:
39-23 (1) the commissioner shall notify the Board of
39-24 Governors of the Federal Reserve System that the application has
39-25 been set for hearing as provided by federal regulations;
39-26 (2) the department shall participate as the opposing
39-27 party; and
40-1 (3) the commissioner shall conduct the hearing and one
40-2 or more prehearing conferences and opportunities for discovery as
40-3 the commissioner considers advisable and consistent with applicable
40-4 law.
40-5 (c) Information relating to the financial condition and
40-6 business affairs of the foreign bank and financial information
40-7 relating to its management and shareholders, except for previously
40-8 published statements and information, is confidential and may not
40-9 be considered in the public portion of the hearing or disclosed by
40-10 the commissioner or an employee of the department except as
40-11 provided by Subchapter D, Chapter 31.
40-12 (d) The commissioner shall make a finding from the record of
40-13 the hearing on each condition listed in Section 204.103 and enter
40-14 an order granting or denying the license. If the license is
40-15 denied, the commissioner shall inform the Board of Governors of the
40-16 Federal Reserve System of the order and the reasons the federal
40-17 application should be denied.
40-18 (e) The commissioner may make approval of an application
40-19 conditional. The commissioner shall include any conditions in the
40-20 order granting the license but may not issue the license until the
40-21 Texas state branch or agency has received the approval of the Board
40-22 of Governors of the Federal Reserve System. If the approval is
40-23 conditioned on a written commitment from the applicant offered to
40-24 and accepted by the commissioner, the commitment is enforceable
40-25 against the applicant.
40-26 Sec. 204.103. ISSUANCE OF LICENSE. (a) The commissioner
40-27 shall issue a license to a foreign bank to establish and maintain a
41-1 Texas state branch or agency if the commissioner finds after
41-2 reasonable inquiry that:
41-3 (1) all members of the management of the Texas state
41-4 branch or agency have sufficient banking experience, ability,
41-5 standing, competence, trustworthiness, and integrity to justify a
41-6 belief that the agency will operate in compliance with state law;
41-7 (2) the foreign bank has sufficient standing to
41-8 justify a belief that the Texas state branch or agency will be free
41-9 from improper or unlawful influence or interference with respect to
41-10 the office's operation in compliance with state law; and
41-11 (3) the foreign bank is acting in good faith and the
41-12 application does not contain a material misrepresentation.
41-13 (b) Each Texas state branch or agency shall post its license
41-14 in a conspicuous place at its office. A license issued under this
41-15 subchapter is not transferable or assignable.
41-16 Sec. 204.104. NO CONCURRENT FEDERAL BRANCH OR AGENCY. (a)
41-17 A foreign bank licensed under this subchapter to establish and
41-18 maintain a Texas state branch or agency may not concurrently
41-19 maintain a federal branch or federal agency in this state.
41-20 (b) A foreign bank which maintains a federal branch or
41-21 federal agency in this state may not concurrently be licensed under
41-22 this subchapter to maintain a Texas state branch or agency.
41-23 Sec. 204.105. POWERS OF BRANCH AND AGENCY. (a) A Texas
41-24 state branch or agency is subject to this subtitle and other laws
41-25 of this state applicable to banks as if the Texas state branch or
41-26 agency were a Texas state bank unless:
41-27 (1) this chapter or a rule adopted under this subtitle
42-1 provides otherwise; or
42-2 (2) the context of a provision or other information
42-3 indicates that a provision applies only to a bank organized under
42-4 the laws of a state or the United States.
42-5 (b) Among other exceptions to Subsection (a) that may be
42-6 required or authorized by the commissioner provided by this
42-7 subchapter or by rules adopted under this subtitle:
42-8 (1) a Texas state branch may not accept deposits of
42-9 less than $100,000 from citizens or residents of the United States,
42-10 other than credit balances that are incidental to or arise out of
42-11 its exercise of other lawful banking powers, unless the Federal
42-12 Deposit Insurance Corporation determines that specific deposit
42-13 taking activities in lesser amounts do not constitute domestic
42-14 retail deposit activities requiring deposit insurance protection
42-15 within the meaning of Section 6, International Banking Act (12
42-16 U.S.C. Section 3104);
42-17 (2) a Texas state agency may not accept deposits from
42-18 citizens or residents of the United States, other than credit
42-19 balances that are incidental to or arise out of its exercise of
42-20 other lawful banking powers, but may accept deposits from persons
42-21 who are neither citizens nor residents of the United States; and
42-22 (3) a limitation or restriction based on the capital
42-23 and certified surplus of a Texas state bank is considered to refer,
42-24 as applied to a Texas state branch or agency, to the dollar
42-25 equivalent of the capital and surplus of the foreign bank, and if
42-26 the foreign bank has more than one Texas state branch or agency in
42-27 this state, the business transacted by all the branches and
43-1 agencies must be aggregated in determining compliance with the
43-2 limitation.
43-3 (c) Subject to Subsections (a) and (b), a foreign bank
43-4 licensed to transact business in this state through a Texas state
43-5 branch or agency may:
43-6 (1) borrow and lend money with or without property as
43-7 security;
43-8 (2) purchase, sell, and make loans regardless of
43-9 whether the loans are secured by bonds or mortgages on real
43-10 property;
43-11 (3) engage in a foreign exchange transaction;
43-12 (4) issue, advise, confirm, and otherwise deal with a
43-13 letter of credit and pay, accept, or negotiate a draft drawn under
43-14 a letter of credit;
43-15 (5) accept a bill of exchange or draft;
43-16 (6) buy or acquire and sell or dispose of a bill of
43-17 exchange, draft, note, acceptance, or other obligation for the
43-18 payment of money;
43-19 (7) maintain a credit balance of money received at the
43-20 Texas state branch or agency incidental to or arising out of the
43-21 exercise of its authorized activities in this state if the money is
43-22 not intended to be a deposit and does not remain in the Texas state
43-23 branch or agency after the completion of all transactions to which
43-24 it relates;
43-25 (8) accept deposits to the extent permitted by
43-26 Subsection (b);
43-27 (9) receive money for transmission and transmit the
44-1 money from its authorized place of business in this state to any
44-2 other place;
44-3 (10) act as an indenture trustee or as a registrar,
44-4 paying agent, or transfer agent, on behalf of the issuer, for
44-5 equity or investment securities; and
44-6 (11) perform other activities that:
44-7 (A) are authorized by rules adopted to
44-8 accomplish the purposes of this subtitle; or
44-9 (B) the commissioner determines are analogous or
44-10 incidental to specific activities authorized by this section for a
44-11 Texas state branch or agency.
44-12 (d) A foreign bank licensed to transact business in this
44-13 state through a Texas state branch or agency may share the premises
44-14 of the Texas state branch or agency with another authorized office
44-15 of the foreign bank or a direct or indirect subsidiary of the
44-16 foreign bank if the books and records of the Texas state branch or
44-17 agency are kept separately from the books and records of the other
44-18 office.
44-19 (e) For purposes of this section, the term "resident of the
44-20 United States" means:
44-21 (1) an individual residing in the United States;
44-22 (2) a corporation, partnership, association, or other
44-23 entity organized in the United States; or
44-24 (3) a branch or office located in the United States of
44-25 an entity that is not organized in the United States.
44-26 Sec. 204.106. APPLICATION TO ACT AS FIDUCIARY. (a) Except
44-27 as provided by Section 204.105(c)(10), a foreign bank may not act
45-1 as a fiduciary at a Texas state branch or agency except by
45-2 obtaining a fiduciary license as provided by this section. A
45-3 foreign bank that intends to act as a fiduciary at a Texas state
45-4 branch or agency shall submit an application to the commissioner.
45-5 The application must:
45-6 (1) be accompanied by all application fees and
45-7 deposits required by applicable rules;
45-8 (2) be in the form specified by the commissioner;
45-9 (3) be subscribed and acknowledged by an officer of
45-10 the foreign bank;
45-11 (4) describe in detail:
45-12 (A) the proposed fiduciary activities;
45-13 (B) the names and relevant expertise of its
45-14 officers and employees that will conduct the fiduciary activities;
45-15 and
45-16 (C) the manner in which the fiduciary activities
45-17 will be captured in the books and records of the Texas state branch
45-18 or agency with due regard for separation of beneficial and legal
45-19 interests; and
45-20 (5) contain other information that:
45-21 (A) is necessary to enable the commissioner to
45-22 make the findings required by Subsection (c);
45-23 (B) is required by rules adopted under this
45-24 subtitle; or
45-25 (C) the commissioner reasonably requests.
45-26 (b) On or before the 60th day after the date the application
45-27 is complete and accepted for filing and all required fees and
46-1 deposits have been paid, the commissioner shall approve the
46-2 application or set the application for hearing. If the
46-3 commissioner sets the application for hearing, the department shall
46-4 participate as the opposing party and the commissioner shall
46-5 conduct the hearing and one or more prehearing conferences and
46-6 opportunities for discovery as the commissioner considers advisable
46-7 and consistent with applicable law.
46-8 (c) The commissioner may issue a license permitting the
46-9 foreign bank to engage in fiduciary activities if the commissioner
46-10 finds that the foreign bank will exercise its fiduciary powers in
46-11 accordance with the laws of this state and has sufficient fiduciary
46-12 and accounting expertise and controls to protect beneficial
46-13 interests under its control. The commissioner may make approval of
46-14 an application conditional by including conditions and limitations
46-15 in the order granting the license. If the approval is conditioned
46-16 on a written commitment from the applicant offered to and accepted
46-17 by the commissioner, the commitment is enforceable against the
46-18 applicant.
46-19 (d) A foreign bank that obtains the approval of the
46-20 commissioner under this section may engage in fiduciary activities
46-21 at its Texas state branch or agency to the same extent and in the
46-22 same manner as a Texas state bank could do so at the same location,
46-23 subject to any conditions or limitations applicable to the license.
46-24 (e) The commissioner may initiate an enforcement action
46-25 under Chapter 35 or may suspend or revoke the authority of a
46-26 foreign bank to engage in fiduciary activities in this state in the
46-27 same manner as a revocation of license under Section 204.118 if the
47-1 commissioner finds in writing that:
47-2 (1) conditions exist related to the fiduciary
47-3 activities of the foreign bank in this state which would authorize
47-4 the commissioner to revoke or suspend its license pursuant to
47-5 Section 204.117; or
47-6 (2) a fact or condition exists which, if it had
47-7 existed at the time of the foreign bank's original notice to engage
47-8 in fiduciary activities, would have resulted in the commissioner
47-9 denying authority to engage in fiduciary activities.
47-10 Sec. 204.107. FILING OF AMENDMENTS TO ARTICLES OF
47-11 INCORPORATION. If the articles of incorporation of a foreign bank
47-12 licensed to maintain a Texas state branch or agency are amended,
47-13 the foreign bank shall promptly file with the commissioner a copy
47-14 of the amendment, duly authenticated by the proper officer of the
47-15 country of the foreign bank's organization. The filing does not
47-16 enlarge or alter the business the foreign bank is authorized to
47-17 pursue in this state, authorize the foreign bank to transact
47-18 business in this state under a name other than the name set forth
47-19 in its license, or extend the duration of its corporate existence.
47-20 Sec. 204.108. AMENDED LICENSE FOR BRANCH OR AGENCY. (a) A
47-21 foreign bank licensed to establish and maintain a Texas state
47-22 branch or agency shall apply to the commissioner for an amended
47-23 license if it changes its corporate name, changes the duration of
47-24 its corporate existence, or desires to pursue in this state other
47-25 or additional purposes than those set forth in its prior
47-26 application for the foreign bank's license or amended license then
47-27 in effect.
48-1 (b) The requirements with respect to the form and contents
48-2 of an application under Subsection (a), the manner of its
48-3 execution, the issuance of an amended license, and the effect of
48-4 the amended license are the same as in the case of an initial
48-5 application for a license to establish and maintain a Texas state
48-6 branch or agency.
48-7 Sec. 204.109. RELOCATION OF OFFICE. (a) With the prior
48-8 written approval of the commissioner, a foreign bank licensed to
48-9 establish and maintain a Texas state branch or agency may relocate
48-10 the branch or agency office. A foreign bank that intends to
48-11 relocate a Texas state branch or agency office shall submit a
48-12 letter to the commissioner describing the address of the proposed
48-13 location, the reasons for relocation, and the manner of notifying
48-14 its customers of the relocation.
48-15 (b) On or before the 30th day after the date the foreign
48-16 bank's letter has been accepted for filing and any required fee has
48-17 been paid, the commissioner shall approve or deny the relocation.
48-18 The commissioner may not permit the foreign bank to relocate its
48-19 Texas state branch or agency office if the commissioner finds that
48-20 the proposed location and the manner of relocation and notification
48-21 will be deceptive or that the relocation will impede or tend to
48-22 impede the foreign bank's depositors and creditors in this state.
48-23 Sec. 204.110. SEPARATE ASSETS. (a) Each foreign bank
48-24 licensed to establish and maintain a Texas state branch or agency
48-25 in this state shall keep the assets of its business in this state
48-26 separate and apart from the assets of its business outside this
48-27 state.
49-1 (b) The depositors and creditors of a foreign bank arising
49-2 out of transactions with, and recorded on the books of, its Texas
49-3 state branch or agency are entitled to absolute preference and
49-4 priority over the depositors and creditors of the foreign bank's
49-5 offices located outside this state with respect to the assets of
49-6 the foreign bank in this state.
49-7 Sec. 204.111. DISCLOSURE OF LACK OF DEPOSIT INSURANCE. Each
49-8 foreign bank licensed to establish and maintain a Texas state
49-9 branch or agency shall give notice that deposits and credit
49-10 balances in the office are not insured by the Federal Deposit
49-11 Insurance Corporation.
49-12 Sec. 204.112. LIMITATIONS ON PAYMENT OF INTEREST ON
49-13 DEPOSITS. A foreign bank licensed to establish and maintain a
49-14 Texas state branch or agency is subject to the same limitations
49-15 with respect to the payment of interest on deposits as a state bank
49-16 that is a member of the Federal Reserve System.
49-17 Sec. 204.113. PLEDGE OF ASSETS. (a) In accordance with
49-18 rules adopted under this subtitle, a foreign bank licensed to
49-19 establish and maintain a Texas state branch or agency may be
49-20 required to keep on deposit, with unaffiliated banks in this state
49-21 that the foreign bank designates and the commissioner approves,
49-22 money and securities pledged to the commissioner in an aggregate
49-23 amount to be determined by the commissioner, valued at the lower of
49-24 principal amount or market value, consisting of:
49-25 (1) dollar deposits;
49-26 (2) bonds, notes, debentures, or other legally
49-27 created, general obligations of a state, an agency or political
50-1 subdivision of a state, the United States, or an instrumentality of
50-2 the United States;
50-3 (3) securities that this state, an agency or political
50-4 subdivision of this state, the United States, or an instrumentality
50-5 of the United States has unconditionally agreed to purchase,
50-6 insure, or guarantee;
50-7 (4) securities issued or guaranteed by the Federal
50-8 Home Loan Mortgage Corporation, the Federal National Mortgage
50-9 Association, the Government National Mortgage Association, the
50-10 Federal Agricultural Mortgage Corporation, or the Federal Farm
50-11 Credit Banks Funding Corporation;
50-12 (5) obligations of or issued or guaranteed by the
50-13 International Bank for Reconstruction and Development, the African
50-14 Development Bank, the Asian Development Bank, the InterAmerican
50-15 Development Bank, or the North American Development Bank; or
50-16 (6) other assets as may be permitted by rule.
50-17 (b) The assets deposited and the amount of the assets to be
50-18 maintained under Subsection (a) are subject to the conditions and
50-19 limitations the commissioner considers necessary or desirable for
50-20 the maintenance of a sound financial condition, the protection of
50-21 depositors, creditors, and the public interest in this state, and
50-22 the support of public confidence in the business of the Texas state
50-23 branch or agency. The commissioner may give credit to reserves
50-24 required to be maintained with a federal reserve bank in or outside
50-25 this state pursuant to federal law, in accordance with rules
50-26 adopted under this subtitle.
50-27 (c) While a foreign bank continues business in the ordinary
51-1 course, the foreign bank may collect interest on the money and
51-2 securities deposited under this section and from time to time
51-3 exchange, examine, and verify the securities.
51-4 Sec. 204.114. ASSET MAINTENANCE. (a) In accordance with
51-5 rules adopted under this subtitle, a foreign bank licensed to
51-6 establish and maintain a Texas state branch or agency shall at all
51-7 times satisfy the ratio of branch or agency assets to liabilities
51-8 determined by the commissioner, in the commissioner's sole
51-9 discretion, to be necessary or desirable with respect to the
51-10 foreign bank. The type of assets to be held in this state are
51-11 specified by Subsection (b) and the type of liabilities to be
51-12 included in the ratio are specified by Subsection (c).
51-13 (b) Assets to be held in this state for the purpose of
51-14 satisfying the ratio of assets to liabilities:
51-15 (1) include:
51-16 (A) currency, bonds, notes, debentures, drafts,
51-17 bills of exchange, or other evidences of indebtedness, including
51-18 loan participation agreements or certificates;
51-19 (B) other obligations payable in the United
51-20 States or in United States funds or, with the prior approval of the
51-21 commissioner, in funds freely convertible into United States funds;
51-22 and
51-23 (C) other assets the commissioner permits or as
51-24 may be specified by rule; and
51-25 (2) exclude obligations of a person for money borrowed
51-26 to the extent that the total of the obligations of the person
51-27 exceeds 10 percent of total assets considered for purposes of this
52-1 section.
52-2 (c) Liabilities included for purposes of calculating the
52-3 ratio of assets to liabilities:
52-4 (1) include all liabilities of the foreign bank
52-5 appearing in the books, accounts, or records of its Texas state
52-6 branch or agency, including acceptances; and
52-7 (2) exclude amounts due and other liabilities to other
52-8 offices, agencies, branches, and wholly owned subsidiaries of the
52-9 foreign bank, and other liabilities the commissioner determines.
52-10 The existence of a nominal number of directors' shares outstanding
52-11 does not cause a subsidiary to be considered less than wholly
52-12 owned.
52-13 (d) Subject to rules adopted under this subtitle, the
52-14 commissioner, in the commissioner's sole discretion, may vary the
52-15 ratio of assets to liabilities required by this section for a
52-16 foreign bank as may be necessary or desirable to reflect
52-17 differences among Texas branches or Texas agencies because of:
52-18 (1) the financial condition of Texas branch or agency
52-19 offices of the foreign bank;
52-20 (2) the financial condition of branch or agency
52-21 offices of the foreign bank located in other states;
52-22 (3) the general economic conditions prevalent in the
52-23 home country of the foreign bank; or
52-24 (4) the financial condition of the foreign bank
52-25 itself, including:
52-26 (A) the financial condition of its branches and
52-27 agencies located in other countries;
53-1 (B) the financial condition of its affiliated
53-2 bank and nonbank subsidiaries in the United States; and
53-3 (C) the financial condition of the foreign bank
53-4 on a worldwide consolidated basis or in its home country.
53-5 (e) For purposes of this section, assets must be valued at
53-6 the lower of principal amount or market value. The commissioner
53-7 may determine the value of a non-marketable security, loan, or
53-8 other asset or obligation held or owed to the foreign bank or its
53-9 Texas state branch or agency in this state. If the commissioner
53-10 cannot determine the value of an non-marketable asset, the asset
53-11 must be excluded from the ratio computation.
53-12 (f) The commissioner may require a foreign bank to deposit
53-13 the assets required to be held in this state pursuant to this
53-14 section with specific banks in this state designated by the
53-15 commissioner if, because of the existence or the potential
53-16 occurrence of unusual and extraordinary circumstances, the
53-17 commissioner considers it necessary or desirable for the
53-18 maintenance of a sound financial condition, the protection of
53-19 depositors, creditors, and the public interest in this state, and
53-20 the maintenance of public confidence in the business of a Texas
53-21 state branch or agency.
53-22 Sec. 204.115. VOLUNTARY CLOSURE OF BRANCH OR AGENCY. (a) A
53-23 foreign bank licensed to establish and maintain a Texas state
53-24 branch or agency may not close the office without filing an
53-25 application with, and obtaining the prior approval of, the
53-26 commissioner. An application by a foreign bank under this section
53-27 must be in the form and include the information the commissioner
54-1 requires.
54-2 (b) The commissioner shall approve the application if the
54-3 commissioner finds that the closing of the office will not be
54-4 substantially detrimental to the foreign bank's depositors and
54-5 creditors in this state. An application may be approved subject to
54-6 conditions imposed by the commissioner for the continued protection
54-7 of the foreign bank's depositors and creditors in this state,
54-8 including a condition that the foreign bank pledge assets in the
54-9 manner specified by Section 204.113 for a specified period of time.
54-10 (c) When an application by a foreign bank under this section
54-11 has been approved and all conditions precedent to the closing have
54-12 been fulfilled, the foreign bank may close the office and an
54-13 officer, manager, or agent of the foreign bank shall deliver to the
54-14 commissioner:
54-15 (1) all copies of examination reports or other
54-16 property of the department;
54-17 (2) a statement under oath by an authorized officer,
54-18 manager, or agent of the foreign bank that all deposit and other
54-19 liabilities of the Texas state branch or agency to depositors and
54-20 creditors in this state have been properly discharged by payment or
54-21 pledge or otherwise assumed or retained by a financial institution;
54-22 (3) the license issued by the commissioner;
54-23 (4) an appropriate board resolution closing the Texas
54-24 state branch or agency; and
54-25 (5) a statement of the location where the records of
54-26 the Texas state branch or agency will be kept after the closing.
54-27 Sec. 204.116. ENFORCEMENT. The commissioner may initiate an
55-1 enforcement action under Chapter 35 or a proceeding to revoke the
55-2 license of a Texas state branch or agency if the commissioner by
55-3 examination or other credible evidence finds that the foreign bank:
55-4 (1) does not currently meet the criteria established
55-5 by this chapter for the original issuance of a license;
55-6 (2) has refused to permit the commissioner to examine
55-7 its books, papers, accounts, records, or affairs in accordance with
55-8 Sections 204.002 and 204.003;
55-9 (3) has failed to make a report required under this
55-10 chapter or made a material false or misleading statement in the
55-11 report;
55-12 (4) has violated this subtitle, another law or rule
55-13 applicable to a foreign bank or a Texas state branch or agency, or
55-14 a final and enforceable order of the commissioner or the finance
55-15 commission;
55-16 (5) has misrepresented or concealed a material fact in
55-17 the original application for license;
55-18 (6) has violated a condition of its license or an
55-19 agreement between the foreign bank and the commissioner or the
55-20 department; or
55-21 (7) conducts business in an unsafe and unsound manner.
55-22 Sec. 204.117. PROCEDURE FOR REVOCATION. (a) Notice of a
55-23 revocation proceeding must:
55-24 (1) be in the form of a proposed order;
55-25 (2) be served on the foreign bank by personal delivery
55-26 or registered or certified mail, return receipt requested, to a
55-27 director, officer, manager, or employee of the foreign bank at a
56-1 Texas state branch or agency location, or to the registered agent
56-2 of the foreign bank;
56-3 (3) state the effective date of the proposed order,
56-4 which may not be before the 21st day after the date the proposed
56-5 order is mailed or delivered except as otherwise provided in
56-6 Section 204.118; and
56-7 (4) state the grounds for the proposed revocation with
56-8 reasonable certainty.
56-9 (b) Unless the foreign bank requests a hearing in writing on
56-10 or before the effective date of the proposed order, the order takes
56-11 effect as proposed and is final and nonappealable.
56-12 (c) A hearing requested on a proposed order shall be held
56-13 not later than the 30th day after the date the written request for
56-14 hearing is received by the department unless the parties agree to a
56-15 later hearing date. The department shall participate as the
56-16 opposing party, and the commissioner shall conduct the hearing and
56-17 one or more prehearing conferences and opportunities for discovery
56-18 as the commissioner considers advisable and consistent with
56-19 applicable statutes and rules. The foreign bank may not accept new
56-20 business during the pendency of the hearing unless the commissioner
56-21 gives prior written approval, except that it shall comply with any
56-22 stricter requirements imposed by Section 7(e), International
56-23 Banking Act (12 U.S.C. Section 3105(e)).
56-24 (d) Information relating to the financial condition and
56-25 business affairs of the foreign bank, except previously published
56-26 statements and information, is confidential and may not be
56-27 considered in the public portion of the hearing or disclosed by the
57-1 commissioner or an employee of the department except as provided by
57-2 Subchapter D, Chapter 31.
57-3 (e) Based on the record, the commissioner shall issue or
57-4 refuse to issue the proposed order. An issued order may contain
57-5 modifications indicated by the record to be necessary or desirable,
57-6 including modifications to impose penalties available under Chapter
57-7 35 in lieu of license revocation.
57-8 Sec. 204.118. IMMEDIATE SUSPENSION OR REVOCATION. (a) If
57-9 the commissioner finds that any of the factors set forth in Section
57-10 204.116 are true with respect to a foreign bank licensed to
57-11 maintain a Texas state branch or agency and that it is necessary
57-12 for the protection of the interests of creditors of the foreign
57-13 bank's business in this state or for the protection of the public
57-14 interest that the commissioner immediately suspend or revoke the
57-15 license of the foreign bank, the commissioner may issue, without
57-16 notice and hearing, an order suspending or revoking the license of
57-17 the foreign bank for a period of up to 90 days, pending
57-18 investigation or hearing under Section 204.117.
57-19 (b) An order issued under this section shall be served on
57-20 the foreign bank in the manner required by Section 204.117(a)(2).
57-21 Sec. 204.119. STATUS OF REVOKED LICENSE. Unless stayed by
57-22 the finance commission or district court that has jurisdiction over
57-23 an appeal, a final order of the commissioner revoking a license is
57-24 effective immediately and the foreign bank shall immediately cease
57-25 all activity in this state requiring a license. Subject to Section
57-26 204.120, all functions requiring a license must be immediately
57-27 transferred to a branch, affiliate, or agency of the foreign bank
58-1 that is located outside of this state and that has the power to
58-2 perform those functions under governing law. Continued activity in
58-3 this state of an unlicensed foreign bank is subject to Subchapter
58-4 C, Chapter 35.
58-5 Sec. 204.120. SEIZURE AND LIQUIDATION. (a) If the
58-6 commissioner finds that any of the factors set forth in Section
58-7 204.116 are true with respect to a foreign bank licensed to
58-8 establish and maintain a Texas state branch or agency, the
58-9 commissioner may by order immediately take possession of the
58-10 property and business of the foreign bank in this state if that
58-11 action is necessary or desirable for the protection of the
58-12 interests of the depositors and creditors of the foreign bank's
58-13 business in this state or for the protection of the public. The
58-14 commissioner shall retain possession until the foreign bank resumes
58-15 business in this state or is finally liquidated, except that the
58-16 commissioner may permit the foreign bank to resume business in this
58-17 state on conditions the commissioner requires. An order issued
58-18 under this section shall be served on the foreign bank in the
58-19 manner required by Section 204.117(a)(2).
58-20 (b) As soon as practicable after taking possession of the
58-21 property and business of a foreign bank pursuant to Subsection (a),
58-22 the commissioner shall initiate a receivership proceeding by filing
58-23 a copy of the order issued under this section in a district court
58-24 in Travis County to be governed by Chapter 36 as if the foreign
58-25 bank were a Texas state bank, except as otherwise provided by this
58-26 section. Notwithstanding the priorities established by Chapter 36,
58-27 the depositors and creditors of the Texas state branch or agency,
59-1 arising out of transactions with and recorded on the books of the
59-2 Texas state branch or agency, have an absolute preference and
59-3 priority over the creditors of the foreign bank's offices located
59-4 outside this state.
59-5 (c) An action initiated that seeks to directly or indirectly
59-6 affect the assets of the Texas state branch or agency is considered
59-7 to be an intervention in the receivership proceeding. Venue for an
59-8 action instituted to effect, contest, or otherwise intervene in the
59-9 liquidation of a Texas state branch or agency is in Travis County,
59-10 except that on motion filed and served concurrently with or before
59-11 the filing of the answer, the court may, on a finding of good
59-12 cause, transfer the action to the county of the Texas state branch
59-13 or agency location.
59-14 (d) The foreign bank may contest the commissioner's actions
59-15 as provided by this subsection. On or before the 10th day after
59-16 the date the commissioner has taken possession of the property and
59-17 business of a foreign bank pursuant to Subsection (a), the foreign
59-18 bank, acting through a majority of its directors, may intervene in
59-19 the action filed by the banking commissioner to challenge the
59-20 commissioner's closing of the foreign bank's Texas state branch or
59-21 agency and to enjoin the commissioner or other receiver from
59-22 liquidating its assets. The court may issue an ex parte order
59-23 restraining the commissioner or other receiver from liquidating the
59-24 foreign bank's assets pending a hearing on the injunction. The
59-25 commissioner or other receiver shall comply with the restraining
59-26 order but may petition the court for permission to liquidate an
59-27 asset as necessary to prevent its loss or diminution pending the
60-1 outcome of the injunction. The commissioner or other receiver may
60-2 not be required to post bond. The court shall hear this action as
60-3 quickly as possible and shall give it priority over other business.
60-4 The foreign bank or the commissioner or other receiver may appeal
60-5 the court's judgment as in other civil cases, except that the
60-6 commissioner or other receiver shall retain all seized foreign bank
60-7 assets pending a final appellate court order even if the
60-8 commissioner does not prevail in the trial court. If the
60-9 commissioner prevails in the trial court, liquidation of the state
60-10 trust company may proceed unless the trial court or appellate court
60-11 orders otherwise. If liquidation is enjoined or stayed pending
60-12 appeal, the trial court retains jurisdiction to permit liquidation
60-13 of an asset as necessary to prevent its loss or diminution pending
60-14 the outcome of the appeal.
60-15 (e) After the commissioner or other receiver has completed
60-16 the liquidation of the property and business of a foreign bank, the
60-17 commissioner or other receiver shall transfer any remaining assets
60-18 to the foreign bank in accordance with the court's orders, except
60-19 that:
60-20 (1) if the foreign bank has an office in another state
60-21 of the United States that is in liquidation and the assets of the
60-22 office appear to be insufficient to pay in full the creditors of
60-23 that office, the court shall order the commissioner or other
60-24 receiver to transfer to the liquidator of that office the amount of
60-25 the remaining assets that appears to be necessary to cover the
60-26 insufficiency; or
60-27 (2) if the foreign bank has two or more such offices
61-1 in liquidation and the amount of remaining assets is less than the
61-2 aggregate amount of insufficiencies with respect to the offices,
61-3 the court shall order the commissioner or other receiver to
61-4 distribute the remaining assets among the liquidators of the
61-5 offices in the manner the court finds equitable.
61-6 Sec. 204.121. DISSOLUTION. (a) If a foreign bank licensed
61-7 to maintain a Texas state branch or agency in this state is
61-8 dissolved, has its authority or existence terminated or canceled in
61-9 the jurisdiction of its incorporation, or has its authority to
61-10 maintain a branch or agency in this state terminated by the Board
61-11 of Governors of the Federal Reserve System under Section 7(e),
61-12 International Banking Act (12 U.S.C. Section 3105(e)), an officer,
61-13 manager, or agent of the foreign bank shall deliver to the
61-14 commissioner:
61-15 (1) a certified copy of:
61-16 (A) a certificate of the official responsible
61-17 for records of banking corporations of the foreign bank's
61-18 jurisdiction of incorporation attesting to the occurrence of
61-19 dissolution or of termination or cancellation of authority or
61-20 existence;
61-21 (B) an order or decree of a court directing the
61-22 dissolution of the foreign bank or the termination or cancellation
61-23 of its authority or existence; or
61-24 (C) an order of the Board of Governors of the
61-25 Federal Reserve System terminating its authority under Section
61-26 7(e), International Banking Act (12 U.S.C. Section 3105(e)); and
61-27 (2) the documents and information required by Section
62-1 204.115(c).
62-2 (b) The filing of the certificate, order, or decree has the
62-3 same effect provided by Section 204.119 as if the license issued
62-4 under this subchapter were revoked by the commissioner as of the
62-5 effective date of termination or cancellation specified in the
62-6 certificate, order, or decree unless the commissioner orders an
62-7 earlier effective date, subject to the procedural protections of
62-8 Section 204.117 or 204.118.
62-9 (Sections 204.122-204.200 reserved for expansion
62-10 SUBCHAPTER C. REPRESENTATIVE OFFICES OF FOREIGN BANK
62-11 Sec. 204.201. REGISTRATION OF REPRESENTATIVE OFFICE. (a) A
62-12 foreign bank may establish a Texas representative office if the
62-13 foreign bank files with the commissioner a verified statement of
62-14 registration. A statement of registration must:
62-15 (1) be accompanied by all registration fees and
62-16 deposits required by rule;
62-17 (2) be in the form specified by the commissioner;
62-18 (3) be subscribed and acknowledged by an officer of
62-19 the foreign bank;
62-20 (4) contain as an exhibit or attachment:
62-21 (A) a copy of the foreign bank's notice or
62-22 application submitted to the Board of Governors of the Federal
62-23 Reserve System under Section 10, International Banking Act (12
62-24 U.S.C. Section 3107), and, when issued, the order or notification
62-25 from the board of governors indicating that the representative
62-26 office has been approved;
62-27 (B) an authenticated copy of the foreign bank's
63-1 articles of incorporation and bylaws or other constitutive
63-2 documents and, if the copy is in a language other than English, an
63-3 English translation of the document, under the oath of the
63-4 translator; and
63-5 (C) evidence of compliance with Section 201.102;
63-6 (5) be submitted when the federal notice or
63-7 application is submitted to the board of governors; and
63-8 (6) directly or in exhibits or attachments contain:
63-9 (A) the name of the foreign bank;
63-10 (B) the street address and post office address
63-11 where each Texas representative office is to be located in this
63-12 state;
63-13 (C) the name and qualifications of each officer
63-14 and director of the foreign bank who will have charge of any aspect
63-15 of the business and affairs of the Texas representative office;
63-16 (D) a complete and detailed statement of the
63-17 financial condition of the foreign bank as of a date not more than
63-18 360 days before the date of the filing; and
63-19 (E) other information the commissioner requires.
63-20 (b) The finance commission may adopt rules prescribing
63-21 abbreviated registration procedures and standards for foreign banks
63-22 that have already established an initial Texas representative
63-23 office to establish additional Texas representative offices.
63-24 (c) A foreign bank that maintains a Texas state or federal
63-25 branch or agency in this state is not prohibited from establishing
63-26 or maintaining one or more Texas representative offices.
63-27 Sec. 204.202. PLACE OF BUSINESS. A Texas representative
64-1 office may engage in the business authorized by this subchapter at
64-2 each place of business registered with the commissioner. A Texas
64-3 representative office may change its location in this state by
64-4 filing a notice with the commissioner containing the street address
64-5 and post office address of the new location.
64-6 Sec. 204.203. PERMISSIBLE ACTIVITIES OF REPRESENTATIVE
64-7 OFFICE. (a) A registered Texas representative office of a foreign
64-8 bank may:
64-9 (1) solicit loans and in connection with a loan:
64-10 (A) assemble credit information about the
64-11 borrower;
64-12 (B) inspect and appraise property;
64-13 (C) obtain property title information; and
64-14 (D) prepare a loan application;
64-15 (2) solicit purchasers for loans from the foreign
64-16 bank;
64-17 (3) solicit persons to contract for servicing the
64-18 foreign bank loans;
64-19 (4) conduct research;
64-20 (5) perform services as liaison for customers and
64-21 correspondents of the foreign bank;
64-22 (6) execute loan documents relating to permitted loans
64-23 with the written approval of the foreign bank;
64-24 (7) perform back office administrative functions as
64-25 may be more specifically defined by rule; and
64-26 (8) engage in other activities approved by the
64-27 commissioner or permitted by rule.
65-1 (b) A representative office may not solicit or accept credit
65-2 balances or deposits or make final credit decisions.
65-3 (c) A Texas representative office that is or becomes a
65-4 regional administrative office of the foreign bank, as may be
65-5 defined more fully by rule, may engage in credit approval
65-6 activities if:
65-7 (1) the foreign bank gives prior written notice to the
65-8 commissioner not later than the 30th day before the date the Texas
65-9 representative office engages in credit approval activities; and
65-10 (2) the commissioner does not object within the 30-day
65-11 period to the conduct of the activities by the Texas representative
65-12 office.
65-13 (d) Written notice under Subsection (c) must be in a form
65-14 and contain the information the commissioner requires.
65-15 Sec. 204.204. ENFORCEMENT. The commissioner may initiate an
65-16 enforcement action under Chapter 35 or a proceeding to revoke the
65-17 registration of a representative office if the commissioner by
65-18 examination or other credible evidence finds that the foreign bank:
65-19 (1) has refused to permit the commissioner to examine
65-20 the books, papers, accounts, records, or affairs of a Texas
65-21 representative office in accordance with Sections 204.002 and
65-22 204.003;
65-23 (2) has violated this subtitle, another law or rule
65-24 applicable to a foreign bank or a Texas representative office, or a
65-25 final and enforceable order of the commissioner or the finance
65-26 commission;
65-27 (3) has misrepresented or concealed a material fact in
66-1 the original registration;
66-2 (4) has violated a condition of an agreement between
66-3 the foreign bank and the commissioner, a bank supervisory agency,
66-4 or another state regulatory agency; or
66-5 (5) conducts business in an unsafe and unsound manner.
66-6 Sec. 204.205. PROCEDURE FOR REVOCATION. (a) Notice of a
66-7 revocation proceeding must:
66-8 (1) be in the form of a proposed order;
66-9 (2) be served on the foreign bank by personal delivery
66-10 or registered or certified mail, return receipt requested, to a
66-11 director, officer, or employee of the foreign bank at a Texas
66-12 representative office location, or to the registered agent of the
66-13 foreign bank;
66-14 (3) state the effective date of the proposed order,
66-15 which may not be before the 21st day after the date the proposed
66-16 order is mailed or delivered; and
66-17 (4) state the grounds for the proposed revocation with
66-18 reasonable certainty.
66-19 (b) Unless the foreign bank requests a hearing in writing on
66-20 or before the effective date of the proposed order, the order takes
66-21 effect as proposed and is final and nonappealable.
66-22 (c) A hearing requested on a proposed order shall be held
66-23 not later than the 30th day after the date the written request for
66-24 hearing is received by the commissioner unless the parties agree to
66-25 a later hearing date. The department shall participate as the
66-26 opposing party, and the commissioner shall conduct the hearing and
66-27 one or more prehearing conferences and opportunities for discovery
67-1 as the commissioner considers advisable and consistent with
67-2 applicable statutes and rules. During the pendency of the hearing
67-3 and unless the commissioner gives prior written approval, the
67-4 foreign bank may not accept new business from this state.
67-5 (d) Information relating to the financial condition and
67-6 business affairs of the foreign bank, except previously published
67-7 statements and information, is confidential and may not be
67-8 considered in the public portion of the hearing or disclosed by the
67-9 commissioner or an employee of the department except as provided by
67-10 Subchapter D, Chapter 31.
67-11 (e) Based on the record, the commissioner shall issue or
67-12 refuse to issue the proposed order. An issued order may contain
67-13 modifications indicated by the record to be necessary or desirable,
67-14 including modifications to impose penalties available under Chapter
67-15 35 in lieu of revocation of registration.
67-16 Sec. 204.206. EFFECT OF REVOKED REGISTRATION. A foreign
67-17 bank that has had its registration under this subchapter revoked
67-18 shall cease all activities in this state. Continued activity in
67-19 this state of an unregistered foreign bank is subject to Subchapter
67-20 C, Chapter 35.
67-21 Sec. 204.207. DISSOLUTION. (a) If a foreign bank with a
67-22 registered Texas representative office is dissolved, has its
67-23 authority or existence terminated or canceled in the jurisdiction
67-24 of its incorporation, or has its authority to maintain its Texas
67-25 representative office terminated by the Board of Governors of the
67-26 Federal Reserve System under Section 10(b), International Banking
67-27 Act (12 U.S.C. Section 3107(b)), an officer, manager, or agent of
68-1 the foreign bank shall deliver to the commissioner a certified copy
68-2 of:
68-3 (1) a certificate of the official responsible for
68-4 records of banking corporations of the foreign bank's jurisdiction
68-5 of incorporation attesting to the occurrence of dissolution or of
68-6 termination or cancellation of authority or existence;
68-7 (2) an order or decree of a court directing the
68-8 dissolution of the foreign bank or the termination or cancellation
68-9 of its authority or existence; or
68-10 (3) an order of the Board of Governors of the Federal
68-11 Reserve System terminating its authority under Section 10(b),
68-12 International Banking Act (12 U.S.C. Section 3107(b)).
68-13 (b) The filing of the certificate, order, or decree has the
68-14 same effect under Section 204.206 as if the registration made under
68-15 this subchapter were revoked by the commissioner.
68-16 ARTICLE 2. CONFORMING AMENDMENTS TO FINANCE CODE
68-17 SECTION 2.001. Section 12.110(a), Finance Code, is amended
68-18 to read as follows:
68-19 (a) The banking commissioner or an officer or employee of
68-20 the department commits an offense if the person knowingly:
68-21 (1) discloses information or permits access to a file
68-22 or record of the department in violation of Subchapter D, Chapter
68-23 31;
68-24 (2) becomes directly or indirectly indebted to, or
68-25 financially interested in, an entity supervised or regulated by the
68-26 banking commissioner [a state bank, foreign bank agency, or trust
68-27 company]; or
69-1 (3) purchases an asset owned by an entity supervised
69-2 or regulated by the banking commissioner [a state bank or trust
69-3 company] in the possession of the banking commissioner or other
69-4 receiver for purposes of liquidation.
69-5 SECTION 2.002. Sections 31.002(a)(2), (8), (50), and (52),
69-6 Finance Code, are amended to read as follows:
69-7 (2) "Bank" means a state or national bank. If the
69-8 context requires, the term includes a bank as defined by Section
69-9 201.002(a)(4) that is organized under the laws of another state or
69-10 country.
69-11 (8) "Branch" means a location of a bank, other than
69-12 the bank's home office, at which the bank engages in the business
69-13 of banking. The term does not include:
69-14 (A) a drive-in facility located not more than
69-15 2,000 feet from the nearest wall of the home office or an approved
69-16 branch office of the bank;
69-17 (B) a night depository;
69-18 (C) an electronic terminal subject to Section
69-19 59.201;
69-20 (D) a loan production office subject to Section
69-21 32.204;
69-22 (E) a state or federally licensed armored car
69-23 service or other courier service transporting items for deposit or
69-24 payment, unless:
69-25 (i) the risk of loss of items in the
69-26 custody of the service is borne by the employing bank; or
69-27 (ii) the items in the custody of the
70-1 service are considered to be in customer accounts at the employing
70-2 bank or federally insured through the employing bank;
70-3 (F) a bank acting as an agent for another [a]
70-4 depository institution [affiliate] as provided by Section
70-5 59.005(a); or
70-6 (G) other offices as determined by rule.
70-7 (50) "State bank" means a banking association or
70-8 limited banking association organized or reorganized under this
70-9 subtitle, including an association organized under the laws of this
70-10 state before September 1, 1995, with the express power to receive
70-11 and accept deposits and possessing other rights and powers granted
70-12 by this subtitle expressly or by implication. The term does not
70-13 include a savings association, savings bank, or credit union. If
70-14 the context requires, the term includes a bank as defined by
70-15 Section 201.002(a)(4) that is organized under the laws of another
70-16 state or country.
70-17 (52) "State savings bank" means a savings bank
70-18 organized under or subject to Subtitle C. If the context requires,
70-19 the term includes a savings bank organized under the laws of
70-20 another state.
70-21 SECTION 2.003. Section 31.005(b), Finance Code, is amended
70-22 to read as follows:
70-23 (b) Subsection (a) does not apply to[:]
70-24 [(1)] a depository institution or other [authorized to
70-25 conduct business in this state;]
70-26 [(2) a foreign bank agency;]
70-27 [(3) a loan production office or representative office
71-1 of a foreign bank corporation or an out-of-state bank established
71-2 in compliance with this subtitle; or]
71-3 [(4) another] entity organized under the laws of this
71-4 state, another state, the United States, or a foreign sovereign
71-5 state to the extent that the depository institution or other entity
71-6 is:
71-7 (1) [(A) the entity is] authorized under its charter
71-8 or the laws of this state or the United States to use a term, word,
71-9 character, ideogram, phonogram, or phrase prohibited by Subsection
71-10 (a); and
71-11 (2) [(B) the entity is] authorized by the laws of this
71-12 state or the United States to conduct the activities in which it
71-13 [the entity] is engaged in this state.
71-14 SECTION 2.004. Section 31.007(a), Finance Code, is amended
71-15 to read as follows:
71-16 (a) An officer, director, manager, managing participant, or
71-17 employee of a bank that has its main office or a branch located in
71-18 this state with fewer than 500 shareholders or participants or of a
71-19 bank holding company with fewer than 500 shareholders or
71-20 participants that controls a bank that has its main office or a
71-21 branch located in this state is exempt from the registration and
71-22 licensing provisions of The Securities Act (Article 581-1 et seq.,
71-23 Vernon's Texas Civil Statutes) with respect to that person's
71-24 participation in a transaction, including a sale, involving
71-25 securities issued by:
71-26 (1) the bank or bank holding company of which that
71-27 person is an officer, director, manager, managing participant, or
72-1 employee;
72-2 (2) a bank holding company that controls the bank of
72-3 which that person is an officer, director, manager, managing
72-4 participant, or employee; or
72-5 (3) a bank controlled by the bank holding company of
72-6 which that person is an officer, director, manager, managing
72-7 participant, or employee.
72-8 SECTION 2.005. Sections 31.102 and 31.103, Finance Code, are
72-9 amended to read as follows:
72-10 Sec. 31.102. ISSUANCE OF INTERPRETIVE STATEMENTS. (a) The
72-11 banking commissioner[:]
72-12 [(1)] may issue interpretive statements containing
72-13 matters of general policy to guide the public and state banks,
72-14 and[;]
72-15 [(2) shall file the statements for publication in the
72-16 Texas Register; and]
72-17 [(3)] may amend or repeal a published interpretive
72-18 statement by issuing an amended statement or notice of repeal of a
72-19 statement [and filing the statement or notice for publication in
72-20 the Texas Register].
72-21 (b) An interpretive statement may be disseminated by
72-22 newsletter, via an electronic medium such as the internet, in a
72-23 volume of statutes or related materials published by the banking
72-24 commissioner or others, or by other means reasonably calculated to
72-25 notify persons affected by the interpretive statement. Notice of
72-26 an amended or withdrawn statement must be disseminated in a
72-27 substantially similar manner as the affected statement was
73-1 originally disseminated [The secretary of state shall publish a
73-2 filed statement or notice in the Texas Register and a designated
73-3 chapter of the Texas Administrative Code].
73-4 Sec. 31.103. ISSUANCE OF OPINION. (a) In response to a
73-5 specific request from a member of the public or the banking
73-6 industry, the banking commissioner may issue an opinion directly or
73-7 through the deputy banking commissioner or a department attorney.
73-8 (b) If the banking commissioner determines that the opinion
73-9 is useful for the general guidance of the public, state banks, or
73-10 trust companies, the commissioner may disseminate the opinion by
73-11 newsletter, via an electronic medium such as the internet, in a
73-12 volume of statutes or related materials published by the banking
73-13 commissioner or others, or by other means reasonably calculated to
73-14 notify persons affected by the opinion [file the opinion for
73-15 publication in the Texas Register]. A published opinion must be
73-16 redacted to preserve the confidentiality of the requesting party
73-17 unless the requesting party consents to be identified in the
73-18 published opinion.
73-19 (c) The banking commissioner may amend or repeal a published
73-20 opinion by issuing an amended opinion or notice of repeal of an
73-21 opinion and disseminating [filing] the opinion or notice in a
73-22 substantially similar manner as the affected statement or opinion
73-23 was originally disseminated [for publication in the Texas
73-24 Register]. The requesting party, however, may rely on the original
73-25 opinion if:
73-26 (1) all material facts were originally disclosed to
73-27 the banking commissioner;
74-1 (2) the safety and soundness of the affected bank will
74-2 not be affected by further reliance on the original opinion; and
74-3 (3) the text and interpretation of relevant, governing
74-4 provisions of this subtitle or Chapter 12 have not been changed by
74-5 legislative or judicial action.
74-6 [(d) The secretary of state shall publish the filed opinions
74-7 and notices in the Texas Register and a designated chapter of the
74-8 Texas Administrative Code.]
74-9 SECTION 2.006. Subchapter A, Chapter 32, Finance Code, is
74-10 amended by adding Section 32.010 to read as follows:
74-11 Sec. 32.010. ADDITIONAL POWERS. (a) Notwithstanding
74-12 another law, a Texas state bank may perform an act, own property,
74-13 or offer a product or service that is at the time permissible
74-14 within the United States for a depository institution organized
74-15 under federal law or the law of this state or another state, if the
74-16 banking commissioner approves the exercise of the power as provided
74-17 by this section, subject to the same limitations and restrictions
74-18 applicable to the other depository institution by pertinent law,
74-19 except to the extent the limitations and restrictions are modified
74-20 by rules adopted under Subsection (e). This section may not be
74-21 used by a Texas state bank to alter or negate the application of
74-22 the laws of this state with respect to:
74-23 (1) establishment and maintenance of a branch in this
74-24 state or another state or country;
74-25 (2) sale of insurance products and services in this
74-26 state;
74-27 (3) permissible interest rates and loan fees
75-1 chargeable in this state;
75-2 (4) fiduciary duties owed to a client or customer by
75-3 the bank in its capacity as fiduciary in this state;
75-4 (5) consumer protection laws applicable to
75-5 transactions in this state; or
75-6 (6) real estate development, marketing, and sales
75-7 activities in this state.
75-8 (b) A state bank that intends to exercise a power, directly
75-9 or through a subsidiary, granted by Subsection (a) that is not
75-10 otherwise authorized for state banks under the statutes of this
75-11 state shall submit a letter to the banking commissioner describing
75-12 in detail the power that the bank proposes to exercise and the
75-13 specific authority of another depository institution to exercise
75-14 the power. The bank shall attach copies, if available, of relevant
75-15 law, regulations, and interpretive letters. The bank may begin to
75-16 exercise the proposed power after the 30th day after the date the
75-17 banking commissioner receives the bank's letter unless the banking
75-18 commissioner specifies an earlier or later date or prohibits the
75-19 activity. The banking commissioner may prohibit the bank from
75-20 exercising the power only if the banking commissioner finds that:
75-21 (1) specific authority does not exist for another
75-22 depository institution to exercise the proposed power;
75-23 (2) if the state bank is insured by the Federal
75-24 Deposit Insurance Corporation, the state bank is prohibited from
75-25 exercising the power pursuant to Section 24, Federal Deposit
75-26 Insurance Act (12 U.S.C. Section 1831a), as amended, and 12 C.F.R.
75-27 Part 362; or
76-1 (3) the exercise of the power by the bank would
76-2 adversely affect the safety and soundness of the bank.
76-3 (c) The banking commissioner may extend the 30-day period
76-4 under Subsection (b) if the banking commissioner determines that
76-5 the bank's letter raises issues requiring additional information or
76-6 additional time for analysis. If the 30-day period is extended,
76-7 the bank may exercise the proposed power only on prior written
76-8 approval by the banking commissioner, except that the banking
76-9 commissioner must approve or prohibit the proposed power or convene
76-10 a hearing under Section 31.201 not later than the 60th day after
76-11 the date the banking commissioner receives the bank's letter. If a
76-12 hearing is convened, the banking commissioner must approve or
76-13 prohibit the proposed power not later than the 30th day after the
76-14 date the hearing is completed.
76-15 (d) A state bank that is denied the requested power by the
76-16 banking commissioner under this section may appeal as provided by
76-17 Sections 31.202, 31.203, and 31.204 or may resubmit a letter under
76-18 this section with additional information or authority relevant to
76-19 the banking commissioner's determination. A denial is immediately
76-20 final for purposes of appeal.
76-21 (e) To effectuate this section, the finance commission may
76-22 adopt rules implementing the method or manner in which a state bank
76-23 exercises specific powers granted under this section, including
76-24 rules regarding the exercise of a power that would be prohibited to
76-25 state banks under state law but for this section. The finance
76-26 commission may not adopt rules under this subsection unless it
76-27 considers the factors listed in Section 31.003(b) and finds that:
77-1 (1) the conditions for prohibition by the banking
77-2 commissioner under Subsection (b) do not exist; and
77-3 (2) if the rights and privileges would be prohibited
77-4 to state banks under other state law, the rules contain adequate
77-5 safeguards and controls, consistent with safety and soundness, to
77-6 address the concern of the legislature evidenced by the state law
77-7 the rules would affect.
77-8 (f) The exercise of a power by a state bank in compliance
77-9 with and in the manner authorized by this section is not a
77-10 violation of any statute of this state.
77-11 SECTION 2.007. Section 32.202(a), Chapter 32, Finance Code,
77-12 is amended to read as follows:
77-13 (a) Each state bank must have and continuously maintain in
77-14 this state a home office. The home office must be a location at
77-15 which the bank does business with the public and keeps its
77-16 corporate books and records. At least one officer of the bank must
77-17 maintain an office at the home office. In addition to the
77-18 registered agent for the bank, if one is maintained pursuant to
77-19 Section 201.103, [and] each officer at the home office is an agent
77-20 for service of process for the bank.
77-21 SECTION 2.008. Subchapter D, Chapter 32, Finance Code, is
77-22 amended by adding Section 32.304 to read as follows:
77-23 Sec. 32.304. LIMITATION ON CONTROL OF DEPOSITS. (a) A
77-24 merger is not permitted under this subchapter if, on consummation
77-25 of the transaction, the resulting state bank, including all insured
77-26 depository institution affiliates of the resulting state bank,
77-27 would control 20 percent or more of the total amount of deposits in
78-1 this state held by all insured depository institutions in this
78-2 state.
78-3 (b) On request of the banking commissioner the applicant
78-4 shall provide supplemental information to the banking commissioner
78-5 to aid in a determination under this section, including information
78-6 that is more current than or in addition to information in the most
78-7 recently available summary of deposits, reports of condition, or
78-8 similar reports filed with or produced by state or federal
78-9 authorities.
78-10 (c) In this section, "deposit" and "insured depository
78-11 institution" have the meanings assigned by Section 3, Federal
78-12 Deposit Insurance Act (12 U.S.C. Section 1813), as amended.
78-13 SECTION 2.009. Subchapter E, Chapter 32, Finance Code, is
78-14 amended by adding Section 32.406 to read as follows:
78-15 Sec. 32.406. LIMITATION ON CONTROL OF DEPOSITS. (a) A
78-16 purchase of assets is not permitted under Section 32.401 if, on
78-17 consummation of the transaction, the acquiring state bank,
78-18 including all insured depository institution affiliates of the
78-19 resulting state bank, would control 20 percent or more of the total
78-20 amount of deposits in this state held by all insured depository
78-21 institutions in this state.
78-22 (b) On request of the banking commissioner the applicant
78-23 shall provide supplemental information to the banking commissioner
78-24 to aid in a determination under this section, including information
78-25 that is more current than or in addition to information in the most
78-26 recently available summary of deposits, reports of condition, or
78-27 similar reports filed with or produced by state or federal
79-1 authorities.
79-2 (c) In this section, "deposit" and "insured depository
79-3 institution" have the meanings assigned by Section 3, Federal
79-4 Deposit Insurance Act (12 U.S.C. Section 1813), as amended.
79-5 SECTION 2.010. Subchapter F, Chapter 32, Finance Code, is
79-6 amended to read as follows:
79-7 SUBCHAPTER F. EXIT OF STATE BANK OR ENTRY OF ANOTHER
79-8 FINANCIAL INSTITUTION
79-9 Sec. 32.501. MERGER[, REORGANIZATION,] OR CONVERSION OF
79-10 STATE BANK INTO ANOTHER FINANCIAL INSTITUTION [NATIONAL BANK OR
79-11 SAVINGS BANK OR SAVINGS ASSOCIATION]. (a) Subject to Subtitle G,
79-12 a [A] state bank may act as necessary under and to the extent
79-13 permitted by the laws of the United States, [or] this state,
79-14 another state, or another country to merge[, reorganize,] or
79-15 convert into another financial institution, as that term is defined
79-16 by Section 201.101 [a national bank, state or federal savings bank,
79-17 or state or federal savings association].
79-18 (b) The merger[, reorganization,] or conversion by the state
79-19 bank must be made and approval of its board, shareholders, or
79-20 participants must be obtained in accordance with the Texas Business
79-21 Corporation Act as if the state bank were a domestic corporation
79-22 and all other parties to the transaction, if any, were foreign
79-23 corporations and other entities, except as provided by rule. For
79-24 purposes of this subsection, a conversion is considered a merger
79-25 into the successor form of financial institution.
79-26 (c) The state bank does not cease to be a state bank subject
79-27 to the supervision of the banking commissioner unless:
80-1 (1) the banking commissioner has been given written
80-2 notice of the intention to merge[, reorganize,] or convert before
80-3 the 31st day before the date of the proposed transaction;
80-4 (2) the bank has published notice of the transaction,
80-5 in the form and frequency specified by the banking commissioner,
80-6 in:
80-7 (A) a newspaper of general circulation published
80-8 in the county of its home office or, if such a newspaper is not
80-9 published in the county, in an adjacent county; and
80-10 (B) other locations that the banking
80-11 commissioner considers appropriate;
80-12 (3) the bank has filed with the banking commissioner:
80-13 (A) a copy of the application filed with the
80-14 successor regulatory authority, including a copy of each contract
80-15 evidencing or implementing the merger[, reorganization,] or
80-16 conversion, or other documents sufficient to show compliance with
80-17 applicable law;
80-18 (B) a certified copy of all minutes of board
80-19 meetings and shareholder or participant meetings at which action
80-20 was taken regarding the merger[, reorganization,] or conversion;
80-21 and
80-22 (C) a publisher's certificate showing
80-23 publication of the required notice;
80-24 (4) the banking commissioner determines that:
80-25 (A) all deposit and other liabilities of the
80-26 state bank are fully discharged, assumed, or otherwise retained by
80-27 the successor form of financial institution;
81-1 (B) any conditions imposed by the banking
81-2 commissioner for the protection of depositors and creditors have
81-3 been met or otherwise resolved; and
81-4 (C) any required filing fees have been paid; and
81-5 (5) the bank has received a certificate of authority
81-6 to do business as the successor financial institution [a national
81-7 bank, state or federal savings bank, or state or federal savings
81-8 association].
81-9 (d) Section 32.304 applies to a proposed merger under this
81-10 section.
81-11 Sec. 32.502. CONVERSION OF FINANCIAL INSTITUTION INTO STATE
81-12 BANK. (a) A financial institution, as that term is defined by
81-13 Section 201.101, may apply to the banking commissioner for
81-14 conversion into a state bank on a form prescribed by the banking
81-15 commissioner and accompanied by any required fee if the institution
81-16 follows the procedures prescribed by the laws of the United States,
81-17 [or] this state, another state, or another country governing the
81-18 exit of the financial institution for the purpose of conversion
81-19 into a state bank from the regulatory system applicable before the
81-20 conversion. A banking association or limited banking association
81-21 may convert its organizational form under this section.
81-22 (b) A financial [An] institution applying to convert into a
81-23 state bank may receive a certificate of authority to do business as
81-24 a state bank if the banking commissioner finds that:
81-25 (1) the financial institution is not engaging in a
81-26 pattern or practice of unsafe and unsound banking practices;
81-27 (2) the financial institution has adequate
82-1 capitalization for a state bank to engage in business at the same
82-2 locations as the financial institution is engaged in business
82-3 before the conversion;
82-4 (3) the financial institution can be expected to
82-5 operate profitably after the conversion;
82-6 (4) the officers, directors, managers, and managing
82-7 participants of the financial institution as a group have
82-8 sufficient banking experience, ability, standing, competence,
82-9 trustworthiness, and integrity to justify a belief that the
82-10 financial institution will operate as a state bank in compliance
82-11 with law; [and]
82-12 (5) each principal shareholder or participant has
82-13 sufficient experience, ability, standing, competence,
82-14 trustworthiness, and integrity to justify a belief that the
82-15 financial institution will be free from improper or unlawful
82-16 influence or interference with respect to the financial
82-17 institution's operation as a state bank in compliance with law; and
82-18 (6) if the converting financial institution did not
82-19 have general depository powers and the state bank will have those
82-20 powers, the factors set forth in Section 32.003(b) are satisfied.
82-21 (c) The banking commissioner may:
82-22 (1) request additional information considered
82-23 necessary to an informed decision under this section;
82-24 (2) perform an examination of the converting financial
82-25 institution at the expense of the converting financial institution;
82-26 and
82-27 (3) require that examination fees be paid before a
83-1 certificate of authority is issued.
83-2 (d) In connection with the application, the converting
83-3 financial institution must:
83-4 (1) submit a statement of the law governing the exit
83-5 of the financial institution from the regulatory system applicable
83-6 before the conversion and the terms of the transition into a state
83-7 bank; and
83-8 (2) demonstrate that all applicable law has been fully
83-9 satisfied.
83-10 SECTION 2.011. Section 33.005, Finance Code, is amended to
83-11 read as follows:
83-12 Sec. 33.005. EXEMPTIONS. The following acquisitions are
83-13 exempt from Section 33.001:
83-14 (1) an acquisition of securities in connection with
83-15 the exercise of a security interest or otherwise in full or partial
83-16 satisfaction of a debt previously contracted for in good faith and
83-17 the acquiring person files written notice of acquisition with the
83-18 banking commissioner before the person votes the securities
83-19 acquired;
83-20 (2) an acquisition of voting securities in any class
83-21 or series by a controlling person who has previously complied with
83-22 and received approval under this subchapter or who was identified
83-23 as a controlling person in a prior application filed with and
83-24 approved by the banking commissioner;
83-25 (3) an acquisition or transfer by operation of law,
83-26 will, or intestate succession and the acquiring person files
83-27 written notice of acquisition with the banking commissioner before
84-1 the person votes the securities acquired;
84-2 (4) a transaction subject to Chapter 202 [38]; and
84-3 (5) a transaction exempted by the banking commissioner
84-4 or by rules adopted under this subtitle because the transaction is
84-5 not within the purposes of this subchapter or the regulation of the
84-6 transaction is not necessary or appropriate to achieve the
84-7 objectives of this subchapter.
84-8 SECTION 2.0115. Section 33.103, Finance Code, is amended by
84-9 adding Subsection (f) to read as follows:
84-10 (f) The banking commissioner in the exercise of discretion
84-11 may waive or reduce the residency requirements for directors set
84-12 forth in Subsection (a).
84-13 SECTION 2.012. Section 34.301, Finance Code, is amended by
84-14 adding Subsection (c) to read as follows:
84-15 (c) To the extent provided by Section 4.102(c), Business &
84-16 Commerce Code, the laws of this state govern a deposit contract
84-17 between a bank and a consumer account holder if the branch or
84-18 separate office of the bank that accepts the deposit contract is
84-19 located in this state.
84-20 SECTION 2.013. Section 35.003(a), Finance Code, is amended
84-21 to read as follows:
84-22 (a) The banking commissioner has grounds to remove a present
84-23 or former officer, director, manager, managing participant, or
84-24 employee of a state bank from office or employment in, or prohibit
84-25 a controlling shareholder or participant or other person
84-26 participating in the affairs of a state bank from further
84-27 participation in the affairs of, a state bank[, trust company, or
85-1 other entity chartered or licensed by the banking commissioner
85-2 under the laws of this state] if the banking commissioner
85-3 determines from examination or other credible evidence that:
85-4 (1) the person:
85-5 (A) intentionally committed or participated in
85-6 commission of an act described by Section 35.002(a) with regard to
85-7 the affairs of the bank; or
85-8 (B) violated a final cease and desist order
85-9 issued in response to the same or a similar act;
85-10 (2) because of this action by the person:
85-11 (A) the bank has suffered or will probably
85-12 suffer financial loss or other damage;
85-13 (B) the interests of the bank's depositors have
85-14 been or could be prejudiced; or
85-15 (C) the person has received financial gain or
85-16 other benefit by reason of the action; and
85-17 (3) the action:
85-18 (A) involves personal dishonesty on the part of
85-19 the person; or
85-20 (B) demonstrates wilful or continuing disregard
85-21 for the safety or soundness of the bank.
85-22 SECTION 2.014. Section 35.007(a), Finance Code, is amended
85-23 to read as follows:
85-24 (a) Without the prior written approval of the banking
85-25 commissioner, a person subject to a final and enforceable removal
85-26 or prohibition order issued by the banking commissioner may not:
85-27 (1) serve as a director, officer, or employee of a
86-1 state bank, trust company, or other entity chartered or licensed by
86-2 the banking commissioner under the laws of this state, including an
86-3 interstate branch, trust office, or representative office in this
86-4 state of an out-of-state state bank, trust company, or foreign
86-5 bank;
86-6 (2) directly or indirectly participate in any manner
86-7 in the management of such an entity;
86-8 (3) directly or indirectly vote for a director of such
86-9 an entity; or
86-10 (4) solicit, procure, transfer, attempt to transfer,
86-11 vote, or attempt to vote a proxy, consent, or authorization with
86-12 respect to voting rights in such an entity.
86-13 SECTION 2.015. Section 35.201, Finance Code, is amended to
86-14 read as follows:
86-15 Sec. 35.201. INAPPLICABILITY. This subchapter does not
86-16 apply to a financial institution, as that term is defined by
86-17 Section 201.101, that lawfully maintains its main office or a
86-18 branch in this state [state or national bank, a state or federal
86-19 savings bank, a state or federal savings association, or a state or
86-20 federal credit union].
86-21 SECTION 2.016. Subchapter A, Chapter 59, Finance Code, is
86-22 amended to read as follows:
86-23 SUBCHAPTER A. GENERAL PROVISIONS
86-24 Sec. 59.001. DEFINITIONS. In this subchapter:
86-25 (1) "Civil action" means a civil proceeding pending in
86-26 a tribunal. The term does not include an examination or
86-27 enforcement proceeding initiated by:
87-1 (A) a governmental agency with primary
87-2 regulatory jurisdiction over a financial institution in possession
87-3 of a compliance review document;
87-4 (B) the Federal Deposit Insurance
87-5 Corporation or its successor; or
87-6 (C) the board of governors of the Federal
87-7 Reserve System or its successor.
87-8 (2) "Claim against a customer" means a writ of
87-9 attachment, writ of garnishment, notice of freeze, notice of levy,
87-10 notice of child support lien, notice of seizure, notice of
87-11 receivership, restraining order, injunction or other instrument
87-12 served on or delivered to a financial institution and purporting to
87-13 assert, establish, or perfect any interest in or claim against an
87-14 account, extension of credit, or product of the financial
87-15 institution held or established by the financial institution in the
87-16 name of the customer or for the benefit of the customer, or in the
87-17 name of the financial institution as the fiduciary, agent, or
87-18 custodian or in another representative capacity for the customer.
87-19 The term does not include citation or other process in a civil suit
87-20 in which the financial institution is made a defendant and against
87-21 which claims for affirmative relief are asserted, even though the
87-22 subject matter of the suit is an account, extension of credit, or
87-23 product of the financial institution held or established by the
87-24 financial institution in the name of a customer or in the name of
87-25 the financial institution as the fiduciary, agent, or custodian or
87-26 in another representative capacity for the customer.
87-27 (3) "Compliance review document" means a document
88-1 prepared by or for a compliance review committee acting pursuant to
88-2 Section 59.009.
88-3 (4) "Customer" means a person who uses, purchases, or
88-4 obtains an account, extension of credit, or product of a financial
88-5 institution or for whom a financial institution acts as a
88-6 fiduciary, agent, or custodian or in another representative
88-7 capacity.
88-8 (5) "Financial institution" has the meaning assigned
88-9 by Section 201.101, except that the term does not include a
88-10 financial institution organized under the laws of another state or
88-11 organized under federal law with its main office in another state
88-12 that does not maintain a branch or other office in this state.
88-13 (6) "Out-of-state financial institution" means a
88-14 financial institution, organized under the laws of another state or
88-15 organized under federal law with its main office in another state,
88-16 that has a branch or other office in this state.
88-17 (7) "Record" means financial or other information of a
88-18 customer maintained by a financial institution.
88-19 (8) "Record request" means a valid and enforceable
88-20 subpoena, request for production, or other instrument issued under
88-21 authority of a tribunal that compels production of a customer
88-22 record.
88-23 (9) "Texas financial institution" means a financial
88-24 institution organized under the laws of this state or organized
88-25 under federal law with its main office in this state.
88-26 (10) "Tribunal" means a court or other adjudicatory
88-27 tribunal with jurisdiction to issue a request for records,
89-1 including a government agency exercising adjudicatory functions and
89-2 an alternative dispute resolution mechanism, voluntary or required,
89-3 under which a party may compel the production of records. [OFFICE
89-4 OF OUT-OF-STATE BANK. (a) A bank that is not domiciled or
89-5 primarily located in this state may establish one or more offices
89-6 in this state for any lawful purpose. Before transacting business
89-7 in this state, the bank shall file with the secretary of state:]
89-8 [(1) an executed instrument, by its terms of
89-9 indefinite duration and irrevocable, appointing the secretary of
89-10 state as its agent for service of process on whom a notice or
89-11 process issued by a court in this state may be served in an action
89-12 or proceeding relating to the business of the bank in this state;
89-13 and]
89-14 [(2) a written certificate of designation specifying
89-15 the name and address of the officer, agent, or other person to whom
89-16 the notice or process should be forwarded by the secretary of
89-17 state.]
89-18 [(b) A bank may change a certificate of designation under
89-19 Subsection (a)(2) by filing an amended certificate of designation.]
89-20 [(c) The secretary of state shall collect the following
89-21 fees:]
89-22 [(1) $100 for indexing and filing the initial
89-23 certificate of designation and accompanying instruments required to
89-24 be filed by Subsection (a); and]
89-25 [(2) $15 for filing an amended certificate of
89-26 designation.]
89-27 [(d) On receipt of a notice or process, the secretary of
90-1 state shall promptly forward it by registered or certified mail,
90-2 return receipt requested, to the designated person. Failure of the
90-3 bank to maintain a designated person does not affect the validity
90-4 of service mailed to the most recently designated person at the
90-5 most recently designated address. Service of notice or process on
90-6 the secretary of state as agent for a bank described in this
90-7 section has the same effect as personal service made in this state
90-8 on a depository institution.]
90-9 [(e) A bank that complies with this section is not
90-10 transacting business in this state for purposes of Part Eight,
90-11 Texas Business Corporation Act.]
90-12 [(f) A bank described by Subsection (a) may not use any form
90-13 of advertising, including a sign or printed or broadcast material,
90-14 that implies or tends to imply that the bank is engaged in banking
90-15 business that the bank is not legally authorized to transact.]
90-16 Sec. 59.002. SLANDER OR LIBEL OF BANK. (a) A person
90-17 commits an offense if the person:
90-18 (1) knowingly makes, circulates, or transmits to
90-19 another person an untrue statement that is derogatory to the
90-20 financial condition of a bank located in this state; or
90-21 (2) with intent to injure a bank located in this
90-22 state, counsels, aids, procures, or induces another person to
90-23 knowingly make, circulate, or transmit to another person an untrue
90-24 statement that is derogatory to the financial condition of any bank
90-25 located in this state.
90-26 (b) An offense under this section is a state jail felony.
90-27 Sec. 59.003. AUTHORITY OF NOTARY PUBLIC. A notary public is
91-1 not disqualified from taking an acknowledgment or proof of a
91-2 written instrument as provided by Section 406.016, Government Code,
91-3 solely because of the person's ownership of stock or a
91-4 participation interest in or employment by a financial institution
91-5 [bank] that is an interested party to the underlying transaction.
91-6 Sec. 59.004. SUCCESSION OF TRUST POWERS. (a) If, at the
91-7 time of a merger, reorganization, conversion, [or] sale of
91-8 substantially all of its assets under Chapter 32 or other
91-9 applicable law, or sale of substantially all of its trust accounts
91-10 and related activities at a separate branch or other office, a
91-11 reorganizing or selling financial institution is acting as trustee,
91-12 guardian, executor, or administrator, or in another fiduciary
91-13 capacity, a [the] successor or purchasing financial institution
91-14 with sufficient fiduciary authority may [entity with fiduciary
91-15 powers may, without the necessity of judicial action or action by
91-16 the creator of the trust,] continue the office, trust, or fiduciary
91-17 relationship:
91-18 (1) without the necessity of judicial action or action
91-19 by the creator of the office, trust, or fiduciary relationship; and
91-20 (2) without regard to whether the successor or
91-21 purchasing financial institution meets qualification requirements
91-22 specified in an instrument creating the office, trust, or fiduciary
91-23 relationship other than a requirement related to geographic locale
91-24 of account administration, including requirements as to
91-25 jurisdiction of incorporation, location of principal office, or
91-26 type of financial institution.
91-27 (b) The successor or purchasing financial institution
92-1 [entity] may perform all the duties and exercise all the powers
92-2 connected with or incidental to the fiduciary relationship in the
92-3 same manner as if the successor or purchasing financial institution
92-4 [entity] had been originally designated as the fiduciary.
92-5 Sec. 59.005. AGENCY ACTIVITIES. (a) A state bank may, on
92-6 compliance with this section, agree to receive deposits, renew time
92-7 deposits, close loans, service loans, receive payments on loans and
92-8 other obligations, and perform other services, with the prior
92-9 approval of the banking commissioner, as an agent for another
92-10 financial institution.
92-11 (b) A state bank that proposes to enter into an agency
92-12 agreement under this section shall file a letter with the banking
92-13 commissioner, not later than 30 days before the effective date of
92-14 the agreement, setting forth:
92-15 (1) a notice of intention to enter into an agency
92-16 agreement with a financial institution;
92-17 (2) a description of the services proposed to be
92-18 performed under the agency agreement;
92-19 (3) a copy of the agency agreement; and
92-20 (4) other information the banking commissioner
92-21 requests.
92-22 (c) If a proposed service is not specifically designated in
92-23 Subsection (a) and has not previously been approved by rule or in
92-24 an opinion or interpretation issued by the banking commissioner,
92-25 the banking commissioner shall decide whether to approve the
92-26 offering of the service on or before the 30th day after the date of
92-27 receipt of the notice required by Subsection (b). In deciding
93-1 whether to approve a proposed service that is not specifically
93-2 designated by Subsection (a) or in a rule or prior opinion or
93-3 interpretation, the banking commissioner shall consider whether the
93-4 service would be consistent with applicable federal and state law
93-5 and the safety and soundness of the principal and agent.
93-6 (d) A proposed service subject to Subsection (c) is
93-7 considered approved if the banking commissioner does not take
93-8 action on the notice required by Subsection (b) within the time
93-9 limits specified by Subsection (c). The banking commissioner may
93-10 extend the 30-day period on a determination that the bank's letter
93-11 raises issues that require additional information or additional
93-12 time for analysis. If the period is extended, the bank may engage
93-13 in the proposed service only on prior written approval of the
93-14 banking commissioner.
93-15 (e) A state bank may not under an agency agreement:
93-16 (1) conduct an activity as agent that it would be
93-17 prohibited from conducting as a principal under applicable state or
93-18 federal law; or
93-19 (2) have an agent conduct an activity that the bank as
93-20 principal would be prohibited from conducting under applicable
93-21 state or federal law.
93-22 (f) The banking commissioner may order a state bank or
93-23 another financial institution subject to the banking commissioner's
93-24 enforcement powers to cease acting as an agent or principal under
93-25 an agency agreement that the banking commissioner finds to be
93-26 inconsistent with safe and sound banking practices.
93-27 (g) Notwithstanding another law, a state bank acting as an
94-1 agent for a financial institution in accordance with this section
94-2 is not considered to be a branch of that institution, and a
94-3 financial institution acting as an agent for a state bank in
94-4 accordance with this section is not considered to be a branch of
94-5 the state bank.
94-6 (h) This section does not affect:
94-7 (1) authority under another law for a depository
94-8 institution to act as an agent on behalf of another person or to
94-9 act as a principal in employing another person as agent; or
94-10 (2) whether an agent's activities on behalf of a
94-11 depository institution under another law would cause the agent to
94-12 be considered a branch of the depository institution. [AGENT FOR
94-13 AFFILIATE. (a) A bank subsidiary of a bank holding company may
94-14 receive deposits, renew time deposits, close loans, service loans,
94-15 and receive payments on loans and other obligations as an agent for
94-16 a depository institution affiliate. Notwithstanding any other
94-17 provision of law, a bank acting as an agent for a depository
94-18 institution affiliate as provided by this section is not considered
94-19 to be a branch of the affiliate.]
94-20 [(b) A depository institution may not:]
94-21 [(1) conduct an activity as an agent under Subsection
94-22 (a) that the institution is prohibited from conducting as a
94-23 principal under a law of this state or the United States; or]
94-24 [(2) as a principal, have an agent conduct an activity
94-25 under Subsection (a) that the institution is prohibited from
94-26 conducting under a law of this state or the United States.]
94-27 [(c) This section does not affect:]
95-1 [(1) the authority of a depository institution to act
95-2 as an agent on behalf of another depository institution under
95-3 another law; or]
95-4 [(2) whether a depository institution that conducts
95-5 activity as an agent on behalf of another depository institution
95-6 under another law is considered to be a branch of the other
95-7 institution.]
95-8 [(d) An agency relationship between depository institutions
95-9 under Subsection (a) must be on terms that are consistent with safe
95-10 and sound banking practices and applicable rules.]
95-11 Sec. 59.006. DISCOVERY OF CUSTOMER RECORDS. (a) This
95-12 section provides the exclusive method for compelled discovery of a
95-13 record of a financial institution relating to one or more
95-14 customers. This section does not create a right of privacy in a
95-15 record and does not apply to:
95-16 (1) a demand or inquiry from a state or federal
95-17 government agency authorized by law to conduct an examination of
95-18 the financial institution;
95-19 (2) a record request from a state or federal
95-20 government agency or instrumentality under statutory or
95-21 administrative authority that provides for, or is accompanied by, a
95-22 specific mechanism for discovery and protection of a customer
95-23 record of a financial institution, including a record request from
95-24 a federal agency subject to the Right to Financial Privacy Act of
95-25 1978 (12 U.S.C. Section 3401 et seq.), as amended, or from the
95-26 Internal Revenue Service under Section 1205, Internal Revenue Code
95-27 of 1986;
96-1 (3) a record request from or report to a government
96-2 agency arising out of the investigation or prosecution of a
96-3 criminal offense;
96-4 (4) a record request in connection with a garnishment
96-5 proceeding in which the financial institution is garnishee and the
96-6 customer is debtor;
96-7 (5) a record request by a duly appointed receiver for
96-8 the customer;
96-9 (6) an investigative demand or inquiry from a state
96-10 legislative investigating committee;
96-11 (7) an investigative demand or inquiry from the
96-12 attorney general of this state as authorized by law other than the
96-13 procedural law governing discovery in civil cases; or
96-14 (8) the voluntary use or disclosure of a record by a
96-15 financial institution subject to other applicable state or federal
96-16 law.
96-17 (b) A financial institution shall produce a record in
96-18 response to a record request only if:
96-19 (1) it is served with the record request not later
96-20 than the 24th day before the date that compliance with the record
96-21 request is required;
96-22 (2) before the financial institution complies with the
96-23 record request the requesting party pays the financial
96-24 institution's reasonable costs of complying with the record
96-25 request, including costs of reproduction, postage, research,
96-26 delivery, and attorney's fees, or posts a cost bond in an amount
96-27 estimated by the financial institution to cover those costs; and
97-1 (3) if the customer is not a party to the proceeding
97-2 in which the request was issued, the requesting party complies with
97-3 Subsections (c) and (d) and:
97-4 (A) the financial institution receives the
97-5 customer's written consent to release the record after a request
97-6 under Subsection (c)(3); or
97-7 (B) the tribunal takes further action based on
97-8 action initiated by the requesting party under Subsection (d).
97-9 (c) If the affected customer is not a party to the
97-10 proceeding in which the record request was issued, in addition to
97-11 serving the financial institution with a record request, the
97-12 requesting party shall:
97-13 (1) give notice stating the rights of the customer
97-14 under Subsection (e) and a copy of the request to each affected
97-15 customer in the manner and within the time provided by Rule 21a,
97-16 Texas Rules of Civil Procedure;
97-17 (2) file a certificate of service indicating that the
97-18 customer has been mailed or served with the notice and a copy of
97-19 the record request as required by this subsection with the tribunal
97-20 and the financial institution; and
97-21 (3) request the customer's written consent authorizing
97-22 the financial institution to comply with the request.
97-23 (d) If the customer that is not a party to the proceeding
97-24 does not execute the written consent requested under Subsection
97-25 (c)(3) on or before the date that compliance with the request is
97-26 required, the requesting party may by written motion seek an in
97-27 camera inspection of the requested record as its sole means of
98-1 obtaining access to the requested record. In response to a motion
98-2 for in camera inspection, the tribunal may inspect the requested
98-3 record to determine its relevance to the matter before the
98-4 tribunal. The tribunal may order redaction of portions of the
98-5 records that the tribunal determines should not be produced and
98-6 shall enter a protective order preventing the record that it orders
98-7 produced from being:
98-8 (1) disclosed to a person who is not a party to the
98-9 proceeding before the tribunal; and
98-10 (2) used by a person for any purpose other than
98-11 resolving the dispute before the tribunal.
98-12 (e) A customer that is a party to the proceeding bears the
98-13 burden of preventing or limiting the financial institution's
98-14 compliance with a record request subject to this section by seeking
98-15 an appropriate remedy, including filing a motion to quash the
98-16 record request or a motion for a protective order. Any motion
98-17 filed shall be served on the financial institution and the
98-18 requesting party before the date that compliance with the request
98-19 is required. A financial institution is not liable to its
98-20 customer or another person for disclosure of a record in compliance
98-21 with this section.
98-22 (f) A financial institution may not be required to produce a
98-23 record under this section before the later of:
98-24 (1) the 24th day after the date of receipt of the
98-25 record request as provided by Subsection (b)(1);
98-26 (2) the 15th day after the date of receipt of a
98-27 customer consent to disclose a record as provided by Subsection
99-1 (b)(3); or
99-2 (3) the 15th day after the date a court orders
99-3 production of a record after an in camera inspection of a requested
99-4 record as provided by Subsection (d).
99-5 (g) An order to quash or for protection or other remedy
99-6 entered or denied by the tribunal under Subsection (d) or (e) is
99-7 not a final order and an interlocutory appeal may not be taken.
99-8 [Civil discovery of a customer record maintained by a financial
99-9 institution is governed by Section 30.007, Civil Practice and
99-10 Remedies Code, as added by Chapter 914, Acts of the 74th
99-11 Legislature, Regular Session, 1995.]
99-12 Sec. 59.007. ATTACHMENT, INJUNCTION, EXECUTION, OR
99-13 GARNISHMENT. (a) An attachment, injunction, execution, or writ of
99-14 garnishment may not be issued against or served on a financial
99-15 institution that has its principal office or a branch in this state
99-16 to collect a money judgment or secure a prospective money judgment
99-17 against the financial institution before the judgment is final and
99-18 all appeals have been foreclosed by law.
99-19 (b) An attachment, injunction, execution, or writ of
99-20 garnishment issued to or served on a financial institution for the
99-21 purpose of collecting a money judgment or securing a prospective
99-22 money judgment against a customer of the financial institution is
99-23 governed by Section 59.008 and not this section.
99-24 Sec. 59.008. CLAIMS AGAINST CUSTOMERS OF FINANCIAL
99-25 INSTITUTIONS. (a) A claim against a customer of a financial
99-26 institution shall be delivered or served as otherwise required or
99-27 permitted by law at the address designated as the address of the
100-1 registered agent of the financial institution in a registration
100-2 filed with the secretary of state pursuant to Section 201.102, with
100-3 respect to an out-of-state financial institution, or Section
100-4 201.103, with respect to a Texas financial institution.
100-5 (b) If a financial institution files a registration
100-6 statement with the secretary of state pursuant to Section 201.102,
100-7 with respect to an out-of-state financial institution, or Section
100-8 201.103, with respect to a Texas financial institution, a claim
100-9 against a customer of the financial institution is not effective as
100-10 to the financial institution if the claim is served or delivered to
100-11 an address other than that designated by the financial institution
100-12 in the registration as the address of the financial institution's
100-13 registered agent.
100-14 (c) The customer bears the burden of preventing or limiting
100-15 a financial institution's compliance with or response to a claim
100-16 subject to this section by seeking an appropriate remedy, including
100-17 a restraining order, injunction, protective order, or other remedy,
100-18 to prevent or suspend the financial institution's response to a
100-19 claim against the customer.
100-20 (d) A financial institution that does not file a
100-21 registration with the secretary of state pursuant to Section
100-22 201.102, with respect to an out-of-state financial institution, or
100-23 Section 201.103, with respect to a Texas financial institution, is
100-24 subject to service or delivery of all claims against customers of
100-25 the financial institution as otherwise provided by law.
100-26 Sec. 59.009 [59.007]. COMPLIANCE REVIEW COMMITTEE. (a) A
100-27 financial institution or an affiliate of a financial institution,
101-1 including its holding company, may establish a compliance review
101-2 committee to test, review, or evaluate the financial institution's
101-3 conduct, transactions, or potential transactions for the purpose of
101-4 monitoring and improving or enforcing compliance with:
101-5 (1) a statutory or regulatory requirement;
101-6 (2) financial reporting to a governmental agency;
101-7 (3) the policies and procedures of the financial
101-8 institution or its affiliates; or
101-9 (4) safe, sound, and fair lending practices.
101-10 (b) Except as provided by Subsection (c):
101-11 (1) a compliance review document is confidential and
101-12 is not discoverable or admissible in evidence in a civil action;
101-13 (2) an individual serving on a compliance review
101-14 committee or acting under the direction of a compliance review
101-15 committee may not be required to testify in a civil action as to:
101-16 (A) the contents or conclusions of a compliance
101-17 review document; or
101-18 (B) an action taken or discussions conducted by
101-19 or for a compliance review committee; and
101-20 (3) a compliance review document or an action taken or
101-21 discussion conducted by or for a compliance review committee that
101-22 is disclosed to a governmental agency remains confidential and is
101-23 not discoverable or admissible in a civil action.
101-24 (c) Subsection (b)(2) does not apply to an individual who
101-25 has management responsibility for the operations, records,
101-26 employees, or activities being examined or evaluated by the
101-27 compliance review committee.
102-1 (d) This section does not limit the discovery or
102-2 admissibility in a civil action of a document that is not a
102-3 compliance review document.
102-4 [(e) In this section:]
102-5 [(1) "Civil action" means a civil proceeding pending
102-6 in a court or other adjudicatory tribunal with jurisdiction to
102-7 issue a request or subpoena for records, including a voluntary or
102-8 required alternative dispute resolution mechanism under which a
102-9 party may compel the production of records. The term does not
102-10 include an examination or enforcement proceeding initiated by:]
102-11 [(A) a governmental agency with primary
102-12 regulatory jurisdiction over a financial institution in possession
102-13 of a compliance review document;]
102-14 [(B) the Federal Deposit Insurance Corporation
102-15 or its successor; or]
102-16 [(C) the board of governors of the Federal
102-17 Reserve System or its successor.]
102-18 [(2) "Compliance review document" means a document
102-19 prepared by or for a compliance review committee.]
102-20 SECTION 2.017. Section 59.201, Finance Code, is amended to
102-21 read as follows:
102-22 Sec. 59.201. ELECTRONIC TERMINALS AUTHORIZED; SHARING OF
102-23 ELECTRONIC TERMINAL. (a) A person may install, maintain, and
102-24 operate one or more electronic terminals at any location in this
102-25 state for the convenience of customers of financial [depository]
102-26 institutions.
102-27 (b) Financial [Depository] institutions may agree in writing
103-1 to share in the use of an electronic terminal on a reasonable,
103-2 nondiscriminatory basis and on the condition that a financial
103-3 [depository] institution using an electronic terminal may be
103-4 required to meet necessary and reasonable technical standards and
103-5 to pay charges for the use of the electronic terminal. The
103-6 standards or charges imposed must be reasonable, fair, equitable,
103-7 and nondiscriminatory among the financial [depository]
103-8 institutions. Any charges imposed:
103-9 (1) may not exceed an equitable proportion of the cost
103-10 of establishing the electronic terminal, including provisions for
103-11 amortization of development costs and capital expenditures over a
103-12 reasonable period, and the cost of operation and maintenance of the
103-13 electronic terminal, plus a reasonable return on those costs; and
103-14 (2) must be related to the services provided to the
103-15 financial [depository] institution or its customers.
103-16 (c) This section does not apply to:
103-17 (1) an electronic terminal located at the domicile or
103-18 home office or a branch of a financial [depository] institution; or
103-19 (2) the use by a person of an electronic terminal,
103-20 regardless of location, solely to withdraw cash, make account
103-21 balance inquiries, or make transfers between the person's accounts
103-22 in the same financial [depository] institution.
103-23 (d) In this section, the term "financial institution" has
103-24 the meaning assigned by Section 201.101.
103-25 SECTION 2.018. Section 59.202(c)(3), Finance Code, is
103-26 amended to read as follows:
103-27 (3) "Financial institution" has the meaning assigned
104-1 by Section 201.101 [means a state, national, or private bank,
104-2 savings bank, savings association, thrift company, or credit
104-3 union].
104-4 SECTION 2.019. Section 59.301(7), Finance Code, is amended
104-5 to read as follows:
104-6 (7) "Financial institution" has the meaning assigned
104-7 by Section 201.101 [means a bank, savings association, credit
104-8 union, or savings bank].
104-9 SECTION 2.020. Section 152.202(a), Finance Code, is amended
104-10 to read as follows:
104-11 (a) Section 152.201 does not apply to:
104-12 (1) a federally insured financial institution, as that
104-13 term is defined by Section 201.101 [bank, credit union, savings and
104-14 loan association, or savings bank, whether the institution is state
104-15 or federal], if the institution does not sell checks, other than
104-16 traveler's checks,[:]
104-17 [(A) off premises; or]
104-18 [(B)] through an agent who is not directly or
104-19 indirectly owned by the institution unless the agent is also a
104-20 federally insured financial institution [bank, credit union,
104-21 savings and loan association, or savings bank];
104-22 (2) an agent or subagent of a license holder unless
104-23 the agent or subagent sells the license holder's checks
104-24 over-the-counter to the public and in the regular conduct of that
104-25 business receives or at any time has access to:
104-26 (A) a check of the license holder that is
104-27 returned after payment for verification, reconciliation, or
105-1 accounting; or
105-2 (B) a bank statement relating to a returned
105-3 check;
105-4 (3) a title company or attorney that issues an escrow
105-5 or trust fund check;
105-6 (4) the United States; or
105-7 (5) with the commissioner's prior written consent, a
105-8 person who:
105-9 (A) holds a license issued under Chapter 153;
105-10 (B) has a net worth of at least $250,000 and
105-11 meets the licensing requirements of this chapter;
105-12 (C) maintains a bond under Section 152.206 in
105-13 the minimum principal amount of $350,000; and
105-14 (D) sells checks only in conjunction with a
105-15 currency exchange or transmission transaction, as defined by
105-16 Chapter 153, and separates all proceeds from that transaction from
105-17 the sale of checks.
105-18 SECTION 2.021. Section 152.301(b), Finance Code, is amended
105-19 to read as follows:
105-20 (b) A surety bond or letter of credit required under
105-21 Subsection (a)(3) must be:
105-22 (1) in addition to any other bond or security required
105-23 by this chapter;
105-24 (2) issued by a bonding company or insurance company
105-25 authorized to do business in this state and acceptable to the
105-26 commissioner, in the case of a surety bond;
105-27 (3) issued by a federally insured financial
106-1 institution, as that term is defined by Section 201.101, that has
106-2 its main office or a branch in this state and is [state or national
106-3 bank, savings bank, or savings and loan association] acceptable to
106-4 the commissioner, in the case of a letter of credit; and
106-5 (4) payable to the commissioner on behalf of any
106-6 claimants against the license holder to secure the faithful
106-7 performance of the obligations of the license holder with respect
106-8 to the receipt, handling, and payment of money in connection with
106-9 the sale of checks.
106-10 SECTION 2.022. Section 153.117(a), Finance Code, is amended
106-11 to read as follows:
106-12 (a) The following persons are not required to be licensed
106-13 under this chapter:
106-14 (1) a federally insured financial institution, as that
106-15 term is defined by Section 201.101, that is [bank, foreign bank
106-16 agency, credit union, savings bank, or savings and loan
106-17 association, whether] organized under the laws of this state,
106-18 another state, or [of] the United States;
106-19 (2) a foreign bank branch or agency in the United
106-20 States established under the federal International Banking Act of
106-21 1978 (12 U.S.C. Section 3101 et seq.), as amended;
106-22 (3) a license holder under Chapter 152, except that
106-23 the license holder is required to comply with the other provisions
106-24 of this chapter to the extent [unless] the license holder engages
106-25 in currency exchange, transportation, or transmission transactions;
106-26 or
106-27 (4) [(3)] a person registered as a securities dealer
107-1 under The Securities Act (Article 581-1 et seq., Vernon's Texas
107-2 Civil Statutes).
107-3 SECTION 2.023. Sections 154.002(1)-(4), Finance Code, are
107-4 amended to read as follows:
107-5 (1) ["Bank" means a state or national bank.]
107-6 [(2)] "Commissioner" means the banking commissioner of
107-7 Texas.
107-8 (2) [(3)] "Department" means the Texas Department of
107-9 Banking.
107-10 (3) [(4)] "Earnings" means the amount in an account in
107-11 excess of the amount paid by the purchaser of a prepaid funeral
107-12 benefits contract that is deposited in the account as provided by
107-13 Section 154.253, including accrued interest, accrued income, and
107-14 enhanced or increased value.
107-15 (4) "Financial institution" has the meaning assigned
107-16 by Section 201.101.
107-17 SECTION 2.024. Section 154.253(a), Finance Code, is amended
107-18 to read as follows:
107-19 (a) Not later than the 30th day after the date of
107-20 collection, the money, other than money retained as provided by
107-21 Section 154.252, shall be deposited:
107-22 (1) in a financial institution that has its main
107-23 office or a branch [savings and loan association] in this state in
107-24 an interest-bearing account insured by the federal government; or
107-25 (2) in trust [in a bank in this state in an
107-26 interest-bearing account insured by the federal government; or]
107-27 [(3)] with [the trust department in] a financial
108-1 institution that has its main office or a branch located in this
108-2 state and is authorized to act as a fiduciary [bank in this state,
108-3 or in a trust company authorized to do business] in this state, to
108-4 be invested by the financial institution as trustee [trust
108-5 department or company] in accordance with this subchapter.
108-6 SECTION 2.025. Section 154.257(a), Finance Code, is amended
108-7 to read as follows:
108-8 (a) A permit holder or trustee, if the permit holder
108-9 deposits the money with a financial institution as trustee [bank
108-10 trust department or a trust company], shall:
108-11 (1) adopt a written investment plan consistent with
108-12 this section and Sections 154.256 and 154.258 that specifies the
108-13 quality, maturity, and diversification of investments;
108-14 (2) at least annually, review the adequacy and
108-15 implementation of the investment plan;
108-16 (3) maintain investment records covering each
108-17 transaction; and
108-18 (4) maintain the investment plan in the principal
108-19 offices of the permit holder and trustee.
108-20 SECTION 2.026. Section 154.258(a), Finance Code, is amended
108-21 to read as follows:
108-22 (a) Money in a prepaid funeral benefits trust may be
108-23 invested only in:
108-24 (1) demand deposits, savings accounts, certificates of
108-25 deposit, or other accounts issued by financial institutions [banks
108-26 or savings and loan associations organized under state or federal
108-27 law] if the amounts deposited in those accounts are fully covered
109-1 by federal deposit insurance or otherwise fully secured by a
109-2 separate fund of securities in the manner provided by Section
109-3 5.401, Texas Trust Company Act (Article 342a-5.401, Vernon's Texas
109-4 Civil Statutes), and rules adopted under that section;
109-5 (2) bonds, evidences of indebtedness, or obligations
109-6 of the United States or an instrumentality of the United States;
109-7 (3) bonds, evidences of indebtedness, or obligations
109-8 the principal and interest of which are guaranteed by the full
109-9 faith and credit of the United States;
109-10 (4) bonds of a state or local government that are
109-11 exempt from federal income taxation and that are rated:
109-12 (A) "Aa" or better by Moody's bond rating
109-13 service; or
109-14 (B) "AA" or better by Standard and Poor's bond
109-15 rating service;
109-16 (5) bonds, evidences of indebtedness, or obligations
109-17 of corporations organized under state or federal law and that are
109-18 rated:
109-19 (A) "A" or better by Moody's bond rating
109-20 service; or
109-21 (B) "A" or better by Standard and Poor's bond
109-22 rating service;
109-23 (6) notes, evidences of indebtedness, or participation
109-24 in notes or evidences of indebtedness, secured by a first lien on
109-25 real property located in the United States, if the amount of each
109-26 obligation does not exceed 90 percent of the value of the real
109-27 property securing that obligation;
110-1 (7) common stock of a corporation that is organized
110-2 under state or federal law and:
110-3 (A) has a net worth of at least $1 million; or
110-4 (B) will have a net worth of at least $1 million
110-5 after completion of a securities offering to which the trust is
110-6 subscribing;
110-7 (8) preferred stock of a corporation organized under
110-8 state or federal law and that is rated:
110-9 (A) "Baa" ["BAA"] or better by Moody's bond
110-10 rating service; or
110-11 (B) "BBB" or better by Standard and Poor's bond
110-12 rating service;
110-13 (9) investments not covered by this subsection,
110-14 including real property, oil and gas interests, and limited
110-15 partnerships;
110-16 (10) mutual funds, collective investment funds, or
110-17 similar participative investment funds, the assets of which are
110-18 invested only in investments that are permitted under this section
110-19 and that, if aggregated with other investments, meet the percentage
110-20 limitations specified by this section; and
110-21 (11) other investments the department approves in
110-22 writing.
110-23 SECTION 2.027. Section 154.353(a), Finance Code, is amended
110-24 to read as follows:
110-25 (a) The fund may be deposited with:
110-26 (1) the comptroller;
110-27 (2) a federally insured financial institution that has
111-1 its main office or a branch [bank] in this state; or
111-2 (3) in trust with [a savings and loan association in
111-3 this state;]
111-4 [(4) the trust department in] a financial institution
111-5 that has its main office or a branch in this state and is
111-6 authorized to act as a fiduciary [bank] in this state[; or]
111-7 [(5) a trust company authorized to do business in this
111-8 state].
111-9 SECTION 2.028. Section 271.001(a), Finance Code, is amended
111-10 to read as follows:
111-11 (a) A financial institution [in this state] that is required
111-12 to file a report with respect to a transaction in this state under
111-13 the Currency and Foreign Transactions Reporting Act (31 U.S.C.
111-14 Section 5311 et seq.), 31 C.F.R. Part 103, or 12 C.F.R. Section
111-15 21.11, and their subsequent amendments, shall file a copy of the
111-16 report with the attorney general.
111-17 SECTION 2.029. Section 271.002(a), Finance Code, is amended
111-18 to read as follows:
111-19 (a) A person engaged in a trade or business who, in the
111-20 course of the trade or business, receives more than $10,000 in one
111-21 transaction or in two or more related transactions in this state
111-22 and who is required to file a return under Section 6050I, Internal
111-23 Revenue Code of 1986 (26 U.S.C. Section 6050I), or 26 C.F.R.
111-24 Section 1.6050I-1, and their subsequent amendments, shall file a
111-25 copy of the return with the attorney general.
111-26 SECTION 2.030. Sections 274.001, 274.002, and 274.003,
111-27 Finance Code, are amended to read as follows:
112-1 Sec. 274.001. DEFINITIONS. In this chapter:
112-2 (1) "Bank" has the meaning assigned by Section 2(c),
112-3 Bank Holding Company Act of 1956 (12 U.S.C. Section 1841(c)) as
112-4 amended, excluding a bank that does not have its main office or a
112-5 branch located in this state.
112-6 (2) "Bank holding company" has the meaning assigned by
112-7 Section 2(a), Bank Holding Company Act of 1956 (12 U.S.C. Section
112-8 1841(a)), as amended.
112-9 (3) [(2)] "Commissioner" means the banking
112-10 commissioner of Texas.
112-11 (4) [(3)] "Fiduciary" means an entity responsible for
112-12 managing a fiduciary account.
112-13 (5) [(4)] "Fiduciary account" means an account with a
112-14 situs of administration in this state involving the exercise of a
112-15 corporate purpose specified by Section 151.052 or 151.103.
112-16 Sec. 274.002. AFFILIATED BANK. A bank is affiliated with a
112-17 subsidiary trust company if[:]
112-18 [(1) the bank is a state or national bank that has its
112-19 main office in this state; and]
112-20 [(2)] more than 50 percent of the bank's voting stock
112-21 is directly or indirectly owned by a bank holding company that owns
112-22 more than 50 percent of the voting stock of the subsidiary trust
112-23 company.
112-24 Sec. 274.003. SUBSIDIARY TRUST COMPANY. An entity is a
112-25 subsidiary trust company of a bank holding company if:
112-26 (1) the entity is a:
112-27 (A) corporation incorporated under Subchapter B,
113-1 Chapter 151; or
113-2 (B) [national] bank that[:]
113-3 [(i)] is organized to conduct a trust
113-4 business and any incidental business or to exercise trust powers;
113-5 and
113-6 [(ii) has its main office in this state;
113-7 or]
113-8 [(C) state bank that is organized to exercise
113-9 trust powers and has its main office in this state; and]
113-10 (2) more than 50 percent of the voting stock of the
113-11 entity is directly or indirectly owned by the bank holding company.
113-12 SECTION 2.031. Section 274.101(a), Finance Code, is amended
113-13 to read as follows:
113-14 (a) A subsidiary trust company may enter into an agreement
113-15 with an affiliated bank of the company to substitute the company as
113-16 fiduciary for the bank in each fiduciary account listed in the
113-17 agreement, provided the situs of account administration is not
113-18 moved outside of this state without the express written consent of
113-19 all persons entitled to notice under Sections 274.103(a) and (c).
113-20 SECTION 2.032. Section 274.102, Finance Code, is amended to
113-21 read as follows:
113-22 Sec. 274.102. SITUS OF ACCOUNT ADMINISTRATION. The situs of
113-23 administration of a fiduciary account is the county in this state
113-24 in which the fiduciary maintains the office that is primarily
113-25 responsible for dealing with the parties involved in the account.
113-26 SECTION 2.033. Sections 341.001(1), (2), and (8), Finance
113-27 Code, are amended to read as follows:
114-1 (1) "Authorized lender" means a person who holds a
114-2 license issued under Chapter 342, a bank, or a savings [and loan]
114-3 association.
114-4 (2) "Bank" means a person:
114-5 (A) organized as a state bank [doing business]
114-6 under Subtitle A, Title 3, or under similar laws of another state
114-7 if the deposits of a bank from another state are insured by the
114-8 Federal Deposit Insurance Corporation; or
114-9 (B) organized as a national bank under 12 U.S.C.
114-10 Section 21 et seq., as subsequently amended.
114-11 (8) "Savings [and loan] association" means a person:
114-12 (A) organized as a state savings and loan
114-13 association or savings bank [doing business] under Subtitle B or C,
114-14 Title 3, or under similar laws of another state if the deposits of
114-15 the savings association from another state are insured by the
114-16 Federal Deposit Insurance Corporation; or
114-17 (B) organized as a federal savings and loan
114-18 association or savings bank under the Home Owners' Loan Act (12
114-19 U.S.C. Section 1461 et seq.), as subsequently amended.
114-20 SECTION 2.034. Section 341.103, Finance Code, is amended to
114-21 read as follows:
114-22 Sec. 341.103. REGULATION OF SAVINGS [AND LOAN] ASSOCIATIONS.
114-23 (a) The savings and loan commissioner shall enforce this subtitle
114-24 relating to the regulation of state savings [and loan] associations
114-25 operating under this subtitle.
114-26 (b) The official exercising authority over the operation of
114-27 federal savings [and loan] associations equivalent to the authority
115-1 exercised by the savings and loan commissioner over state savings
115-2 [and loan] associations may enforce this subtitle relating to the
115-3 regulation of a federal savings [and loan] association operating
115-4 under this subtitle.
115-5 SECTION 2.035. Section 345.001(1), Finance Code, is amended
115-6 to read as follows:
115-7 (1) "Credit card issuer" means a person who issues an
115-8 identification device, including a card or plate, that is used to
115-9 obtain goods or services under a retail credit card arrangement,
115-10 other than a person who is:
115-11 (A) a bank, savings [and loan] association, or
115-12 credit union;
115-13 (B) licensed to do business under Chapter 342;
115-14 or
115-15 (C) regularly and principally engaged in the
115-16 business of lending money for personal, family, or household
115-17 purposes.
115-18 SECTION 2.036. Section 393.002(a), Finance Code, is amended
115-19 to read as follows:
115-20 (a) This chapter does not apply to:
115-21 (1) a person:
115-22 (A) authorized to make a loan or grant an
115-23 extension of consumer credit under the laws of this state or the
115-24 United States; and
115-25 (B) subject to regulation and supervision by
115-26 this state or the United States;
115-27 (2) a lender approved by the United States secretary
116-1 of housing and urban development for participation in a mortgage
116-2 insurance program under the National Housing Act (12 U.S.C. Section
116-3 1701 et seq.);
116-4 (3) a bank or savings [and loan] association the
116-5 deposits or accounts of which are eligible to be insured by the
116-6 Federal Deposit Insurance Corporation or a subsidiary of the bank
116-7 or association;
116-8 (4) a credit union doing business in this state;
116-9 (5) a nonprofit organization exempt from taxation
116-10 under Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C.
116-11 Section 501(c)(3));
116-12 (6) a real estate broker or salesman licensed under
116-13 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
116-14 Statutes) who is acting within the course and scope of that
116-15 license;
116-16 (7) an individual licensed to practice law in this
116-17 state who is acting within the course and scope of the individual's
116-18 practice as an attorney;
116-19 (8) a broker-dealer registered with the Securities and
116-20 Exchange Commission or the Commodity Futures Trading Commission
116-21 acting within the course and scope of that regulation;
116-22 (9) a consumer reporting agency; or
116-23 (10) a person whose primary business is making loans
116-24 secured by liens on real property.
116-25 SECTION 2.037. Section 393.402(a), Finance Code, is amended
116-26 to read as follows:
116-27 (a) The surety account of a credit services organization
117-1 must be held in trust at a federally insured bank or savings [and
117-2 loan] association located in this state.
117-3 SECTION 2.038. Section 394.103, Finance Code, is amended to
117-4 read as follows:
117-5 Sec. 394.103. EXCEPTIONS. A debt-pooling contract entered
117-6 into by the following is not void because of Section 394.102:
117-7 (1) a bank, savings [and loan] association, trust
117-8 company, or credit union doing business under the laws of this
117-9 state or the United States;
117-10 (2) an attorney at law;
117-11 (3) a judicial officer or other person acting under
117-12 the orders of a court of this state or the United States;
117-13 (4) an agency, instrumentality, or subdivision of this
117-14 state or the United States;
117-15 (5) a retail merchants association or nonprofit trade
117-16 association formed to collect accounts and exchange credit
117-17 information; or
117-18 (6) a nonprofit organization providing debt-counseling
117-19 services to residents of this state.
117-20 ARTICLE 3. MULTISTATE TRUST BUSINESS
117-21 SECTION 3.001. The Texas Trust Company Act (Article
117-22 342a-1.001 et seq., Vernon's Texas Civil Statutes) is amended by
117-23 adding Chapter 9 to read as follows:
117-24 CHAPTER 9. MULTISTATE TRUST BUSINESS
117-25 SUBCHAPTER A. GENERAL PROVISIONS
117-26 Sec. 9.001. DEFINITIONS. (a) In this chapter:
117-27 (1) "Acquire" means an act that results in direct or
118-1 indirect control by an out-of-state trust company of a state trust
118-2 institution, including an act that causes the company to:
118-3 (A) merge with the state trust institution;
118-4 (B) assume direct or indirect ownership of a
118-5 controlling interest in any class of voting shares of the state
118-6 trust institution; or
118-7 (C) assume direct ownership or control of all or
118-8 substantially all of the accounts of a state trust institution.
118-9 (2) "Bank" means:
118-10 (A) a state bank chartered under Chapter 32,
118-11 Finance Code, or the laws of another state;
118-12 (B) a national bank chartered under federal law;
118-13 or
118-14 (C) a foreign bank that is organized under the
118-15 laws of a territory of the United States, Puerto Rico, Guam,
118-16 American Samoa, or the Virgin Islands, and that has its deposits
118-17 insured by the Federal Deposit Insurance Corporation.
118-18 (3) "Branch" has the meaning assigned by Section
118-19 31.002(a), Finance Code.
118-20 (4) "Credit union" means a credit union chartered
118-21 under Chapter 122, Finance Code, the laws of another state, or
118-22 federal law.
118-23 (5) "De novo trust office" means a trust office
118-24 located in a host state that:
118-25 (A) is originally established by a trust company
118-26 as a trust office; and
118-27 (B) does not become a trust office of the trust
119-1 company as a result of an acquisition or conversion of another
119-2 trust institution.
119-3 (6) "Foreign bank" has the meaning assigned by Section
119-4 1(b)(7), federal International Banking Act of 1978 (12 U.S.C.
119-5 3101(7)), as amended.
119-6 (7) "Home state" means:
119-7 (A) with respect to a federally chartered trust
119-8 institution or a foreign bank, the state in which the institution
119-9 maintains its principal office; and
119-10 (B) with respect to another trust institution,
119-11 the state which chartered the institution.
119-12 (8) "Home state regulator" means the supervisory
119-13 agency with primary responsibility for chartering and supervising a
119-14 trust company.
119-15 (9) "Host state" means a state, other than the home
119-16 state of a trust company, or a foreign country in which the trust
119-17 company maintains or seeks to acquire or establish an office.
119-18 (10) "Office" means, with respect to a trust company,
119-19 the principal office, a trust office, or a representative trust
119-20 office.
119-21 (11) "Out-of-state trust company" means a trust
119-22 company:
119-23 (A) whose home state is another state; or
119-24 (B) that is chartered under the laws of a
119-25 foreign country.
119-26 (12) "Principal office" means:
119-27 (A) with respect to a state trust company, its
120-1 home office as defined by Section 1.002(a); and
120-2 (B) with respect to a bank, savings bank,
120-3 savings association, foreign bank, or out-of-state trust company,
120-4 its main office or principal place of business in the United
120-5 States.
120-6 (13) "Representative trust office" means an office at
120-7 which a trust company has been authorized by the banking
120-8 commissioner to engage in activities other than acting as a
120-9 fiduciary as provided by Subchapter C.
120-10 (14) "Savings association" means a savings and loan
120-11 association chartered under Chapter 62, Finance Code, the laws of
120-12 another state, or federal law.
120-13 (15) "Savings bank" means a savings bank chartered
120-14 under Chapter 92, Finance Code, the laws of another state, or
120-15 federal law.
120-16 (16) "State" means any state of the United States, the
120-17 District of Columbia, any territory of the United States, Puerto
120-18 Rico, Guam, American Samoa, the Trust Territory of the Pacific
120-19 Islands, the Virgin Islands, and the Northern Mariana Islands.
120-20 (17) "State trust institution" means a trust
120-21 institution whose home state is this state.
120-22 (18) "Supervisory agency" means:
120-23 (A) an agency of another state or a foreign
120-24 country with primary responsibility for chartering and supervising
120-25 a trust institution; and
120-26 (B) with respect to a federally chartered trust
120-27 institution or foreign bank, the Office of the Comptroller of the
121-1 Currency, the Federal Deposit Insurance Corporation, the Board of
121-2 Governors of the Federal Reserve System, the Office of Thrift
121-3 Supervision, or the National Credit Union Administration, as
121-4 applicable.
121-5 (19) "Trust company" means a state trust company or a
121-6 company chartered under the laws of another state or a foreign
121-7 country to conduct a trust business that is not a bank, credit
121-8 union, savings association, savings bank, or foreign bank.
121-9 (20) "Trust institution" means a bank, credit union,
121-10 foreign bank, savings association, savings bank, or trust company
121-11 that is authorized by its charter to conduct a trust business.
121-12 (21) "Trust office" means an office, other than the
121-13 principal office, at which a trust company is licensed by the
121-14 banking commissioner to conduct a trust business.
121-15 (b) The definitions provided by Section 1.002(a) of this Act
121-16 apply to this chapter to the extent not inconsistent with this
121-17 chapter.
121-18 (c) The definitions shall be liberally construed to
121-19 accomplish the purposes of this chapter.
121-20 (d) The finance commission by rule may adopt other
121-21 definitions to accomplish the purposes of this chapter.
121-22 Sec. 9.002. COMPANIES AUTHORIZED TO CONDUCT A TRUST
121-23 BUSINESS. (a) A company may not conduct a trust business in this
121-24 state unless the company is a trust institution and is:
121-25 (1) a state trust company chartered pursuant to this
121-26 Act;
121-27 (2) a bank, savings association, savings bank, or
122-1 credit union that maintains its principal office or a branch in
122-2 this state in accordance with governing law, or another office in
122-3 this state with the power to conduct a trust business to the extent
122-4 permitted by rule;
122-5 (3) a trust company chartered under the laws of
122-6 another state or a foreign country that has a trust office in this
122-7 state licensed by the banking commissioner pursuant to this
122-8 chapter; or
122-9 (4) a foreign bank with an office in this state that
122-10 is authorized to act as a fiduciary pursuant to Section 204.106,
122-11 Finance Code.
122-12 (b) Notwithstanding Subsection (a), a trust institution that
122-13 does not maintain a principal office, branch, or trust office in
122-14 this state may act as a fiduciary in this state to the extent
122-15 permitted by Section 105A, Probate Code.
122-16 (c) A company does not engage in the trust business in this
122-17 state in a manner requiring a charter or license under this Act by
122-18 engaging in an activity identified in Section 3.022 of this Act,
122-19 except that the registration requirements of Section 9.202 of this
122-20 Act may apply to a trust representative office engaging in the
122-21 activity.
122-22 Sec. 9.003. INTERSTATE TRUST BUSINESS OF STATE TRUST
122-23 COMPANY. Subject to the approval of the banking commissioner
122-24 pursuant to Section 3.203 of this Act, a state trust company may
122-25 engage in the trust business in another state or a foreign country
122-26 at a trust office or a trust representative office to the extent
122-27 permitted by and subject to applicable laws of the state or foreign
123-1 country.
123-2 Sec. 9.004. TRUST BUSINESS OF OUT-OF-STATE TRUST COMPANY.
123-3 (a) An out-of-state trust company that establishes or maintains an
123-4 office in this state under this chapter may conduct any activity at
123-5 the office that would be authorized under the laws of this state
123-6 for a state trust company to conduct at the office.
123-7 (b) Before establishing an office in this state, an
123-8 out-of-state trust company must comply with Section 201.102,
123-9 Finance Code.
123-10 Sec. 9.005. DESIGNATION OF TRUSTEE AND GOVERNING LAW. (a)
123-11 Unless another law restricts the designation of trustee, a person
123-12 residing in this state may designate a trust institution to act as
123-13 a fiduciary on behalf of the person.
123-14 (b) Unless another law specifies governing law and except as
123-15 provided in Subsection (c), if a trust or its subject matter bears
123-16 a reasonable relation to this state and also to another state or a
123-17 foreign country, a trust institution and its affected client may
123-18 agree that the law of this state or of the other state or country
123-19 governs their rights and duties, including the law of a state or a
123-20 foreign country where the affected client resides or where the
123-21 trust institution has its principal office.
123-22 (c) Notwithstanding Subsection (b), a trust institution is
123-23 subject to Sections 113.052 and 113.053, Property Code, with
123-24 respect to a trust if the trust is established by a client that
123-25 resides in this state and is solicited from or accepted by an
123-26 office of the trust institution in this state.
123-27 Sec. 9.006. TAXATION. An out-of-state trust institution
124-1 doing business in this state is subject to the franchise tax to the
124-2 extent provided by Chapter 171, Tax Code.
124-3 Sec. 9.007. SEVERABILITY. The provisions of this chapter or
124-4 applications of those provisions are severable as provided by
124-5 Section 312.013(c), Government Code.
124-6 SUBCHAPTER B. OUT-OF-STATE TRUST COMPANY TRUST OFFICE
124-7 Sec. 9.101. TRUST OFFICES IN THIS STATE. An out-of-state
124-8 trust company may engage in a trust business at an office in this
124-9 state only if it establishes and maintains a trust office in this
124-10 state as permitted by this subchapter.
124-11 Sec. 9.102. ESTABLISHING AN INTERSTATE TRUST OFFICE. (a)
124-12 An out-of-state trust company that does not operate a trust office
124-13 in this state may not establish and maintain a de novo trust office
124-14 in this state unless:
124-15 (1) a state trust company would be permitted to
124-16 establish a de novo trust office in the home state or foreign
124-17 country of the out-of-state trust company; and
124-18 (2) a bank whose home state is this state would be
124-19 permitted to establish a de novo branch in the home state or
124-20 foreign country of the out-of-state trust company.
124-21 (b) Subject to Subsection (a), a de novo trust office may be
124-22 established in this state under this section through the
124-23 acquisition of a trust office in this state of an existing trust
124-24 institution.
124-25 Sec. 9.103. ACQUIRING AN INTERSTATE TRUST OFFICE. (a) An
124-26 out-of-state trust company that does not operate a trust office in
124-27 this state and that meets the requirements of this subchapter may
125-1 acquire an existing trust institution in this state and after the
125-2 acquisition operate and maintain the acquired institution as a
125-3 trust office in this state, subject to Subchapter A, Chapter 4 of
125-4 this Act, or Subchapter A, Chapter 33, Finance Code, if applicable.
125-5 If the institution to be acquired is a bank or a state savings
125-6 bank, Section 203.005, Finance Code, applies to the transaction.
125-7 (b) An out-of-state trust institution that does not operate
125-8 a trust office in this state may not establish and maintain a trust
125-9 office in this state through the acquisition of a trust office of
125-10 an existing trust institution except as provided by Section 9.102
125-11 of this Act. This section does not affect or prohibit a trust
125-12 institution, other entity, or person from chartering a state trust
125-13 company pursuant to Section 3.001 of this Act.
125-14 Sec. 9.104. REQUIREMENT OF NOTICE. An out-of-state trust
125-15 company desiring to establish and maintain a de novo trust office
125-16 or acquire an existing trust institution in this state and to
125-17 operate and maintain the acquired institution as a trust office
125-18 pursuant to this subchapter shall provide written notice of the
125-19 proposed transaction to the banking commissioner on or after the
125-20 date on which the out-of-state trust company applies to the home
125-21 state regulator for approval to establish and maintain or acquire
125-22 the trust office. The filing of the notice shall be preceded or
125-23 accompanied by a copy of the resolution adopted by the board
125-24 authorizing the additional office and the filing fee, if any,
125-25 prescribed by law. The written notice must contain sufficient
125-26 information to enable an informed decision under Section 9.105 of
125-27 this Act.
126-1 Sec. 9.105. CONDITIONS FOR APPROVAL. (a) A trust office of
126-2 an out-of-state trust company may be acquired or established in
126-3 this state under this subchapter if:
126-4 (1) the out-of-state trust company confirms in writing
126-5 to the banking commissioner that while it maintains a trust office
126-6 in this state, it will comply with all applicable laws of this
126-7 state;
126-8 (2) the out-of-state trust company provides
126-9 satisfactory evidence to the banking commissioner of compliance
126-10 with Section 201.102, Finance Code, and the applicable requirements
126-11 of its home state regulator for acquiring or establishing and
126-12 maintaining the office;
126-13 (3) all filing fees have been paid as required by law;
126-14 and
126-15 (4) the banking commissioner finds that:
126-16 (A) applicable conditions of Section 9.102 or
126-17 9.103 of this Act have been met; and
126-18 (B) if a state bank is being acquired, the
126-19 applicable requirements of Subchapter A, Chapter 33, and Section
126-20 203.005, Finance Code, have been met, or if a state trust company
126-21 is being acquired, the applicable requirements of Subchapter A,
126-22 Chapter 4 of this Act have been met; and
126-23 (C) any conditions imposed by the banking
126-24 commissioner pursuant to Subsection (b) have been satisfied.
126-25 (b) The banking commissioner may condition approval of a
126-26 trust office on compliance by the out-of-state trust company with
126-27 any requirement applicable to formation of a state trust company
127-1 pursuant to Sections 3.003(b) and 3.007 of this Act.
127-2 (c) If all requirements of Subsection (a) have been met, the
127-3 out-of-state trust company may commence business at the trust
127-4 office on the 61st day after the date the banking commissioner
127-5 notifies the company that the notice required by Section 9.104 of
127-6 this Act has been accepted for filing, unless the banking
127-7 commissioner specifies an earlier or later date.
127-8 (d) The 60-day period of review may be extended by the
127-9 banking commissioner on a determination that the written notice
127-10 raises issues that require additional information or additional
127-11 time for analysis. If the period of review is extended, the
127-12 out-of-state trust company may establish the office only on prior
127-13 written approval by the banking commissioner.
127-14 (e) If all requirements of Subsection (a) have been met, the
127-15 banking commissioner may otherwise deny approval of the office if
127-16 the banking commissioner finds that the out-of-state trust company
127-17 lacks sufficient financial resources to undertake the proposed
127-18 expansion without adversely affecting its safety or soundness or
127-19 that the proposed office is contrary to the public interest. In
127-20 acting on the notice, the banking commissioner shall consider the
127-21 views of the appropriate supervisory agencies.
127-22 Sec. 9.106. ADDITIONAL TRUST OFFICES. An out-of-state trust
127-23 company that maintains a trust office in this state under this
127-24 subchapter may establish or acquire additional trust offices or
127-25 representative trust offices in this state to the same extent that
127-26 a state trust company may establish or acquire additional offices
127-27 in this state pursuant to the procedures for establishing or
128-1 acquiring the offices set forth in Section 3.203 of this Act.
128-2 SUBCHAPTER C. OUT-OF-STATE TRUST INSTITUTION
128-3 REPRESENTATIVE TRUST OFFICE
128-4 Sec. 9.201. REPRESENTATIVE TRUST OFFICE BUSINESS. (a) An
128-5 out-of-state trust institution may establish a representative trust
128-6 office as permitted by this subchapter to:
128-7 (1) solicit, but not accept, fiduciary appointments;
128-8 (2) act as a fiduciary in this state to the extent
128-9 permitted for a foreign corporate fiduciary by Section 105A,
128-10 Probate Code;
128-11 (3) perform ministerial duties with respect to
128-12 existing clients and accounts of the trust institution;
128-13 (4) engage in an activity permitted by Section 3.022
128-14 of this Act; and
128-15 (5) the extent not acting as a fiduciary:
128-16 (A) receive for safekeeping personal property of
128-17 every description;
128-18 (B) act as assignee, bailee, conservator,
128-19 custodian, escrow agent, registrar, receiver, or transfer agent;
128-20 and
128-21 (C) act as financial advisor, investment advisor
128-22 or manager, agent, or attorney-in-fact in any agreed capacity.
128-23 (b) Except as provided by Subsection (a), a trust
128-24 representative office may not act as a fiduciary or otherwise
128-25 engage in the trust business in this state.
128-26 (c) Subject to the requirements of this subchapter, an
128-27 out-of-state trust institution may establish and maintain
129-1 representative trust offices anywhere in this state.
129-2 Sec. 9.202. REGISTRATION OF REPRESENTATIVE TRUST OFFICE.
129-3 (a) Except as provided by Subsection (e) with respect to a credit
129-4 union, a savings association, or a savings bank, an out-of-state
129-5 trust institution that does not maintain a branch or trust office
129-6 in this state and that desires to establish or acquire and maintain
129-7 a representative trust office shall:
129-8 (1) file a notice on a form prescribed by the banking
129-9 commissioner, setting forth:
129-10 (A) the name of the out-of-state trust
129-11 institution;
129-12 (B) the location of the proposed office; and
129-13 (C) satisfactory evidence that the notificant is
129-14 a trust institution;
129-15 (2) pay the filing fee, if any, prescribed by law; and
129-16 (3) submit a copy of the resolution adopted by the
129-17 board authorizing the representative trust office and a copy of the
129-18 trust institution's registration filed with the secretary of state
129-19 pursuant to Section 201.102, Finance Code.
129-20 (b) The notificant may commence business at the
129-21 representative trust office on the 31st day after the date the
129-22 banking commissioner receives the notice unless the banking
129-23 commissioner specifies an earlier or later date.
129-24 (c) The 30-day period of review may be extended by the
129-25 banking commissioner on a determination that the written notice
129-26 raises issues that require additional information or additional
129-27 time for analysis. If the period of review is extended, the
130-1 out-of-state trust institution may establish the representative
130-2 trust office only on prior written approval by the banking
130-3 commissioner.
130-4 (d) The banking commissioner may deny approval of the
130-5 representative trust office if the banking commissioner finds that
130-6 the notificant lacks sufficient financial resources to undertake
130-7 the proposed expansion without adversely affecting its safety or
130-8 soundness or that the proposed office would be contrary to the
130-9 public interests. In acting on the notice, the banking commissioner
130-10 shall consider the views of the appropriate supervisory agencies.
130-11 (e) A credit union, savings association, or savings bank
130-12 that does not maintain a branch in this state and desires to
130-13 establish or acquire and maintain a representative trust office
130-14 shall comply with this section, except that the notice required by
130-15 Subsection (a) must be filed with, and the duties and
130-16 responsibilities of the banking commissioner under Subsections
130-17 (b)-(d) shall be performed by:
130-18 (1) the Texas credit union commissioner, with respect
130-19 to a credit union; or
130-20 (2) the Texas savings and loan commissioner, with
130-21 respect to a savings association or savings bank.
130-22 (f) An out-of-state trust institution that fails to register
130-23 as required by this section is subject to Subchapter C, Chapter 6
130-24 of this Act.
130-25 SUBCHAPTER D. SUPERVISION OF OUT-OF-STATE TRUST COMPANY
130-26 Sec. 9.301. COOPERATIVE AGREEMENTS; FEES. (a) To carry out
130-27 the purposes of this Act, the banking commissioner may:
131-1 (1) enter into cooperative, coordinating, or
131-2 information sharing agreements with another supervisory agency or
131-3 an organization affiliated with or representing one or more
131-4 supervisory agencies;
131-5 (2) with respect to periodic examination or other
131-6 supervision or investigation, accept reports of examination or
131-7 investigation by, and reports submitted to, another supervisory
131-8 agency in lieu of conducting examinations or investigations or
131-9 receiving reports as might otherwise be required or permissible
131-10 under this Act;
131-11 (3) enter into contracts with another supervisory
131-12 agency having concurrent regulatory or supervisory jurisdiction to
131-13 engage the services of the agency for reasonable compensation to
131-14 assist in connection with the banking commissioner's performance of
131-15 official duties under this Act or other law, or to provide services
131-16 to the agency for reasonable compensation in connection with the
131-17 agency's performance of official duties under law, except that
131-18 Chapter 2254, Government Code, does not apply to such contracts;
131-19 (4) enter into joint examinations or joint enforcement
131-20 actions with another supervisory agency having concurrent
131-21 regulatory or supervisory jurisdiction, except that the banking
131-22 commissioner may independently take action under Section 9.305 of
131-23 this Act if the banking commissioner determines that the action is
131-24 necessary to carry out the banking commissioner's responsibilities
131-25 under this Act or to enforce compliance with the laws of this
131-26 state; and
131-27 (5) assess supervisory and examination fees to be paid
132-1 by an out-of-state trust company that maintains one or more offices
132-2 in this state in connection with the banking commissioner's
132-3 performance of duties under this Act.
132-4 (b) Supervisory or examination fees assessed by the banking
132-5 commissioner in accordance with this Act may be shared with another
132-6 supervisory agency or an organization affiliated with or
132-7 representing one or more supervisory agencies in accordance with an
132-8 agreement between the banking commissioner and the agency or
132-9 organization. The banking commissioner may also receive a portion
132-10 of supervisory or examination fees assessed by another supervisory
132-11 agency in accordance with an agreement between the banking
132-12 commissioner and the agency.
132-13 Sec. 9.302. EXAMINATIONS; PERIODIC REPORTS. (a) To the
132-14 extent consistent with Section 9.301 of this Act, the banking
132-15 commissioner may make examinations of a trust office or trust
132-16 representative office established and maintained in this state by
132-17 an out-of-state trust company pursuant to this chapter as the
132-18 banking commissioner considers necessary to determine whether the
132-19 office is being operated in compliance with the laws of this state
132-20 and in accordance with safe and sound fiduciary practices. The
132-21 provisions of Section 2.002 of this Act apply to the examinations.
132-22 (b) The finance commission may by rule prescribe
132-23 requirements for periodic reports regarding a trust office or trust
132-24 representative office in this state. The required reports must be
132-25 provided by the trust institution maintaining the office.
132-26 Reporting requirements under this subsection must be appropriate
132-27 for the purpose of enabling the banking commissioner to discharge
133-1 the responsibilities of the banking commissioner under this
133-2 chapter.
133-3 Sec. 9.303. INTERPRETIVE STATEMENTS AND OPINIONS. (a)
133-4 Subject to Subsection (b), to encourage the effective coordination
133-5 and implementation of home state laws and host state laws with
133-6 respect to interstate trust business, the banking commissioner,
133-7 directly or through the deputy banking commissioner or a department
133-8 attorney in the manner provided by Sections 2.001 and 2.0011 of
133-9 this Act, and with the effect provided by Section 2.0012 of this
133-10 Act, may issue:
133-11 (1) an interpretive statement for the general guidance
133-12 of trust institutions in this state and the general public; or
133-13 (2) an opinion interpreting or determining the
133-14 applicability of laws of this state to the trust business and the
133-15 operation of a branch, trust office, or another office in this
133-16 state of an out-of-state trust institution, or in other states by
133-17 state trust companies.
133-18 (b) With respect to the trust business of a credit union,
133-19 savings association, or savings bank, the duties and
133-20 responsibilities of the banking commissioner under Subsection (a)
133-21 shall be performed by:
133-22 (1) the Texas credit union commissioner, with respect
133-23 to a credit union; or
133-24 (2) the Texas savings and loan commissioner, with
133-25 respect to a savings association or savings bank.
133-26 Sec. 9.304. CONFIDENTIAL INFORMATION. Information obtained
133-27 directly or indirectly by the banking commissioner relative to the
134-1 financial condition or business affairs of a trust institution,
134-2 other than the public portions of a report of condition or income
134-3 statement, or a present, former, or prospective shareholder,
134-4 participant, officer, director, manager, affiliate, or service
134-5 provider of the trust institution, whether obtained through
134-6 application, examination, or otherwise, and each related file or
134-7 record of the department is confidential and may not be disclosed
134-8 by the banking commissioner or an employee of the department except
134-9 as expressly provided by Subchapter B, Chapter 2 of this Act.
134-10 Sec. 9.305. ENFORCEMENT; APPEALS. (a) If the banking
134-11 commissioner determines that an out-of-state trust company has
134-12 violated this Act or other applicable law of this state, the
134-13 banking commissioner may take all enforcement actions the banking
134-14 commissioner would be empowered to take if the out-of-state trust
134-15 company were a state trust company, except that the banking
134-16 commissioner shall promptly give notice to the home state regulator
134-17 of each enforcement action to be taken against an out-of-state
134-18 trust company and, to the extent practicable, shall consult and
134-19 cooperate with the home state regulator in pursuing and resolving
134-20 the enforcement action. An out-of-state trust company may appeal a
134-21 final order or other decision of the banking commissioner under
134-22 this Act as provided by Section 3.010 of this Act.
134-23 (b) Notwithstanding Subsection (a) of this section, the
134-24 banking commissioner may enforce this Act against a trust
134-25 institution by appropriate action in the courts, including an
134-26 action for injunctive relief, if the banking commissioner concludes
134-27 the action is necessary or desirable.
135-1 Sec. 9.306. NOTICE OF SUBSEQUENT EVENT. Each out-of-state
135-2 trust company that has established and maintains an office in this
135-3 state pursuant to this Act shall give written notice, at least 30
135-4 days before the effective date of the event, or, in the case of an
135-5 emergency transaction, a shorter period before the effective date
135-6 consistent with applicable state or federal law, to the banking
135-7 commissioner of:
135-8 (1) a merger or other transaction that would cause a
135-9 change of control with respect to the trust company, with the
135-10 result that an application would be required to be filed with the
135-11 home state regulator or a federal supervisory agency;
135-12 (2) a transfer of all or substantially all of the
135-13 trust accounts or trust assets of the out-of-state trust company to
135-14 another person; or
135-15 (3) the closing or disposition of an office in this
135-16 state.
135-17 ARTICLE 4. CONFORMING AMENDMENTS TO TRUST LAW
135-18 SECTION 4.001. Sections 1.002(a)(11), (46), and (52)-(54),
135-19 Texas Trust Company Act (Article 342a-1.001 et seq., Vernon's Texas
135-20 Civil Statutes), are amended to read as follows:
135-21 (11) "Company" means a [includes a bank, trust
135-22 company,] corporation, partnership, association, business trust,
135-23 [or] another trust, or a similar organization, including a trust
135-24 institution.
135-25 (46) "State trust company" or "trust company" means a
135-26 trust association or limited trust association organized or
135-27 reorganized under this Act, including an association organized
136-1 under the laws of this state before September 1, 1997. If the
136-2 context or circumstances require, the term includes a trust company
136-3 organized under the laws of another state that lawfully maintains a
136-4 trust office in this state in accordance with Chapter 9 of this
136-5 Act.
136-6 (52) "Unauthorized trust activity" means an act or
136-7 practice within this state by a company [person] without a charter,
136-8 license, permit, registration, or other authority issued or granted
136-9 by the banking commissioner or other appropriate regulatory
136-10 authority for which such a charter, license, permit, registration,
136-11 or other authority is required to conduct trust business.
136-12 (53) "Trust institution" means a bank, credit union,
136-13 foreign bank, savings association, savings bank, or trust company
136-14 that is authorized by its charter to conduct a trust business.
136-15 (54) "Undivided profits" means the part of equity
136-16 capital of a state trust company equal to the balance of its net
136-17 profits, income, gains, and losses since the date of its formation
136-18 minus subsequent distributions to shareholders or participants and
136-19 transfers to surplus or capital under share dividends or
136-20 appropriate board resolutions. The term includes amounts allocated
136-21 to undivided profits as a result of a merger.
136-22 (55) [(54)] "Voting security" means a share,
136-23 participation share, or other evidence of proprietary interest in a
136-24 state trust company or other company that has as an attribute the
136-25 right to vote or participate in the election of the board of the
136-26 trust company or other company, regardless of whether the right is
136-27 limited to the election of fewer than all of the board members.
137-1 The term includes a security that is convertible or exchangeable
137-2 into a voting security and a nonvoting participation share of a
137-3 managing participant.
137-4 SECTION 4.002. Section 1.003(a), Texas Trust Company Act
137-5 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
137-6 amended to read as follows:
137-7 (a) The finance commission may adopt rules to accomplish the
137-8 purposes of this Act, including rules necessary or reasonable to:
137-9 (1) implement and clarify this Act;
137-10 (2) preserve or protect the safety and soundness of
137-11 state trust companies;
137-12 (3) grant the same rights and privileges to state
137-13 trust companies with respect to the exercise of fiduciary powers
137-14 that are or may be granted to a trust institution that maintains
137-15 its principal office or a branch or trust office [state or national
137-16 bank that is domiciled] in this state [and exercising fiduciary
137-17 powers];
137-18 (4) provide for recovery of the cost of maintenance
137-19 and operation of the department and the cost of enforcing this Act
137-20 through the imposition and collection of ratable and equitable fees
137-21 for notices, applications, and examinations; and
137-22 (5) facilitate the fair hearing and adjudication of
137-23 matters before the banking commissioner and the finance commission.
137-24 SECTION 4.003. Section 2.001, Texas Trust Company Act
137-25 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
137-26 amended to read as follows:
137-27 Sec. 2.001. ISSUANCE OF INTERPRETIVE STATEMENTS [AND
138-1 OPINIONS]. (a) The banking commissioner may issue interpretive
138-2 statements containing matters of general policy for the guidance of
138-3 the general public and state trust companies, and[. The banking
138-4 commissioner shall file the statements for publication in the Texas
138-5 Register. The banking commissioner] may amend or repeal a
138-6 published interpretive statement by issuing an amended statement or
138-7 notice of repeal of a statement [and filing the statement or notice
138-8 for publication in the Texas Register. The secretary of state
138-9 shall publish the filed statements and notices in the Texas
138-10 Register and in a designated chapter of the Texas Administrative
138-11 Code].
138-12 (b) An interpretive statement may be disseminated by
138-13 newsletter, via an electronic medium such as the internet, in a
138-14 volume of statutes or related materials published by the banking
138-15 commissioner or others, or by other means reasonably calculated to
138-16 notify persons affected by the interpretive statement. Notice of
138-17 an amended or withdrawn statement must be published in a
138-18 substantially similar manner as the affected statement was
138-19 originally published.
138-20 Sec. 2.0011. ISSUANCE OF OPINION. (a) In response to a
138-21 specific request from a member of the public or industry, the [The]
138-22 banking commissioner may issue an opinion [in response to a
138-23 specific request from a member of the public or the state trust
138-24 company industry] directly or through the deputy banking
138-25 commissioner or the department's attorneys.
138-26 (b) If the banking commissioner determines that the opinion
138-27 is useful for the general guidance of trust companies and the
139-1 general public, the banking commissioner may disseminate [file] the
139-2 opinion by newsletter, via an electronic medium such as the
139-3 internet, in a volume of statutes or related materials published by
139-4 the banking commissioner or others, or by other means reasonably
139-5 calculated to notify persons affected by the opinion [for
139-6 publication in the Texas Register]. A published opinion must be
139-7 redacted to preserve [in a manner that preserves] the
139-8 confidentiality of the requesting party, unless the requesting
139-9 party consents to be identified in the published opinion.
139-10 (c) The banking commissioner may amend or repeal a published
139-11 opinion by issuing an amended opinion or notice of repeal of an
139-12 opinion and disseminating [filing] the opinion or notice in a
139-13 substantially similar manner as the affected statement or opinion
139-14 was originally published. The [for publication in the Texas
139-15 Register, except that the] requesting party, however, may rely on
139-16 the original opinion if:
139-17 (1) all material facts were originally disclosed to
139-18 the banking commissioner;
139-19 (2) the[, considerations of] safety and soundness of
139-20 the affected trust company will not be affected by [companies are
139-21 not implicated with respect to] further [and prospective] reliance
139-22 on the original opinion; [,] and
139-23 (3) the text and interpretation of relevant governing
139-24 provisions of this Act have not been changed by legislative or
139-25 judicial action. [The secretary of state shall publish the filed
139-26 opinions and notices in the Texas Register and a designated chapter
139-27 of the Texas Administrative Code.]
140-1 Sec. 2.0012. EFFECT OF INTERPRETIVE STATEMENT OR OPINION.
140-2 [(c)] An interpretive statement or opinion issued under this
140-3 section does not have the force of law and is not a rule for the
140-4 purposes of Chapter 2001, Government Code, unless adopted by the
140-5 finance commission as provided by Chapter 2001, Government Code.
140-6 An interpretive statement or opinion is an administrative
140-7 construction of this Act entitled to great weight if the
140-8 construction is reasonable and does not conflict with this Act.
140-9 SECTION 4.004. Section 3.001(a), Texas Trust Company Act
140-10 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
140-11 amended to read as follows:
140-12 (a) Subject to the other provisions of this chapter, one or
140-13 more persons may organize and charter a state trust company as a
140-14 state trust association or a limited trust association. A state
140-15 trust company may engage in the trust business by [perform any act
140-16 as a fiduciary that a state bank or national bank exclusively
140-17 exercising trust powers may perform under the laws of this state,
140-18 including]:
140-19 (1) acting as trustee under a written agreement;
140-20 (2) receiving money and other property in its capacity
140-21 as trustee for investment in real or personal property;
140-22 (3) acting as trustee and performing the fiduciary
140-23 duties committed or transferred to it by order of a court of
140-24 competent jurisdiction;
140-25 (4) acting as executor, administrator, or trustee of
140-26 the estate of a deceased person;
140-27 (5) acting as a custodian, guardian, conservator, or
141-1 trustee for a minor or incapacitated person;
141-2 (6) acting as a successor fiduciary to a trust
141-3 [depository] institution or other fiduciary;
141-4 (7) receiving for safekeeping personal property;
141-5 (8) acting as custodian, assignee, transfer agent,
141-6 escrow agent, registrar, or receiver;
141-7 (9) acting as investment advisor, agent, or attorney
141-8 in fact according to an applicable agreement;
141-9 (10) exercising additional powers expressly conferred
141-10 by rule of the finance commission; and
141-11 (11) exercising any incidental power that is
141-12 reasonably necessary to enable it to fully exercise the powers
141-13 expressly conferred according to commonly accepted fiduciary
141-14 customs and usages.
141-15 SECTION 4.005. Section 3.005(e), Texas Trust Company Act
141-16 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
141-17 amended to read as follows:
141-18 (e) Chapter 2001, Government Code, does not apply to a
141-19 charter application filed for the purpose of assuming all or any
141-20 portion of the assets, liabilities, and accounts of a trust [any
141-21 depository] institution [or state trust company] considered by the
141-22 banking commissioner to be in hazardous condition.
141-23 SECTION 4.006. Section 3.022, Texas Trust Company Act
141-24 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
141-25 amended to read as follows:
141-26 Sec. 3.022. ACTIVITIES NOT REQUIRING CHARTER. Subject to
141-27 Subchapter C, Chapter 9 of this Act, a [A] company does not engage
142-1 in the trust business in a manner requiring a state charter by:
142-2 (1) acting in a manner authorized by law and in the
142-3 scope of authority as an agent of a trust institution [state trust
142-4 company];
142-5 (2) rendering a service customarily performed as an
142-6 attorney in a manner approved and authorized by the Supreme Court
142-7 of Texas or State Bar of Texas;
142-8 (3) acting as trustee under a deed of trust made only
142-9 as security for the payment of money or for the performance of
142-10 another act;
142-11 (4) conducting [a trust] business as a trust
142-12 institution [under a charter that authorizes the exercise of trust
142-13 powers as a depository institution,] if the exercise of fiduciary
142-14 [trust] powers in this state by the trust [depository] institution
142-15 is not otherwise prohibited by law;
142-16 (5) engaging in a business regulated by the Office of
142-17 Consumer Credit Commissioner, except as limited by rules adopted by
142-18 the finance commission;
142-19 (6) receiving and distributing rents and proceeds of
142-20 sale as a licensed real estate broker on behalf of a principal in a
142-21 manner authorized by the Texas Real Estate Commission;
142-22 (7) engaging in a securities transaction or providing
142-23 an investment advisory service as a licensed and registered dealer,
142-24 salesman, or advisor to the extent that the activity is regulated
142-25 by the State Securities Board or the Securities and Exchange
142-26 Commission;
142-27 (8) engaging in the sale and administration of an
143-1 insurance product by an insurance company or agent licensed by the
143-2 Texas Department of Insurance to the extent that the activity is
143-3 regulated by the Texas Department of Insurance;
143-4 (9) engaging in the lawful sale of prepaid funeral
143-5 benefits under a permit issued by the banking commissioner under
143-6 Chapter 154, Finance Code [512, Acts of the 54th Legislature,
143-7 Regular Session, 1955 (Article 548b, Vernon's Texas Civil
143-8 Statutes)];
143-9 (10) engaging in the lawful business of a perpetual
143-10 care cemetery corporation under Chapter 712, Health and Safety
143-11 Code;
143-12 (11) engaging as a principal or agent in the lawful
143-13 sale of checks under a license issued by the banking commissioner
143-14 under The Sale of Checks Act, Chapter 152, Finance Code [(Article
143-15 489d, Vernon's Texas Civil Statutes)];
143-16 (12) acting as trustee under a voting trust as
143-17 provided by Article 2.30, Texas Business Corporation Act;
143-18 (13) acting as trustee by a public, private, or
143-19 independent institution of higher education or a university system,
143-20 as defined by Section 61.003, Education Code, including an
143-21 affiliated foundation or corporation of such an institution or
143-22 system acting as trustee as provided by the Education Code;
143-23 (14) engaging in another activity expressly excluded
143-24 from the application of this Act by rule of the finance commission;
143-25 (15) rendering services customarily performed by a
143-26 certified accountant in a manner authorized by the Texas State
143-27 Board of Public Accountancy;
144-1 (16) serving as trustee of a charitable trust as
144-2 provided by Article 2.31, Texas Non-Profit Corporation Act (Article
144-3 1396-2.31, Vernon's Texas Civil Statutes);
144-4 (17) performing escrow or settlement services if
144-5 licensed under Chapter 9, Insurance Code; [or]
144-6 (18) acting as a qualified intermediary in a tax
144-7 deferred exchange under 26 U.S.C. Section 1031 and applicable
144-8 regulations; or
144-9 (19) providing permitted services at a trust
144-10 representative office established in this state pursuant to
144-11 Subchapter C, Chapter 9 of this Act.
144-12 SECTION 4.007. Section 3.203(a), Texas Trust Company Act
144-13 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
144-14 amended to read as follows:
144-15 (a) A state trust company may establish and maintain
144-16 additional offices [anywhere in this state] by filing a written
144-17 notice with the banking commissioner setting forth the name of the
144-18 state trust company, the street address of the proposed additional
144-19 office, a description of the activities proposed to be conducted at
144-20 the additional office, and a copy of the resolution adopted by the
144-21 board authorizing the additional office.
144-22 SECTION 4.008. Section 3.302(c), Texas Trust Company Act
144-23 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
144-24 amended to read as follows:
144-25 (c) The banking commissioner may approve the merger if:
144-26 (1) each resulting state trust company will be solvent
144-27 and have adequate capitalization for its business and location;
145-1 (2) each resulting state trust company has in all
145-2 respects complied with the statutes and rules relating to the
145-3 organization of a state trust company;
145-4 (3) all obligations and liabilities of each trust
145-5 company that is a party to the merger have been properly discharged
145-6 or otherwise lawfully assumed or retained by a trust institution
145-7 [company] or other fiduciary;
145-8 (4) each surviving, new, or acquiring person that is
145-9 not authorized to engage in the trust business will not engage in
145-10 the trust business and has in all respects complied with the laws
145-11 of this state; and
145-12 (5) all conditions imposed by the banking commissioner
145-13 have been satisfied or otherwise resolved.
145-14 SECTION 4.009. Section 3.401, Texas Trust Company Act
145-15 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
145-16 amended to read as follows:
145-17 Sec. 3.401. AUTHORITY TO PURCHASE ASSETS OF ANOTHER TRUST
145-18 INSTITUTION [COMPANY]. (a) A state trust company, with the prior
145-19 written approval of the banking commissioner, may purchase all or
145-20 substantially all of the assets of another trust [regulated
145-21 financial] institution, including the right to control accounts
145-22 established with the trust institution [state trust company].
145-23 Except as otherwise expressly provided by this section or another
145-24 statute, the purchase of all or part of the assets of the trust
145-25 institution does not make the purchasing state trust company
145-26 responsible for any liability or obligation of the selling trust
145-27 institution that the purchasing state trust company does not
146-1 expressly assume. Except as otherwise provided by this Act, this
146-2 subchapter does not govern or prohibit the purchase by a state
146-3 trust company of all or part of the assets of a corporation or
146-4 other entity that is not a trust institution [state trust company].
146-5 (b) To make a purchase under this section, an application in
146-6 the form required by the banking commissioner must be filed with
146-7 the banking commissioner. The banking commissioner shall
146-8 investigate the condition of the purchaser and seller and may
146-9 require the submission of additional information as considered
146-10 necessary to make an informed decision. The banking commissioner
146-11 shall approve the purchase if:
146-12 (1) the acquiring state trust company will be solvent
146-13 and have sufficient capitalization for its business and location;
146-14 (2) the acquiring state trust company has complied
146-15 with all applicable statutes and rules;
146-16 (3) all obligations and liabilities of each trust
146-17 institution [company] that is a party to the purchase or sale of
146-18 assets have been properly discharged or otherwise lawfully assumed
146-19 or retained by a trust institution [company] or other fiduciary;
146-20 (4) all conditions imposed by the banking commissioner
146-21 have been satisfied or otherwise resolved; and
146-22 (5) all fees and costs have been paid.
146-23 (c) A purchase is effective on the date of approval unless
146-24 the purchase agreement provides for and the banking commissioner
146-25 consents to a different effective date.
146-26 (d) The acquiring state trust company shall succeed by
146-27 operation of law to all of the rights, privileges, and obligations
147-1 of the selling trust institution under each account included in the
147-2 assets acquired.
147-3 SECTION 4.010. Section 3.405, Texas Trust Company Act
147-4 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
147-5 amended by adding Subsection (e) to read as follows:
147-6 (e) The acquiring trust institution shall succeed by
147-7 operation of law to all of the rights, privileges, and obligations
147-8 of the selling state trust company under each account included in
147-9 the assets acquired.
147-10 SECTION 4.011. Subchapter F, Chapter 3, Texas Trust Company
147-11 Act (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
147-12 amended to read as follows:
147-13 SUBCHAPTER F. [STATE TRUST REGULATORY SYSTEM:]
147-14 EXIT OF STATE TRUST COMPANY OR
147-15 ENTRY OF ANOTHER TRUST INSTITUTION
147-16 Sec. 3.501. MERGER[, REORGANIZATION,] OR CONVERSION OF STATE
147-17 TRUST COMPANY INTO ANOTHER TRUST INSTITUTION [NATIONAL BANK]
147-18 EXERCISING FIDUCIARY POWERS. (a) Subject to Chapter 9 of this
147-19 Act, a [A] state trust company may act as necessary and to the
147-20 extent permitted by [under] the laws of the United States, [or]
147-21 this state, another state, or another country to merge[,
147-22 reorganize,] or convert into another form of trust institution [a
147-23 national bank exercising fiduciary powers].
147-24 (b) The merger [, reorganization,] or conversion must be
147-25 made and approval of the state trust company's board, shareholders,
147-26 or participants must be obtained in accordance with the Texas
147-27 Business Corporation Act as if the state trust company were a
148-1 domestic corporation and all other parties to the transaction, if
148-2 any, were foreign corporations or other entities, except as may be
148-3 otherwise provided by rules. For purposes of this subsection, a
148-4 conversion is considered a merger into the successor trust
148-5 institution [national bank exercising fiduciary powers].
148-6 (c) The state trust company does not cease to be a state
148-7 trust company subject to the supervision of the banking
148-8 commissioner unless:
148-9 (1) the banking commissioner has been given written
148-10 notice of the intention to merge[, reorganize,] or convert before
148-11 the 31st day before the date of the proposed transaction;
148-12 (2) the state trust company has published notice of
148-13 the transaction, in the form and frequency specified by the banking
148-14 commissioner, in a newspaper of general circulation published in
148-15 the county of its home office or, if such a newspaper is not
148-16 published in the county, in an adjacent county and in other
148-17 locations that the banking commissioner considers appropriate;
148-18 (3) the state trust company has filed with the banking
148-19 commissioner:
148-20 (A) a copy of the application filed with the
148-21 successor regulatory authority, including a copy of each contract
148-22 evidencing or implementing the merger[, reorganization,] or
148-23 conversion, or other documents sufficient to show compliance with
148-24 applicable law;
148-25 (B) a certified copy of all minutes of board
148-26 meetings and shareholder or participant meetings at which action
148-27 was taken regarding the merger[, reorganization,] or conversion;
149-1 and
149-2 (C) a publisher's certificate showing
149-3 publication of the required notice;
149-4 (4) the banking commissioner determines that:
149-5 (A) all accounts and liabilities of the state
149-6 trust company are fully discharged, assumed, or otherwise retained
149-7 by the successor trust institution [national bank exercising
149-8 fiduciary powers];
149-9 (B) any conditions imposed by the banking
149-10 commissioner for the protection of clients and creditors have been
149-11 met or otherwise resolved; and
149-12 (C) any required filing fees have been paid; and
149-13 (5) the state trust company has received a certificate
149-14 of authority to do business as the successor trust institution [a
149-15 national bank exercising fiduciary powers].
149-16 Sec. 3.502. CONVERSION OF TRUST INSTITUTION INTO STATE TRUST
149-17 COMPANY. (a) A trust institution may apply to the banking
149-18 commissioner for conversion into a state trust company on a form
149-19 prescribed by the banking commissioner and accompanied by any
149-20 required fee if the trust institution follows the procedures
149-21 prescribed by the laws of the United States, this state, another
149-22 state, or another country governing the exit of the trust
149-23 institution for the purpose of conversion into a state trust
149-24 company from the regulatory system applicable before the
149-25 conversion. A trust association or limited trust association may
149-26 convert its organizational form under this section.
149-27 (b) A trust institution applying to convert into a state
150-1 trust company may receive a certificate of authority to do business
150-2 as a state trust company if the banking commissioner finds that:
150-3 (1) the trust institution is not engaging in a pattern
150-4 or practice of unsafe and unsound fiduciary or banking practices;
150-5 (2) the trust institution has adequate capitalization
150-6 for a state trust company to act as a fiduciary at the same
150-7 locations as the trust institution is acting as a fiduciary before
150-8 the conversion;
150-9 (3) the trust institution can be expected to operate
150-10 profitably after the conversion;
150-11 (4) the officers and directors of the trust
150-12 institution as a group have sufficient banking experience, ability,
150-13 standing, competence, trustworthiness, and integrity to justify a
150-14 belief that the trust institution will operate as a state trust
150-15 company in compliance with law; and
150-16 (5) each principal shareholder has sufficient
150-17 experience, ability, standing, competence, trustworthiness, and
150-18 integrity to justify a belief that the trust institution will be
150-19 free from improper or unlawful influence or interference with
150-20 respect to the trust institution's operation as a state trust
150-21 company in compliance with law.
150-22 (c) The banking commissioner may:
150-23 (1) request additional information considered
150-24 necessary to an informed decision under this section;
150-25 (2) perform an examination of the converting trust
150-26 institution at the expense of the converting trust institution; and
150-27 (3) require that examination fees be paid before a
151-1 certificate of authority is issued.
151-2 (d) In connection with the application, the converting trust
151-3 institution must:
151-4 (1) submit a statement of the law governing the exit
151-5 of the trust institution from the regulatory system applicable
151-6 before the conversion and the terms of the transition into a state
151-7 trust company; and
151-8 (2) demonstrate that all applicable law has been fully
151-9 satisfied.
151-10 SECTION 4.012. Section 6.003(a), Texas Trust Company Act
151-11 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
151-12 amended to read as follows:
151-13 (a) The banking commissioner has grounds to remove a present
151-14 or former officer, director, manager, managing participant, or
151-15 employee of a state trust company from office or employment in, or
151-16 prohibit a controlling shareholder or participant or other person
151-17 [participating in the affairs of the state trust company] from
151-18 further participation in the affairs of, the state trust company[,
151-19 state bank, or other entity chartered or licensed by the banking
151-20 commissioner under the laws of this state,] if the banking
151-21 commissioner determines from examination or other credible evidence
151-22 that:
151-23 (1) the person committed, participated, or acted, in
151-24 other than an inadvertent or unintentional manner, as described by
151-25 Section 6.002(a) of this Act with regard to the affairs of the
151-26 state trust company, or violated a final cease and desist order
151-27 issued in response to the same or a similar act;
152-1 (2) because of this action by the person:
152-2 (A) the state trust company has suffered or will
152-3 probably suffer financial loss or other damage;
152-4 (B) the interests of the trust company's clients
152-5 have been or could be prejudiced; or
152-6 (C) the person has received financial gain or
152-7 other benefit by reason of the violation; and
152-8 (3) this action by the person:
152-9 (A) involves personal dishonesty on the part of
152-10 the person; or
152-11 (B) demonstrates wilful or continuing disregard
152-12 for the safety or soundness of the state trust company.
152-13 SECTION 4.013. Section 6.007(a), Texas Trust Company Act
152-14 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
152-15 amended to read as follows:
152-16 (a) Without the prior written approval of the banking
152-17 commissioner, a person subject to a final and enforceable removal
152-18 or prohibition order issued by the banking commissioner:
152-19 (1) may not serve as a director, officer, or employee
152-20 of a [any] state trust company, state bank, or other entity
152-21 chartered or licensed by the banking commissioner under the laws of
152-22 this state while the order is in effect, including an interstate
152-23 branch, trust office, or representative office in this state of an
152-24 out-of-state state bank, trust company, or foreign bank;
152-25 (2) may not directly or indirectly participate in any
152-26 manner in the management of such an entity;
152-27 (3) may not directly or indirectly vote for a director
153-1 of such an entity;
153-2 (4) may not solicit, procure, transfer, attempt to
153-3 transfer, vote, or attempt to vote a proxy, consent, or
153-4 authorization with respect to voting rights in such an entity; and
153-5 (5) remains entitled to receive dividends or a share
153-6 of profits, return of contribution, or other distributive benefit
153-7 from such an entity with respect to voting securities in the entity
153-8 owned by the person.
153-9 SECTION 4.014. Section 6.202(b), Texas Trust Company Act
153-10 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
153-11 amended to read as follows:
153-12 (b) This section does not apply to:
153-13 (1) a trust institution [state or national bank, a
153-14 state or federal savings bank, a state or federal savings
153-15 association, a state or federal credit union, or a depository or
153-16 trust company institution] authorized under this Act to conduct a
153-17 trust business in this state; and
153-18 (2) another entity organized under the laws of this
153-19 state, another state, the United States, or a foreign sovereign
153-20 state to the extent that:
153-21 (A) the entity is authorized under its charter
153-22 or the laws of this state or the United States to use a term, word,
153-23 character, ideogram, phonogram, or phrase prohibited by Subsection
153-24 (a) of this section; and
153-25 (B) the entity is authorized by the laws of this
153-26 state or the United States to conduct the activities in which the
153-27 entity is engaged in this state.
154-1 SECTION 4.015. Section 7.101(b), Texas Trust Company Act
154-2 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
154-3 amended to read as follows:
154-4 (b) Unless the banking commissioner directs or consents
154-5 otherwise, the home office and all additional trust [branch]
154-6 offices of the state trust company shall remain open for business
154-7 during normal business hours until the last date specified in
154-8 published notices for presentation of claims, withdrawal of
154-9 accounts, and redemption of property.
154-10 SECTION 4.016. Section 7.102(c), Texas Trust Company Act
154-11 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
154-12 amended to read as follows:
154-13 (c) The state trust company shall publish notice in a
154-14 newspaper of general circulation in each community where its home
154-15 office or an additional trust office [a branch] is located at least
154-16 once each week for eight consecutive weeks or at other times
154-17 specified by the banking commissioner or rules adopted under this
154-18 Act. The notice must state that the state trust company is
154-19 liquidating, that clients, depositors, and creditors must present
154-20 their claims for payment on or before a specific date, and that all
154-21 safe deposit box holders and bailors of property left with the
154-22 state trust company should remove their property on or before a
154-23 specified date. The dates selected by the state trust company must
154-24 be approved by the banking commissioner and must allow the affairs
154-25 of the state trust company to be wound up as quickly as feasible
154-26 and allow creditors, clients, and owners of property adequate time
154-27 for presentation of claims, withdrawal of accounts, and redemption
155-1 of property. The banking commissioner may adjust the dates with or
155-2 without republication of notice if additional time appears needed
155-3 for these activities.
155-4 SECTION 4.017. Section 7.105(d), Texas Trust Company Act
155-5 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
155-6 amended to read as follows:
155-7 (d) After distribution of all remaining assets, the state
155-8 trust company shall:
155-9 (1) file with the department, under the oath or
155-10 affirmation of a majority of its board or managing participants,
155-11 another affidavit accompanied by schedules showing the distribution
155-12 to each shareholder, participant, or participant-transferee; and
155-13 (2) tender to the department:
155-14 (A) all copies of reports of examination of the
155-15 state trust company in its possession; and
155-16 (B) its original charter, or an affidavit
155-17 stating that the original charter is lost, and any [branch]
155-18 certificates of authority for additional trust offices.
155-19 SECTION 4.018. Section 7.205(a), Texas Trust Company Act
155-20 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
155-21 amended to read as follows:
155-22 (a) As soon as reasonably practicable after initiation of
155-23 the receivership proceeding, the receiver shall publish notice, in
155-24 a newspaper of general circulation in each community where the
155-25 state trust company's home office or any additional trust office is
155-26 [and a branch are] located. The notice must state that the state
155-27 trust company has been closed for liquidation, that clients and
156-1 creditors must present their claims for payment on or before a
156-2 specific date, and that all safe deposit box holders and bailors of
156-3 property left with the state trust company should remove their
156-4 property not later than a specified date. The receiver shall
156-5 select the dates to allow the affairs of the state trust company to
156-6 be wound up as quickly as feasible while allowing creditors,
156-7 clients, and owners of property adequate time for presentation of
156-8 claims, withdrawal of accounts, and redemption of property, but may
156-9 not select a date before the 121st day after the date of the
156-10 notice. The receiver may adjust the dates with the approval of the
156-11 court with or without republication of notice if additional time
156-12 appears needed for these activities.
156-13 SECTION 4.019. Section 8.002, Texas Trust Company Act
156-14 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
156-15 amended to read as follows:
156-16 Sec. 8.002. ATTACHMENT, INJUNCTION, OR EXECUTION. [(a)] An
156-17 attachment, injunction, or execution for the purpose of collecting
156-18 a money judgment or securing a prospective money judgment against a
156-19 trust institution, including a state trust company or a trust
156-20 institution organized under the laws of another state that lawfully
156-21 maintains an office in this state, or against a client of or client
156-22 account in the trust institution, is governed by Sections 59.007
156-23 and 59.008, Finance Code [may not be issued against a state trust
156-24 company located in this state before the judgment is final and all
156-25 appeals have been exhausted or foreclosed by law.]
156-26 [(b) This section does not affect an attachment, injunction,
156-27 execution, or writ of garnishment issued to or served on a state
157-1 trust company for the purpose of collecting a money judgment or
157-2 securing a prospective money judgment against a client of or client
157-3 account in the state trust company].
157-4 SECTION 4.020. Section 8.004, Texas Trust Company Act
157-5 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
157-6 amended to read as follows:
157-7 Sec. 8.004. AUTHORITY TO ACT AS NOTARY PUBLIC. A notary
157-8 public is not disqualified from taking an acknowledgement or proof
157-9 of a written instrument as provided by Section 406.016, Government
157-10 Code, solely because of the person's ownership of stock or
157-11 participation interest in or employment by a [state] trust
157-12 institution [company] that is an interested party in the underlying
157-13 transaction, including a state trust company or a trust institution
157-14 organized under the laws of another state that lawfully maintains
157-15 an office in this state.
157-16 SECTION 4.021. Section 8.005(a), Texas Trust Company Act
157-17 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
157-18 amended to read as follows:
157-19 (a) An officer, director, manager, managing participant, or
157-20 employee of a [state] trust institution [company] with fewer than
157-21 500 shareholders or participants, including a state trust company
157-22 or a trust institution organized under the laws of another state
157-23 that lawfully maintains an office in this state, or a holding
157-24 company with fewer than 500 shareholders or participants that
157-25 controls a [state] trust institution, [company] is exempt from the
157-26 registration and licensing provisions of The Securities Act
157-27 (Article 581-1 et seq., Vernon's Texas Civil Statutes) with respect
158-1 to that person's participation in a sale or other transaction
158-2 involving securities issued by the [state] trust institution
158-3 [company] or the holding company of which that person is an
158-4 officer, director, manager, managing participant, or employee.
158-5 SECTION 4.022. Section 8.006, Texas Trust Company Act
158-6 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
158-7 amended to read as follows:
158-8 Sec. 8.006. SUCCESSION OF TRUST POWERS. (a) If, [a
158-9 reorganizing or selling state trust company] at the time of a
158-10 merger, reorganization, conversion, [or] sale of substantially all
158-11 of its assets under Chapter 3 or Chapter 9 of this Act or other
158-12 applicable law, or sale of substantially all of its trust accounts
158-13 and related activities at a separate branch or trust office, a
158-14 reorganizing or selling trust institution is acting as trustee,
158-15 guardian, executor, or administrator, or in another fiduciary
158-16 capacity, a [the] successor or purchasing trust institution with
158-17 sufficient fiduciary authority may [entity with fiduciary powers
158-18 may, without the necessity of judicial action or action by the
158-19 creator of the trust,] continue the office, trust, or fiduciary
158-20 relationship:
158-21 (1) without the necessity of judicial action or action
158-22 by the creator of the office, trust, or fiduciary relationship; and
158-23 (2) without regard to whether the successor or
158-24 purchasing trust institution meets qualification requirements
158-25 specified in an instrument creating the office, trust, or fiduciary
158-26 relationship other than a requirement related to geographic locale
158-27 of account administration, including requirements as to
159-1 jurisdiction of incorporation, location of principal office, or
159-2 type of financial institution.
159-3 (b) The successor or purchasing trust institution [entity]
159-4 may perform all the duties and exercise all the powers connected
159-5 with or incidental to the fiduciary relationship in the same manner
159-6 as if the successor or purchasing trust institution [entity] had
159-7 been originally designated as the fiduciary.
159-8 SECTION 4.023. Section 8.007, Texas Trust Company Act
159-9 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
159-10 amended to read as follows:
159-11 Sec. 8.007. DISCOVERY OF CLIENT RECORDS. Civil discovery of
159-12 a client record maintained by a trust institution, including a
159-13 state trust company or a trust institution organized under the laws
159-14 of another state that lawfully maintains an office in this state,
159-15 is governed by Section 59.006, Finance Code [30.007, Civil Practice
159-16 and Remedies Code, as added by Chapter 914, Acts of the 74th
159-17 Legislature, Regular Session, 1995].
159-18 SECTION 4.024. Section 8.008, Texas Trust Company Act
159-19 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
159-20 amended to read as follows:
159-21 Sec. 8.008. COMPLIANCE REVIEW COMMITTEE. A trust company
159-22 may establish a compliance review committee as provided by Section
159-23 59.009, Finance Code [(a) In this section:]
159-24 [(1) "Civil action" means a civil proceeding pending
159-25 in a court or other adjudicatory tribunal with jurisdiction to
159-26 issue a request or subpoena for records, including an alternative
159-27 dispute resolution mechanism, voluntary or required, under which a
160-1 party may compel the production of records. The term does not
160-2 include an examination or enforcement proceeding initiated by the
160-3 Federal Deposit Insurance Corporation or its successor and the
160-4 board of governors of the Federal Reserve System or its successor,
160-5 in exercise of their jurisdiction.]
160-6 [(2) "Compliance review document" means a document
160-7 prepared for or created by a compliance review committee.]
160-8 [(b) A state trust company or an affiliate of a state trust
160-9 company, including its holding company, may establish a compliance
160-10 review committee to test, review, or evaluate the institution's
160-11 conduct, transactions, or potential transactions for the purpose of
160-12 monitoring and improving or enforcing compliance with:]
160-13 [(1) a statutory or regulatory requirement;]
160-14 [(2) financial reporting to a governmental agency;]
160-15 [(3) the policies and procedures of the state trust
160-16 company or its affiliates; or]
160-17 [(4) safe, sound, and fair lending practices.]
160-18 [(c) Except as provided by Subsection (d) of this section:]
160-19 [(1) a compliance review document is confidential and
160-20 is not discoverable or admissible in evidence in a civil action;]
160-21 [(2) an individual serving on a compliance review
160-22 committee or acting under the direction of a compliance review
160-23 committee may not be required to testify in a civil action as to
160-24 the contents or conclusions of a compliance review document or as
160-25 to an action taken or discussions conducted by or for a compliance
160-26 review committee; and]
160-27 [(3) a compliance review document or an action taken
161-1 or discussion conducted by or for a compliance review committee
161-2 that is disclosed to a governmental agency remains confidential and
161-3 is not discoverable or admissible in a civil action.]
161-4 [(d) Subsection (c)(2) of this section does not apply to an
161-5 individual that has management responsibility for the operations,
161-6 records, employees, or activities being examined or evaluated by
161-7 the compliance review committee.]
161-8 [(e) This section does not limit the discovery or
161-9 admissibility in a civil action of a document that is not a
161-10 compliance review document].
161-11 SECTION 4.025. Section 8.009, Texas Trust Company Act
161-12 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
161-13 amended to read as follows:
161-14 Sec. 8.009. PARITY. (a) A state trust company has the same
161-15 rights and privileges with respect to the exercise of fiduciary
161-16 powers that are or may be granted to a trust institution [state or
161-17 national bank] that maintains its principal office or a branch or
161-18 trust office [is domiciled] in this state, except that this section
161-19 may not be used by a state trust company to:
161-20 (1) diminish its otherwise applicable fiduciary duties
161-21 to a client under the laws of this state; or
161-22 (2) avoid otherwise applicable consumer protection
161-23 laws of this state [and exercising fiduciary powers].
161-24 (b) A state trust company that intends to exercise a right
161-25 or privilege with respect to the exercise of fiduciary powers
161-26 granted to a trust [regulated financial] institution described in
161-27 Subsection (a) of this section that is not authorized for state
162-1 trust companies under the statutes and rules of this state shall
162-2 submit a letter to the banking commissioner, describing in detail
162-3 the activity in which the state trust company intends to engage and
162-4 the specific authority for the trust [regulated financial]
162-5 institution described in Subsection (a) to undertake the proposed
162-6 activity and shall attach copies, if available, of relevant state
162-7 and federal law, including regulations and interpretive letters.
162-8 The state trust company may begin to perform the proposed activity
162-9 after the 30th day after the date the banking commissioner receives
162-10 the state trust company's letter unless the banking commissioner
162-11 specifies an earlier or later date or prohibits the activity. The
162-12 banking commissioner may prohibit the state trust company from
162-13 performing the activity only if the banking commissioner finds
162-14 that:
162-15 (1) a trust [regulated financial] institution
162-16 described in Subsection (a) of this section [that is domiciled in
162-17 this state] does not possess the specific right or privilege to
162-18 perform the activity the state trust company seeks to perform; or
162-19 (2) the performance of the activity by the state trust
162-20 company would adversely affect the safety and soundness of the
162-21 requesting state trust company.
162-22 (c) The banking commissioner may extend the 30-day period
162-23 under Subsection (b) of this section if the banking commissioner
162-24 determines that the state trust company's letter raises issues
162-25 requiring additional information or additional time for analysis.
162-26 If the 30-day period is extended, the state trust company may
162-27 perform the proposed activity only on prior written approval by the
163-1 banking commissioner, except that the banking commissioner must
163-2 approve or prohibit the proposed activity or convene a hearing
163-3 under Section 3.009 of this Act not later than the 60th day after
163-4 the date the commissioner receives the state trust company's
163-5 letter. If a hearing is covened under Section 3.009 of this Act,
163-6 the banking commissioner must approve or prohibit the proposed
163-7 activity not later than the 30th day after the date the hearing is
163-8 completed.
163-9 (d) A state trust company that is denied the requested right
163-10 or privilege to engage in an activity by the banking commissioner
163-11 under this section may appeal as provided by Section 3.010 of this
163-12 Act or may resubmit a letter under this subsection with additional
163-13 information or authority relevant to the banking commissioner's
163-14 determination. A denial is immediately final for purposes of
163-15 appeal.
163-16 (e) The finance commission may adopt rules implementing the
163-17 method or manner in which a state trust company exercises specific
163-18 rights and privileges, including rules regarding the exercise of
163-19 rights and privileges that would be prohibited to state trust
163-20 companies under state law except as provided by this section. The
163-21 finance commission may not adopt rules under this subsection unless
163-22 it finds that:
163-23 (1) trust [regulated financial] institutions described
163-24 in Subsection (a) [of this section that are domiciled in this
163-25 state] possess the rights or privileges to perform activities the
163-26 rules would permit state trust companies to perform; and
163-27 (2) if the rights and privileges would be prohibited
164-1 to state trust companies under other state law, the rules contain
164-2 adequate safeguards and controls, consistent with safety and
164-3 soundness, to address the concern of the legislature evidenced by
164-4 the state law the rules would impact.
164-5 (f) The exercise of rights and privileges by a state trust
164-6 company in compliance with and in the manner authorized by this
164-7 section is not a violation of any statute of this state.
164-8 SECTION 4.026. Section 115.002, Property Code, is amended to
164-9 read as follows:
164-10 Sec. 115.002. VENUE. (a) The venue of an action under
164-11 Section 115.001 of this Act is determined according to this
164-12 section.
164-13 (b) If there is a single, noncorporate trustee, an action
164-14 shall be brought [venue is] in the county in which:
164-15 (1) the trustee resides or has resided at any time
164-16 during the four-year period preceding the date the action is filed;
164-17 or
164-18 (2) the situs of administration of the trust is
164-19 maintained or has been maintained at any time during the four-year
164-20 period preceding the date the action is filed [the trustee's
164-21 residence is located].
164-22 (c) If there are multiple trustees or a corporate [any]
164-23 trustee, an action shall be brought [is a corporation, venue is] in
164-24 the county in which the situs of administration of the trust is
164-25 maintained or has been maintained at any time during the four-year
164-26 period preceding the date the action is filed, provided that an
164-27 action against a corporate trustee as defendant may be brought in
165-1 the county in which the corporate trustee maintains its principal
165-2 office in this state [the corporation's principal office is
165-3 located, or, if two or more corporations are trustees of the trust,
165-4 venue is in the county in which the principal office of any of the
165-5 corporations is located].
165-6 (d) For just and reasonable cause, including the location of
165-7 the records and the convenience of the parties and witnesses, the
165-8 court may transfer an action from a county of proper venue under
165-9 this section to another county of proper venue:
165-10 (1) on motion of a defendant or joined party, filed
165-11 concurrently with or before the filing of the answer or other
165-12 initial responsive pleading, and served in accordance with law; or
165-13 (2) on motion of an intervening party, filed not later
165-14 than the 20th day after the court signs the order allowing the
165-15 intervention, and served in accordance with law.
165-16 (e) Notwithstanding any other provision of this section, on
165-17 agreement by all parties the court may transfer an action from a
165-18 county of proper venue under this section to any other county.
165-19 (f) For the purposes of this section:
165-20 (1) "Corporate trustee" means an entity organized as a
165-21 financial institution or a corporation with the authority to act in
165-22 a fiduciary capacity.
165-23 (2) "Principal office" means an office of a corporate
165-24 trustee in this state where the decision makers for the corporate
165-25 trustee within this state conduct the daily affairs of the
165-26 corporate trustee. The mere presence of an agent or representative
165-27 of the corporate trustee does not establish a principal office.
166-1 The principal office of the corporate trustee may also be but is
166-2 not necessarily the same as the situs of administration of the
166-3 trust.
166-4 (3) "Situs of administration" means the location in
166-5 this state where the trustee maintains the office that is primarily
166-6 responsible for dealing with the settlor and beneficiaries of the
166-7 trust. The situs of administration may also be but is not
166-8 necessarily the same as the principal office of a corporate trustee
166-9 [If there are two or more trustees, none of which is a corporation,
166-10 venue is in the county in which the principal office of the trust
166-11 is maintained].
166-12 ARTICLE 5. PUBLIC DEPOSITS
166-13 SECTION 5.001. Section 4.102, Business & Commerce Code, is
166-14 amended by adding Subsection (c) to read as follows:
166-15 (c) Notwithstanding Section 1.105, the laws of this state
166-16 govern a deposit contract between a bank and a consumer account
166-17 holder if the branch or separate office of the bank that accepts
166-18 the deposit contract is located in this state. For purposes of
166-19 this subsection, "consumer account holder" means a natural person
166-20 who holds a deposit account primarily for personal, family, or
166-21 household purposes but does not include a natural person who holds
166-22 an account for another in a professional capacity.
166-23 SECTION 5.002. Section 45.201(2), Education Code, is amended
166-24 to read as follows:
166-25 (2) "Bank" means a [state bank authorized and
166-26 regulated under the laws of this state pertaining to banking, in
166-27 particular The Texas Banking Code (Article 342-101 et seq.,
167-1 Vernon's Texas Civil Statutes), a national] bank, a savings and
167-2 loan association, or a savings bank [authorized and regulated by
167-3 federal law, or a savings and loan association or savings bank]
167-4 organized under the laws of this state, another state, or federal
167-5 law that has its main office or a branch office in this state. The
167-6 term does not include any bank the deposits of which are not
167-7 insured by the Federal Deposit Insurance Corporation.
167-8 SECTION 5.003. Section 404.023, Government Code, is amended
167-9 to read as follows:
167-10 Sec. 404.023. DESIGNATION. The comptroller shall designate
167-11 one or more state depository banks that have main offices or
167-12 branches in centrally located cities in this state to be used for
167-13 clearing checks and other obligations due the state.
167-14 SECTION 5.004. Section 404.024(g), Government Code, is
167-15 amended to read as follows:
167-16 (g) To the extent practicable, the comptroller shall give
167-17 first consideration to [Texas] banks that maintain main offices or
167-18 branch offices in this state when investing in direct security
167-19 repurchase agreements.
167-20 SECTION 5.005. Section 404.031(f), Government Code, is
167-21 amended to read as follows:
167-22 (f) Instead of depositing pledged securities with the
167-23 comptroller, a state depository may deposit pledged securities with
167-24 a [the] Federal Reserve Bank [of Dallas] or a [the] Federal Home
167-25 Loan Bank [of Dallas]. The securities shall be held by the bank to
167-26 secure funds deposited by the comptroller in the state depository
167-27 pledging the securities. When the pledged securities are
168-1 deposited, the bank may apply book entry to the securities. The
168-2 records of the bank shall at all times reflect the name of the
168-3 state depository depositing the pledged securities, and the bank
168-4 shall issue an advice of transaction to the comptroller and the
168-5 state depository pledging the securities.
168-6 SECTION 5.006. Section 2257.024(a), Government Code, is
168-7 amended to read as follows:
168-8 (a) A public entity may contract with a bank that has its
168-9 main office or a branch office [domiciled] in this state to secure
168-10 a deposit of public funds.
168-11 SECTION 5.007. Section 2257.041(d), Government Code, is
168-12 amended to read as follows:
168-13 (d) A custodian must be approved by the public entity and
168-14 be:
168-15 (1) a state or national bank that:
168-16 (A) is designated by the comptroller as a state
168-17 depository;
168-18 (B) has its main office or a branch office [is
168-19 domiciled] in this state; and
168-20 (C) has a capital stock and permanent surplus of
168-21 $5 million or more;
168-22 (2) the Texas Treasury Safekeeping Trust Company;
168-23 (3) a Federal Reserve Bank or a branch of a Federal
168-24 Reserve Bank; or
168-25 (4) a federal home loan bank.
168-26 SECTION 5.008. Sections 105.001(1), (12), and (13), Local
168-27 Government Code, are amended to read as follows:
169-1 (1) "Bank" means a state bank or a national bank that
169-2 has its main office or a branch office [domiciled] in this state.
169-3 (12) "Savings association" means a [state] savings
169-4 association or savings bank organized under the laws of this state,
169-5 another state, or federal law that has its main office or a branch
169-6 office [or a federal savings association domiciled] in this state.
169-7 (13) "State bank" means a bank organized under the
169-8 laws of this state or another state [has the meaning assigned by
169-9 Section 1.002(a), Texas Banking Act].
169-10 SECTION 5.009. Section 116.001(1), Local Government Code,
169-11 is amended to read as follows:
169-12 (1) "Bank" means a:
169-13 (A) bank organized under the laws of this state,
169-14 another state, or federal law that has its main office or a branch
169-15 office in this state; or
169-16 (B) [banking corporation, association or an
169-17 individual banker,] savings and loan association or savings bank
169-18 organized under the laws of this state, another state, or [a
169-19 savings and loan association or savings bank organized under]
169-20 federal law that has its main office or a branch office in this
169-21 state.
169-22 SECTION 5.010. Section 131.001, Local Government Code, is
169-23 amended to read as follows:
169-24 Sec. 131.001. SPECIAL DEPOSITORY AUTHORIZED. If a financial
169-25 institution [bank] that is a depository under state law for the
169-26 public funds of a county, municipality, or district suspends
169-27 business or is taken charge of by a state or federal bank
170-1 regulatory agency [the banking commissioner of Texas or the federal
170-2 comptroller of the currency], the local government authority
170-3 authorized to select the original depository may select by contract
170-4 a special depository for the public funds in the suspended
170-5 financial institution [bank].
170-6 SECTION 5.011. Section 131.005(a), Local Government Code, is
170-7 amended to read as follows:
170-8 (a) The comptroller shall determine the amount of state
170-9 funds held by a county depository that suspends business or is
170-10 taken charge of by a state or federal bank regulatory agency [the
170-11 Banking Commissioner of Texas or the federal comptroller of the
170-12 currency]. The comptroller may:
170-13 (1) contract with a special depository selected by the
170-14 county authorities as provided by this subchapter for the custody
170-15 and payment of those funds; and
170-16 (2) approve a bond for the deposit contract.
170-17 SECTION 5.012. Section 131.901(a), Local Government Code, is
170-18 amended to read as follows:
170-19 (a) The governing body of a political subdivision, including
170-20 a county, municipality, school district, or other district, may not
170-21 designate a financial institution located outside the state as a
170-22 depository for funds under the governing body's jurisdiction. An
170-23 out-of-state financial institution is not considered to be located
170-24 outside this state to the extent the governing body designates a
170-25 branch office of such institution that is located in this state.
170-26 SECTION 5.013. Section 161.173(a), Natural Resources Code,
170-27 is amended to read as follows:
171-1 (a) Money in the fund that is not immediately committed to
171-2 paying principal of and interest on the bonds, to the purchase of
171-3 land, or to the payment of expenses as provided in this chapter may
171-4 be invested in:
171-5 (1) direct security repurchase agreements and reverse
171-6 security repurchase agreements made with state or national banks
171-7 that have main offices or branch offices [domiciled] in this state
171-8 or with primary dealers as approved by the Federal Reserve System;
171-9 (2) direct obligations of or obligations the principal
171-10 and interest of which are guaranteed by the United States;
171-11 (3) direct obligations of or obligations guaranteed by
171-12 the Federal Home Loan Banks, the Federal National Mortgage
171-13 Association, the Federal Farm Credit System, the Student Loan
171-14 Marketing Association, the Federal Home Loan Mortgage Corporation,
171-15 or a successor organization to one of those organizations;
171-16 (4) bankers' acceptances that:
171-17 (A) are eligible for purchase by members of the
171-18 Federal Reserve System;
171-19 (B) do not exceed 270 days to maturity; and
171-20 (C) are issued by a bank that has received the
171-21 highest short-term credit rating by a nationally recognized
171-22 investment rating firm;
171-23 (5) commercial paper that:
171-24 (A) does not exceed 270 days to maturity; and
171-25 (B) has received the highest short-term credit
171-26 rating by a nationally recognized investment rating firm;
171-27 (6) contracts written by the board in which the board
172-1 grants the purchaser the right to purchase securities in the
172-2 board's marketable securities portfolio at a specified price over a
172-3 specified period and for which the board is paid a fee and
172-4 specifically prohibits naked-option or uncovered option trading;
172-5 (7) obligations of a state or an agency, county, city,
172-6 or other political subdivision of a state and mutual funds composed
172-7 of these obligations;
172-8 (8) an investment instrument, obligation, or other
172-9 evidence of indebtedness the payment of which is directly or
172-10 indirectly guaranteed by the full faith and credit of the United
172-11 States;
172-12 (9) an investment, account, depository receipt, or
172-13 deposit that is fully:
172-14 (A) insured by the Federal Deposit Insurance
172-15 Corporation or its[, the Federal Savings and Loan Insurance
172-16 Corporation, or a] successor [organization to one of those
172-17 organizations]; or
172-18 (B) secured by securities described by
172-19 Subdivision (2), (3), or (8) of this subsection;
172-20 (10) a collateralized mortgage obligation fully
172-21 secured by securities or mortgages issued or guaranteed by the
172-22 Government National Mortgage Association (GNMA) or any entity
172-23 described by Subdivision (3) of this subsection;
172-24 (11) a security or evidence of indebtedness issued by
172-25 the Farm Credit System Financial Assistance Corporation, the
172-26 Private Export Funding Corporation, or the Export-Import Bank; and
172-27 (12) any other investment authorized for investment of
173-1 state funds by the comptroller under Section 404.024, Government
173-2 Code.
173-3 SECTION 5.014. Sections 223.010(b) and (d), Transportation
173-4 Code, are amended to read as follows:
173-5 (b) At the request of the contractor and with the approval
173-6 of the department and the comptroller, the amount retained may be
173-7 deposited under a trust agreement with a state or national bank
173-8 that has its main office or a branch office [domiciled] in this
173-9 state and is selected by the contractor.
173-10 (d) The bank, acting as escrow agent and by instructions
173-11 from the contractor, may reinvest the retained amount in a
173-12 certificate of deposit issued by a state or national bank that has
173-13 its main office or a branch office [domiciled] in this state, bank
173-14 time deposit, or other similar investment prescribed by the trust
173-15 agreement.
173-16 SECTION 5.015. Section 361.178, Transportation Code, is
173-17 amended to read as follows:
173-18 Sec. 361.178. FURNISHING OF INDEMNIFYING BONDS OR PLEDGE OF
173-19 SECURITIES. A bank or trust company that has its main office or a
173-20 branch office in [incorporated under the laws of] this state and
173-21 that acts as depository of the proceeds of bonds or of revenue may
173-22 furnish indemnifying bonds or pledge securities that the authority
173-23 requires.
173-24 ARTICLE 6. AMENDMENTS TO PROBATE CODE
173-25 SECTION 6.001. Section 3(d), Probate Code, is amended to
173-26 read as follows:
173-27 (d) "Corporate fiduciary" means a financial institution as
174-1 defined by Section 201.101, Finance Code, [trust company or bank]
174-2 having trust powers, existing or doing business under the laws of
174-3 this state, another state, or [of] the United States, which is
174-4 authorized by law to act under the order or appointment of any
174-5 court of record, without giving bond, as receiver, trustee,
174-6 executor, administrator, or, although without general depository
174-7 powers, depository for any moneys paid into court, or to become
174-8 sole guarantor or surety in or upon any bond required to be given
174-9 under the laws of this state.
174-10 SECTION 6.002. Section 105A, Probate Code, is amended to
174-11 read as follows:
174-12 Sec. 105A. APPOINTMENT AND SERVICE OF FOREIGN BANKS AND
174-13 TRUST COMPANIES IN FIDUCIARY CAPACITY. (a) A corporate fiduciary
174-14 that does not have its main office or a branch office in this
174-15 state, hereinafter called "foreign corporate fiduciaries" [Any bank
174-16 or trust company organized under the laws of, and having its
174-17 principal office in, the District of Columbia or any territory or
174-18 state of the United States of America, other than the State of
174-19 Texas, and any national bank having its principal office in the
174-20 District of Columbia or such territory or other state (all such
174-21 banks or trust companies being hereinafter sometimes called
174-22 "foreign banks or trust companies")], having the corporate power to
174-23 so act, may be appointed and may serve in the State of Texas as
174-24 trustee (whether of a personal or corporate trust), executor,
174-25 administrator, guardian of the estate, or in any other fiduciary
174-26 capacity, whether the appointment be by will, deed, agreement,
174-27 declaration, indenture, court order or decree, or otherwise, when
175-1 and to the extent that the home state of the corporate fiduciary
175-2 [District of Columbia or territory or other state in which such
175-3 foreign bank or trust company is organized and has its principal
175-4 office] grants authority to serve in like fiduciary capacity to a
175-5 corporate fiduciary whose home state is this state [bank or trust
175-6 company organized under the laws of, and having its principal
175-7 office in, the State of Texas, or to a national bank having its
175-8 principal office in the State of Texas].
175-9 (b) Before qualifying or serving in the State of Texas in
175-10 any fiduciary capacity, as aforesaid, such a foreign corporate
175-11 fiduciary [bank or trust company] shall file in the office of the
175-12 Secretary of the State of the State of Texas (1) a copy of its
175-13 charter, articles of incorporation or of association, and all
175-14 amendments thereto, certified by its secretary under its corporate
175-15 seal; (2) a duly executed instrument in writing, by its terms of
175-16 indefinite duration and irrevocable, appointing the Secretary of
175-17 State and his successors its agent for service of process upon whom
175-18 all notices and processes issued by any court of this state may be
175-19 served in any action or proceeding relating to any trust, estate,
175-20 fund or other matter within this state with respect to which such
175-21 foreign corporate fiduciary [bank or trust company] is acting in
175-22 any fiduciary capacity, including the acts or defaults of such
175-23 foreign corporate fiduciary [bank or trust company] with respect to
175-24 any such trust, estate or fund; and (3) a written certificate of
175-25 designation, which may be changed from time to time thereafter by
175-26 the filing of a new certificate of designation, specifying the name
175-27 and address of the officer, agent or other person to whom such
176-1 notice or process shall be forwarded by the Secretary of State.
176-2 Upon receipt of such notice or process, it shall be the duty of the
176-3 Secretary of State forthwith to forward same by registered or
176-4 certified mail to the officer, agent or other person so designated.
176-5 Service of notice or process upon the Secretary of State as agent
176-6 for such a foreign corporate fiduciary [bank or trust company]
176-7 shall in all ways and for all purposes have the same effect as if
176-8 personal service had been had within this state upon such foreign
176-9 corporate fiduciary [bank or trust company].
176-10 (c) [No foreign bank or trust company shall establish or
176-11 maintain any branch office, agency or other place of business
176-12 within this state, or shall in any way solicit, directly or
176-13 indirectly, any fiduciary business in this state of the types
176-14 embraced by subdivision (a) hereof. Except as authorized herein or
176-15 as may otherwise be authorized by the laws of this state, no
176-16 foreign bank or trust company shall act in a fiduciary capacity in
176-17 this state. Nothing in this Section shall be construed to authorize
176-18 foreign banks and trust companies to issue or to sell or otherwise
176-19 market or distribute in this state any investment certificates,
176-20 trust certificates, or other types of securities (including without
176-21 limiting the generality of the foregoing any securities of the
176-22 types authorized by Chapter 7 of the Insurance Code of 1951 prior
176-23 to the repeal thereof), or to conduct any activities or exercise
176-24 any powers of the type embraced and regulated by the Texas Banking
176-25 Act (Article 342-1.001 et seq., Vernon's Texas Civil Statutes) or
176-26 the Texas Trust Company Act other than those conducted and
176-27 exercised in a fiduciary capacity under the terms and conditions
177-1 hereof.]
177-2 [(d)] Any foreign corporate fiduciary [bank or trust
177-3 company] acting in a fiduciary capacity in this state in strict
177-4 accordance with the provisions of this Section shall not be deemed
177-5 to be doing business in the State of Texas within the meaning of
177-6 Article 8.01 of the Texas Business Corporation Act; and shall be
177-7 deemed qualified to serve in such capacity under the provisions of
177-8 Section 105 of this Code. [; and notwithstanding other law shall
177-9 not be prohibited from using in its name and stationery the terms
177-10 "bank," "trust," or "bank and trust."]
177-11 (d) [(e)] The provisions hereof are in addition to, and not
177-12 a limitation on, the provisions of Subtitle G, Finance Code, and
177-13 the Texas Trust Company Act (Article 342a-1.001 et seq., Vernon's
177-14 Texas Civil Statutes) [Section 2 of Chapter 388, Acts of the 55th
177-15 Legislature, Regular Session, 1957].
177-16 (e) [(f)] Any foreign corporate fiduciary [bank or trust
177-17 Company] which shall violate any provision of this Section 105a
177-18 shall be guilty of a misdemeanor and, upon conviction thereof,
177-19 shall be subject to a fine of not exceeding Five Thousand Dollars
177-20 ($5,000.00), and may, in the discretion of the court, be prohibited
177-21 from thereafter serving in this state in any fiduciary capacity.
177-22 SECTION 6.003. Subsection 5, Section 194, Probate Code, is
177-23 amended to read as follows:
177-24 5. Agreement as to Deposit of Assets. It shall be
177-25 lawful, and the court may require such action when deemed in the
177-26 best interest of an estate, for a personal representative to agree
177-27 with the surety or sureties, either corporate or personal, for the
178-1 deposit of any or all cash, and safekeeping of other assets of the
178-2 estate in a financial institution as defined by Section 201.101,
178-3 Finance Code, with its main office or a branch office in this state
178-4 [domestic state or national bank, trust company, savings and loan
178-5 association, or other domestic corporate depository, duly
178-6 incorporated] and qualified to act as a depository in this State
178-7 [such] under the laws of this State or of the United States, if
178-8 such deposit is otherwise proper, in such manner as to prevent the
178-9 withdrawal of such moneys or other assets without the written
178-10 consent of the surety, or an order of the court made on such notice
178-11 to the surety as the court shall direct. No such agreement shall in
178-12 any manner release from or change the liability of the principal or
178-13 sureties as established by the terms of the bond.
178-14 SECTION 6.004. Section 389(b), Probate Code, is amended to
178-15 read as follows:
178-16 (b) If, at any time, the guardian of the estate shall have
178-17 on hand money belonging to the ward beyond that which may be
178-18 necessary for the education and maintenance of such ward or wards,
178-19 he shall invest such money as follows:
178-20 (1) In bonds or other obligations of the United
178-21 States;
178-22 (2) In tax-supported bonds of the State of Texas;
178-23 (3) In tax-supported bonds of any county, district,
178-24 political subdivision, or incorporated city or town in the State of
178-25 Texas; provided, that the bonds of counties, districts,
178-26 subdivisions, cities, and towns may be purchased only subject to
178-27 the following restrictions: the net funded debt of said issuing
179-1 unit shall not exceed ten per cent of the assessed value of taxable
179-2 property therein, "net funded debt" meaning the total funded debt
179-3 less sinking funds on hand; and further, in the case of cities or
179-4 towns, less that part of the debt incurred for acquisition or
179-5 improvement of revenue-producing utilities, the revenues of which
179-6 are not pledged to support other obligations; provided, however,
179-7 that these restrictions shall not apply to bonds issued for road
179-8 purposes in this state under authority of Section 52 of Article III
179-9 of the Constitution of Texas, which bonds are supported by a tax
179-10 unlimited as to rate or amount;
179-11 (4) In shares or share accounts of any state savings
179-12 [building] and loan association or savings bank with its main
179-13 office or a branch office in [organized under the laws of] this
179-14 state, provided the payment of such shares or share accounts is
179-15 insured by the Federal Deposit [Savings & Loan] Insurance
179-16 Corporation;
179-17 (5) In the shares or share accounts of any federal
179-18 savings and loan association or savings bank with its main office
179-19 or a branch office [domiciled] in this state, where the payment of
179-20 such shares or share accounts is insured by the Federal Deposit
179-21 [Savings & Loan] Insurance Corporation;
179-22 (6) In collateral bonds of companies incorporated
179-23 under the laws of the State of Texas, having a paid-in capital of
179-24 One Million Dollars or more, when such bonds are a direct
179-25 obligation of the company issuing them, and are specifically
179-26 secured by first mortgage real estate notes or other securities
179-27 pledged with a trustee; or
180-1 (7) In interest-bearing time deposits which may be
180-2 withdrawn on or before one year after demand in any bank doing
180-3 business in Texas where the payment of such time deposits is
180-4 insured by the Federal Deposit Insurance Corporation.
180-5 SECTION 6.005. Section 601(5), Probate Code, is amended to
180-6 read as follows:
180-7 (5) "Corporate fiduciary" means a financial
180-8 institution as defined by Section 201.101, Finance Code, [trust
180-9 company or bank] having trust powers, existing or doing business
180-10 under the laws of this state, another state, or [of] the United
180-11 States, that is authorized by law to act under the order or
180-12 appointment of any court of record, without giving bond, as a
180-13 guardian, receiver, trustee, executor, or administrator, or,
180-14 although without general depository powers, as a depository for any
180-15 money paid into court, or to become sole guarantor or surety in or
180-16 on any bond required to be given under the laws of this state.
180-17 SECTION 6.006. Sections 703(e) and (g), Probate Code, are
180-18 amended to read as follows:
180-19 (e) If the court considers it to be in the best interests of
180-20 the ward, the court may require that the guardian and the corporate
180-21 or personal sureties on the bond of the guardian of the ward agree
180-22 to deposit any or all cash and safekeeping of other assets of the
180-23 guardianship estate in a financial institution as defined by
180-24 Section 201.101, Finance Code, with its main office or a branch
180-25 office in this state [domestic state or national bank, trust
180-26 company, savings and loan association, or other domestic corporate
180-27 depository, duly incorporated] and qualified to act as a depository
181-1 in this state [national bank, trust company, savings and loan
181-2 association, or other domestic corporate depository] under the laws
181-3 of this state or of the United States, and, if the depository is
181-4 otherwise proper, the court may require the deposit to be made in a
181-5 manner so as to prevent the withdrawal of the money or other assets
181-6 in the guardianship estate without the written consent of the
181-7 surety or on court order made on the notice to the surety. An
181-8 agreement made by a guardian and the sureties on the bond of the
181-9 guardian under this section does not release from liability or
181-10 change the liability of the principal or sureties as established by
181-11 the terms of the bond.
181-12 (g) In lieu of giving a surety or sureties on a bond that is
181-13 required of the guardian, or for purposes of reducing the amount of
181-14 the bond, the guardian of an estate may deposit out of the
181-15 guardian's own assets cash or securities that are acceptable to the
181-16 court with a financial institution as defined by Section 201.101,
181-17 Finance Code, with its main office or a branch office in this state
181-18 [domestic state or national bank, trust company, savings and loan
181-19 association, or other domestic corporate depository or with any
181-20 other corporate depository approved by the court]. If the deposit
181-21 is otherwise proper, the deposit must be equal in amount or value
181-22 to the amount of the bond required or the bond shall be reduced by
181-23 the value of assets that are deposited.
181-24 SECTION 6.007. Section 855(b), Probate Code, is amended to
181-25 read as follows:
181-26 (b) If the guardian of the estate has on hand money that
181-27 belongs to the ward that exceeds that amount of money that may be
182-1 necessary for the education and maintenance of the ward, the
182-2 guardian shall invest the money as follows:
182-3 (1) in bonds or other obligations of the United
182-4 States;
182-5 (2) in tax-supported bonds of this state;
182-6 (3) except as limited by Subsections (c) and (d) of
182-7 this section, in tax-supported bonds of a county, district,
182-8 political subdivision, or incorporated city or town in this state;
182-9 (4) in shares or share accounts of a state savings
182-10 [building] and loan association or savings bank with its main
182-11 office or a branch office in [organized under the laws of] this
182-12 state if the payment of the shares or share accounts is insured by
182-13 the Federal Deposit [Savings and Loan] Insurance Corporation;
182-14 (5) in the shares or share accounts of a federal
182-15 savings and loan association or savings bank with its main office
182-16 or a branch office [domiciled] in this state if the payment of the
182-17 shares or share accounts is insured by the Federal Deposit [Savings
182-18 and Loan] Insurance Corporation;
182-19 (6) in collateral bonds of companies incorporated
182-20 under the laws of this state, having a paid-in capital of
182-21 $1,000,000 or more, when the bonds are a direct obligation of the
182-22 company that issues the bonds and are specifically secured by first
182-23 mortgage real estate notes or other securities pledged with a
182-24 trustee; or
182-25 (7) in interest-bearing time deposits that may be
182-26 withdrawn on or before one year after demand in a bank that does
182-27 business in this state where the payment of the time deposits is
183-1 insured by the Federal Deposit Insurance Corporation.
183-2 ARTICLE 7. CIVIL PROCESS
183-3 SECTION 7.001. Section 30.007, Civil Practice and Remedies
183-4 Code, is amended to read as follows:
183-5 Sec. 30.007. PRODUCTION OF FINANCIAL INSTITUTION RECORDS.
183-6 Civil discovery of a customer record maintained by a financial
183-7 institution is governed by Section 59.006, Finance Code.
183-8 [(a) In this section:]
183-9 [(1) "Customer" means a person who uses, purchases, or
183-10 obtains an account, extension of credit, or product of a financial
183-11 institution or for whom a financial institution acts as a
183-12 fiduciary, agent, or custodian or in another representative
183-13 capacity.]
183-14 [(2) "Financial institution" means a state or national
183-15 bank, state or federal savings and loan association, state or
183-16 federal savings bank, state or federal credit union, foreign bank,
183-17 foreign bank agency, or trust company.]
183-18 [(3) "Record" means financial or other information of
183-19 a customer maintained by a financial institution.]
183-20 [(4) "Record request" means a valid and enforceable
183-21 subpoena, request for production, or other instrument issued under
183-22 authority of a tribunal that compels production of a customer
183-23 record.]
183-24 [(5) "Tribunal" means a court or other adjudicatory
183-25 tribunal with jurisdiction to issue a request for records,
183-26 including a government agency exercising adjudicatory functions and
183-27 an alternative dispute resolution mechanism, voluntary or required,
184-1 under which a party may compel the production of records.]
184-2 [(b) This section provides the exclusive method for
184-3 compelled discovery of a record of a financial institution relating
184-4 to one or more customers, does not create a right of privacy in a
184-5 record, and does not apply to:]
184-6 [(1) a demand or inquiry from a state or federal
184-7 government agency authorized by law to conduct an examination of
184-8 the financial institution;]
184-9 [(2) a record request from a state or federal
184-10 government agency or instrumentality under statutory or
184-11 administrative authority that provides for, or is accompanied by, a
184-12 specific mechanism for discovery and protection of a customer
184-13 record of a financial institution, including a record request from
184-14 a federal agency subject to the Right to Financial Privacy Act of
184-15 1978 (12 U.S.C. Section 3401 et seq.) or from the Internal Revenue
184-16 Service under 26 U.S.C. Section 7609;]
184-17 [(3) a record request from or report to a government
184-18 agency arising out of the investigation or prosecution of a
184-19 criminal offense;]
184-20 [(4) a record request in connection with a garnishment
184-21 proceeding in which the financial institution is garnishee and the
184-22 customer is debtor;]
184-23 [(5) an investigative demand or inquiry from a state
184-24 legislative investigating committee;]
184-25 [(6) an investigative demand or inquiry from the
184-26 attorney general of this state as authorized by law other than the
184-27 procedural law governing discovery in civil cases; or]
185-1 [(7) the voluntary use or disclosure of a record by a
185-2 financial institution subject to other applicable state or federal
185-3 law.]
185-4 [(c) A financial institution shall produce a record in
185-5 response to a record request only if:]
185-6 [(1) it is served with the record request not later
185-7 than the 24th day before the date that compliance with the record
185-8 request is required;]
185-9 [(2) before the financial institution complies with
185-10 the record request the requesting party pays the financial
185-11 institution's reasonable costs of complying with the record
185-12 request, including costs of reproduction, postage, research,
185-13 delivery, and attorney's fees, or posts a cost bond in an amount
185-14 estimated by the financial institution to cover those costs; and]
185-15 [(3) when the customer is not a party to the
185-16 proceeding in which the request was issued, the requesting party
185-17 complies with Subsections (d) and (e) and:]
185-18 [(A) the financial institution receives the
185-19 customer's written consent to release the record after a request
185-20 under Subsection (d)(3); or]
185-21 [(B) the tribunal takes further action based on
185-22 action initiated by the requesting party under Subsection (e).]
185-23 [(d) If the affected customer is not a party to the
185-24 proceeding in which the record request was issued, in addition to
185-25 serving the financial institution with a record request, the
185-26 requesting party shall:]
185-27 [(1) give notice stating the rights of the customer
186-1 under Subsection (f) and a copy of the request to each affected
186-2 customer in the manner and within the time provided by Rule 21a,
186-3 Texas Rules of Civil Procedure;]
186-4 [(2) file a certificate of service indicating that the
186-5 customer has been mailed or served with the notice and a copy of
186-6 the record request as required by this subsection with the tribunal
186-7 and the financial institution; and]
186-8 [(3) request the customer's written consent
186-9 authorizing the financial institution to comply with the request.]
186-10 [(e) If the customer refuses to execute the written consent
186-11 or fails to respond to the requesting party's request under
186-12 Subsection (d)(3) on or before the date that compliance with the
186-13 request is required, the requesting party may by written motion
186-14 seek an in camera inspection of the requested record as its sole
186-15 means of obtaining access to the requested record. In response to
186-16 a motion for in camera inspection, the tribunal may inspect the
186-17 requested record to determine its relevance to the matter before
186-18 the tribunal. The tribunal may order redaction of portions of the
186-19 records that the tribunal determines should not be produced and
186-20 shall enter a protective order preventing the record that it orders
186-21 produced from being:]
186-22 [(1) disclosed to a person who is not a party to the
186-23 proceeding before the tribunal; and]
186-24 [(2) used by a person for any purpose other than
186-25 resolving the dispute before the tribunal.]
186-26 [(f) The customer bears the burden of preventing or limiting
186-27 the financial institution's compliance with a record request
187-1 subject to this section by seeking an appropriate remedy, including
187-2 filing a motion to quash the record request or a motion for a
187-3 protective order. The customer has standing to appear before the
187-4 tribunal for that purpose if the customer is not otherwise a party.
187-5 Any motion filed shall be served on the financial institution and
187-6 the requesting party before the date that compliance with the
187-7 request is required. A financial institution is not liable to its
187-8 customer or another person for disclosure of a record in compliance
187-9 with this section.]
187-10 [(g) A financial institution may not be required to produce
187-11 a record under this section before the later of:]
187-12 [(1) the 24th day after the date of receipt of the
187-13 record request as provided by Subsection (c)(1);]
187-14 [(2) the 15th day after the date of receipt of a
187-15 customer consent to disclose a record as provided by Subsection
187-16 (c)(3); or]
187-17 [(3) the 15th day after the date a court orders
187-18 production of a record after an in camera inspection of a requested
187-19 record as provided by Subsection (e).]
187-20 [(h) An order to quash or for protection or other remedy
187-21 entered or denied by the tribunal under Subsection (e) or (f) is
187-22 not a final order and an interlocutory appeal may not be taken.]
187-23 SECTION 7.002. Section 31.002, Civil Practice and Remedies
187-24 Code, is amended by adding Subsection (g) to read as follows:
187-25 (g) With respect to turnover of property held by a financial
187-26 institution in the name of or on behalf of the judgment debtor as
187-27 customer of the financial institution, the rights of a receiver
188-1 appointed under Subsection (b)(3) do not attach until the financial
188-2 institution receives service of a certified copy of the order of
188-3 receivership in the manner specified by Section 59.008, Finance
188-4 Code.
188-5 SECTION 7.003. Subchapter C, Chapter 61, Civil Practice and
188-6 Remedies Code, is amended by adding Section 61.045 to read as
188-7 follows:
188-8 Sec. 61.045. ATTACHMENT OF PERSONALTY HELD BY FINANCIAL
188-9 INSTITUTION. Service of a writ of attachment on a financial
188-10 institution relating to personal property held by the financial
188-11 institution in the name of or on behalf of a customer of the
188-12 financial institution is governed by Section 59.008, Finance Code.
188-13 SECTION 7.004. Chapter 63, Civil Practice and Remedies Code,
188-14 is amended by adding Section 63.008 to read as follows:
188-15 Sec. 63.008. FINANCIAL INSTITUTION AS GARNISHEE. Service of
188-16 a writ of garnishment on a financial institution named as the
188-17 garnishee in the writ is governed by Section 59.008, Finance Code.
188-18 SECTION 7.005. Subchapter C, Chapter 64, Civil Practice and
188-19 Remedies Code, is amended by adding Section 64.036 to read as
188-20 follows:
188-21 Sec. 64.036. RECEIVERSHIP PROPERTY HELD BY FINANCIAL
188-22 INSTITUTION. Service or delivery of a notice of receivership, or a
188-23 demand or instruction by or on behalf of a receiver, relating to
188-24 receivership property held by a financial institution in the name
188-25 of or on behalf of a customer of the financial institution is
188-26 governed by Section 59.008, Finance Code.
188-27 SECTION 7.006. Subchapter A, Chapter 65, Civil Practice and
189-1 Remedies Code, is amended by adding Section 65.002 to read as
189-2 follows:
189-3 Sec. 65.002. RESTRAINING ORDER OR INJUNCTION AFFECTING
189-4 CUSTOMER OF FINANCIAL INSTITUTION. Service or delivery of a
189-5 restraining order or injunction affecting property held by a
189-6 financial institution in the name of or on behalf of a customer of
189-7 the financial institution is governed by Section 59.008, Finance
189-8 Code.
189-9 SECTION 7.007. Section 157.317(a), Family Code, is amended
189-10 to read as follows:
189-11 (a) A lien attaches to all real and personal property not
189-12 exempt under the Texas Constitution, including a claim for
189-13 negligence, personal injury, or workers' compensation, or an
189-14 insurance award for the claim, owned by the obligor on or after the
189-15 date the lien notice or abstract of judgment is filed with the
189-16 county clerk of the county in which the property is located, with
189-17 the court clerk as to property or claims in litigation, or, as to
189-18 property of the obligor in the possession or control of a third
189-19 party, from the date the lien notice is filed with that party.
189-20 Service of a lien notice on a financial institution relating to
189-21 property held by the financial institution in the name of or on
189-22 behalf of an obligor who is a customer of the financial institution
189-23 is governed by Section 59.008, Finance Code.
189-24 SECTION 7.008. Section 111.017, Tax Code, is amended to read
189-25 as follows:
189-26 Sec. 111.017. SEIZURE AND SALE OF PROPERTY. Before the
189-27 expiration of three years after a person becomes delinquent in the
190-1 payment of any amount under this title, the comptroller may seize
190-2 and sell at public auction real and personal property of the
190-3 person. A seizure made to collect the tax is limited only to
190-4 property of the person that is not exempt from execution. Service
190-5 or delivery of a notice of seizure under this section affecting
190-6 property held by a financial institution in the name of or on
190-7 behalf of a delinquent who is a customer of the financial
190-8 institution is governed by Section 59.008, Finance Code.
190-9 SECTION 7.009. Section 111.021(e), Tax Code, is amended to
190-10 read as follows:
190-11 (e) A notice under this section that attempts to prohibit
190-12 the transfer or disposal of an asset possessed or controlled by a
190-13 bank or other financial institution is governed by Section 59.008,
190-14 Finance Code, and also is effective if it is delivered or mailed to
190-15 the principal or any branch office of the bank or other financial
190-16 institution including any office of the bank or other financial
190-17 institution at which the deposit is carried or the credit or
190-18 property is held.
190-19 ARTICLE 8. AMENDMENTS TO TEXAS NON-PROFIT CORPORATION ACT
190-20 SECTION 8.001. Article 2.31, Texas Non-Profit Corporation
190-21 Act (Article 1396-2.31, Vernon's Texas Civil Statutes), is amended
190-22 to read as follows:
190-23 Art. 2.31. Power to Serve as Trustee
190-24 A. A corporation that is described by Section 501(c)(3) or
190-25 170(c), Internal Revenue Code of 1986, or a corresponding provision
190-26 of a subsequent federal tax law, or a corporation listed by the
190-27 Internal Revenue Service in the Cumulative List of Organizations
191-1 Described in Section 170(c) of the Internal Revenue Code of 1986,
191-2 I.R.S. Publication 78, may serve as the trustee of a trust:
191-3 (1) of which the corporation is a beneficiary; or
191-4 (2) benefiting another organization described by one
191-5 of those sections of the Internal Revenue Code of 1986, or a
191-6 corresponding provision of a subsequent federal tax law, or listed
191-7 by the Internal Revenue Service in the Cumulative List of
191-8 Organizations Described in Section 170(c) of the Internal Revenue
191-9 Code of 1986, I.R.S. Publication 78.
191-10 B. Any corporation (or person or entity assisting such
191-11 corporation) described in this article shall have immunity from
191-12 suit (including both a defense to liability and the right not to
191-13 bear the cost, burden, and risk of discovery and trial) as to any
191-14 claim alleging that the corporation's role as trustee of a trust
191-15 described in this article constitutes engaging in the trust
191-16 business in a manner requiring a state charter as defined in
191-17 Section 1.002(9), Texas Trust Company Act (Article 342a-1.002,
191-18 Vernon's Texas Civil Statutes). An interlocutory appeal may be
191-19 taken if a court denies or otherwise fails to grant a motion for
191-20 summary judgment that is based on an assertion of the immunity
191-21 provided in this section.
191-22 SECTION 8.002. (a) Article 2.31, Texas Non-Profit
191-23 Corporation Act (Article 1396-2.31, Vernon's Texas Civil Statutes),
191-24 as that section exists on the effective date of this article,
191-25 applies to any trust created before, on, or after the effective
191-26 date of this article, including any trust that is the subject of
191-27 litigation or another proceeding that is pending before, on, or
192-1 after the effective date of this article.
192-2 (b) This section applies without regard to the effective
192-3 date of the legislation enacting Article 2.31, Texas Non-Profit
192-4 Corporation Act (Article 1396-2.31, Vernon's Texas Civil Statutes),
192-5 or any other legislation enacted by any legislature that amended
192-6 the provisions of Article 2.31, Texas Non-Profit Corporation Act
192-7 (Article 1396-2.31, Vernon's Texas Civil Statutes).
192-8 SECTION 8.003. This article applies to any trust created
192-9 before, on, or after the effective date of this article, including
192-10 any trust that is the subject of litigation or another proceeding
192-11 that is pending before, on, or after the effective date of this
192-12 article.
192-13 ARTICLE 9. TRANSITION, EFFECTIVE DATE, EMERGENCY
192-14 SECTION 9.001. DATE FOR CERTAIN FILINGS. (a) With respect
192-15 to an interstate branch or other office of an out-of-state
192-16 financial institution that exists in this state on the effective
192-17 date of this Act, regardless of whether the out-of-state financial
192-18 institution has filed a designation pursuant to or was not
192-19 previously subject to Section 39.003 or 59.001, Finance Code, as
192-20 those sections existed before the effective date of this Act, the
192-21 out-of-state financial institution must file the documentation and
192-22 information required by Section 201.102, Finance Code, as added by
192-23 this Act, before January 1, 2000.
192-24 (b) With respect to an out-of-state trust institution that
192-25 does not maintain a branch or trust office in this state but
192-26 maintains a representative trust office in this state on the
192-27 effective date of this Act, the out-of-state trust institution must
193-1 file the documentation and information required by Section 9.202,
193-2 Texas Trust Company Act (Article 342a-1.001 et seq., Vernon's Texas
193-3 Civil Statutes), as added by this Act, before January 1, 2000.
193-4 SECTION 9.002. REPEALER. (a) The following provisions of
193-5 the Finance Code are repealed:
193-6 (1) Sections 31.002(a)(26) and (27);
193-7 (2) Sections 31.008 and 32.0095; and
193-8 (3) Chapters 38, 39, and 272.
193-9 (b) The following provisions of the Texas Trust Company Act
193-10 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes) are
193-11 repealed:
193-12 (1) Sections 1.002(a)(3), (6), (16), and (20); and
193-13 (2) Section 3.021.
193-14 SECTION 9.003. RELATIONSHIP TO OTHER LAWS. If this Act
193-15 conflicts with an Act of the 76th Legislature, Regular Session,
193-16 1999, adopting a nonsubstantive revision of statutes relating to
193-17 financial institutions and practices, this Act prevails.
193-18 SECTION 9.004. EFFECTIVE DATE. (a) Except as provided by
193-19 Subsection (b), this Act takes effect immediately.
193-20 (b) Articles 1-7 of this Act take effect September 1, 1999.
193-21 SECTION 9.005. EMERGENCY. The importance of this
193-22 legislation and the crowded condition of the calendars in both
193-23 houses create an emergency and an imperative public necessity that
193-24 the constitutional rule requiring bills to be read on three several
193-25 days in each house be suspended, and this rule is hereby suspended,
193-26 and that this Act take effect and be in force according to its
193-27 terms, and it is so enacted.