1-1 By: Marchant (Senate Sponsor - Fraser) H.B. No. 2066
1-2 (In the Senate - Received from the House April 30, 1999;
1-3 May 3, 1999, read first time and referred to Committee on Economic
1-4 Development; May 13, 1999, reported favorably by the following
1-5 vote: Yeas 6, Nays 0; May 13, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to regulation of bank holding companies in an interstate
1-9 banking and branching environment, the authorization of interstate
1-10 operations of financial institutions in accordance with the
1-11 requirements of federal law, and the enhancement of state bank and
1-12 trust company charters for the interstate banking and branching
1-13 environment.
1-14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-15 ARTICLE 1. INTERSTATE BANKING AND BRANCHING
1-16 SECTION 1.001. Title 3, Finance Code, is amended by adding
1-17 Subtitle G to read as follows:
1-18 SUBTITLE G. BANK HOLDING COMPANIES; INTERSTATE BANK OPERATIONS
1-19 CHAPTER 201. GENERAL PROVISIONS
1-20 SUBCHAPTER A. GENERAL PROVISIONS
1-21 Sec. 201.001. SCOPE OF SUBTITLE. (a) This subtitle:
1-22 (1) sets forth the conditions under which a company
1-23 may acquire a Texas bank or a Texas bank holding company, pursuant
1-24 to the provisions of Chapter 202;
1-25 (2) permits interstate branching under the Interstate
1-26 Banking and Branching Efficiency Act pursuant to the provisions of
1-27 Chapter 203; and
1-28 (3) provides for state regulation of the participation
1-29 by foreign banks in the financial markets of this state, pursuant
1-30 to the provisions of Chapter 204.
1-31 (b) This subtitle is not intended to discriminate against
1-32 out-of-state banks and bank holding companies in a manner that
1-33 would violate the Interstate Banking and Branching Efficiency Act.
1-34 Sec. 201.002. DEFINITIONS. (a) Unless the context requires
1-35 otherwise, in this subtitle:
1-36 (1) "Acquire" means an act that results in direct or
1-37 indirect control by a company of a bank holding company or a bank,
1-38 including an act that causes:
1-39 (A) the company to merge with a bank holding
1-40 company or a bank;
1-41 (B) the company to assume direct or indirect
1-42 ownership or control of:
1-43 (i) more than 25 percent of any class of
1-44 voting shares of a bank holding company or a bank, if the acquiring
1-45 company was not a bank holding company before the acquisition;
1-46 (ii) more than five percent of any class
1-47 of voting shares of a bank holding company or a bank, if the
1-48 acquiring company was a bank holding company before the
1-49 acquisition; or
1-50 (iii) all or substantially all of the
1-51 assets of a bank holding company or a bank; or
1-52 (C) an application relating to control of a bank
1-53 holding company or bank to be filed with a federal bank supervisory
1-54 agency.
1-55 (2) "Affiliate" has the meaning assigned by Section
1-56 2(k), Bank Holding Company Act (12 U.S.C. Section 1841(k)).
1-57 (3) "Agency" when used in reference to an office of a
1-58 foreign bank, has the meaning assigned by Section 1(b)(1),
1-59 International Banking Act (12 U.S.C. Section 3101(1)).
1-60 (4) "Bank":
1-61 (A) for purposes of Chapter 202 and the laws of
1-62 this state as they relate to Chapter 202, has the meaning assigned
1-63 by Section 2(c), Bank Holding Company Act (12 U.S.C. Section
1-64 1841(c));
2-1 (B) for purposes of Chapter 203 and the laws of
2-2 this state as they relate to Chapter 203, has the meaning assigned
2-3 to the term "insured bank" by Section 3(h), Federal Deposit
2-4 Insurance Act (12 U.S.C. Section 1813(h)), except that the term
2-5 does not include a foreign bank unless it is organized under the
2-6 laws of a territory of the United States, Puerto Rico, Guam,
2-7 American Samoa, or the Virgin Islands and its deposits are insured
2-8 by the Federal Deposit Insurance Corporation; and
2-9 (C) for purposes of Chapter 204 and the laws of
2-10 this state as they relate to Chapter 204, has the meaning assigned
2-11 by Section 2(c), Bank Holding Company Act (12 U.S.C. Section
2-12 1841(c)), or Section 3(a)(1), Federal Deposit Insurance Act (12
2-13 U.S.C. Section 1813(a)(1)), except that the term does not include a
2-14 foreign bank or a branch or agency of a foreign bank.
2-15 (5) "Bank holding company" has the meaning assigned by
2-16 Section 2(a), Bank Holding Company Act (12 U.S.C. Section 1841(a)),
2-17 and includes a Texas bank holding company, an out-of-state bank
2-18 holding company, and a foreign bank holding company unless the
2-19 context requires otherwise.
2-20 (6) "Bank Holding Company Act" means the federal Bank
2-21 Holding Company Act of 1956 (12 U.S.C. Section 1841 et seq.), as
2-22 amended.
2-23 (7) "Bank supervisory agency" means any of the
2-24 following:
2-25 (A) an agency of another state with primary
2-26 responsibility for chartering and supervising banks;
2-27 (B) the Office of the Comptroller of the
2-28 Currency, the Federal Deposit Insurance Corporation, or the Board
2-29 of Governors of the Federal Reserve System, and any successor to
2-30 these agencies; or
2-31 (C) an agency of a country, including a colony,
2-32 dependency, possession, or political subdivision of a country,
2-33 other than the United States with primary responsibility for
2-34 chartering and supervising banks.
2-35 (8) "Branch" has the meaning assigned by Section
2-36 31.002(a), except that for purposes of Chapter 204 and the laws of
2-37 this state as they relate to Chapter 204 the term:
2-38 (A) with respect to an office of a foreign bank,
2-39 has the meaning assigned by Section 1(b)(3), International Banking
2-40 Act (12 U.S.C. Section 3101(3)); and
2-41 (B) with respect to an office of a bank as
2-42 defined by this section for the purposes of Chapter 204, has the
2-43 meaning assigned to the term "domestic branch" by Section 3(o),
2-44 Federal Deposit Insurance Act (12 U.S.C. Section 1813(o)).
2-45 (9) "Commissioner" has the meaning assigned to the
2-46 term "banking commissioner" by Section 31.002(a), except that for
2-47 purposes of Chapter 203 and the laws of this state as they relate
2-48 to Chapter 203, with respect to a state savings bank, the term
2-49 means the savings and loan commissioner of Texas.
2-50 (10) "Company" has the meaning assigned by Section
2-51 2(b), Bank Holding Company Act (12 U.S.C. Section 1841(b)), and
2-52 includes a bank holding company.
2-53 (11) "Control" shall be construed consistently with
2-54 Section 2(a)(2), Bank Holding Company Act (12 U.S.C. Section
2-55 1841(a)(2)), and regulations and interpretive rulings of the Board
2-56 of Governors of the Federal Reserve System.
2-57 (12) "De novo branch" means a branch of a bank located
2-58 in a host state that:
2-59 (A) is originally established by the bank as a
2-60 branch; and
2-61 (B) does not become a branch of the bank as a
2-62 result of:
2-63 (i) the acquisition of another bank or a
2-64 branch of another bank; or
2-65 (ii) the merger or conversion involving
2-66 the bank or branch.
2-67 (13) "Deposit" has the meaning assigned by Section
2-68 3(l), Federal Deposit Insurance Act (12 U.S.C. Section 1813(l)).
2-69 (14) "Depository institution" means an institution
3-1 included for any purpose within the definitions of "insured
3-2 depository institution" as assigned by Sections 3(c)(2) and
3-3 3(c)(3), Federal Deposit Insurance Act (12 U.S.C. Sections
3-4 1813(c)(2) and 1813(c)(3)).
3-5 (15) "Federal agency" means an agency of a foreign
3-6 bank that is licensed by the Comptroller of the Currency pursuant
3-7 to Section 4, International Banking Act (12 U.S.C. Section 3102).
3-8 (16) "Federal branch" means a branch of a foreign bank
3-9 that is licensed by the Comptroller of the Currency pursuant to
3-10 Section 4, International Banking Act (12 U.S.C. Section 3102).
3-11 (17) "Federal Deposit Insurance Act" means the Federal
3-12 Deposit Insurance Act (12 U.S.C. Section 1811 et seq.), as amended.
3-13 (18) "Foreign bank" has the meaning assigned by
3-14 Section 1(b)(7), International Banking Act (12 U.S.C. Section
3-15 3101(7)).
3-16 (19) "Foreign bank holding company" means a bank
3-17 holding company that is organized under the laws of a country other
3-18 than the United States or a territory or possession of the United
3-19 States.
3-20 (20) "Foreign person" means a natural or juridical
3-21 person who is a citizen or national of one or more countries,
3-22 including any colonies, dependencies, or possessions of the
3-23 countries, other than the United States.
3-24 (21) "Home state" means:
3-25 (A) with respect to a national bank, the state
3-26 in which the main office of the bank is located;
3-27 (B) with respect to a state bank, the state by
3-28 which the bank is chartered;
3-29 (C) with respect to a foreign bank, the state
3-30 determined to be the home state of the foreign bank under Section
3-31 5(c), International Banking Act (12 U.S.C. Section 3103(c)); and
3-32 (D) with respect to a bank holding company, the
3-33 state in which the total deposits of all bank subsidiaries of the
3-34 company are the largest on the later of July 1, 1966, or the date
3-35 on which the company became a bank holding company.
3-36 (22) "Home state regulator" means:
3-37 (A) with respect to an out-of-state bank holding
3-38 company, the bank supervisory agency of the home state of the bank
3-39 holding company; and
3-40 (B) with respect to an out-of-state state bank,
3-41 the bank supervisory agency of the state in which the bank is
3-42 chartered.
3-43 (23) "Host state" means:
3-44 (A) with respect to a bank, a state other than
3-45 the home state of the bank in which the bank maintains or seeks to
3-46 establish and maintain a branch; and
3-47 (B) with respect to a bank holding company, a
3-48 state other than the home state of the company in which the company
3-49 controls or seeks to control a bank subsidiary.
3-50 (24) "International Banking Act" means the federal
3-51 International Banking Act of 1978 (12 U.S.C. Section 3101 et seq.),
3-52 as amended.
3-53 (25) "Interstate Banking and Branching Efficiency Act"
3-54 means the federal Riegle-Neal Interstate Banking and Branching
3-55 Efficiency Act of 1994, Public Law No. 103-328, codified at various
3-56 sections of Title 12, United States Code.
3-57 (26) "Interstate branch" means a branch of a bank or a
3-58 branch of a foreign bank, as the context requires, established,
3-59 acquired, or retained pursuant to the Interstate Banking and
3-60 Branching Efficiency Act, outside the home state of the bank or
3-61 foreign bank. The term does not include, with respect to a foreign
3-62 bank, a limited branch as that term is defined by this section.
3-63 (27) "Interstate merger transaction" means:
3-64 (A) the merger of banks with different home
3-65 states and the conversion of branches of a bank involved in the
3-66 merger into branches of the resulting bank; or
3-67 (B) the purchase of all or substantially all of
3-68 the assets, including all or substantially all of the branches, of
3-69 a bank whose home state is different from the home state of the
4-1 acquiring bank.
4-2 (28) "Limited branch" means a branch of a foreign bank
4-3 that accepts only the deposits that would be permissible for a
4-4 corporation organized under Section 25A, Federal Reserve Act (12
4-5 U.S.C. Section 611 et seq.), in accordance with Section 5(a)(7),
4-6 International Banking Act (12 U.S.C. Section 3103(a)(7)).
4-7 (29) "Out-of-state bank" means a bank whose home state
4-8 is another state.
4-9 (30) "Out-of-state bank holding company" means a bank
4-10 holding company whose home state is another state.
4-11 (31) "Out-of-state foreign bank" means a foreign bank
4-12 whose home state is another state.
4-13 (32) "Out-of-state state bank" means a bank chartered
4-14 under the laws of another state.
4-15 (33) "Representative office" has the meaning assigned
4-16 by Section 1(b)(15), International Banking Act (12 U.S.C. Section
4-17 3101(15)).
4-18 (34) "Resulting bank" means a bank that results from
4-19 an interstate merger transaction.
4-20 (35) "State" means a state of the United States, the
4-21 District of Columbia, a territory of the United States, Puerto
4-22 Rico, Guam, American Samoa, the Trust Territory of the Pacific
4-23 Islands, the Virgin Islands, or the Northern Mariana Islands,
4-24 except that for purposes of Chapter 202 and the laws of this state
4-25 as they relate to Chapter 202 the term means a state, territory, or
4-26 other possession of the United States, including the District of
4-27 Columbia.
4-28 (36) "State bank" means a Texas state bank or an
4-29 out-of-state state bank, including an out-of-state state savings
4-30 bank.
4-31 (37) "State savings bank" has the meaning assigned to
4-32 the term "savings bank" by Section 3(g), Federal Deposit Insurance
4-33 Act (12 U.S.C. Section 1813(g)), and includes a savings bank
4-34 organized under Subtitle C or under similar laws of another state.
4-35 (38) "Subsidiary" has the meaning assigned by Section
4-36 2(d), Bank Holding Company Act (12 U.S.C. Section 1841(d)).
4-37 (39) "Texas bank" means a bank whose home state is
4-38 this state, except that for purposes of Chapter 202 and the laws of
4-39 this state as they relate to Chapter 202 the term means a Texas
4-40 state bank or a national bank organized under federal law with its
4-41 main office in this state.
4-42 (40) "Texas bank holding company" means a bank holding
4-43 company whose home state is this state and that is not controlled
4-44 by a bank holding company other than a Texas bank holding company.
4-45 (41) "Texas representative office" means a
4-46 representative office that is located in this state and registered
4-47 pursuant to Subchapter C, Chapter 204.
4-48 (42) "Texas state agency," means, when used in
4-49 reference to an office of a foreign bank, an agency of a foreign
4-50 bank that is located in this state and licensed pursuant to
4-51 Subchapter B, Chapter 204.
4-52 (43) "Texas state bank" means a bank that is organized
4-53 under Subtitle A.
4-54 (44) "Texas state branch," means, when used in
4-55 reference to an office of a foreign bank, a branch of a foreign
4-56 bank that is located in this state and licensed pursuant to
4-57 Subchapter B, Chapter 204.
4-58 (45) "United States" means:
4-59 (A) when used in a geographical sense, the
4-60 several states, the District of Columbia, Puerto Rico, Guam,
4-61 American Samoa, the American Virgin Islands, the Trust Territory of
4-62 the Pacific Islands, and other territories of the United States;
4-63 and
4-64 (B) when used in a political sense, the federal
4-65 government of the United States.
4-66 (b) The definitions provided by Section 31.002 apply to this
4-67 subtitle to the extent not inconsistent with this section and as
4-68 the context requires.
4-69 (c) The definitions shall be liberally construed to
5-1 accomplish the purposes of this subtitle.
5-2 (d) The finance commission by rule may adopt other
5-3 definitions to accomplish the purposes of this subtitle.
5-4 Sec. 201.003. RULES. (a) The finance commission may adopt
5-5 rules to accomplish the purposes of this subtitle, including rules
5-6 necessary or reasonable to:
5-7 (1) implement and clarify this subtitle in a manner
5-8 consistent with and to the extent permitted by applicable federal
5-9 law;
5-10 (2) preserve or protect the safety and soundness of
5-11 banking in this state;
5-12 (3) grant the same rights and privileges to Texas
5-13 state banks that are or may be granted to other depository
5-14 institutions;
5-15 (4) recover the cost of maintaining and operating the
5-16 department and the cost of enforcing this subtitle by imposing and
5-17 collecting ratable and equitable fees for supervision and
5-18 regulation, including fees for notices, applications, and
5-19 examinations; and
5-20 (5) facilitate the fair hearing and adjudication of
5-21 matters before the commissioner and the finance commission.
5-22 (b) In adopting rules, the finance commission shall consider
5-23 the need to:
5-24 (1) coordinate with applicable federal law;
5-25 (2) promote a stable banking environment;
5-26 (3) provide the public with convenient, safe, and
5-27 competitive banking services;
5-28 (4) preserve and promote the competitive parity of
5-29 Texas state banks with other depository institutions consistent
5-30 with the safety and soundness of Texas state banks and the Texas
5-31 state bank system; and
5-32 (5) allow for economic development in this state.
5-33 (c) The presence or absence in this subtitle of a specific
5-34 reference to rules regarding a particular subject does not enlarge
5-35 or diminish the rulemaking authority provided by this section.
5-36 Sec. 201.004. LAW APPLICABLE TO INTERSTATE BRANCHES. (a)
5-37 The laws of this state apply to an interstate branch located in
5-38 this state to the same extent the laws of this state would apply if
5-39 the branch in this state were a national bank with its main office
5-40 located in this state, except to the extent otherwise provided
5-41 under federal law.
5-42 (b) To the extent provided by Section 4.102(c), Business &
5-43 Commerce Code, the laws of this state govern a deposit contract
5-44 between a bank and a consumer account holder if the branch or
5-45 separate office of the bank that accepts the deposit contract is
5-46 located in this state.
5-47 (c) Without limiting Subsection (a), for purposes of the
5-48 laws of this state relating to authority to act as a fiduciary,
5-49 depository of public funds, or custodian of securities pledged to
5-50 secure public funds, or authority to engage in repurchase
5-51 transactions with public entities, a legally operating interstate
5-52 branch in this state is considered to be in, within, located in,
5-53 authorized to do business in, domiciled in, and chartered in this
5-54 state.
5-55 Sec. 201.005. COOPERATIVE AGREEMENTS; FEES. (a) To carry
5-56 out the purposes of this subtitle, to the extent permitted by
5-57 federal law, the commissioner may:
5-58 (1) enter into cooperative, coordinating, or
5-59 information sharing agreements with another bank supervisory agency
5-60 or an organization affiliated with or representing one or more bank
5-61 supervisory agencies;
5-62 (2) with respect to periodic examination or other
5-63 supervision or investigation, accept reports of examination or
5-64 investigation by, and reports submitted to, another bank
5-65 supervisory agency in lieu of conducting examinations or
5-66 investigations or receiving reports as might otherwise be required
5-67 or permissible under this subtitle;
5-68 (3) enter into contracts with another bank supervisory
5-69 agency having concurrent regulatory or supervisory jurisdiction to
6-1 engage the services of the agency for reasonable compensation to
6-2 assist in connection with the commissioner's performance of
6-3 official duties under this subtitle or other law, or to provide
6-4 services to the agency for reasonable compensation in connection
6-5 with the agency's performance of official duties under law, except
6-6 that Chapter 2254, Government Code, does not apply to the
6-7 contracts;
6-8 (4) enter into joint examinations or joint enforcement
6-9 actions with another bank supervisory agency having concurrent
6-10 regulatory or supervisory jurisdiction, except that the
6-11 commissioner may independently take action under Section 201.009 if
6-12 the commissioner determines that the action is necessary to carry
6-13 out the commissioner's responsibilities under this subtitle or to
6-14 enforce compliance with the laws of this state; and
6-15 (5) assess supervisory and examination fees to be paid
6-16 by a state bank, state savings bank, bank holding company, or
6-17 foreign bank in connection with the commissioner's performance of
6-18 duties under this subtitle.
6-19 (b) Supervisory or examination fees assessed by the
6-20 commissioner in accordance with this subtitle may be shared with
6-21 another bank supervisory agency or an organization affiliated with
6-22 or representing one or more bank supervisory agencies in accordance
6-23 with an agreement between the commissioner and the agency or
6-24 organization. The commissioner may also receive a portion of
6-25 supervisory or examination fees assessed by another bank
6-26 supervisory agency in accordance with an agreement between the
6-27 commissioner and the agency.
6-28 Sec. 201.006. ISSUANCE OF INTERPRETIVE STATEMENTS AND
6-29 OPINIONS. (a) To encourage the effective coordination and
6-30 implementation of home state laws and host state laws with respect
6-31 to interstate branching, the commissioner, directly or through the
6-32 deputy commissioner or a department attorney, may:
6-33 (1) issue interpretive statements containing matters
6-34 of general policy to guide the public and banks and bank holding
6-35 companies subject to this subtitle;
6-36 (2) amend or repeal a published interpretive statement
6-37 by issuing an amended statement or notice of repeal of a statement
6-38 and publishing the statement or notice;
6-39 (3) issue, in response to specific requests from the
6-40 public or the banking industry, opinions interpreting this subtitle
6-41 or determining the applicability of laws of this state to the
6-42 operation of interstate branches or other offices in this state by
6-43 out-of-state banks or in other states by Texas banks; and
6-44 (4) amend or repeal an opinion by issuing an amended
6-45 opinion or notice of repeal of an opinion, except that the
6-46 requesting party may rely on the original opinion if:
6-47 (A) all material facts were originally disclosed
6-48 to the commissioner;
6-49 (B) the safety and soundness of the affected
6-50 bank or bank holding company will not be affected by further
6-51 reliance on the original opinion; and
6-52 (C) the text and interpretation of relevant,
6-53 governing provisions of applicable home state, host state, and
6-54 federal law have not been changed by legislative or judicial
6-55 action.
6-56 (b) An interpretive statement or opinion may be disseminated
6-57 by newsletter, via electronic medium such as the internet, in a
6-58 volume of statutes or related materials published by the
6-59 commissioner or others, or by other means reasonably calculated to
6-60 notify persons affected by the interpretive statement or opinion.
6-61 An opinion may be disseminated to the public if the commissioner
6-62 determines that the opinion is useful for the general guidance and
6-63 convenience of the public or banks or bank holding companies. A
6-64 published opinion must be redacted to preserve the confidentiality
6-65 of the requesting party unless the requesting party consents to be
6-66 identified in the published opinion. Notice of an amended or
6-67 withdrawn statement or opinion must be disseminated in a
6-68 substantially similar manner as the affected statement or opinion
6-69 was originally disseminated.
7-1 (c) An interpretive statement or opinion issued under this
7-2 subtitle does not have the force of law and is not a rule for the
7-3 purposes of Chapter 2001, Government Code, unless adopted by the
7-4 finance commission as provided by Chapter 2001, Government Code.
7-5 An interpretive statement or opinion is an administrative
7-6 construction of this subtitle entitled to great weight if the
7-7 construction is reasonable and does not conflict with this
7-8 subtitle.
7-9 Sec. 201.007. CONFIDENTIALITY. Except as expressly provided
7-10 otherwise in this subtitle, confidentiality of information obtained
7-11 by the commissioner under this subtitle is governed by Subchapter
7-12 D, Chapter 31, or, with respect to a state savings bank, Subtitle
7-13 C, and may not be disclosed by the commissioner or an employee of
7-14 the commissioner's department except as provided by Subchapter D,
7-15 Chapter 31, or, with respect to a state savings bank, Subtitle C.
7-16 Sec. 201.008. NOTICE OF SUBSEQUENT EVENT. Each out-of-state
7-17 state bank that has established and maintains an interstate branch
7-18 in this state pursuant to this subtitle shall give written notice
7-19 to the commissioner, at least 30 days before the effective date of
7-20 the event, or in the case of an emergency transaction, within a
7-21 shorter period consistent with applicable state or federal law, of
7-22 a merger or other transaction that would cause a change of control
7-23 with respect to the bank or a bank holding company that controls
7-24 the bank, with the result that an application would be required to
7-25 be filed with the bank's home state regulator or a federal bank
7-26 supervisory agency, including an application filed pursuant to the
7-27 Change in Bank Control Act of 1978 (12 U.S.C. Section 1817(j)), as
7-28 amended, or the Bank Holding Company Act (12 U.S.C. Section 1841 et
7-29 seq.).
7-30 Sec. 201.009. ENFORCEMENT; APPEALS. (a) If the
7-31 commissioner determines that a bank holding company or a foreign
7-32 bank has violated this subtitle or other applicable law of this
7-33 state, the commissioner may take any enforcement action the
7-34 commissioner would be empowered to take if the bank holding company
7-35 or foreign bank were a Texas state bank, except that the
7-36 commissioner shall promptly give notice to the home state regulator
7-37 of each enforcement action taken against an out-of-state bank
7-38 holding company or foreign bank and, to the extent practicable,
7-39 shall consult and cooperate with the home state regulator in
7-40 pursuing and resolving the enforcement action. A bank holding
7-41 company or foreign bank may appeal a final order or other decision
7-42 of the commissioner under this subtitle as provided by Sections
7-43 31.202, 31.203, and 31.204.
7-44 (b) If the commissioner determines that an interstate branch
7-45 maintained by an out-of-state state bank in this state is being
7-46 operated in violation of a law of this state or in an unsafe and
7-47 unsound manner, the commissioner may take any enforcement action
7-48 the commissioner would be empowered to take if the branch were a
7-49 Texas state bank or state savings bank, as the case may be, except
7-50 that the commissioner shall promptly give notice to the home state
7-51 regulator of each enforcement action taken against an out-of-state
7-52 state bank and, to the extent practicable, shall consult and
7-53 cooperate with the home state regulator in pursuing and resolving
7-54 the enforcement action. An out-of-state state bank may appeal a
7-55 final order or other decision of the commissioner under this
7-56 subtitle as provided by Sections 31.202, 31.203, and 31.204, or as
7-57 provided under Subtitle C with respect to a state savings bank.
7-58 (c) Notwithstanding Subsections (a) and (b), the
7-59 commissioner may enforce the laws of this state against an entity
7-60 subject to this subtitle by appropriate action in the courts,
7-61 including an action for injunctive relief, if the banking
7-62 commissioner concludes the action is necessary or desirable.
7-63 Sec. 201.010. TAXATION. A bank subject to this subtitle is
7-64 subject to the franchise tax to the extent provided by Chapter 171,
7-65 Tax Code.
7-66 Sec. 201.011. SEVERABILITY. The provisions of this subtitle
7-67 or the applications of those provisions are severable as provided
7-68 by Section 311.032(c), Government Code.
7-69 (Sections 201.012-201.100 reserved for expansion
8-1 SUBCHAPTER B. REGISTRATION OF FINANCIAL INSTITUTIONS
8-2 Sec. 201.101. DEFINITIONS. In this subchapter:
8-3 (1) "Financial institution" means:
8-4 (A) a bank as defined for any purpose by Section
8-5 201.002(a)(4), whether chartered under the laws of this state,
8-6 another state, the United States, or another country, including a
8-7 state savings bank;
8-8 (B) a savings and loan association chartered
8-9 under Chapter 62 or similar laws of another state;
8-10 (C) a federal savings and loan association,
8-11 federal savings bank, or federal credit union;
8-12 (D) a credit union chartered under Chapter 122
8-13 or similar laws of another state; or
8-14 (E) a trust company chartered under the laws of
8-15 this state or another state.
8-16 (2) "Out-of-state financial institution" means a
8-17 financial institution that:
8-18 (A) is not chartered under the laws of this
8-19 state; and
8-20 (B) has its main or principal office in another
8-21 state or country.
8-22 (3) "Texas financial institution" means a financial
8-23 institution that:
8-24 (A) is chartered under the laws of this state or
8-25 under federal law; and
8-26 (B) has its main or principal office in this
8-27 state.
8-28 Sec. 201.102. REGISTRATION TO DO BUSINESS. An out-of-state
8-29 financial institution must file an application for registration
8-30 with the secretary of state, before operating a branch or other
8-31 office in this state, by complying with the law of this state
8-32 relating to foreign corporations doing business in this state,
8-33 notwithstanding a provision in that law that purports to limit or
8-34 prohibit its applicability to financial institutions.
8-35 Sec. 201.103. APPOINTMENT OF AGENT TO RECEIVE SERVICE OF
8-36 PROCESS. (a) A Texas financial institution may file in the office
8-37 of the secretary of state a statement appointing an agent
8-38 authorized to receive service of process.
8-39 (b) A statement appointing an agent must set forth:
8-40 (1) the name of the Texas financial institution;
8-41 (2) the federal tax identification number of the Texas
8-42 financial institution;
8-43 (3) the address, including the street address, of the
8-44 principal office of the Texas financial institution; and
8-45 (4) the name of the agent in this state authorized to
8-46 receive service of process and the agent's address, including the
8-47 street address, in this state.
8-48 (c) The agent named under Subsection (b) must be:
8-49 (1) an individual resident of this state;
8-50 (2) a domestic corporation, limited partnership,
8-51 partnership, limited liability company, professional association,
8-52 cooperative, or real estate investment trust; or
8-53 (3) a foreign entity registered with the secretary of
8-54 state to transact business in this state.
8-55 (d) A statement appointing an agent must be signed by an
8-56 officer of the Texas financial institution. The statement must
8-57 also be signed by the person appointed agent, who by signing
8-58 accepts the appointment. The appointed agent may resign by filing
8-59 a resignation in the office of the secretary of state and giving
8-60 notice to the Texas financial institution.
8-61 (e) The secretary of state shall collect for the use of the
8-62 state:
8-63 (1) a fee of $25 for indexing and filing the original
8-64 statement appointing an agent; and
8-65 (2) a fee of $15 for filing an amendment to or
8-66 cancellation of a statement appointing an agent.
8-67 (f) An amendment to a statement appointing an agent to
8-68 receive service of process must meet the requirements for execution
8-69 of an original statement.
9-1 (g) A statement appointing an agent may be canceled by
9-2 filing with the secretary of state a written notice of cancellation
9-3 executed by an officer of the Texas financial institution. A
9-4 notice of cancellation must contain:
9-5 (1) the name of the Texas financial institution;
9-6 (2) the federal tax identification number of the Texas
9-7 financial institution;
9-8 (3) the date of filing of the statement appointing the
9-9 agent; and
9-10 (4) the current street address of the principal office
9-11 of the Texas financial institution.
9-12 (h) Service of process on a registered agent appointed under
9-13 this section is an alternate method of service in addition to other
9-14 methods provided by law unless other law specifically requires
9-15 service to be made on the registered agent. A resignation or
9-16 notice of cancellation is effective immediately on acknowledgement
9-17 of filing by the secretary of state, and after the acknowledgement
9-18 the financial institution is subject to service of process as
9-19 otherwise provided by law.
9-20 (i) The secretary of state may adopt forms and procedural
9-21 rules for filing of documents under this section.
9-22 CHAPTER 202. BANK HOLDING COMPANIES
9-23 Sec. 202.001. ACQUISITION OF BANK OR BANK HOLDING COMPANY.
9-24 (a) A company intending to acquire a Texas bank holding company or
9-25 a Texas bank shall submit to the commissioner a copy of the
9-26 application for approval or notice submitted to the Board of
9-27 Governors of the Federal Reserve System under Section 3, Bank
9-28 Holding Company Act (12 U.S.C. Section 1842). The copy must be:
9-29 (1) submitted to the commissioner when the application
9-30 is submitted to the board of governors;
9-31 (2) accompanied by any additional information required
9-32 under Subsection (b); and
9-33 (3) accompanied by any filing fee required by law.
9-34 (b) An applicant or notificant that is an out-of-state bank
9-35 holding company shall provide satisfactory evidence to the
9-36 commissioner of compliance with or inapplicability of:
9-37 (1) the requirements of Section 202.003; and
9-38 (2) if the applicant or notificant is not incorporated
9-39 under the laws of this state, the laws of this state relating to
9-40 registration of foreign corporations to do business in this state.
9-41 (c) On receipt of the notice prescribed by Section 3(b),
9-42 Bank Holding Company Act (12 U.S.C. Section 1842(b)), the
9-43 commissioner shall state in writing within the period prescribed by
9-44 that subsection the commissioner's:
9-45 (1) views and recommendations concerning the proposed
9-46 transaction;
9-47 (2) opinion regarding whether the proposed transaction
9-48 complies with this chapter and the Interstate Banking and Branching
9-49 Efficiency Act; and
9-50 (3) opinion regarding whether the proposed transaction
9-51 complies with the Community Reinvestment Act of 1977 (12 U.S.C.
9-52 Section 2901 et seq.), as amended.
9-53 (d) The commissioner is not required to disapprove the
9-54 application or notice solely because of the opinion stated under
9-55 Subsection (c)(3).
9-56 (e) If the commissioner's response disapproves an
9-57 application for or notice of an acquisition of a Texas state bank
9-58 or a Texas bank holding company controlling a Texas state bank, the
9-59 commissioner may:
9-60 (1) appear at the hearing held as provided by Section
9-61 3(b), Bank Holding Company Act (12 U.S.C. Section 1842(b)); and
9-62 (2) present evidence at the hearing regarding the
9-63 reasons the application or notice should be denied.
9-64 (f) If the commissioner's response disapproves an
9-65 application for or notice of an acquisition other than as described
9-66 by Subsection (e), the commissioner may request that a hearing be
9-67 held as provided by Section 3(b), Bank Holding Company Act (12
9-68 U.S.C. Section 1842(b)). If the board of governors grants the
9-69 request, the commissioner shall appear and present evidence at the
10-1 hearing regarding the reasons the application or notice should be
10-2 denied.
10-3 (g) If the board of governors approves an application or
10-4 notice that the commissioner disapproved, the commissioner may
10-5 accept the decision or attempt to overturn the decision on appeal
10-6 as provided by Section 9, Bank Holding Company Act (12 U.S.C.
10-7 Section 1848).
10-8 Sec. 202.002. LIMITATION ON CONTROL OF DEPOSITS. (a) The
10-9 commissioner may not approve an acquisition if, on consummation of
10-10 the transaction, the applicant, including all depository
10-11 institution affiliates of the applicant, would control 20 percent
10-12 or more of the total amount of deposits in this state held by
10-13 depository institutions in this state.
10-14 (b) The commissioner may request and the applicant shall
10-15 provide supplemental information to the commissioner to aid in a
10-16 determination under this section, including information that is
10-17 more current than or in addition to information in the most
10-18 recently available summary of deposits, reports of condition, or
10-19 similar reports filed with or produced by state or federal
10-20 authorities.
10-21 Sec. 202.003. REQUIRED AGE OF ACQUIRED BANK. (a) An
10-22 out-of-state bank holding company may not make an acquisition under
10-23 this chapter if the Texas bank to be acquired, or any Texas bank
10-24 subsidiary of the bank holding company to be acquired, has not been
10-25 in existence and in continuous operation for at least five years as
10-26 of the effective date of acquisition.
10-27 (b) For purposes of this section:
10-28 (1) a bank that is the successor as a result of merger
10-29 or acquisition of all or substantially all of the assets of a prior
10-30 bank is considered to have been in existence and continuously
10-31 operated during the period of its existence and continuous
10-32 operation as a bank and during the period of existence and
10-33 continuous operation of the prior bank; and
10-34 (2) a bank effecting a purchase and assumption,
10-35 merger, or similar transaction with or supervised by the Federal
10-36 Deposit Insurance Corporation or its successor is considered to
10-37 have been in existence and continuously operated during the
10-38 existence and continuous operation of the bank with respect to
10-39 which the transaction was consummated.
10-40 Sec. 202.004. ACQUISITION OF NONBANKING INSTITUTION. (a) A
10-41 bank holding company doing business in this state that submits an
10-42 application or notice to the Board of Governors of the Federal
10-43 Reserve System regarding an acquisition or activity regulated by
10-44 Section 4, Bank Holding Company Act (12 U.S.C. Section 1843), that
10-45 involves or will involve an office location in this state shall
10-46 submit to the commissioner a copy of the application or notice when
10-47 the application or notice is submitted to the board of governors.
10-48 The bank holding company shall submit other information reasonably
10-49 requested by the commissioner to determine the manner in which the
10-50 acquisition or activity will directly or indirectly affect
10-51 residents of this state.
10-52 (b) To assist in determining whether to disapprove the
10-53 proposed acquisition or activity, the commissioner may hold a
10-54 public hearing as provided by Section 31.201, regardless of whether
10-55 requested to do so by a person, regarding the proposed acquisition
10-56 or activity and its effect on this state. The commissioner shall
10-57 convene a hearing if the bank holding company requests a hearing in
10-58 writing when it submits the application or notice to the
10-59 commissioner.
10-60 (c) The commissioner shall disapprove the proposed
10-61 acquisition or activity if the commissioner determines that the
10-62 acquisition or activity would be detrimental to the public interest
10-63 as a result of probable adverse effects, including undue
10-64 concentration of resources, decreased or unfair competition,
10-65 conflicts of interest, or unsound banking practices.
10-66 (d) If the commissioner determines to disapprove the
10-67 proposed acquisition or activity, the commissioner may prepare and
10-68 file a response to the application or notice with the board of
10-69 governors and may request that a hearing be held. If the board of
11-1 governors grants the request, the commissioner shall appear and
11-2 present evidence at the hearing regarding the reasons the proposed
11-3 acquisition or activity should be denied.
11-4 (e) If the board of governors approves a proposed
11-5 acquisition or activity that the commissioner disapproved, the
11-6 commissioner may accept the decision or seek to overturn the
11-7 decision on appeal as provided by Section 9, Bank Holding Company
11-8 Act (12 U.S.C. Section 1848).
11-9 Sec. 202.005. APPLICABLE LAWS. (a) The commissioner may:
11-10 (1) examine a bank holding company that controls a
11-11 Texas bank to the same extent as if the bank holding company were a
11-12 Texas state bank; and
11-13 (2) bring an enforcement proceeding under Chapter 35
11-14 against a bank holding company that violates or participates in a
11-15 violation of this subtitle, an agreement filed with the
11-16 commissioner under this chapter, or a rule adopted or order issued
11-17 by the commissioner or the finance commission under this subtitle,
11-18 as if the bank holding company were a Texas state bank.
11-19 (b) A Texas bank that is controlled by a bank holding
11-20 company that is not a Texas bank holding company shall be subject
11-21 to all laws of this state that are applicable to Texas banks that
11-22 are controlled by Texas bank holding companies.
11-23 CHAPTER 203. INTERSTATE BANK MERGERS AND BRANCHING
11-24 Sec. 203.001. INTERSTATE BRANCHING BY TEXAS STATE BANKS.
11-25 (a) With the prior approval of the commissioner, a Texas state
11-26 bank may establish and maintain a de novo branch or acquire a
11-27 branch in a state other than Texas pursuant to Section 32.203.
11-28 (b) With the prior approval of the commissioner, a Texas
11-29 state bank may establish, maintain, and operate one or more
11-30 branches in another state pursuant to an interstate merger
11-31 transaction in which the Texas state bank is the resulting bank.
11-32 Not later than the date on which the required application for the
11-33 interstate merger transaction is filed with the responsible federal
11-34 bank supervisory agency, the applicant Texas state bank shall file
11-35 an application on a form prescribed by the commissioner and pay the
11-36 fee prescribed by law. The applicant shall also comply with the
11-37 applicable provisions of Sections 32.301-32.303. The commissioner
11-38 shall approve the interstate merger transaction and the operation
11-39 of branches outside of this state by the Texas state bank if the
11-40 commissioner makes the findings required by Section 32.302(b). An
11-41 interstate merger transaction may be consummated only after the
11-42 applicant has received the commissioner's written approval.
11-43 Sec. 203.002. CONDITIONS FOR ENTRY BY DE NOVO BRANCHING.
11-44 (a) An out-of-state bank may establish a de novo branch in this
11-45 state if:
11-46 (1) the laws of the home state of the out-of-state
11-47 bank would permit a Texas bank to establish and maintain a de novo
11-48 branch in that state under substantially the same terms and
11-49 conditions as set forth in this subchapter;
11-50 (2) the out-of-state bank confirms in writing to the
11-51 commissioner that as long as it maintains a branch in this state,
11-52 it will comply with all applicable laws of this state;
11-53 (3) the applicant provides satisfactory evidence to
11-54 the commissioner of compliance with the applicable requirements of
11-55 Section 201.102; and
11-56 (4) the commissioner, acting on or before the 30th day
11-57 after the date the commissioner receives notice of an application
11-58 under Subsection (b), certifies to the responsible federal bank
11-59 supervisory agency that the requirements of this subchapter have
11-60 been met.
11-61 (b) An out-of-state bank desiring to establish and maintain
11-62 a de novo branch shall provide written notice of the proposed
11-63 transaction to the commissioner not later than the date on which
11-64 the bank applies to the responsible federal bank supervisory agency
11-65 for approval to establish the branch. The filing of the notice
11-66 must be accompanied by the filing fee, if any, prescribed by the
11-67 commissioner.
11-68 (c) A de novo branch may be established in this state
11-69 through the acquisition of a branch of an existing Texas bank if
12-1 the acquiring out-of-state bank complies with this section.
12-2 Sec. 203.003. ENTRY BY INTERSTATE MERGER TRANSACTION. (a)
12-3 Subject to Sections 203.004 and 203.005, one or more Texas banks
12-4 may enter into an interstate merger transaction with one or more
12-5 out-of-state banks under this chapter, and an out-of-state bank
12-6 resulting from the transaction may maintain and operate the
12-7 branches in this state of a Texas bank that participated in the
12-8 transaction. An out-of-state bank that will be the resulting bank
12-9 in the interstate merger transaction shall comply with Section
12-10 201.102.
12-11 (b) An out-of-state bank that will be the resulting bank
12-12 pursuant to an interstate merger transaction involving a Texas
12-13 state bank shall notify the commissioner of the proposed merger not
12-14 later than the date on which it files an application for an
12-15 interstate merger transaction with the responsible federal bank
12-16 supervisory agency, and shall submit a copy of that application to
12-17 the commissioner and pay the filing fee, if any, required by the
12-18 commissioner. A Texas state bank that is a party to the interstate
12-19 merger transaction shall comply with Chapter 32 and with other
12-20 applicable state and federal laws. An out-of-state bank that will
12-21 be the resulting bank in the interstate merger transaction shall
12-22 provide satisfactory evidence to the commissioner of compliance
12-23 with Section 201.102.
12-24 (c) An out-of-state bank that does not operate a branch in
12-25 this state may not establish and maintain a branch in this state
12-26 through the acquisition of a branch of an existing Texas bank
12-27 except as provided by Section 203.002.
12-28 Sec. 203.004. LIMITATION ON CONTROL OF DEPOSITS. (a) An
12-29 interstate merger transaction is not permitted if, on consummation
12-30 of the transaction, the resulting bank, including all depository
12-31 institution affiliates of the resulting bank, would control 20
12-32 percent or more of the total amount of deposits in this state held
12-33 by all depository institutions in this state.
12-34 (b) The commissioner may request and the applicant shall
12-35 provide supplemental information to the commissioner to aid in a
12-36 determination under this section, including information that is
12-37 more current than or in addition to information in the most
12-38 recently available summary of deposits, reports of condition, or
12-39 similar reports filed with or produced by state or federal
12-40 authorities.
12-41 Sec. 203.005. REQUIRED AGE OF ACQUIRED BANK. (a) An
12-42 out-of-state bank may not acquire a Texas bank in an interstate
12-43 merger transaction if the Texas bank has not been in existence and
12-44 in continuous operation for at least five years as of the effective
12-45 date of the interstate merger transaction. However, this section
12-46 does not apply if the acquiring out-of-state bank could establish a
12-47 de novo branch in this state pursuant to Section 203.002.
12-48 (b) For purposes of this section:
12-49 (1) a bank that is the successor as a result of merger
12-50 or acquisition of all or substantially all of the assets of a prior
12-51 bank is considered to have been in existence and continuously
12-52 operated during the period of its existence and continuous
12-53 operation as a bank and during the period of existence and
12-54 continuous operation of the prior bank; and
12-55 (2) a bank effecting a purchase and assumption,
12-56 merger, or similar transaction with or supervised by the Federal
12-57 Deposit Insurance Corporation or its successor is considered to
12-58 have been in existence and continuously operated during the
12-59 existence and continuous operation of the bank with respect to
12-60 which the transaction was consummated.
12-61 Sec. 203.006. ADDITIONAL BRANCHES. An out-of-state bank
12-62 that has established or acquired a branch in this state under this
12-63 chapter may establish or acquire additional branches in this state
12-64 to the same extent that a Texas state bank may establish or acquire
12-65 a branch in this state under applicable state and federal law.
12-66 Sec. 203.007. EXAMINATIONS; PERIODIC REPORTS. (a) The
12-67 banking commissioner may make examinations of a branch established
12-68 and maintained in this state pursuant to this chapter by an
12-69 out-of-state bank as the banking commissioner considers necessary
13-1 to determine whether the branch is being operated in compliance
13-2 with the laws of this state and in accordance with safe and sound
13-3 banking practices. Sections 31.105-31.107 or 96.054-96.057, as
13-4 appropriate, apply to the examinations.
13-5 (b) The commissioner may prescribe requirements for periodic
13-6 reports from an out-of-state bank that operates a branch in Texas
13-7 pursuant to this chapter. Reporting requirements prescribed by the
13-8 commissioner under this section must be:
13-9 (1) consistent with the reporting requirements
13-10 applicable to Texas state banks or state savings banks, as
13-11 appropriate; and
13-12 (2) appropriate to discharge the responsibilities of
13-13 the commissioner under this chapter.
13-14 CHAPTER 204. FOREIGN BANKS
13-15 SUBCHAPTER A. GENERAL PROVISIONS
13-16 Sec. 204.001. TRANSACTING BUSINESS. (a) A foreign bank may
13-17 not transact business in this state except to the extent permitted
13-18 by this chapter.
13-19 (b) Subsection (a) does not prohibit a foreign bank:
13-20 (1) from transacting business at a licensed federal
13-21 branch or agency in this state in accordance with federal law;
13-22 (2) that does not maintain a branch or agency in this
13-23 state or conduct business from an office or location in this state
13-24 from making unsecured loans in this state or loans secured by liens
13-25 on real or personal property located in this state, enforcing those
13-26 loans in this state, or transacting trust business in this state,
13-27 to the extent permitted by other law; or
13-28 (3) organized under the laws of a territory of the
13-29 United States, Puerto Rico, Guam, American Samoa, or the Virgin
13-30 Islands, the deposits of which are insured by the Federal Deposit
13-31 Insurance Corporation, from establishing and operating an
13-32 interstate branch in this state in its capacity as a state bank
13-33 pursuant to Chapter 203.
13-34 (c) For purposes of Subsection (a), a foreign bank is not
13-35 considered to be transacting business in this state merely because
13-36 a subsidiary or affiliate transacts business in this state,
13-37 including business that a depository institution subsidiary or
13-38 affiliate may lawfully conduct in this state as an agent for the
13-39 foreign bank to the extent authorized by the laws of this state.
13-40 Sec. 204.002. BOOKS, ACCOUNTS, AND RECORDS. Each Texas
13-41 state branch, agency, or representative office shall maintain and
13-42 make available appropriate books, accounts, and records reflecting:
13-43 (1) all transactions effected by or on behalf of the
13-44 office; and
13-45 (2) all other actions taken in this state by employees
13-46 of the foreign bank located in this state to effect transactions on
13-47 behalf of an office of the foreign bank located outside this state.
13-48 Sec. 204.003. EXAMINATION; FEES. (a) The commissioner may
13-49 make examinations of a Texas state branch, agency, or
13-50 representative office as the commissioner considers necessary to
13-51 determine whether the office is being operated in compliance with
13-52 the laws of this state and in accordance with safe and sound
13-53 banking practices. Sections 31.105-31.107 apply to the
13-54 examinations.
13-55 (b) A foreign bank that maintains a Texas state branch,
13-56 agency, or representative office shall pay fees to the commissioner
13-57 in accordance with Section 201.005 or rules adopted under this
13-58 subtitle.
13-59 Sec. 204.004. REPORTS. (a) A foreign bank doing business
13-60 in this state through a Texas state branch, agency, or
13-61 representative office shall make written reports to the
13-62 commissioner that:
13-63 (1) are in English;
13-64 (2) are submitted at the times and in the form
13-65 specified by the commissioner or by rules adopted under this
13-66 subtitle;
13-67 (3) are under oath of one of the foreign bank's
13-68 officers, managers, or agents transacting business in this state;
13-69 (4) show the amount of the foreign bank's assets and
14-1 liabilities, expressed in United States currency;
14-2 (5) with respect to a Texas state branch or agency,
14-3 show the amount of the branch or agency's assets and liabilities,
14-4 expressed in United States currency; and
14-5 (6) contain other information that the commissioner
14-6 requires.
14-7 (b) A license or registration of a foreign bank under this
14-8 chapter may be revoked or the foreign bank may be subject to an
14-9 enforcement action under Chapter 35 if the foreign bank fails to
14-10 make a report required under Subsection (a) or makes a material
14-11 false or misleading statement in the report.
14-12 Sec. 204.005. CHANGE OF CONTROL OF FOREIGN BANK. A foreign
14-13 bank licensed to establish and maintain a Texas state branch or
14-14 agency pursuant to Subchapter B, or which has registered a Texas
14-15 representative office pursuant to Subchapter C, shall file with the
14-16 commissioner a notice of change of control, in the form and
14-17 containing the information the commissioner requires, not later
14-18 than the 14th day after the date of a merger or other transaction
14-19 that results or will result in a change of control.
14-20 Sec. 204.006. OPERATIONS IN THIS STATE OF BANKS OWNED OR
14-21 CONTROLLED BY FOREIGN BANKS AND OTHER FOREIGN PERSONS. (a) Except
14-22 as provided in Subsection (b):
14-23 (1) the laws of this state governing the acquisition
14-24 or ownership of interests in Texas banks or out-of-state banks
14-25 seeking to establish and maintain interstate branches in this state
14-26 do not prohibit ownership of those institutions by, or otherwise
14-27 discriminate against, foreign banks or other foreign persons; and
14-28 (2) the laws of this state governing the powers and
14-29 activities of Texas banks and out-of-state banks maintaining
14-30 interstate branches in this state do not discriminate among those
14-31 banks on the basis of their ownership or control by foreign banks
14-32 or other foreign persons.
14-33 (b) Notwithstanding Subsection (a), the commissioner may
14-34 apply the laws of this state governing the ownership, control, or
14-35 operations of Texas banks, even if applicable specifically or
14-36 exclusively to foreign banks or other foreign persons, to the
14-37 extent those laws are determined by the commissioner to be:
14-38 (1) substantially equivalent to or consistent with the
14-39 standards or requirements governing the ownership, control, or
14-40 operations of Texas banks by foreign banks or other foreign persons
14-41 under applicable federal law; or
14-42 (2) otherwise consistent with the laws and policies of
14-43 the United States, including its international agreements governing
14-44 financial services.
14-45 Sec. 204.007. ESTABLISHMENT OF INTERSTATE BRANCH IN THIS
14-46 STATE BY AN OUT-OF-STATE FOREIGN BANK. (a) An out-of-state
14-47 foreign bank may establish an interstate Texas state branch in the
14-48 same manner as, and subject to the same criteria, standards,
14-49 conditions, requirements, and procedures applicable to, the
14-50 establishment of an interstate branch in this state by an
14-51 out-of-state bank having the same home state in the United States,
14-52 including by acquisition of or merger with a Texas bank, or
14-53 establishment of a de novo branch in the manner provided by Section
14-54 203.002, notwithstanding another law of this state to the contrary
14-55 other than Subsection (b).
14-56 (b) With respect to establishment of an initial interstate
14-57 Texas state branch and subsequent intrastate branches of an
14-58 out-of-state foreign bank, the commissioner:
14-59 (1) shall apply the same criteria, standards,
14-60 conditions, requirements, and procedures applicable under
14-61 Subchapter B to the establishment of an initial Texas state branch
14-62 and subsequent intrastate branches in this state;
14-63 (2) may apply other criteria, standards, conditions,
14-64 requirements, or provisions of the laws of this state that are
14-65 determined by the commissioner to be substantially equivalent to or
14-66 consistent with federal law generally applicable to the
14-67 establishment of a branch in the United States by a foreign bank or
14-68 specifically applicable to the establishment of a branch in the
14-69 United States by the applicant foreign bank; and
15-1 (3) may allow an out-of-state foreign bank to:
15-2 (A) acquire or merge with another foreign bank
15-3 maintaining a Texas branch or agency and after the acquisition or
15-4 merger continue the operations as its own;
15-5 (B) acquire or establish an interstate Texas
15-6 branch through another means not inconsistent with Section 5,
15-7 International Banking Act (12 U.S.C. Section 3103); or
15-8 (C) convert a state agency to a state branch as
15-9 provided by Section 204.008.
15-10 Sec. 204.008. CONVERSION OF EXISTING OFFICE. (a) For
15-11 purposes of this section, foreign bank offices in this state are
15-12 divided into classes and ranked in ascending order as:
15-13 (1) representative office;
15-14 (2) Texas state agency; and
15-15 (3) Texas state branch.
15-16 (b) A foreign bank may change a lower class office into a
15-17 higher class office by applying for the higher class office
15-18 pursuant to Section 204.101. On approval of the application to
15-19 establish the higher class office and after all conditions to the
15-20 approval have been fulfilled, the foreign bank may change the lower
15-21 class office into the higher class office and the commissioner
15-22 shall issue a license authorizing the bank to maintain the higher
15-23 class office. The foreign bank shall promptly surrender any
15-24 license or registration previously issued by the commissioner in
15-25 connection with the lower class office.
15-26 (c) A foreign bank may change a higher class office into a
15-27 lower class office by applying for approval to close the higher
15-28 class office pursuant to Section 204.115. On approval of the
15-29 application to close the higher class office and after conditions
15-30 precedent to the closing have been fulfilled, the foreign bank may
15-31 change the higher class office into the lower class office, and the
15-32 commissioner shall issue a license or registration authorizing the
15-33 bank to maintain the lower class office.
15-34 (Sections 204.009-204.100 reserved for expansion
15-35 SUBCHAPTER B. DIRECT BRANCH AND AGENCY OFFICES OF
15-36 FOREIGN BANKS
15-37 Sec. 204.101. APPLICATION TO ESTABLISH BRANCH OR AGENCY.
15-38 (a) A foreign bank that desires to establish and maintain a Texas
15-39 state branch or agency shall submit an application to the
15-40 commissioner. The application must:
15-41 (1) be accompanied by all application fees and
15-42 deposits required by applicable rules;
15-43 (2) be in the form specified by the commissioner;
15-44 (3) be subscribed and acknowledged by an officer of
15-45 the foreign bank;
15-46 (4) have attached:
15-47 (A) a complete copy of the foreign bank's
15-48 application to the Board of Governors of the Federal Reserve System
15-49 under Section 7(d), International Banking Act (12 U.S.C. Section
15-50 3105(d));
15-51 (B) an authenticated copy of the foreign bank's
15-52 articles of incorporation and bylaws or other constitutive
15-53 documents and, if the copy is in a language other than English, an
15-54 English translation of the document, under the oath of the
15-55 translator; and
15-56 (C) evidence of compliance with Section 201.102;
15-57 (5) be submitted when the federal application is
15-58 submitted to the board of governors; and
15-59 (6) include on its face or in accompanying documents:
15-60 (A) the name of the foreign bank;
15-61 (B) the street address where the principal
15-62 office of the Texas state branch or agency is to be located and, if
15-63 different, the Texas state branch or agency's mailing address;
15-64 (C) the name and qualifications of each officer
15-65 and director of the foreign bank who will have control of all or
15-66 part of the business and affairs of the Texas state branch or
15-67 agency;
15-68 (D) a detailed statement of the foreign bank's
15-69 financial condition as of a date not more than 360 days before the
16-1 date of the application; and
16-2 (E) other information that:
16-3 (i) is necessary to enable the
16-4 commissioner to make the findings listed in Section 204.103;
16-5 (ii) is required by rules adopted under
16-6 this subtitle; or
16-7 (iii) the commissioner reasonably
16-8 requests.
16-9 (b) The finance commission may adopt rules prescribing
16-10 abbreviated application procedures and standards applicable to
16-11 applications by foreign banks that have already established an
16-12 initial Texas state branch or agency to establish additional
16-13 intrastate branches or agencies.
16-14 Sec. 204.102. HEARING AND DECISION ON APPLICATION. (a)
16-15 After the application is complete and accepted for filing and all
16-16 required fees and deposits have been paid, the commissioner shall
16-17 determine from the application and the initial investigation
16-18 whether the conditions set forth by Section 204.103 have been
16-19 established. The commissioner shall approve the application or set
16-20 the application for hearing.
16-21 (b) If the commissioner sets the application for hearing:
16-22 (1) the commissioner shall notify the Board of
16-23 Governors of the Federal Reserve System that the application has
16-24 been set for hearing as provided by federal regulations;
16-25 (2) the department shall participate as the opposing
16-26 party; and
16-27 (3) the commissioner shall conduct the hearing and one
16-28 or more prehearing conferences and opportunities for discovery as
16-29 the commissioner considers advisable and consistent with applicable
16-30 law.
16-31 (c) Information relating to the financial condition and
16-32 business affairs of the foreign bank and financial information
16-33 relating to its management and shareholders, except for previously
16-34 published statements and information, is confidential and may not
16-35 be considered in the public portion of the hearing or disclosed by
16-36 the commissioner or an employee of the department except as
16-37 provided by Subchapter D, Chapter 31.
16-38 (d) The commissioner shall make a finding from the record of
16-39 the hearing on each condition listed in Section 204.103 and enter
16-40 an order granting or denying the license. If the license is
16-41 denied, the commissioner shall inform the Board of Governors of the
16-42 Federal Reserve System of the order and the reasons the federal
16-43 application should be denied.
16-44 (e) The commissioner may make approval of an application
16-45 conditional. The commissioner shall include any conditions in the
16-46 order granting the license but may not issue the license until the
16-47 Texas state branch or agency has received the approval of the Board
16-48 of Governors of the Federal Reserve System. If the approval is
16-49 conditioned on a written commitment from the applicant offered to
16-50 and accepted by the commissioner, the commitment is enforceable
16-51 against the applicant.
16-52 Sec. 204.103. ISSUANCE OF LICENSE. (a) The commissioner
16-53 shall issue a license to a foreign bank to establish and maintain a
16-54 Texas state branch or agency if the commissioner finds after
16-55 reasonable inquiry that:
16-56 (1) all members of the management of the Texas state
16-57 branch or agency have sufficient banking experience, ability,
16-58 standing, competence, trustworthiness, and integrity to justify a
16-59 belief that the agency will operate in compliance with state law;
16-60 (2) the foreign bank has sufficient standing to
16-61 justify a belief that the Texas state branch or agency will be free
16-62 from improper or unlawful influence or interference with respect to
16-63 the office's operation in compliance with state law; and
16-64 (3) the foreign bank is acting in good faith and the
16-65 application does not contain a material misrepresentation.
16-66 (b) Each Texas state branch or agency shall post its license
16-67 in a conspicuous place at its office. A license issued under this
16-68 subchapter is not transferable or assignable.
16-69 Sec. 204.104. NO CONCURRENT FEDERAL BRANCH OR AGENCY. (a)
17-1 A foreign bank licensed under this subchapter to establish and
17-2 maintain a Texas state branch or agency may not concurrently
17-3 maintain a federal branch or federal agency in this state.
17-4 (b) A foreign bank which maintains a federal branch or
17-5 federal agency in this state may not concurrently be licensed under
17-6 this subchapter to maintain a Texas state branch or agency.
17-7 Sec. 204.105. POWERS OF BRANCH AND AGENCY. (a) A Texas
17-8 state branch or agency is subject to this subtitle and other laws
17-9 of this state applicable to banks as if the Texas state branch or
17-10 agency were a Texas state bank unless:
17-11 (1) this chapter or a rule adopted under this subtitle
17-12 provides otherwise; or
17-13 (2) the context of a provision or other information
17-14 indicates that a provision applies only to a bank organized under
17-15 the laws of a state or the United States.
17-16 (b) Among other exceptions to Subsection (a) that may be
17-17 required or authorized by the commissioner provided by this
17-18 subchapter or by rules adopted under this subtitle:
17-19 (1) a Texas state branch may not accept deposits of
17-20 less than $100,000 from citizens or residents of the United States,
17-21 other than credit balances that are incidental to or arise out of
17-22 its exercise of other lawful banking powers, unless the Federal
17-23 Deposit Insurance Corporation determines that specific deposit
17-24 taking activities in lesser amounts do not constitute domestic
17-25 retail deposit activities requiring deposit insurance protection
17-26 within the meaning of Section 6, International Banking Act (12
17-27 U.S.C. Section 3104);
17-28 (2) a Texas state agency may not accept deposits from
17-29 citizens or residents of the United States, other than credit
17-30 balances that are incidental to or arise out of its exercise of
17-31 other lawful banking powers, but may accept deposits from persons
17-32 who are neither citizens nor residents of the United States; and
17-33 (3) a limitation or restriction based on the capital
17-34 and certified surplus of a Texas state bank is considered to refer,
17-35 as applied to a Texas state branch or agency, to the dollar
17-36 equivalent of the capital and surplus of the foreign bank, and if
17-37 the foreign bank has more than one Texas state branch or agency in
17-38 this state, the business transacted by all the branches and
17-39 agencies must be aggregated in determining compliance with the
17-40 limitation.
17-41 (c) Subject to Subsections (a) and (b), a foreign bank
17-42 licensed to transact business in this state through a Texas state
17-43 branch or agency may:
17-44 (1) borrow and lend money with or without property as
17-45 security;
17-46 (2) purchase, sell, and make loans regardless of
17-47 whether the loans are secured by bonds or mortgages on real
17-48 property;
17-49 (3) engage in a foreign exchange transaction;
17-50 (4) issue, advise, confirm, and otherwise deal with a
17-51 letter of credit and pay, accept, or negotiate a draft drawn under
17-52 a letter of credit;
17-53 (5) accept a bill of exchange or draft;
17-54 (6) buy or acquire and sell or dispose of a bill of
17-55 exchange, draft, note, acceptance, or other obligation for the
17-56 payment of money;
17-57 (7) maintain a credit balance of money received at the
17-58 Texas state branch or agency incidental to or arising out of the
17-59 exercise of its authorized activities in this state if the money is
17-60 not intended to be a deposit and does not remain in the Texas state
17-61 branch or agency after the completion of all transactions to which
17-62 it relates;
17-63 (8) accept deposits to the extent permitted by
17-64 Subsection (b);
17-65 (9) receive money for transmission and transmit the
17-66 money from its authorized place of business in this state to any
17-67 other place;
17-68 (10) act as an indenture trustee or as a registrar,
17-69 paying agent, or transfer agent, on behalf of the issuer, for
18-1 equity or investment securities; and
18-2 (11) perform other activities that:
18-3 (A) are authorized by rules adopted to
18-4 accomplish the purposes of this subtitle; or
18-5 (B) the commissioner determines are analogous or
18-6 incidental to specific activities authorized by this section for a
18-7 Texas state branch or agency.
18-8 (d) A foreign bank licensed to transact business in this
18-9 state through a Texas state branch or agency may share the premises
18-10 of the Texas state branch or agency with another authorized office
18-11 of the foreign bank or a direct or indirect subsidiary of the
18-12 foreign bank if the books and records of the Texas state branch or
18-13 agency are kept separately from the books and records of the other
18-14 office.
18-15 (e) For purposes of this section, the term "resident of the
18-16 United States" means:
18-17 (1) an individual residing in the United States;
18-18 (2) a corporation, partnership, association, or other
18-19 entity organized in the United States; or
18-20 (3) a branch or office located in the United States of
18-21 an entity that is not organized in the United States.
18-22 Sec. 204.106. APPLICATION TO ACT AS FIDUCIARY. (a) Except
18-23 as provided by Section 204.105(c)(10), a foreign bank may not act
18-24 as a fiduciary at a Texas state branch or agency except by
18-25 obtaining a fiduciary license as provided by this section. A
18-26 foreign bank that intends to act as a fiduciary at a Texas state
18-27 branch or agency shall submit an application to the commissioner.
18-28 The application must:
18-29 (1) be accompanied by all application fees and
18-30 deposits required by applicable rules;
18-31 (2) be in the form specified by the commissioner;
18-32 (3) be subscribed and acknowledged by an officer of
18-33 the foreign bank;
18-34 (4) describe in detail:
18-35 (A) the proposed fiduciary activities;
18-36 (B) the names and relevant expertise of its
18-37 officers and employees that will conduct the fiduciary activities;
18-38 and
18-39 (C) the manner in which the fiduciary activities
18-40 will be captured in the books and records of the Texas state branch
18-41 or agency with due regard for separation of beneficial and legal
18-42 interests; and
18-43 (5) contain other information that:
18-44 (A) is necessary to enable the commissioner to
18-45 make the findings required by Subsection (c);
18-46 (B) is required by rules adopted under this
18-47 subtitle; or
18-48 (C) the commissioner reasonably requests.
18-49 (b) On or before the 60th day after the date the application
18-50 is complete and accepted for filing and all required fees and
18-51 deposits have been paid, the commissioner shall approve the
18-52 application or set the application for hearing. If the
18-53 commissioner sets the application for hearing, the department shall
18-54 participate as the opposing party and the commissioner shall
18-55 conduct the hearing and one or more prehearing conferences and
18-56 opportunities for discovery as the commissioner considers advisable
18-57 and consistent with applicable law.
18-58 (c) The commissioner may issue a license permitting the
18-59 foreign bank to engage in fiduciary activities if the commissioner
18-60 finds that the foreign bank will exercise its fiduciary powers in
18-61 accordance with the laws of this state and has sufficient fiduciary
18-62 and accounting expertise and controls to protect beneficial
18-63 interests under its control. The commissioner may make approval of
18-64 an application conditional by including conditions and limitations
18-65 in the order granting the license. If the approval is conditioned
18-66 on a written commitment from the applicant offered to and accepted
18-67 by the commissioner, the commitment is enforceable against the
18-68 applicant.
18-69 (d) A foreign bank that obtains the approval of the
19-1 commissioner under this section may engage in fiduciary activities
19-2 at its Texas state branch or agency to the same extent and in the
19-3 same manner as a Texas state bank could do so at the same location,
19-4 subject to any conditions or limitations applicable to the license.
19-5 (e) The commissioner may initiate an enforcement action
19-6 under Chapter 35 or may suspend or revoke the authority of a
19-7 foreign bank to engage in fiduciary activities in this state in the
19-8 same manner as a revocation of license under Section 204.118 if the
19-9 commissioner finds in writing that:
19-10 (1) conditions exist related to the fiduciary
19-11 activities of the foreign bank in this state which would authorize
19-12 the commissioner to revoke or suspend its license pursuant to
19-13 Section 204.117; or
19-14 (2) a fact or condition exists which, if it had
19-15 existed at the time of the foreign bank's original notice to engage
19-16 in fiduciary activities, would have resulted in the commissioner
19-17 denying authority to engage in fiduciary activities.
19-18 Sec. 204.107. FILING OF AMENDMENTS TO ARTICLES OF
19-19 INCORPORATION. If the articles of incorporation of a foreign bank
19-20 licensed to maintain a Texas state branch or agency are amended,
19-21 the foreign bank shall promptly file with the commissioner a copy
19-22 of the amendment, duly authenticated by the proper officer of the
19-23 country of the foreign bank's organization. The filing does not
19-24 enlarge or alter the business the foreign bank is authorized to
19-25 pursue in this state, authorize the foreign bank to transact
19-26 business in this state under a name other than the name set forth
19-27 in its license, or extend the duration of its corporate existence.
19-28 Sec. 204.108. AMENDED LICENSE FOR BRANCH OR AGENCY. (a) A
19-29 foreign bank licensed to establish and maintain a Texas state
19-30 branch or agency shall apply to the commissioner for an amended
19-31 license if it changes its corporate name, changes the duration of
19-32 its corporate existence, or desires to pursue in this state other
19-33 or additional purposes than those set forth in its prior
19-34 application for the foreign bank's license or amended license then
19-35 in effect.
19-36 (b) The requirements with respect to the form and contents
19-37 of an application under Subsection (a), the manner of its
19-38 execution, the issuance of an amended license, and the effect of
19-39 the amended license are the same as in the case of an initial
19-40 application for a license to establish and maintain a Texas state
19-41 branch or agency.
19-42 Sec. 204.109. RELOCATION OF OFFICE. (a) With the prior
19-43 written approval of the commissioner, a foreign bank licensed to
19-44 establish and maintain a Texas state branch or agency may relocate
19-45 the branch or agency office. A foreign bank that intends to
19-46 relocate a Texas state branch or agency office shall submit a
19-47 letter to the commissioner describing the address of the proposed
19-48 location, the reasons for relocation, and the manner of notifying
19-49 its customers of the relocation.
19-50 (b) On or before the 30th day after the date the foreign
19-51 bank's letter has been accepted for filing and any required fee has
19-52 been paid, the commissioner shall approve or deny the relocation.
19-53 The commissioner may not permit the foreign bank to relocate its
19-54 Texas state branch or agency office if the commissioner finds that
19-55 the proposed location and the manner of relocation and notification
19-56 will be deceptive or that the relocation will impede or tend to
19-57 impede the foreign bank's depositors and creditors in this state.
19-58 Sec. 204.110. SEPARATE ASSETS. (a) Each foreign bank
19-59 licensed to establish and maintain a Texas state branch or agency
19-60 in this state shall keep the assets of its business in this state
19-61 separate and apart from the assets of its business outside this
19-62 state.
19-63 (b) The depositors and creditors of a foreign bank arising
19-64 out of transactions with, and recorded on the books of, its Texas
19-65 state branch or agency are entitled to absolute preference and
19-66 priority over the depositors and creditors of the foreign bank's
19-67 offices located outside this state with respect to the assets of
19-68 the foreign bank in this state.
19-69 Sec. 204.111. DISCLOSURE OF LACK OF DEPOSIT INSURANCE. Each
20-1 foreign bank licensed to establish and maintain a Texas state
20-2 branch or agency shall give notice that deposits and credit
20-3 balances in the office are not insured by the Federal Deposit
20-4 Insurance Corporation.
20-5 Sec. 204.112. LIMITATIONS ON PAYMENT OF INTEREST ON
20-6 DEPOSITS. A foreign bank licensed to establish and maintain a
20-7 Texas state branch or agency is subject to the same limitations
20-8 with respect to the payment of interest on deposits as a state bank
20-9 that is a member of the Federal Reserve System.
20-10 Sec. 204.113. PLEDGE OF ASSETS. (a) In accordance with
20-11 rules adopted under this subtitle, a foreign bank licensed to
20-12 establish and maintain a Texas state branch or agency may be
20-13 required to keep on deposit, with unaffiliated banks in this state
20-14 that the foreign bank designates and the commissioner approves,
20-15 money and securities pledged to the commissioner in an aggregate
20-16 amount to be determined by the commissioner, valued at the lower of
20-17 principal amount or market value, consisting of:
20-18 (1) dollar deposits;
20-19 (2) bonds, notes, debentures, or other legally
20-20 created, general obligations of a state, an agency or political
20-21 subdivision of a state, the United States, or an instrumentality of
20-22 the United States;
20-23 (3) securities that this state, an agency or political
20-24 subdivision of this state, the United States, or an instrumentality
20-25 of the United States has unconditionally agreed to purchase,
20-26 insure, or guarantee;
20-27 (4) securities issued or guaranteed by the Federal
20-28 Home Loan Mortgage Corporation, the Federal National Mortgage
20-29 Association, the Government National Mortgage Association, the
20-30 Federal Agricultural Mortgage Corporation, or the Federal Farm
20-31 Credit Banks Funding Corporation;
20-32 (5) obligations of or issued or guaranteed by the
20-33 International Bank for Reconstruction and Development, the African
20-34 Development Bank, the Asian Development Bank, the InterAmerican
20-35 Development Bank, or the North American Development Bank; or
20-36 (6) other assets as may be permitted by rule.
20-37 (b) The assets deposited and the amount of the assets to be
20-38 maintained under Subsection (a) are subject to the conditions and
20-39 limitations the commissioner considers necessary or desirable for
20-40 the maintenance of a sound financial condition, the protection of
20-41 depositors, creditors, and the public interest in this state, and
20-42 the support of public confidence in the business of the Texas state
20-43 branch or agency. The commissioner may give credit to reserves
20-44 required to be maintained with a federal reserve bank in or outside
20-45 this state pursuant to federal law, in accordance with rules
20-46 adopted under this subtitle.
20-47 (c) While a foreign bank continues business in the ordinary
20-48 course, the foreign bank may collect interest on the money and
20-49 securities deposited under this section and from time to time
20-50 exchange, examine, and verify the securities.
20-51 Sec. 204.114. ASSET MAINTENANCE. (a) In accordance with
20-52 rules adopted under this subtitle, a foreign bank licensed to
20-53 establish and maintain a Texas state branch or agency shall at all
20-54 times satisfy the ratio of branch or agency assets to liabilities
20-55 determined by the commissioner, in the commissioner's sole
20-56 discretion, to be necessary or desirable with respect to the
20-57 foreign bank. The type of assets to be held in this state are
20-58 specified by Subsection (b) and the type of liabilities to be
20-59 included in the ratio are specified by Subsection (c).
20-60 (b) Assets to be held in this state for the purpose of
20-61 satisfying the ratio of assets to liabilities:
20-62 (1) include:
20-63 (A) currency, bonds, notes, debentures, drafts,
20-64 bills of exchange, or other evidences of indebtedness, including
20-65 loan participation agreements or certificates;
20-66 (B) other obligations payable in the United
20-67 States or in United States funds or, with the prior approval of the
20-68 commissioner, in funds freely convertible into United States funds;
20-69 and
21-1 (C) other assets the commissioner permits or as
21-2 may be specified by rule; and
21-3 (2) exclude obligations of a person for money borrowed
21-4 to the extent that the total of the obligations of the person
21-5 exceeds 10 percent of total assets considered for purposes of this
21-6 section.
21-7 (c) Liabilities included for purposes of calculating the
21-8 ratio of assets to liabilities:
21-9 (1) include all liabilities of the foreign bank
21-10 appearing in the books, accounts, or records of its Texas state
21-11 branch or agency, including acceptances; and
21-12 (2) exclude amounts due and other liabilities to other
21-13 offices, agencies, branches, and wholly owned subsidiaries of the
21-14 foreign bank, and other liabilities the commissioner determines.
21-15 The existence of a nominal number of directors' shares outstanding
21-16 does not cause a subsidiary to be considered less than wholly
21-17 owned.
21-18 (d) Subject to rules adopted under this subtitle, the
21-19 commissioner, in the commissioner's sole discretion, may vary the
21-20 ratio of assets to liabilities required by this section for a
21-21 foreign bank as may be necessary or desirable to reflect
21-22 differences among Texas branches or Texas agencies because of:
21-23 (1) the financial condition of Texas branch or agency
21-24 offices of the foreign bank;
21-25 (2) the financial condition of branch or agency
21-26 offices of the foreign bank located in other states;
21-27 (3) the general economic conditions prevalent in the
21-28 home country of the foreign bank; or
21-29 (4) the financial condition of the foreign bank
21-30 itself, including:
21-31 (A) the financial condition of its branches and
21-32 agencies located in other countries;
21-33 (B) the financial condition of its affiliated
21-34 bank and nonbank subsidiaries in the United States; and
21-35 (C) the financial condition of the foreign bank
21-36 on a worldwide consolidated basis or in its home country.
21-37 (e) For purposes of this section, assets must be valued at
21-38 the lower of principal amount or market value. The commissioner
21-39 may determine the value of a non-marketable security, loan, or
21-40 other asset or obligation held or owed to the foreign bank or its
21-41 Texas state branch or agency in this state. If the commissioner
21-42 cannot determine the value of an non-marketable asset, the asset
21-43 must be excluded from the ratio computation.
21-44 (f) The commissioner may require a foreign bank to deposit
21-45 the assets required to be held in this state pursuant to this
21-46 section with specific banks in this state designated by the
21-47 commissioner if, because of the existence or the potential
21-48 occurrence of unusual and extraordinary circumstances, the
21-49 commissioner considers it necessary or desirable for the
21-50 maintenance of a sound financial condition, the protection of
21-51 depositors, creditors, and the public interest in this state, and
21-52 the maintenance of public confidence in the business of a Texas
21-53 state branch or agency.
21-54 Sec. 204.115. VOLUNTARY CLOSURE OF BRANCH OR AGENCY. (a) A
21-55 foreign bank licensed to establish and maintain a Texas state
21-56 branch or agency may not close the office without filing an
21-57 application with, and obtaining the prior approval of, the
21-58 commissioner. An application by a foreign bank under this section
21-59 must be in the form and include the information the commissioner
21-60 requires.
21-61 (b) The commissioner shall approve the application if the
21-62 commissioner finds that the closing of the office will not be
21-63 substantially detrimental to the foreign bank's depositors and
21-64 creditors in this state. An application may be approved subject to
21-65 conditions imposed by the commissioner for the continued protection
21-66 of the foreign bank's depositors and creditors in this state,
21-67 including a condition that the foreign bank pledge assets in the
21-68 manner specified by Section 204.113 for a specified period of time.
21-69 (c) When an application by a foreign bank under this section
22-1 has been approved and all conditions precedent to the closing have
22-2 been fulfilled, the foreign bank may close the office and an
22-3 officer, manager, or agent of the foreign bank shall deliver to the
22-4 commissioner:
22-5 (1) all copies of examination reports or other
22-6 property of the department;
22-7 (2) a statement under oath by an authorized officer,
22-8 manager, or agent of the foreign bank that all deposit and other
22-9 liabilities of the Texas state branch or agency to depositors and
22-10 creditors in this state have been properly discharged by payment or
22-11 pledge or otherwise assumed or retained by a financial institution;
22-12 (3) the license issued by the commissioner;
22-13 (4) an appropriate board resolution closing the Texas
22-14 state branch or agency; and
22-15 (5) a statement of the location where the records of
22-16 the Texas state branch or agency will be kept after the closing.
22-17 Sec. 204.116. ENFORCEMENT. The commissioner may initiate an
22-18 enforcement action under Chapter 35 or a proceeding to revoke the
22-19 license of a Texas state branch or agency if the commissioner by
22-20 examination or other credible evidence finds that the foreign bank:
22-21 (1) does not currently meet the criteria established
22-22 by this chapter for the original issuance of a license;
22-23 (2) has refused to permit the commissioner to examine
22-24 its books, papers, accounts, records, or affairs in accordance with
22-25 Sections 204.002 and 204.003;
22-26 (3) has failed to make a report required under this
22-27 chapter or made a material false or misleading statement in the
22-28 report;
22-29 (4) has violated this subtitle, another law or rule
22-30 applicable to a foreign bank or a Texas state branch or agency, or
22-31 a final and enforceable order of the commissioner or the finance
22-32 commission;
22-33 (5) has misrepresented or concealed a material fact in
22-34 the original application for license;
22-35 (6) has violated a condition of its license or an
22-36 agreement between the foreign bank and the commissioner or the
22-37 department; or
22-38 (7) conducts business in an unsafe and unsound manner.
22-39 Sec. 204.117. PROCEDURE FOR REVOCATION. (a) Notice of a
22-40 revocation proceeding must:
22-41 (1) be in the form of a proposed order;
22-42 (2) be served on the foreign bank by personal delivery
22-43 or registered or certified mail, return receipt requested, to a
22-44 director, officer, manager, or employee of the foreign bank at a
22-45 Texas state branch or agency location, or to the registered agent
22-46 of the foreign bank;
22-47 (3) state the effective date of the proposed order,
22-48 which may not be before the 21st day after the date the proposed
22-49 order is mailed or delivered except as otherwise provided in
22-50 Section 204.118; and
22-51 (4) state the grounds for the proposed revocation with
22-52 reasonable certainty.
22-53 (b) Unless the foreign bank requests a hearing in writing on
22-54 or before the effective date of the proposed order, the order takes
22-55 effect as proposed and is final and nonappealable.
22-56 (c) A hearing requested on a proposed order shall be held
22-57 not later than the 30th day after the date the written request for
22-58 hearing is received by the department unless the parties agree to a
22-59 later hearing date. The department shall participate as the
22-60 opposing party, and the commissioner shall conduct the hearing and
22-61 one or more prehearing conferences and opportunities for discovery
22-62 as the commissioner considers advisable and consistent with
22-63 applicable statutes and rules. The foreign bank may not accept new
22-64 business during the pendency of the hearing unless the commissioner
22-65 gives prior written approval, except that it shall comply with any
22-66 stricter requirements imposed by Section 7(e), International
22-67 Banking Act (12 U.S.C. Section 3105(e)).
22-68 (d) Information relating to the financial condition and
22-69 business affairs of the foreign bank, except previously published
23-1 statements and information, is confidential and may not be
23-2 considered in the public portion of the hearing or disclosed by the
23-3 commissioner or an employee of the department except as provided by
23-4 Subchapter D, Chapter 31.
23-5 (e) Based on the record, the commissioner shall issue or
23-6 refuse to issue the proposed order. An issued order may contain
23-7 modifications indicated by the record to be necessary or desirable,
23-8 including modifications to impose penalties available under Chapter
23-9 35 in lieu of license revocation.
23-10 Sec. 204.118. IMMEDIATE SUSPENSION OR REVOCATION. (a) If
23-11 the commissioner finds that any of the factors set forth in Section
23-12 204.116 are true with respect to a foreign bank licensed to
23-13 maintain a Texas state branch or agency and that it is necessary
23-14 for the protection of the interests of creditors of the foreign
23-15 bank's business in this state or for the protection of the public
23-16 interest that the commissioner immediately suspend or revoke the
23-17 license of the foreign bank, the commissioner may issue, without
23-18 notice and hearing, an order suspending or revoking the license of
23-19 the foreign bank for a period of up to 90 days, pending
23-20 investigation or hearing under Section 204.117.
23-21 (b) An order issued under this section shall be served on
23-22 the foreign bank in the manner required by Section 204.117(a)(2).
23-23 Sec. 204.119. STATUS OF REVOKED LICENSE. Unless stayed by
23-24 the finance commission or district court that has jurisdiction over
23-25 an appeal, a final order of the commissioner revoking a license is
23-26 effective immediately and the foreign bank shall immediately cease
23-27 all activity in this state requiring a license. Subject to Section
23-28 204.120, all functions requiring a license must be immediately
23-29 transferred to a branch, affiliate, or agency of the foreign bank
23-30 that is located outside of this state and that has the power to
23-31 perform those functions under governing law. Continued activity in
23-32 this state of an unlicensed foreign bank is subject to Subchapter
23-33 C, Chapter 35.
23-34 Sec. 204.120. SEIZURE AND LIQUIDATION. (a) If the
23-35 commissioner finds that any of the factors set forth in Section
23-36 204.116 are true with respect to a foreign bank licensed to
23-37 establish and maintain a Texas state branch or agency, the
23-38 commissioner may by order immediately take possession of the
23-39 property and business of the foreign bank in this state if that
23-40 action is necessary or desirable for the protection of the
23-41 interests of the depositors and creditors of the foreign bank's
23-42 business in this state or for the protection of the public. The
23-43 commissioner shall retain possession until the foreign bank resumes
23-44 business in this state or is finally liquidated, except that the
23-45 commissioner may permit the foreign bank to resume business in this
23-46 state on conditions the commissioner requires. An order issued
23-47 under this section shall be served on the foreign bank in the
23-48 manner required by Section 204.117(a)(2).
23-49 (b) As soon as practicable after taking possession of the
23-50 property and business of a foreign bank pursuant to Subsection (a),
23-51 the commissioner shall initiate a receivership proceeding by filing
23-52 a copy of the order issued under this section in a district court
23-53 in Travis County to be governed by Chapter 36 as if the foreign
23-54 bank were a Texas state bank, except as otherwise provided by this
23-55 section. Notwithstanding the priorities established by Chapter 36,
23-56 the depositors and creditors of the Texas state branch or agency,
23-57 arising out of transactions with and recorded on the books of the
23-58 Texas state branch or agency, have an absolute preference and
23-59 priority over the creditors of the foreign bank's offices located
23-60 outside this state.
23-61 (c) An action initiated that seeks to directly or indirectly
23-62 affect the assets of the Texas state branch or agency is considered
23-63 to be an intervention in the receivership proceeding. Venue for an
23-64 action instituted to effect, contest, or otherwise intervene in the
23-65 liquidation of a Texas state branch or agency is in Travis County,
23-66 except that on motion filed and served concurrently with or before
23-67 the filing of the answer, the court may, on a finding of good
23-68 cause, transfer the action to the county of the Texas state branch
23-69 or agency location.
24-1 (d) The foreign bank may contest the commissioner's actions
24-2 as provided by this subsection. On or before the 10th day after
24-3 the date the commissioner has taken possession of the property and
24-4 business of a foreign bank pursuant to Subsection (a), the foreign
24-5 bank, acting through a majority of its directors, may intervene in
24-6 the action filed by the banking commissioner to challenge the
24-7 commissioner's closing of the foreign bank's Texas state branch or
24-8 agency and to enjoin the commissioner or other receiver from
24-9 liquidating its assets. The court may issue an ex parte order
24-10 restraining the commissioner or other receiver from liquidating the
24-11 foreign bank's assets pending a hearing on the injunction. The
24-12 commissioner or other receiver shall comply with the restraining
24-13 order but may petition the court for permission to liquidate an
24-14 asset as necessary to prevent its loss or diminution pending the
24-15 outcome of the injunction. The commissioner or other receiver may
24-16 not be required to post bond. The court shall hear this action as
24-17 quickly as possible and shall give it priority over other business.
24-18 The foreign bank or the commissioner or other receiver may appeal
24-19 the court's judgment as in other civil cases, except that the
24-20 commissioner or other receiver shall retain all seized foreign bank
24-21 assets pending a final appellate court order even if the
24-22 commissioner does not prevail in the trial court. If the
24-23 commissioner prevails in the trial court, liquidation of the state
24-24 trust company may proceed unless the trial court or appellate court
24-25 orders otherwise. If liquidation is enjoined or stayed pending
24-26 appeal, the trial court retains jurisdiction to permit liquidation
24-27 of an asset as necessary to prevent its loss or diminution pending
24-28 the outcome of the appeal.
24-29 (e) After the commissioner or other receiver has completed
24-30 the liquidation of the property and business of a foreign bank, the
24-31 commissioner or other receiver shall transfer any remaining assets
24-32 to the foreign bank in accordance with the court's orders, except
24-33 that:
24-34 (1) if the foreign bank has an office in another state
24-35 of the United States that is in liquidation and the assets of the
24-36 office appear to be insufficient to pay in full the creditors of
24-37 that office, the court shall order the commissioner or other
24-38 receiver to transfer to the liquidator of that office the amount of
24-39 the remaining assets that appears to be necessary to cover the
24-40 insufficiency; or
24-41 (2) if the foreign bank has two or more such offices
24-42 in liquidation and the amount of remaining assets is less than the
24-43 aggregate amount of insufficiencies with respect to the offices,
24-44 the court shall order the commissioner or other receiver to
24-45 distribute the remaining assets among the liquidators of the
24-46 offices in the manner the court finds equitable.
24-47 Sec. 204.121. DISSOLUTION. (a) If a foreign bank licensed
24-48 to maintain a Texas state branch or agency in this state is
24-49 dissolved, has its authority or existence terminated or canceled in
24-50 the jurisdiction of its incorporation, or has its authority to
24-51 maintain a branch or agency in this state terminated by the Board
24-52 of Governors of the Federal Reserve System under Section 7(e),
24-53 International Banking Act (12 U.S.C. Section 3105(e)), an officer,
24-54 manager, or agent of the foreign bank shall deliver to the
24-55 commissioner:
24-56 (1) a certified copy of:
24-57 (A) a certificate of the official responsible
24-58 for records of banking corporations of the foreign bank's
24-59 jurisdiction of incorporation attesting to the occurrence of
24-60 dissolution or of termination or cancellation of authority or
24-61 existence;
24-62 (B) an order or decree of a court directing the
24-63 dissolution of the foreign bank or the termination or cancellation
24-64 of its authority or existence; or
24-65 (C) an order of the Board of Governors of the
24-66 Federal Reserve System terminating its authority under Section
24-67 7(e), International Banking Act (12 U.S.C. Section 3105(e)); and
24-68 (2) the documents and information required by Section
24-69 204.115(c).
25-1 (b) The filing of the certificate, order, or decree has the
25-2 same effect provided by Section 204.119 as if the license issued
25-3 under this subchapter were revoked by the commissioner as of the
25-4 effective date of termination or cancellation specified in the
25-5 certificate, order, or decree unless the commissioner orders an
25-6 earlier effective date, subject to the procedural protections of
25-7 Section 204.117 or 204.118.
25-8 (Sections 204.122-204.200 reserved for expansion
25-9 SUBCHAPTER C. REPRESENTATIVE OFFICES OF FOREIGN BANK
25-10 Sec. 204.201. REGISTRATION OF REPRESENTATIVE OFFICE. (a) A
25-11 foreign bank may establish a Texas representative office if the
25-12 foreign bank files with the commissioner a verified statement of
25-13 registration. A statement of registration must:
25-14 (1) be accompanied by all registration fees and
25-15 deposits required by rule;
25-16 (2) be in the form specified by the commissioner;
25-17 (3) be subscribed and acknowledged by an officer of
25-18 the foreign bank;
25-19 (4) contain as an exhibit or attachment:
25-20 (A) a copy of the foreign bank's notice or
25-21 application submitted to the Board of Governors of the Federal
25-22 Reserve System under Section 10, International Banking Act (12
25-23 U.S.C. Section 3107), and, when issued, the order or notification
25-24 from the board of governors indicating that the representative
25-25 office has been approved;
25-26 (B) an authenticated copy of the foreign bank's
25-27 articles of incorporation and bylaws or other constitutive
25-28 documents and, if the copy is in a language other than English, an
25-29 English translation of the document, under the oath of the
25-30 translator; and
25-31 (C) evidence of compliance with Section 201.102;
25-32 (5) be submitted when the federal notice or
25-33 application is submitted to the board of governors; and
25-34 (6) directly or in exhibits or attachments contain:
25-35 (A) the name of the foreign bank;
25-36 (B) the street address and post office address
25-37 where each Texas representative office is to be located in this
25-38 state;
25-39 (C) the name and qualifications of each officer
25-40 and director of the foreign bank who will have charge of any aspect
25-41 of the business and affairs of the Texas representative office;
25-42 (D) a complete and detailed statement of the
25-43 financial condition of the foreign bank as of a date not more than
25-44 360 days before the date of the filing; and
25-45 (E) other information the commissioner requires.
25-46 (b) The finance commission may adopt rules prescribing
25-47 abbreviated registration procedures and standards for foreign banks
25-48 that have already established an initial Texas representative
25-49 office to establish additional Texas representative offices.
25-50 (c) A foreign bank that maintains a Texas state or federal
25-51 branch or agency in this state is not prohibited from establishing
25-52 or maintaining one or more Texas representative offices.
25-53 Sec. 204.202. PLACE OF BUSINESS. A Texas representative
25-54 office may engage in the business authorized by this subchapter at
25-55 each place of business registered with the commissioner. A Texas
25-56 representative office may change its location in this state by
25-57 filing a notice with the commissioner containing the street address
25-58 and post office address of the new location.
25-59 Sec. 204.203. PERMISSIBLE ACTIVITIES OF REPRESENTATIVE
25-60 OFFICE. (a) A registered Texas representative office of a foreign
25-61 bank may:
25-62 (1) solicit loans and in connection with a loan:
25-63 (A) assemble credit information about the
25-64 borrower;
25-65 (B) inspect and appraise property;
25-66 (C) obtain property title information; and
25-67 (D) prepare a loan application;
25-68 (2) solicit purchasers for loans from the foreign
25-69 bank;
26-1 (3) solicit persons to contract for servicing the
26-2 foreign bank loans;
26-3 (4) conduct research;
26-4 (5) perform services as liaison for customers and
26-5 correspondents of the foreign bank;
26-6 (6) execute loan documents relating to permitted loans
26-7 with the written approval of the foreign bank;
26-8 (7) perform back office administrative functions as
26-9 may be more specifically defined by rule; and
26-10 (8) engage in other activities approved by the
26-11 commissioner or permitted by rule.
26-12 (b) A representative office may not solicit or accept credit
26-13 balances or deposits or make final credit decisions.
26-14 (c) A Texas representative office that is or becomes a
26-15 regional administrative office of the foreign bank, as may be
26-16 defined more fully by rule, may engage in credit approval
26-17 activities if:
26-18 (1) the foreign bank gives prior written notice to the
26-19 commissioner not later than the 30th day before the date the Texas
26-20 representative office engages in credit approval activities; and
26-21 (2) the commissioner does not object within the 30-day
26-22 period to the conduct of the activities by the Texas representative
26-23 office.
26-24 (d) Written notice under Subsection (c) must be in a form
26-25 and contain the information the commissioner requires.
26-26 Sec. 204.204. ENFORCEMENT. The commissioner may initiate an
26-27 enforcement action under Chapter 35 or a proceeding to revoke the
26-28 registration of a representative office if the commissioner by
26-29 examination or other credible evidence finds that the foreign bank:
26-30 (1) has refused to permit the commissioner to examine
26-31 the books, papers, accounts, records, or affairs of a Texas
26-32 representative office in accordance with Sections 204.002 and
26-33 204.003;
26-34 (2) has violated this subtitle, another law or rule
26-35 applicable to a foreign bank or a Texas representative office, or a
26-36 final and enforceable order of the commissioner or the finance
26-37 commission;
26-38 (3) has misrepresented or concealed a material fact in
26-39 the original registration;
26-40 (4) has violated a condition of an agreement between
26-41 the foreign bank and the commissioner, a bank supervisory agency,
26-42 or another state regulatory agency; or
26-43 (5) conducts business in an unsafe and unsound manner.
26-44 Sec. 204.205. PROCEDURE FOR REVOCATION. (a) Notice of a
26-45 revocation proceeding must:
26-46 (1) be in the form of a proposed order;
26-47 (2) be served on the foreign bank by personal delivery
26-48 or registered or certified mail, return receipt requested, to a
26-49 director, officer, or employee of the foreign bank at a Texas
26-50 representative office location, or to the registered agent of the
26-51 foreign bank;
26-52 (3) state the effective date of the proposed order,
26-53 which may not be before the 21st day after the date the proposed
26-54 order is mailed or delivered; and
26-55 (4) state the grounds for the proposed revocation with
26-56 reasonable certainty.
26-57 (b) Unless the foreign bank requests a hearing in writing on
26-58 or before the effective date of the proposed order, the order takes
26-59 effect as proposed and is final and nonappealable.
26-60 (c) A hearing requested on a proposed order shall be held
26-61 not later than the 30th day after the date the written request for
26-62 hearing is received by the commissioner unless the parties agree to
26-63 a later hearing date. The department shall participate as the
26-64 opposing party, and the commissioner shall conduct the hearing and
26-65 one or more prehearing conferences and opportunities for discovery
26-66 as the commissioner considers advisable and consistent with
26-67 applicable statutes and rules. During the pendency of the hearing
26-68 and unless the commissioner gives prior written approval, the
26-69 foreign bank may not accept new business from this state.
27-1 (d) Information relating to the financial condition and
27-2 business affairs of the foreign bank, except previously published
27-3 statements and information, is confidential and may not be
27-4 considered in the public portion of the hearing or disclosed by the
27-5 commissioner or an employee of the department except as provided by
27-6 Subchapter D, Chapter 31.
27-7 (e) Based on the record, the commissioner shall issue or
27-8 refuse to issue the proposed order. An issued order may contain
27-9 modifications indicated by the record to be necessary or desirable,
27-10 including modifications to impose penalties available under Chapter
27-11 35 in lieu of revocation of registration.
27-12 Sec. 204.206. EFFECT OF REVOKED REGISTRATION. A foreign
27-13 bank that has had its registration under this subchapter revoked
27-14 shall cease all activities in this state. Continued activity in
27-15 this state of an unregistered foreign bank is subject to Subchapter
27-16 C, Chapter 35.
27-17 Sec. 204.207. DISSOLUTION. (a) If a foreign bank with a
27-18 registered Texas representative office is dissolved, has its
27-19 authority or existence terminated or canceled in the jurisdiction
27-20 of its incorporation, or has its authority to maintain its Texas
27-21 representative office terminated by the Board of Governors of the
27-22 Federal Reserve System under Section 10(b), International Banking
27-23 Act (12 U.S.C. Section 3107(b)), an officer, manager, or agent of
27-24 the foreign bank shall deliver to the commissioner a certified copy
27-25 of:
27-26 (1) a certificate of the official responsible for
27-27 records of banking corporations of the foreign bank's jurisdiction
27-28 of incorporation attesting to the occurrence of dissolution or of
27-29 termination or cancellation of authority or existence;
27-30 (2) an order or decree of a court directing the
27-31 dissolution of the foreign bank or the termination or cancellation
27-32 of its authority or existence; or
27-33 (3) an order of the Board of Governors of the Federal
27-34 Reserve System terminating its authority under Section 10(b),
27-35 International Banking Act (12 U.S.C. Section 3107(b)).
27-36 (b) The filing of the certificate, order, or decree has the
27-37 same effect under Section 204.206 as if the registration made under
27-38 this subchapter were revoked by the commissioner.
27-39 ARTICLE 2. CONFORMING AMENDMENTS TO FINANCE CODE
27-40 SECTION 2.001. Section 12.110(a), Finance Code, is amended
27-41 to read as follows:
27-42 (a) The banking commissioner or an officer or employee of
27-43 the department commits an offense if the person knowingly:
27-44 (1) discloses information or permits access to a file
27-45 or record of the department in violation of Subchapter D, Chapter
27-46 31;
27-47 (2) becomes directly or indirectly indebted to, or
27-48 financially interested in, an entity supervised or regulated by the
27-49 banking commissioner [a state bank, foreign bank agency, or trust
27-50 company]; or
27-51 (3) purchases an asset owned by an entity supervised
27-52 or regulated by the banking commissioner [a state bank or trust
27-53 company] in the possession of the banking commissioner or other
27-54 receiver for purposes of liquidation.
27-55 SECTION 2.002. Sections 31.002(a)(2), (8), (50), and (52),
27-56 Finance Code, are amended to read as follows:
27-57 (2) "Bank" means a state or national bank. If the
27-58 context requires, the term includes a bank as defined by Section
27-59 201.002(a)(4) that is organized under the laws of another state or
27-60 country.
27-61 (8) "Branch" means a location of a bank, other than
27-62 the bank's home office, at which the bank engages in the business
27-63 of banking. The term does not include:
27-64 (A) a drive-in facility located not more than
27-65 2,000 feet from the nearest wall of the home office or an approved
27-66 branch office of the bank;
27-67 (B) a night depository;
27-68 (C) an electronic terminal subject to Section
27-69 59.201;
28-1 (D) a loan production office subject to Section
28-2 32.204;
28-3 (E) a state or federally licensed armored car
28-4 service or other courier service transporting items for deposit or
28-5 payment, unless:
28-6 (i) the risk of loss of items in the
28-7 custody of the service is borne by the employing bank; or
28-8 (ii) the items in the custody of the
28-9 service are considered to be in customer accounts at the employing
28-10 bank or federally insured through the employing bank;
28-11 (F) a bank acting as an agent for another [a]
28-12 depository institution [affiliate] as provided by Section
28-13 59.005(a); or
28-14 (G) other offices as determined by rule.
28-15 (50) "State bank" means a banking association or
28-16 limited banking association organized or reorganized under this
28-17 subtitle, including an association organized under the laws of this
28-18 state before September 1, 1995, with the express power to receive
28-19 and accept deposits and possessing other rights and powers granted
28-20 by this subtitle expressly or by implication. The term does not
28-21 include a savings association, savings bank, or credit union. If
28-22 the context requires, the term includes a bank as defined by
28-23 Section 201.002(a)(4) that is organized under the laws of another
28-24 state or country.
28-25 (52) "State savings bank" means a savings bank
28-26 organized under or subject to Subtitle C. If the context requires,
28-27 the term includes a savings bank organized under the laws of
28-28 another state.
28-29 SECTION 2.003. Section 31.005(b), Finance Code, is amended
28-30 to read as follows:
28-31 (b) Subsection (a) does not apply to[:]
28-32 [(1)] a depository institution or other [authorized to
28-33 conduct business in this state;]
28-34 [(2) a foreign bank agency;]
28-35 [(3) a loan production office or representative office
28-36 of a foreign bank corporation or an out-of-state bank established
28-37 in compliance with this subtitle; or]
28-38 [(4) another] entity organized under the laws of this
28-39 state, another state, the United States, or a foreign sovereign
28-40 state to the extent that the depository institution or other entity
28-41 is:
28-42 (1) [(A) the entity is] authorized under its charter
28-43 or the laws of this state or the United States to use a term, word,
28-44 character, ideogram, phonogram, or phrase prohibited by Subsection
28-45 (a); and
28-46 (2) [(B) the entity is] authorized by the laws of this
28-47 state or the United States to conduct the activities in which it
28-48 [the entity] is engaged in this state.
28-49 SECTION 2.004. Section 31.007(a), Finance Code, is amended
28-50 to read as follows:
28-51 (a) An officer, director, manager, managing participant, or
28-52 employee of a bank that has its main office or a branch located in
28-53 this state with fewer than 500 shareholders or participants or of a
28-54 bank holding company with fewer than 500 shareholders or
28-55 participants that controls a bank that has its main office or a
28-56 branch located in this state is exempt from the registration and
28-57 licensing provisions of The Securities Act (Article 581-1 et seq.,
28-58 Vernon's Texas Civil Statutes) with respect to that person's
28-59 participation in a transaction, including a sale, involving
28-60 securities issued by:
28-61 (1) the bank or bank holding company of which that
28-62 person is an officer, director, manager, managing participant, or
28-63 employee;
28-64 (2) a bank holding company that controls the bank of
28-65 which that person is an officer, director, manager, managing
28-66 participant, or employee; or
28-67 (3) a bank controlled by the bank holding company of
28-68 which that person is an officer, director, manager, managing
28-69 participant, or employee.
29-1 SECTION 2.005. Sections 31.102 and 31.103, Finance Code, are
29-2 amended to read as follows:
29-3 Sec. 31.102. ISSUANCE OF INTERPRETIVE STATEMENTS. (a) The
29-4 banking commissioner[:]
29-5 [(1)] may issue interpretive statements containing
29-6 matters of general policy to guide the public and state banks,
29-7 and[;]
29-8 [(2) shall file the statements for publication in the
29-9 Texas Register; and]
29-10 [(3)] may amend or repeal a published interpretive
29-11 statement by issuing an amended statement or notice of repeal of a
29-12 statement [and filing the statement or notice for publication in
29-13 the Texas Register].
29-14 (b) An interpretive statement may be disseminated by
29-15 newsletter, via an electronic medium such as the internet, in a
29-16 volume of statutes or related materials published by the banking
29-17 commissioner or others, or by other means reasonably calculated to
29-18 notify persons affected by the interpretive statement. Notice of
29-19 an amended or withdrawn statement must be disseminated in a
29-20 substantially similar manner as the affected statement was
29-21 originally disseminated [The secretary of state shall publish a
29-22 filed statement or notice in the Texas Register and a designated
29-23 chapter of the Texas Administrative Code].
29-24 Sec. 31.103. ISSUANCE OF OPINION. (a) In response to a
29-25 specific request from a member of the public or the banking
29-26 industry, the banking commissioner may issue an opinion directly or
29-27 through the deputy banking commissioner or a department attorney.
29-28 (b) If the banking commissioner determines that the opinion
29-29 is useful for the general guidance of the public, state banks, or
29-30 trust companies, the commissioner may disseminate the opinion by
29-31 newsletter, via an electronic medium such as the internet, in a
29-32 volume of statutes or related materials published by the banking
29-33 commissioner or others, or by other means reasonably calculated to
29-34 notify persons affected by the opinion [file the opinion for
29-35 publication in the Texas Register]. A published opinion must be
29-36 redacted to preserve the confidentiality of the requesting party
29-37 unless the requesting party consents to be identified in the
29-38 published opinion.
29-39 (c) The banking commissioner may amend or repeal a published
29-40 opinion by issuing an amended opinion or notice of repeal of an
29-41 opinion and disseminating [filing] the opinion or notice in a
29-42 substantially similar manner as the affected statement or opinion
29-43 was originally disseminated [for publication in the Texas
29-44 Register]. The requesting party, however, may rely on the original
29-45 opinion if:
29-46 (1) all material facts were originally disclosed to
29-47 the banking commissioner;
29-48 (2) the safety and soundness of the affected bank will
29-49 not be affected by further reliance on the original opinion; and
29-50 (3) the text and interpretation of relevant, governing
29-51 provisions of this subtitle or Chapter 12 have not been changed by
29-52 legislative or judicial action.
29-53 [(d) The secretary of state shall publish the filed opinions
29-54 and notices in the Texas Register and a designated chapter of the
29-55 Texas Administrative Code.]
29-56 SECTION 2.006. Subchapter A, Chapter 32, Finance Code, is
29-57 amended by adding Section 32.010 to read as follows:
29-58 Sec. 32.010. ADDITIONAL POWERS. (a) Notwithstanding
29-59 another law, a Texas state bank may perform an act, own property,
29-60 or offer a product or service that is at the time permissible
29-61 within the United States for a depository institution organized
29-62 under federal law or the law of this state or another state, if the
29-63 banking commissioner approves the exercise of the power as provided
29-64 by this section, subject to the same limitations and restrictions
29-65 applicable to the other depository institution by pertinent law,
29-66 except to the extent the limitations and restrictions are modified
29-67 by rules adopted under Subsection (e). This section may not be
29-68 used by a Texas state bank to alter or negate the application of
29-69 the laws of this state with respect to:
30-1 (1) establishment and maintenance of a branch in this
30-2 state or another state or country;
30-3 (2) sale of insurance products and services in this
30-4 state;
30-5 (3) permissible interest rates and loan fees
30-6 chargeable in this state;
30-7 (4) fiduciary duties owed to a client or customer by
30-8 the bank in its capacity as fiduciary in this state;
30-9 (5) consumer protection laws applicable to
30-10 transactions in this state; or
30-11 (6) real estate development, marketing, and sales
30-12 activities in this state.
30-13 (b) A state bank that intends to exercise a power, directly
30-14 or through a subsidiary, granted by Subsection (a) that is not
30-15 otherwise authorized for state banks under the statutes of this
30-16 state shall submit a letter to the banking commissioner describing
30-17 in detail the power that the bank proposes to exercise and the
30-18 specific authority of another depository institution to exercise
30-19 the power. The bank shall attach copies, if available, of relevant
30-20 law, regulations, and interpretive letters. The bank may begin to
30-21 exercise the proposed power after the 30th day after the date the
30-22 banking commissioner receives the bank's letter unless the banking
30-23 commissioner specifies an earlier or later date or prohibits the
30-24 activity. The banking commissioner may prohibit the bank from
30-25 exercising the power only if the banking commissioner finds that:
30-26 (1) specific authority does not exist for another
30-27 depository institution to exercise the proposed power;
30-28 (2) if the state bank is insured by the Federal
30-29 Deposit Insurance Corporation, the state bank is prohibited from
30-30 exercising the power pursuant to Section 24, Federal Deposit
30-31 Insurance Act (12 U.S.C. Section 1831a), as amended, and 12 C.F.R.
30-32 Part 362; or
30-33 (3) the exercise of the power by the bank would
30-34 adversely affect the safety and soundness of the bank.
30-35 (c) The banking commissioner may extend the 30-day period
30-36 under Subsection (b) if the banking commissioner determines that
30-37 the bank's letter raises issues requiring additional information or
30-38 additional time for analysis. If the 30-day period is extended,
30-39 the bank may exercise the proposed power only on prior written
30-40 approval by the banking commissioner, except that the banking
30-41 commissioner must approve or prohibit the proposed power or convene
30-42 a hearing under Section 31.201 not later than the 60th day after
30-43 the date the banking commissioner receives the bank's letter. If a
30-44 hearing is convened, the banking commissioner must approve or
30-45 prohibit the proposed power not later than the 30th day after the
30-46 date the hearing is completed.
30-47 (d) A state bank that is denied the requested power by the
30-48 banking commissioner under this section may appeal as provided by
30-49 Sections 31.202, 31.203, and 31.204 or may resubmit a letter under
30-50 this section with additional information or authority relevant to
30-51 the banking commissioner's determination. A denial is immediately
30-52 final for purposes of appeal.
30-53 (e) To effectuate this section, the finance commission may
30-54 adopt rules implementing the method or manner in which a state bank
30-55 exercises specific powers granted under this section, including
30-56 rules regarding the exercise of a power that would be prohibited to
30-57 state banks under state law but for this section. The finance
30-58 commission may not adopt rules under this subsection unless it
30-59 considers the factors listed in Section 31.003(b) and finds that:
30-60 (1) the conditions for prohibition by the banking
30-61 commissioner under Subsection (b) do not exist; and
30-62 (2) if the rights and privileges would be prohibited
30-63 to state banks under other state law, the rules contain adequate
30-64 safeguards and controls, consistent with safety and soundness, to
30-65 address the concern of the legislature evidenced by the state law
30-66 the rules would affect.
30-67 (f) The exercise of a power by a state bank in compliance
30-68 with and in the manner authorized by this section is not a
30-69 violation of any statute of this state.
31-1 SECTION 2.007. Section 32.202(a), Chapter 32, Finance Code,
31-2 is amended to read as follows:
31-3 (a) Each state bank must have and continuously maintain in
31-4 this state a home office. The home office must be a location at
31-5 which the bank does business with the public and keeps its
31-6 corporate books and records. At least one officer of the bank must
31-7 maintain an office at the home office. In addition to the
31-8 registered agent for the bank, if one is maintained pursuant to
31-9 Section 201.103, [and] each officer at the home office is an agent
31-10 for service of process for the bank.
31-11 SECTION 2.008. Subchapter D, Chapter 32, Finance Code, is
31-12 amended by adding Section 32.304 to read as follows:
31-13 Sec. 32.304. LIMITATION ON CONTROL OF DEPOSITS. (a) A
31-14 merger is not permitted under this subchapter if, on consummation
31-15 of the transaction, the resulting state bank, including all insured
31-16 depository institution affiliates of the resulting state bank,
31-17 would control 20 percent or more of the total amount of deposits in
31-18 this state held by all insured depository institutions in this
31-19 state.
31-20 (b) On request of the banking commissioner the applicant
31-21 shall provide supplemental information to the banking commissioner
31-22 to aid in a determination under this section, including information
31-23 that is more current than or in addition to information in the most
31-24 recently available summary of deposits, reports of condition, or
31-25 similar reports filed with or produced by state or federal
31-26 authorities.
31-27 (c) In this section, "deposit" and "insured depository
31-28 institution" have the meanings assigned by Section 3, Federal
31-29 Deposit Insurance Act (12 U.S.C. Section 1813), as amended.
31-30 SECTION 2.009. Subchapter E, Chapter 32, Finance Code, is
31-31 amended by adding Section 32.406 to read as follows:
31-32 Sec. 32.406. LIMITATION ON CONTROL OF DEPOSITS. (a) A
31-33 purchase of assets is not permitted under Section 32.401 if, on
31-34 consummation of the transaction, the acquiring state bank,
31-35 including all insured depository institution affiliates of the
31-36 resulting state bank, would control 20 percent or more of the total
31-37 amount of deposits in this state held by all insured depository
31-38 institutions in this state.
31-39 (b) On request of the banking commissioner the applicant
31-40 shall provide supplemental information to the banking commissioner
31-41 to aid in a determination under this section, including information
31-42 that is more current than or in addition to information in the most
31-43 recently available summary of deposits, reports of condition, or
31-44 similar reports filed with or produced by state or federal
31-45 authorities.
31-46 (c) In this section, "deposit" and "insured depository
31-47 institution" have the meanings assigned by Section 3, Federal
31-48 Deposit Insurance Act (12 U.S.C. Section 1813), as amended.
31-49 SECTION 2.010. Subchapter F, Chapter 32, Finance Code, is
31-50 amended to read as follows:
31-51 SUBCHAPTER F. EXIT OF STATE BANK OR ENTRY OF ANOTHER
31-52 FINANCIAL INSTITUTION
31-53 Sec. 32.501. MERGER[, REORGANIZATION,] OR CONVERSION OF
31-54 STATE BANK INTO ANOTHER FINANCIAL INSTITUTION [NATIONAL BANK OR
31-55 SAVINGS BANK OR SAVINGS ASSOCIATION]. (a) Subject to Subtitle G,
31-56 a [A] state bank may act as necessary under and to the extent
31-57 permitted by the laws of the United States, [or] this state,
31-58 another state, or another country to merge[, reorganize,] or
31-59 convert into another financial institution, as that term is defined
31-60 by Section 201.101 [a national bank, state or federal savings bank,
31-61 or state or federal savings association].
31-62 (b) The merger[, reorganization,] or conversion by the state
31-63 bank must be made and approval of its board, shareholders, or
31-64 participants must be obtained in accordance with the Texas Business
31-65 Corporation Act as if the state bank were a domestic corporation
31-66 and all other parties to the transaction, if any, were foreign
31-67 corporations and other entities, except as provided by rule. For
31-68 purposes of this subsection, a conversion is considered a merger
31-69 into the successor form of financial institution.
32-1 (c) The state bank does not cease to be a state bank subject
32-2 to the supervision of the banking commissioner unless:
32-3 (1) the banking commissioner has been given written
32-4 notice of the intention to merge[, reorganize,] or convert before
32-5 the 31st day before the date of the proposed transaction;
32-6 (2) the bank has published notice of the transaction,
32-7 in the form and frequency specified by the banking commissioner,
32-8 in:
32-9 (A) a newspaper of general circulation published
32-10 in the county of its home office or, if such a newspaper is not
32-11 published in the county, in an adjacent county; and
32-12 (B) other locations that the banking
32-13 commissioner considers appropriate;
32-14 (3) the bank has filed with the banking commissioner:
32-15 (A) a copy of the application filed with the
32-16 successor regulatory authority, including a copy of each contract
32-17 evidencing or implementing the merger[, reorganization,] or
32-18 conversion, or other documents sufficient to show compliance with
32-19 applicable law;
32-20 (B) a certified copy of all minutes of board
32-21 meetings and shareholder or participant meetings at which action
32-22 was taken regarding the merger[, reorganization,] or conversion;
32-23 and
32-24 (C) a publisher's certificate showing
32-25 publication of the required notice;
32-26 (4) the banking commissioner determines that:
32-27 (A) all deposit and other liabilities of the
32-28 state bank are fully discharged, assumed, or otherwise retained by
32-29 the successor form of financial institution;
32-30 (B) any conditions imposed by the banking
32-31 commissioner for the protection of depositors and creditors have
32-32 been met or otherwise resolved; and
32-33 (C) any required filing fees have been paid; and
32-34 (5) the bank has received a certificate of authority
32-35 to do business as the successor financial institution [a national
32-36 bank, state or federal savings bank, or state or federal savings
32-37 association].
32-38 (d) Section 32.304 applies to a proposed merger under this
32-39 section.
32-40 Sec. 32.502. CONVERSION OF FINANCIAL INSTITUTION INTO STATE
32-41 BANK. (a) A financial institution, as that term is defined by
32-42 Section 201.101, may apply to the banking commissioner for
32-43 conversion into a state bank on a form prescribed by the banking
32-44 commissioner and accompanied by any required fee if the institution
32-45 follows the procedures prescribed by the laws of the United States,
32-46 [or] this state, another state, or another country governing the
32-47 exit of the financial institution for the purpose of conversion
32-48 into a state bank from the regulatory system applicable before the
32-49 conversion. A banking association or limited banking association
32-50 may convert its organizational form under this section.
32-51 (b) A financial [An] institution applying to convert into a
32-52 state bank may receive a certificate of authority to do business as
32-53 a state bank if the banking commissioner finds that:
32-54 (1) the financial institution is not engaging in a
32-55 pattern or practice of unsafe and unsound banking practices;
32-56 (2) the financial institution has adequate
32-57 capitalization for a state bank to engage in business at the same
32-58 locations as the financial institution is engaged in business
32-59 before the conversion;
32-60 (3) the financial institution can be expected to
32-61 operate profitably after the conversion;
32-62 (4) the officers, directors, managers, and managing
32-63 participants of the financial institution as a group have
32-64 sufficient banking experience, ability, standing, competence,
32-65 trustworthiness, and integrity to justify a belief that the
32-66 financial institution will operate as a state bank in compliance
32-67 with law; [and]
32-68 (5) each principal shareholder or participant has
32-69 sufficient experience, ability, standing, competence,
33-1 trustworthiness, and integrity to justify a belief that the
33-2 financial institution will be free from improper or unlawful
33-3 influence or interference with respect to the financial
33-4 institution's operation as a state bank in compliance with law; and
33-5 (6) if the converting financial institution did not
33-6 have general depository powers and the state bank will have those
33-7 powers, the factors set forth in Section 32.003(b) are satisfied.
33-8 (c) The banking commissioner may:
33-9 (1) request additional information considered
33-10 necessary to an informed decision under this section;
33-11 (2) perform an examination of the converting financial
33-12 institution at the expense of the converting financial institution;
33-13 and
33-14 (3) require that examination fees be paid before a
33-15 certificate of authority is issued.
33-16 (d) In connection with the application, the converting
33-17 financial institution must:
33-18 (1) submit a statement of the law governing the exit
33-19 of the financial institution from the regulatory system applicable
33-20 before the conversion and the terms of the transition into a state
33-21 bank; and
33-22 (2) demonstrate that all applicable law has been fully
33-23 satisfied.
33-24 SECTION 2.011. Section 33.005, Finance Code, is amended to
33-25 read as follows:
33-26 Sec. 33.005. EXEMPTIONS. The following acquisitions are
33-27 exempt from Section 33.001:
33-28 (1) an acquisition of securities in connection with
33-29 the exercise of a security interest or otherwise in full or partial
33-30 satisfaction of a debt previously contracted for in good faith and
33-31 the acquiring person files written notice of acquisition with the
33-32 banking commissioner before the person votes the securities
33-33 acquired;
33-34 (2) an acquisition of voting securities in any class
33-35 or series by a controlling person who has previously complied with
33-36 and received approval under this subchapter or who was identified
33-37 as a controlling person in a prior application filed with and
33-38 approved by the banking commissioner;
33-39 (3) an acquisition or transfer by operation of law,
33-40 will, or intestate succession and the acquiring person files
33-41 written notice of acquisition with the banking commissioner before
33-42 the person votes the securities acquired;
33-43 (4) a transaction subject to Chapter 202 [38]; and
33-44 (5) a transaction exempted by the banking commissioner
33-45 or by rules adopted under this subtitle because the transaction is
33-46 not within the purposes of this subchapter or the regulation of the
33-47 transaction is not necessary or appropriate to achieve the
33-48 objectives of this subchapter.
33-49 SECTION 2.0115. Section 33.103, Finance Code, is amended by
33-50 adding Subsection (f) to read as follows:
33-51 (f) The banking commissioner in the exercise of discretion
33-52 may waive or reduce the residency requirements for directors set
33-53 forth in Subsection (a).
33-54 SECTION 2.012. Section 34.301, Finance Code, is amended by
33-55 adding Subsection (c) to read as follows:
33-56 (c) To the extent provided by Section 4.102(c), Business &
33-57 Commerce Code, the laws of this state govern a deposit contract
33-58 between a bank and a consumer account holder if the branch or
33-59 separate office of the bank that accepts the deposit contract is
33-60 located in this state.
33-61 SECTION 2.013. Section 35.003(a), Finance Code, is amended
33-62 to read as follows:
33-63 (a) The banking commissioner has grounds to remove a present
33-64 or former officer, director, manager, managing participant, or
33-65 employee of a state bank from office or employment in, or prohibit
33-66 a controlling shareholder or participant or other person
33-67 participating in the affairs of a state bank from further
33-68 participation in the affairs of, a state bank[, trust company, or
33-69 other entity chartered or licensed by the banking commissioner
34-1 under the laws of this state] if the banking commissioner
34-2 determines from examination or other credible evidence that:
34-3 (1) the person:
34-4 (A) intentionally committed or participated in
34-5 commission of an act described by Section 35.002(a) with regard to
34-6 the affairs of the bank; or
34-7 (B) violated a final cease and desist order
34-8 issued in response to the same or a similar act;
34-9 (2) because of this action by the person:
34-10 (A) the bank has suffered or will probably
34-11 suffer financial loss or other damage;
34-12 (B) the interests of the bank's depositors have
34-13 been or could be prejudiced; or
34-14 (C) the person has received financial gain or
34-15 other benefit by reason of the action; and
34-16 (3) the action:
34-17 (A) involves personal dishonesty on the part of
34-18 the person; or
34-19 (B) demonstrates wilful or continuing disregard
34-20 for the safety or soundness of the bank.
34-21 SECTION 2.014. Section 35.007(a), Finance Code, is amended
34-22 to read as follows:
34-23 (a) Without the prior written approval of the banking
34-24 commissioner, a person subject to a final and enforceable removal
34-25 or prohibition order issued by the banking commissioner may not:
34-26 (1) serve as a director, officer, or employee of a
34-27 state bank, trust company, or other entity chartered or licensed by
34-28 the banking commissioner under the laws of this state, including an
34-29 interstate branch, trust office, or representative office in this
34-30 state of an out-of-state state bank, trust company, or foreign
34-31 bank;
34-32 (2) directly or indirectly participate in any manner
34-33 in the management of such an entity;
34-34 (3) directly or indirectly vote for a director of such
34-35 an entity; or
34-36 (4) solicit, procure, transfer, attempt to transfer,
34-37 vote, or attempt to vote a proxy, consent, or authorization with
34-38 respect to voting rights in such an entity.
34-39 SECTION 2.015. Section 35.201, Finance Code, is amended to
34-40 read as follows:
34-41 Sec. 35.201. INAPPLICABILITY. This subchapter does not
34-42 apply to a financial institution, as that term is defined by
34-43 Section 201.101, that lawfully maintains its main office or a
34-44 branch in this state [state or national bank, a state or federal
34-45 savings bank, a state or federal savings association, or a state or
34-46 federal credit union].
34-47 SECTION 2.016. Subchapter A, Chapter 59, Finance Code, is
34-48 amended to read as follows:
34-49 SUBCHAPTER A. GENERAL PROVISIONS
34-50 Sec. 59.001. DEFINITIONS. In this subchapter:
34-51 (1) "Civil action" means a civil proceeding pending in
34-52 a tribunal. The term does not include an examination or
34-53 enforcement proceeding initiated by:
34-54 (A) a governmental agency with primary
34-55 regulatory jurisdiction over a financial institution in possession
34-56 of a compliance review document;
34-57 (B) the Federal Deposit Insurance
34-58 Corporation or its successor; or
34-59 (C) the board of governors of the Federal
34-60 Reserve System or its successor.
34-61 (2) "Claim against a customer" means a writ of
34-62 attachment, writ of garnishment, notice of freeze, notice of levy,
34-63 notice of child support lien, notice of seizure, notice of
34-64 receivership, restraining order, injunction or other instrument
34-65 served on or delivered to a financial institution and purporting to
34-66 assert, establish, or perfect any interest in or claim against an
34-67 account, extension of credit, or product of the financial
34-68 institution held or established by the financial institution in the
34-69 name of the customer or for the benefit of the customer, or in the
35-1 name of the financial institution as the fiduciary, agent, or
35-2 custodian or in another representative capacity for the customer.
35-3 The term does not include citation or other process in a civil suit
35-4 in which the financial institution is made a defendant and against
35-5 which claims for affirmative relief are asserted, even though the
35-6 subject matter of the suit is an account, extension of credit, or
35-7 product of the financial institution held or established by the
35-8 financial institution in the name of a customer or in the name of
35-9 the financial institution as the fiduciary, agent, or custodian or
35-10 in another representative capacity for the customer.
35-11 (3) "Compliance review document" means a document
35-12 prepared by or for a compliance review committee acting pursuant to
35-13 Section 59.009.
35-14 (4) "Customer" means a person who uses, purchases, or
35-15 obtains an account, extension of credit, or product of a financial
35-16 institution or for whom a financial institution acts as a
35-17 fiduciary, agent, or custodian or in another representative
35-18 capacity.
35-19 (5) "Financial institution" has the meaning assigned
35-20 by Section 201.101, except that the term does not include a
35-21 financial institution organized under the laws of another state or
35-22 organized under federal law with its main office in another state
35-23 that does not maintain a branch or other office in this state.
35-24 (6) "Out-of-state financial institution" means a
35-25 financial institution, organized under the laws of another state or
35-26 organized under federal law with its main office in another state,
35-27 that has a branch or other office in this state.
35-28 (7) "Record" means financial or other information of a
35-29 customer maintained by a financial institution.
35-30 (8) "Record request" means a valid and enforceable
35-31 subpoena, request for production, or other instrument issued under
35-32 authority of a tribunal that compels production of a customer
35-33 record.
35-34 (9) "Texas financial institution" means a financial
35-35 institution organized under the laws of this state or organized
35-36 under federal law with its main office in this state.
35-37 (10) "Tribunal" means a court or other adjudicatory
35-38 tribunal with jurisdiction to issue a request for records,
35-39 including a government agency exercising adjudicatory functions and
35-40 an alternative dispute resolution mechanism, voluntary or required,
35-41 under which a party may compel the production of records. [OFFICE
35-42 OF OUT-OF-STATE BANK. (a) A bank that is not domiciled or
35-43 primarily located in this state may establish one or more offices
35-44 in this state for any lawful purpose. Before transacting business
35-45 in this state, the bank shall file with the secretary of state:]
35-46 [(1) an executed instrument, by its terms of
35-47 indefinite duration and irrevocable, appointing the secretary of
35-48 state as its agent for service of process on whom a notice or
35-49 process issued by a court in this state may be served in an action
35-50 or proceeding relating to the business of the bank in this state;
35-51 and]
35-52 [(2) a written certificate of designation specifying
35-53 the name and address of the officer, agent, or other person to whom
35-54 the notice or process should be forwarded by the secretary of
35-55 state.]
35-56 [(b) A bank may change a certificate of designation under
35-57 Subsection (a)(2) by filing an amended certificate of designation.]
35-58 [(c) The secretary of state shall collect the following
35-59 fees:]
35-60 [(1) $100 for indexing and filing the initial
35-61 certificate of designation and accompanying instruments required to
35-62 be filed by Subsection (a); and]
35-63 [(2) $15 for filing an amended certificate of
35-64 designation.]
35-65 [(d) On receipt of a notice or process, the secretary of
35-66 state shall promptly forward it by registered or certified mail,
35-67 return receipt requested, to the designated person. Failure of the
35-68 bank to maintain a designated person does not affect the validity
35-69 of service mailed to the most recently designated person at the
36-1 most recently designated address. Service of notice or process on
36-2 the secretary of state as agent for a bank described in this
36-3 section has the same effect as personal service made in this state
36-4 on a depository institution.]
36-5 [(e) A bank that complies with this section is not
36-6 transacting business in this state for purposes of Part Eight,
36-7 Texas Business Corporation Act.]
36-8 [(f) A bank described by Subsection (a) may not use any form
36-9 of advertising, including a sign or printed or broadcast material,
36-10 that implies or tends to imply that the bank is engaged in banking
36-11 business that the bank is not legally authorized to transact.]
36-12 Sec. 59.002. SLANDER OR LIBEL OF BANK. (a) A person
36-13 commits an offense if the person:
36-14 (1) knowingly makes, circulates, or transmits to
36-15 another person an untrue statement that is derogatory to the
36-16 financial condition of a bank located in this state; or
36-17 (2) with intent to injure a bank located in this
36-18 state, counsels, aids, procures, or induces another person to
36-19 knowingly make, circulate, or transmit to another person an untrue
36-20 statement that is derogatory to the financial condition of any bank
36-21 located in this state.
36-22 (b) An offense under this section is a state jail felony.
36-23 Sec. 59.003. AUTHORITY OF NOTARY PUBLIC. A notary public is
36-24 not disqualified from taking an acknowledgment or proof of a
36-25 written instrument as provided by Section 406.016, Government Code,
36-26 solely because of the person's ownership of stock or a
36-27 participation interest in or employment by a financial institution
36-28 [bank] that is an interested party to the underlying transaction.
36-29 Sec. 59.004. SUCCESSION OF TRUST POWERS. (a) If, at the
36-30 time of a merger, reorganization, conversion, [or] sale of
36-31 substantially all of its assets under Chapter 32 or other
36-32 applicable law, or sale of substantially all of its trust accounts
36-33 and related activities at a separate branch or other office, a
36-34 reorganizing or selling financial institution is acting as trustee,
36-35 guardian, executor, or administrator, or in another fiduciary
36-36 capacity, a [the] successor or purchasing financial institution
36-37 with sufficient fiduciary authority may [entity with fiduciary
36-38 powers may, without the necessity of judicial action or action by
36-39 the creator of the trust,] continue the office, trust, or fiduciary
36-40 relationship:
36-41 (1) without the necessity of judicial action or action
36-42 by the creator of the office, trust, or fiduciary relationship; and
36-43 (2) without regard to whether the successor or
36-44 purchasing financial institution meets qualification requirements
36-45 specified in an instrument creating the office, trust, or fiduciary
36-46 relationship other than a requirement related to geographic locale
36-47 of account administration, including requirements as to
36-48 jurisdiction of incorporation, location of principal office, or
36-49 type of financial institution.
36-50 (b) The successor or purchasing financial institution
36-51 [entity] may perform all the duties and exercise all the powers
36-52 connected with or incidental to the fiduciary relationship in the
36-53 same manner as if the successor or purchasing financial institution
36-54 [entity] had been originally designated as the fiduciary.
36-55 Sec. 59.005. AGENCY ACTIVITIES. (a) A state bank may, on
36-56 compliance with this section, agree to receive deposits, renew time
36-57 deposits, close loans, service loans, receive payments on loans and
36-58 other obligations, and perform other services, with the prior
36-59 approval of the banking commissioner, as an agent for another
36-60 financial institution.
36-61 (b) A state bank that proposes to enter into an agency
36-62 agreement under this section shall file a letter with the banking
36-63 commissioner, not later than 30 days before the effective date of
36-64 the agreement, setting forth:
36-65 (1) a notice of intention to enter into an agency
36-66 agreement with a financial institution;
36-67 (2) a description of the services proposed to be
36-68 performed under the agency agreement;
36-69 (3) a copy of the agency agreement; and
37-1 (4) other information the banking commissioner
37-2 requests.
37-3 (c) If a proposed service is not specifically designated in
37-4 Subsection (a) and has not previously been approved by rule or in
37-5 an opinion or interpretation issued by the banking commissioner,
37-6 the banking commissioner shall decide whether to approve the
37-7 offering of the service on or before the 30th day after the date of
37-8 receipt of the notice required by Subsection (b). In deciding
37-9 whether to approve a proposed service that is not specifically
37-10 designated by Subsection (a) or in a rule or prior opinion or
37-11 interpretation, the banking commissioner shall consider whether the
37-12 service would be consistent with applicable federal and state law
37-13 and the safety and soundness of the principal and agent.
37-14 (d) A proposed service subject to Subsection (c) is
37-15 considered approved if the banking commissioner does not take
37-16 action on the notice required by Subsection (b) within the time
37-17 limits specified by Subsection (c). The banking commissioner may
37-18 extend the 30-day period on a determination that the bank's letter
37-19 raises issues that require additional information or additional
37-20 time for analysis. If the period is extended, the bank may engage
37-21 in the proposed service only on prior written approval of the
37-22 banking commissioner.
37-23 (e) A state bank may not under an agency agreement:
37-24 (1) conduct an activity as agent that it would be
37-25 prohibited from conducting as a principal under applicable state or
37-26 federal law; or
37-27 (2) have an agent conduct an activity that the bank as
37-28 principal would be prohibited from conducting under applicable
37-29 state or federal law.
37-30 (f) The banking commissioner may order a state bank or
37-31 another financial institution subject to the banking commissioner's
37-32 enforcement powers to cease acting as an agent or principal under
37-33 an agency agreement that the banking commissioner finds to be
37-34 inconsistent with safe and sound banking practices.
37-35 (g) Notwithstanding another law, a state bank acting as an
37-36 agent for a financial institution in accordance with this section
37-37 is not considered to be a branch of that institution, and a
37-38 financial institution acting as an agent for a state bank in
37-39 accordance with this section is not considered to be a branch of
37-40 the state bank.
37-41 (h) This section does not affect:
37-42 (1) authority under another law for a depository
37-43 institution to act as an agent on behalf of another person or to
37-44 act as a principal in employing another person as agent; or
37-45 (2) whether an agent's activities on behalf of a
37-46 depository institution under another law would cause the agent to
37-47 be considered a branch of the depository institution. [AGENT FOR
37-48 AFFILIATE. (a) A bank subsidiary of a bank holding company may
37-49 receive deposits, renew time deposits, close loans, service loans,
37-50 and receive payments on loans and other obligations as an agent for
37-51 a depository institution affiliate. Notwithstanding any other
37-52 provision of law, a bank acting as an agent for a depository
37-53 institution affiliate as provided by this section is not considered
37-54 to be a branch of the affiliate.]
37-55 [(b) A depository institution may not:]
37-56 [(1) conduct an activity as an agent under Subsection
37-57 (a) that the institution is prohibited from conducting as a
37-58 principal under a law of this state or the United States; or]
37-59 [(2) as a principal, have an agent conduct an activity
37-60 under Subsection (a) that the institution is prohibited from
37-61 conducting under a law of this state or the United States.]
37-62 [(c) This section does not affect:]
37-63 [(1) the authority of a depository institution to act
37-64 as an agent on behalf of another depository institution under
37-65 another law; or]
37-66 [(2) whether a depository institution that conducts
37-67 activity as an agent on behalf of another depository institution
37-68 under another law is considered to be a branch of the other
37-69 institution.]
38-1 [(d) An agency relationship between depository institutions
38-2 under Subsection (a) must be on terms that are consistent with safe
38-3 and sound banking practices and applicable rules.]
38-4 Sec. 59.006. DISCOVERY OF CUSTOMER RECORDS. (a) This
38-5 section provides the exclusive method for compelled discovery of a
38-6 record of a financial institution relating to one or more
38-7 customers. This section does not create a right of privacy in a
38-8 record and does not apply to:
38-9 (1) a demand or inquiry from a state or federal
38-10 government agency authorized by law to conduct an examination of
38-11 the financial institution;
38-12 (2) a record request from a state or federal
38-13 government agency or instrumentality under statutory or
38-14 administrative authority that provides for, or is accompanied by, a
38-15 specific mechanism for discovery and protection of a customer
38-16 record of a financial institution, including a record request from
38-17 a federal agency subject to the Right to Financial Privacy Act of
38-18 1978 (12 U.S.C. Section 3401 et seq.), as amended, or from the
38-19 Internal Revenue Service under Section 1205, Internal Revenue Code
38-20 of 1986;
38-21 (3) a record request from or report to a government
38-22 agency arising out of the investigation or prosecution of a
38-23 criminal offense;
38-24 (4) a record request in connection with a garnishment
38-25 proceeding in which the financial institution is garnishee and the
38-26 customer is debtor;
38-27 (5) a record request by a duly appointed receiver for
38-28 the customer;
38-29 (6) an investigative demand or inquiry from a state
38-30 legislative investigating committee;
38-31 (7) an investigative demand or inquiry from the
38-32 attorney general of this state as authorized by law other than the
38-33 procedural law governing discovery in civil cases; or
38-34 (8) the voluntary use or disclosure of a record by a
38-35 financial institution subject to other applicable state or federal
38-36 law.
38-37 (b) A financial institution shall produce a record in
38-38 response to a record request only if:
38-39 (1) it is served with the record request not later
38-40 than the 24th day before the date that compliance with the record
38-41 request is required;
38-42 (2) before the financial institution complies with the
38-43 record request the requesting party pays the financial
38-44 institution's reasonable costs of complying with the record
38-45 request, including costs of reproduction, postage, research,
38-46 delivery, and attorney's fees, or posts a cost bond in an amount
38-47 estimated by the financial institution to cover those costs; and
38-48 (3) if the customer is not a party to the proceeding
38-49 in which the request was issued, the requesting party complies with
38-50 Subsections (c) and (d) and:
38-51 (A) the financial institution receives the
38-52 customer's written consent to release the record after a request
38-53 under Subsection (c)(3); or
38-54 (B) the tribunal takes further action based on
38-55 action initiated by the requesting party under Subsection (d).
38-56 (c) If the affected customer is not a party to the
38-57 proceeding in which the record request was issued, in addition to
38-58 serving the financial institution with a record request, the
38-59 requesting party shall:
38-60 (1) give notice stating the rights of the customer
38-61 under Subsection (e) and a copy of the request to each affected
38-62 customer in the manner and within the time provided by Rule 21a,
38-63 Texas Rules of Civil Procedure;
38-64 (2) file a certificate of service indicating that the
38-65 customer has been mailed or served with the notice and a copy of
38-66 the record request as required by this subsection with the tribunal
38-67 and the financial institution; and
38-68 (3) request the customer's written consent authorizing
38-69 the financial institution to comply with the request.
39-1 (d) If the customer that is not a party to the proceeding
39-2 does not execute the written consent requested under Subsection
39-3 (c)(3) on or before the date that compliance with the request is
39-4 required, the requesting party may by written motion seek an in
39-5 camera inspection of the requested record as its sole means of
39-6 obtaining access to the requested record. In response to a motion
39-7 for in camera inspection, the tribunal may inspect the requested
39-8 record to determine its relevance to the matter before the
39-9 tribunal. The tribunal may order redaction of portions of the
39-10 records that the tribunal determines should not be produced and
39-11 shall enter a protective order preventing the record that it orders
39-12 produced from being:
39-13 (1) disclosed to a person who is not a party to the
39-14 proceeding before the tribunal; and
39-15 (2) used by a person for any purpose other than
39-16 resolving the dispute before the tribunal.
39-17 (e) A customer that is a party to the proceeding bears the
39-18 burden of preventing or limiting the financial institution's
39-19 compliance with a record request subject to this section by seeking
39-20 an appropriate remedy, including filing a motion to quash the
39-21 record request or a motion for a protective order. Any motion
39-22 filed shall be served on the financial institution and the
39-23 requesting party before the date that compliance with the request
39-24 is required. A financial institution is not liable to its
39-25 customer or another person for disclosure of a record in compliance
39-26 with this section.
39-27 (f) A financial institution may not be required to produce a
39-28 record under this section before the later of:
39-29 (1) the 24th day after the date of receipt of the
39-30 record request as provided by Subsection (b)(1);
39-31 (2) the 15th day after the date of receipt of a
39-32 customer consent to disclose a record as provided by Subsection
39-33 (b)(3); or
39-34 (3) the 15th day after the date a court orders
39-35 production of a record after an in camera inspection of a requested
39-36 record as provided by Subsection (d).
39-37 (g) An order to quash or for protection or other remedy
39-38 entered or denied by the tribunal under Subsection (d) or (e) is
39-39 not a final order and an interlocutory appeal may not be taken.
39-40 [Civil discovery of a customer record maintained by a financial
39-41 institution is governed by Section 30.007, Civil Practice and
39-42 Remedies Code, as added by Chapter 914, Acts of the 74th
39-43 Legislature, Regular Session, 1995.]
39-44 Sec. 59.007. ATTACHMENT, INJUNCTION, EXECUTION, OR
39-45 GARNISHMENT. (a) An attachment, injunction, execution, or writ of
39-46 garnishment may not be issued against or served on a financial
39-47 institution that has its principal office or a branch in this state
39-48 to collect a money judgment or secure a prospective money judgment
39-49 against the financial institution before the judgment is final and
39-50 all appeals have been foreclosed by law.
39-51 (b) An attachment, injunction, execution, or writ of
39-52 garnishment issued to or served on a financial institution for the
39-53 purpose of collecting a money judgment or securing a prospective
39-54 money judgment against a customer of the financial institution is
39-55 governed by Section 59.008 and not this section.
39-56 Sec. 59.008. CLAIMS AGAINST CUSTOMERS OF FINANCIAL
39-57 INSTITUTIONS. (a) A claim against a customer of a financial
39-58 institution shall be delivered or served as otherwise required or
39-59 permitted by law at the address designated as the address of the
39-60 registered agent of the financial institution in a registration
39-61 filed with the secretary of state pursuant to Section 201.102, with
39-62 respect to an out-of-state financial institution, or Section
39-63 201.103, with respect to a Texas financial institution.
39-64 (b) If a financial institution files a registration
39-65 statement with the secretary of state pursuant to Section 201.102,
39-66 with respect to an out-of-state financial institution, or Section
39-67 201.103, with respect to a Texas financial institution, a claim
39-68 against a customer of the financial institution is not effective as
39-69 to the financial institution if the claim is served or delivered to
40-1 an address other than that designated by the financial institution
40-2 in the registration as the address of the financial institution's
40-3 registered agent.
40-4 (c) The customer bears the burden of preventing or limiting
40-5 a financial institution's compliance with or response to a claim
40-6 subject to this section by seeking an appropriate remedy, including
40-7 a restraining order, injunction, protective order, or other remedy,
40-8 to prevent or suspend the financial institution's response to a
40-9 claim against the customer.
40-10 (d) A financial institution that does not file a
40-11 registration with the secretary of state pursuant to Section
40-12 201.102, with respect to an out-of-state financial institution, or
40-13 Section 201.103, with respect to a Texas financial institution, is
40-14 subject to service or delivery of all claims against customers of
40-15 the financial institution as otherwise provided by law.
40-16 Sec. 59.009 [59.007]. COMPLIANCE REVIEW COMMITTEE. (a) A
40-17 financial institution or an affiliate of a financial institution,
40-18 including its holding company, may establish a compliance review
40-19 committee to test, review, or evaluate the financial institution's
40-20 conduct, transactions, or potential transactions for the purpose of
40-21 monitoring and improving or enforcing compliance with:
40-22 (1) a statutory or regulatory requirement;
40-23 (2) financial reporting to a governmental agency;
40-24 (3) the policies and procedures of the financial
40-25 institution or its affiliates; or
40-26 (4) safe, sound, and fair lending practices.
40-27 (b) Except as provided by Subsection (c):
40-28 (1) a compliance review document is confidential and
40-29 is not discoverable or admissible in evidence in a civil action;
40-30 (2) an individual serving on a compliance review
40-31 committee or acting under the direction of a compliance review
40-32 committee may not be required to testify in a civil action as to:
40-33 (A) the contents or conclusions of a compliance
40-34 review document; or
40-35 (B) an action taken or discussions conducted by
40-36 or for a compliance review committee; and
40-37 (3) a compliance review document or an action taken or
40-38 discussion conducted by or for a compliance review committee that
40-39 is disclosed to a governmental agency remains confidential and is
40-40 not discoverable or admissible in a civil action.
40-41 (c) Subsection (b)(2) does not apply to an individual who
40-42 has management responsibility for the operations, records,
40-43 employees, or activities being examined or evaluated by the
40-44 compliance review committee.
40-45 (d) This section does not limit the discovery or
40-46 admissibility in a civil action of a document that is not a
40-47 compliance review document.
40-48 [(e) In this section:]
40-49 [(1) "Civil action" means a civil proceeding pending
40-50 in a court or other adjudicatory tribunal with jurisdiction to
40-51 issue a request or subpoena for records, including a voluntary or
40-52 required alternative dispute resolution mechanism under which a
40-53 party may compel the production of records. The term does not
40-54 include an examination or enforcement proceeding initiated by:]
40-55 [(A) a governmental agency with primary
40-56 regulatory jurisdiction over a financial institution in possession
40-57 of a compliance review document;]
40-58 [(B) the Federal Deposit Insurance Corporation
40-59 or its successor; or]
40-60 [(C) the board of governors of the Federal
40-61 Reserve System or its successor.]
40-62 [(2) "Compliance review document" means a document
40-63 prepared by or for a compliance review committee.]
40-64 SECTION 2.017. Section 59.201, Finance Code, is amended to
40-65 read as follows:
40-66 Sec. 59.201. ELECTRONIC TERMINALS AUTHORIZED; SHARING OF
40-67 ELECTRONIC TERMINAL. (a) A person may install, maintain, and
40-68 operate one or more electronic terminals at any location in this
40-69 state for the convenience of customers of financial [depository]
41-1 institutions.
41-2 (b) Financial [Depository] institutions may agree in writing
41-3 to share in the use of an electronic terminal on a reasonable,
41-4 nondiscriminatory basis and on the condition that a financial
41-5 [depository] institution using an electronic terminal may be
41-6 required to meet necessary and reasonable technical standards and
41-7 to pay charges for the use of the electronic terminal. The
41-8 standards or charges imposed must be reasonable, fair, equitable,
41-9 and nondiscriminatory among the financial [depository]
41-10 institutions. Any charges imposed:
41-11 (1) may not exceed an equitable proportion of the cost
41-12 of establishing the electronic terminal, including provisions for
41-13 amortization of development costs and capital expenditures over a
41-14 reasonable period, and the cost of operation and maintenance of the
41-15 electronic terminal, plus a reasonable return on those costs; and
41-16 (2) must be related to the services provided to the
41-17 financial [depository] institution or its customers.
41-18 (c) This section does not apply to:
41-19 (1) an electronic terminal located at the domicile or
41-20 home office or a branch of a financial [depository] institution; or
41-21 (2) the use by a person of an electronic terminal,
41-22 regardless of location, solely to withdraw cash, make account
41-23 balance inquiries, or make transfers between the person's accounts
41-24 in the same financial [depository] institution.
41-25 (d) In this section, the term "financial institution" has
41-26 the meaning assigned by Section 201.101.
41-27 SECTION 2.018. Section 59.202(c)(3), Finance Code, is
41-28 amended to read as follows:
41-29 (3) "Financial institution" has the meaning assigned
41-30 by Section 201.101 [means a state, national, or private bank,
41-31 savings bank, savings association, thrift company, or credit
41-32 union].
41-33 SECTION 2.019. Section 59.301(7), Finance Code, is amended
41-34 to read as follows:
41-35 (7) "Financial institution" has the meaning assigned
41-36 by Section 201.101 [means a bank, savings association, credit
41-37 union, or savings bank].
41-38 SECTION 2.020. Section 152.202(a), Finance Code, is amended
41-39 to read as follows:
41-40 (a) Section 152.201 does not apply to:
41-41 (1) a federally insured financial institution, as that
41-42 term is defined by Section 201.101 [bank, credit union, savings and
41-43 loan association, or savings bank, whether the institution is state
41-44 or federal], if the institution does not sell checks, other than
41-45 traveler's checks,[:]
41-46 [(A) off premises; or]
41-47 [(B)] through an agent who is not directly or
41-48 indirectly owned by the institution unless the agent is also a
41-49 federally insured financial institution [bank, credit union,
41-50 savings and loan association, or savings bank];
41-51 (2) an agent or subagent of a license holder unless
41-52 the agent or subagent sells the license holder's checks
41-53 over-the-counter to the public and in the regular conduct of that
41-54 business receives or at any time has access to:
41-55 (A) a check of the license holder that is
41-56 returned after payment for verification, reconciliation, or
41-57 accounting; or
41-58 (B) a bank statement relating to a returned
41-59 check;
41-60 (3) a title company or attorney that issues an escrow
41-61 or trust fund check;
41-62 (4) the United States; or
41-63 (5) with the commissioner's prior written consent, a
41-64 person who:
41-65 (A) holds a license issued under Chapter 153;
41-66 (B) has a net worth of at least $250,000 and
41-67 meets the licensing requirements of this chapter;
41-68 (C) maintains a bond under Section 152.206 in
41-69 the minimum principal amount of $350,000; and
42-1 (D) sells checks only in conjunction with a
42-2 currency exchange or transmission transaction, as defined by
42-3 Chapter 153, and separates all proceeds from that transaction from
42-4 the sale of checks.
42-5 SECTION 2.021. Section 152.301(b), Finance Code, is amended
42-6 to read as follows:
42-7 (b) A surety bond or letter of credit required under
42-8 Subsection (a)(3) must be:
42-9 (1) in addition to any other bond or security required
42-10 by this chapter;
42-11 (2) issued by a bonding company or insurance company
42-12 authorized to do business in this state and acceptable to the
42-13 commissioner, in the case of a surety bond;
42-14 (3) issued by a federally insured financial
42-15 institution, as that term is defined by Section 201.101, that has
42-16 its main office or a branch in this state and is [state or national
42-17 bank, savings bank, or savings and loan association] acceptable to
42-18 the commissioner, in the case of a letter of credit; and
42-19 (4) payable to the commissioner on behalf of any
42-20 claimants against the license holder to secure the faithful
42-21 performance of the obligations of the license holder with respect
42-22 to the receipt, handling, and payment of money in connection with
42-23 the sale of checks.
42-24 SECTION 2.022. Section 153.117(a), Finance Code, is amended
42-25 to read as follows:
42-26 (a) The following persons are not required to be licensed
42-27 under this chapter:
42-28 (1) a federally insured financial institution, as that
42-29 term is defined by Section 201.101, that is [bank, foreign bank
42-30 agency, credit union, savings bank, or savings and loan
42-31 association, whether] organized under the laws of this state,
42-32 another state, or [of] the United States;
42-33 (2) a foreign bank branch or agency in the United
42-34 States established under the federal International Banking Act of
42-35 1978 (12 U.S.C. Section 3101 et seq.), as amended;
42-36 (3) a license holder under Chapter 152, except that
42-37 the license holder is required to comply with the other provisions
42-38 of this chapter to the extent [unless] the license holder engages
42-39 in currency exchange, transportation, or transmission transactions;
42-40 or
42-41 (4) [(3)] a person registered as a securities dealer
42-42 under The Securities Act (Article 581-1 et seq., Vernon's Texas
42-43 Civil Statutes).
42-44 SECTION 2.023. Sections 154.002(1)-(4), Finance Code, are
42-45 amended to read as follows:
42-46 (1) ["Bank" means a state or national bank.]
42-47 [(2)] "Commissioner" means the banking commissioner of
42-48 Texas.
42-49 (2) [(3)] "Department" means the Texas Department of
42-50 Banking.
42-51 (3) [(4)] "Earnings" means the amount in an account in
42-52 excess of the amount paid by the purchaser of a prepaid funeral
42-53 benefits contract that is deposited in the account as provided by
42-54 Section 154.253, including accrued interest, accrued income, and
42-55 enhanced or increased value.
42-56 (4) "Financial institution" has the meaning assigned
42-57 by Section 201.101.
42-58 SECTION 2.024. Section 154.253(a), Finance Code, is amended
42-59 to read as follows:
42-60 (a) Not later than the 30th day after the date of
42-61 collection, the money, other than money retained as provided by
42-62 Section 154.252, shall be deposited:
42-63 (1) in a financial institution that has its main
42-64 office or a branch [savings and loan association] in this state in
42-65 an interest-bearing account insured by the federal government; or
42-66 (2) in trust [in a bank in this state in an
42-67 interest-bearing account insured by the federal government; or]
42-68 [(3)] with [the trust department in] a financial
42-69 institution that has its main office or a branch located in this
43-1 state and is authorized to act as a fiduciary [bank in this state,
43-2 or in a trust company authorized to do business] in this state, to
43-3 be invested by the financial institution as trustee [trust
43-4 department or company] in accordance with this subchapter.
43-5 SECTION 2.025. Section 154.257(a), Finance Code, is amended
43-6 to read as follows:
43-7 (a) A permit holder or trustee, if the permit holder
43-8 deposits the money with a financial institution as trustee [bank
43-9 trust department or a trust company], shall:
43-10 (1) adopt a written investment plan consistent with
43-11 this section and Sections 154.256 and 154.258 that specifies the
43-12 quality, maturity, and diversification of investments;
43-13 (2) at least annually, review the adequacy and
43-14 implementation of the investment plan;
43-15 (3) maintain investment records covering each
43-16 transaction; and
43-17 (4) maintain the investment plan in the principal
43-18 offices of the permit holder and trustee.
43-19 SECTION 2.026. Section 154.258(a), Finance Code, is amended
43-20 to read as follows:
43-21 (a) Money in a prepaid funeral benefits trust may be
43-22 invested only in:
43-23 (1) demand deposits, savings accounts, certificates of
43-24 deposit, or other accounts issued by financial institutions [banks
43-25 or savings and loan associations organized under state or federal
43-26 law] if the amounts deposited in those accounts are fully covered
43-27 by federal deposit insurance or otherwise fully secured by a
43-28 separate fund of securities in the manner provided by Section
43-29 5.401, Texas Trust Company Act (Article 342a-5.401, Vernon's Texas
43-30 Civil Statutes), and rules adopted under that section;
43-31 (2) bonds, evidences of indebtedness, or obligations
43-32 of the United States or an instrumentality of the United States;
43-33 (3) bonds, evidences of indebtedness, or obligations
43-34 the principal and interest of which are guaranteed by the full
43-35 faith and credit of the United States;
43-36 (4) bonds of a state or local government that are
43-37 exempt from federal income taxation and that are rated:
43-38 (A) "Aa" or better by Moody's bond rating
43-39 service; or
43-40 (B) "AA" or better by Standard and Poor's bond
43-41 rating service;
43-42 (5) bonds, evidences of indebtedness, or obligations
43-43 of corporations organized under state or federal law and that are
43-44 rated:
43-45 (A) "A" or better by Moody's bond rating
43-46 service; or
43-47 (B) "A" or better by Standard and Poor's bond
43-48 rating service;
43-49 (6) notes, evidences of indebtedness, or participation
43-50 in notes or evidences of indebtedness, secured by a first lien on
43-51 real property located in the United States, if the amount of each
43-52 obligation does not exceed 90 percent of the value of the real
43-53 property securing that obligation;
43-54 (7) common stock of a corporation that is organized
43-55 under state or federal law and:
43-56 (A) has a net worth of at least $1 million; or
43-57 (B) will have a net worth of at least $1 million
43-58 after completion of a securities offering to which the trust is
43-59 subscribing;
43-60 (8) preferred stock of a corporation organized under
43-61 state or federal law and that is rated:
43-62 (A) "Baa" ["BAA"] or better by Moody's bond
43-63 rating service; or
43-64 (B) "BBB" or better by Standard and Poor's bond
43-65 rating service;
43-66 (9) investments not covered by this subsection,
43-67 including real property, oil and gas interests, and limited
43-68 partnerships;
43-69 (10) mutual funds, collective investment funds, or
44-1 similar participative investment funds, the assets of which are
44-2 invested only in investments that are permitted under this section
44-3 and that, if aggregated with other investments, meet the percentage
44-4 limitations specified by this section; and
44-5 (11) other investments the department approves in
44-6 writing.
44-7 SECTION 2.027. Section 154.353(a), Finance Code, is amended
44-8 to read as follows:
44-9 (a) The fund may be deposited with:
44-10 (1) the comptroller;
44-11 (2) a federally insured financial institution that has
44-12 its main office or a branch [bank] in this state; or
44-13 (3) in trust with [a savings and loan association in
44-14 this state;]
44-15 [(4) the trust department in] a financial institution
44-16 that has its main office or a branch in this state and is
44-17 authorized to act as a fiduciary [bank] in this state[; or]
44-18 [(5) a trust company authorized to do business in this
44-19 state].
44-20 SECTION 2.028. Section 271.001(a), Finance Code, is amended
44-21 to read as follows:
44-22 (a) A financial institution [in this state] that is required
44-23 to file a report with respect to a transaction in this state under
44-24 the Currency and Foreign Transactions Reporting Act (31 U.S.C.
44-25 Section 5311 et seq.), 31 C.F.R. Part 103, or 12 C.F.R. Section
44-26 21.11, and their subsequent amendments, shall file a copy of the
44-27 report with the attorney general.
44-28 SECTION 2.029. Section 271.002(a), Finance Code, is amended
44-29 to read as follows:
44-30 (a) A person engaged in a trade or business who, in the
44-31 course of the trade or business, receives more than $10,000 in one
44-32 transaction or in two or more related transactions in this state
44-33 and who is required to file a return under Section 6050I, Internal
44-34 Revenue Code of 1986 (26 U.S.C. Section 6050I), or 26 C.F.R.
44-35 Section 1.6050I-1, and their subsequent amendments, shall file a
44-36 copy of the return with the attorney general.
44-37 SECTION 2.030. Sections 274.001, 274.002, and 274.003,
44-38 Finance Code, are amended to read as follows:
44-39 Sec. 274.001. DEFINITIONS. In this chapter:
44-40 (1) "Bank" has the meaning assigned by Section 2(c),
44-41 Bank Holding Company Act of 1956 (12 U.S.C. Section 1841(c)) as
44-42 amended, excluding a bank that does not have its main office or a
44-43 branch located in this state.
44-44 (2) "Bank holding company" has the meaning assigned by
44-45 Section 2(a), Bank Holding Company Act of 1956 (12 U.S.C. Section
44-46 1841(a)), as amended.
44-47 (3) [(2)] "Commissioner" means the banking
44-48 commissioner of Texas.
44-49 (4) [(3)] "Fiduciary" means an entity responsible for
44-50 managing a fiduciary account.
44-51 (5) [(4)] "Fiduciary account" means an account with a
44-52 situs of administration in this state involving the exercise of a
44-53 corporate purpose specified by Section 151.052 or 151.103.
44-54 Sec. 274.002. AFFILIATED BANK. A bank is affiliated with a
44-55 subsidiary trust company if[:]
44-56 [(1) the bank is a state or national bank that has its
44-57 main office in this state; and]
44-58 [(2)] more than 50 percent of the bank's voting stock
44-59 is directly or indirectly owned by a bank holding company that owns
44-60 more than 50 percent of the voting stock of the subsidiary trust
44-61 company.
44-62 Sec. 274.003. SUBSIDIARY TRUST COMPANY. An entity is a
44-63 subsidiary trust company of a bank holding company if:
44-64 (1) the entity is a:
44-65 (A) corporation incorporated under Subchapter B,
44-66 Chapter 151; or
44-67 (B) [national] bank that[:]
44-68 [(i)] is organized to conduct a trust
44-69 business and any incidental business or to exercise trust powers;
45-1 and
45-2 [(ii) has its main office in this state;
45-3 or]
45-4 [(C) state bank that is organized to exercise
45-5 trust powers and has its main office in this state; and]
45-6 (2) more than 50 percent of the voting stock of the
45-7 entity is directly or indirectly owned by the bank holding company.
45-8 SECTION 2.031. Section 274.101(a), Finance Code, is amended
45-9 to read as follows:
45-10 (a) A subsidiary trust company may enter into an agreement
45-11 with an affiliated bank of the company to substitute the company as
45-12 fiduciary for the bank in each fiduciary account listed in the
45-13 agreement, provided the situs of account administration is not
45-14 moved outside of this state without the express written consent of
45-15 all persons entitled to notice under Sections 274.103(a) and (c).
45-16 SECTION 2.032. Section 274.102, Finance Code, is amended to
45-17 read as follows:
45-18 Sec. 274.102. SITUS OF ACCOUNT ADMINISTRATION. The situs of
45-19 administration of a fiduciary account is the county in this state
45-20 in which the fiduciary maintains the office that is primarily
45-21 responsible for dealing with the parties involved in the account.
45-22 SECTION 2.033. Sections 341.001(1), (2), and (8), Finance
45-23 Code, are amended to read as follows:
45-24 (1) "Authorized lender" means a person who holds a
45-25 license issued under Chapter 342, a bank, or a savings [and loan]
45-26 association.
45-27 (2) "Bank" means a person:
45-28 (A) organized as a state bank [doing business]
45-29 under Subtitle A, Title 3, or under similar laws of another state
45-30 if the deposits of a bank from another state are insured by the
45-31 Federal Deposit Insurance Corporation; or
45-32 (B) organized as a national bank under 12 U.S.C.
45-33 Section 21 et seq., as subsequently amended.
45-34 (8) "Savings [and loan] association" means a person:
45-35 (A) organized as a state savings and loan
45-36 association or savings bank [doing business] under Subtitle B or C,
45-37 Title 3, or under similar laws of another state if the deposits of
45-38 the savings association from another state are insured by the
45-39 Federal Deposit Insurance Corporation; or
45-40 (B) organized as a federal savings and loan
45-41 association or savings bank under the Home Owners' Loan Act (12
45-42 U.S.C. Section 1461 et seq.), as subsequently amended.
45-43 SECTION 2.034. Section 341.103, Finance Code, is amended to
45-44 read as follows:
45-45 Sec. 341.103. REGULATION OF SAVINGS [AND LOAN] ASSOCIATIONS.
45-46 (a) The savings and loan commissioner shall enforce this subtitle
45-47 relating to the regulation of state savings [and loan] associations
45-48 operating under this subtitle.
45-49 (b) The official exercising authority over the operation of
45-50 federal savings [and loan] associations equivalent to the authority
45-51 exercised by the savings and loan commissioner over state savings
45-52 [and loan] associations may enforce this subtitle relating to the
45-53 regulation of a federal savings [and loan] association operating
45-54 under this subtitle.
45-55 SECTION 2.035. Section 345.001(1), Finance Code, is amended
45-56 to read as follows:
45-57 (1) "Credit card issuer" means a person who issues an
45-58 identification device, including a card or plate, that is used to
45-59 obtain goods or services under a retail credit card arrangement,
45-60 other than a person who is:
45-61 (A) a bank, savings [and loan] association, or
45-62 credit union;
45-63 (B) licensed to do business under Chapter 342;
45-64 or
45-65 (C) regularly and principally engaged in the
45-66 business of lending money for personal, family, or household
45-67 purposes.
45-68 SECTION 2.036. Section 393.002(a), Finance Code, is amended
45-69 to read as follows:
46-1 (a) This chapter does not apply to:
46-2 (1) a person:
46-3 (A) authorized to make a loan or grant an
46-4 extension of consumer credit under the laws of this state or the
46-5 United States; and
46-6 (B) subject to regulation and supervision by
46-7 this state or the United States;
46-8 (2) a lender approved by the United States secretary
46-9 of housing and urban development for participation in a mortgage
46-10 insurance program under the National Housing Act (12 U.S.C. Section
46-11 1701 et seq.);
46-12 (3) a bank or savings [and loan] association the
46-13 deposits or accounts of which are eligible to be insured by the
46-14 Federal Deposit Insurance Corporation or a subsidiary of the bank
46-15 or association;
46-16 (4) a credit union doing business in this state;
46-17 (5) a nonprofit organization exempt from taxation
46-18 under Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C.
46-19 Section 501(c)(3));
46-20 (6) a real estate broker or salesman licensed under
46-21 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
46-22 Statutes) who is acting within the course and scope of that
46-23 license;
46-24 (7) an individual licensed to practice law in this
46-25 state who is acting within the course and scope of the individual's
46-26 practice as an attorney;
46-27 (8) a broker-dealer registered with the Securities and
46-28 Exchange Commission or the Commodity Futures Trading Commission
46-29 acting within the course and scope of that regulation;
46-30 (9) a consumer reporting agency; or
46-31 (10) a person whose primary business is making loans
46-32 secured by liens on real property.
46-33 SECTION 2.037. Section 393.402(a), Finance Code, is amended
46-34 to read as follows:
46-35 (a) The surety account of a credit services organization
46-36 must be held in trust at a federally insured bank or savings [and
46-37 loan] association located in this state.
46-38 SECTION 2.038. Section 394.103, Finance Code, is amended to
46-39 read as follows:
46-40 Sec. 394.103. EXCEPTIONS. A debt-pooling contract entered
46-41 into by the following is not void because of Section 394.102:
46-42 (1) a bank, savings [and loan] association, trust
46-43 company, or credit union doing business under the laws of this
46-44 state or the United States;
46-45 (2) an attorney at law;
46-46 (3) a judicial officer or other person acting under
46-47 the orders of a court of this state or the United States;
46-48 (4) an agency, instrumentality, or subdivision of this
46-49 state or the United States;
46-50 (5) a retail merchants association or nonprofit trade
46-51 association formed to collect accounts and exchange credit
46-52 information; or
46-53 (6) a nonprofit organization providing debt-counseling
46-54 services to residents of this state.
46-55 ARTICLE 3. MULTISTATE TRUST BUSINESS
46-56 SECTION 3.001. The Texas Trust Company Act (Article
46-57 342a-1.001 et seq., Vernon's Texas Civil Statutes) is amended by
46-58 adding Chapter 9 to read as follows:
46-59 CHAPTER 9. MULTISTATE TRUST BUSINESS
46-60 SUBCHAPTER A. GENERAL PROVISIONS
46-61 Sec. 9.001. DEFINITIONS. (a) In this chapter:
46-62 (1) "Acquire" means an act that results in direct or
46-63 indirect control by an out-of-state trust company of a state trust
46-64 institution, including an act that causes the company to:
46-65 (A) merge with the state trust institution;
46-66 (B) assume direct or indirect ownership of a
46-67 controlling interest in any class of voting shares of the state
46-68 trust institution; or
46-69 (C) assume direct ownership or control of all or
47-1 substantially all of the accounts of a state trust institution.
47-2 (2) "Bank" means:
47-3 (A) a state bank chartered under Chapter 32,
47-4 Finance Code, or the laws of another state;
47-5 (B) a national bank chartered under federal law;
47-6 or
47-7 (C) a foreign bank that is organized under the
47-8 laws of a territory of the United States, Puerto Rico, Guam,
47-9 American Samoa, or the Virgin Islands, and that has its deposits
47-10 insured by the Federal Deposit Insurance Corporation.
47-11 (3) "Branch" has the meaning assigned by Section
47-12 31.002(a), Finance Code.
47-13 (4) "Credit union" means a credit union chartered
47-14 under Chapter 122, Finance Code, the laws of another state, or
47-15 federal law.
47-16 (5) "De novo trust office" means a trust office
47-17 located in a host state that:
47-18 (A) is originally established by a trust company
47-19 as a trust office; and
47-20 (B) does not become a trust office of the trust
47-21 company as a result of an acquisition or conversion of another
47-22 trust institution.
47-23 (6) "Foreign bank" has the meaning assigned by Section
47-24 1(b)(7), federal International Banking Act of 1978 (12 U.S.C.
47-25 3101(7)), as amended.
47-26 (7) "Home state" means:
47-27 (A) with respect to a federally chartered trust
47-28 institution or a foreign bank, the state in which the institution
47-29 maintains its principal office; and
47-30 (B) with respect to another trust institution,
47-31 the state which chartered the institution.
47-32 (8) "Home state regulator" means the supervisory
47-33 agency with primary responsibility for chartering and supervising a
47-34 trust company.
47-35 (9) "Host state" means a state, other than the home
47-36 state of a trust company, or a foreign country in which the trust
47-37 company maintains or seeks to acquire or establish an office.
47-38 (10) "Office" means, with respect to a trust company,
47-39 the principal office, a trust office, or a representative trust
47-40 office.
47-41 (11) "Out-of-state trust company" means a trust
47-42 company:
47-43 (A) whose home state is another state; or
47-44 (B) that is chartered under the laws of a
47-45 foreign country.
47-46 (12) "Principal office" means:
47-47 (A) with respect to a state trust company, its
47-48 home office as defined by Section 1.002(a); and
47-49 (B) with respect to a bank, savings bank,
47-50 savings association, foreign bank, or out-of-state trust company,
47-51 its main office or principal place of business in the United
47-52 States.
47-53 (13) "Representative trust office" means an office at
47-54 which a trust company has been authorized by the banking
47-55 commissioner to engage in activities other than acting as a
47-56 fiduciary as provided by Subchapter C.
47-57 (14) "Savings association" means a savings and loan
47-58 association chartered under Chapter 62, Finance Code, the laws of
47-59 another state, or federal law.
47-60 (15) "Savings bank" means a savings bank chartered
47-61 under Chapter 92, Finance Code, the laws of another state, or
47-62 federal law.
47-63 (16) "State" means any state of the United States, the
47-64 District of Columbia, any territory of the United States, Puerto
47-65 Rico, Guam, American Samoa, the Trust Territory of the Pacific
47-66 Islands, the Virgin Islands, and the Northern Mariana Islands.
47-67 (17) "State trust institution" means a trust
47-68 institution whose home state is this state.
47-69 (18) "Supervisory agency" means:
48-1 (A) an agency of another state or a foreign
48-2 country with primary responsibility for chartering and supervising
48-3 a trust institution; and
48-4 (B) with respect to a federally chartered trust
48-5 institution or foreign bank, the Office of the Comptroller of the
48-6 Currency, the Federal Deposit Insurance Corporation, the Board of
48-7 Governors of the Federal Reserve System, the Office of Thrift
48-8 Supervision, or the National Credit Union Administration, as
48-9 applicable.
48-10 (19) "Trust company" means a state trust company or a
48-11 company chartered under the laws of another state or a foreign
48-12 country to conduct a trust business that is not a bank, credit
48-13 union, savings association, savings bank, or foreign bank.
48-14 (20) "Trust institution" means a bank, credit union,
48-15 foreign bank, savings association, savings bank, or trust company
48-16 that is authorized by its charter to conduct a trust business.
48-17 (21) "Trust office" means an office, other than the
48-18 principal office, at which a trust company is licensed by the
48-19 banking commissioner to conduct a trust business.
48-20 (b) The definitions provided by Section 1.002(a) of this Act
48-21 apply to this chapter to the extent not inconsistent with this
48-22 chapter.
48-23 (c) The definitions shall be liberally construed to
48-24 accomplish the purposes of this chapter.
48-25 (d) The finance commission by rule may adopt other
48-26 definitions to accomplish the purposes of this chapter.
48-27 Sec. 9.002. COMPANIES AUTHORIZED TO CONDUCT A TRUST
48-28 BUSINESS. (a) A company may not conduct a trust business in this
48-29 state unless the company is a trust institution and is:
48-30 (1) a state trust company chartered pursuant to this
48-31 Act;
48-32 (2) a bank, savings association, savings bank, or
48-33 credit union that maintains its principal office or a branch in
48-34 this state in accordance with governing law, or another office in
48-35 this state with the power to conduct a trust business to the extent
48-36 permitted by rule;
48-37 (3) a trust company chartered under the laws of
48-38 another state or a foreign country that has a trust office in this
48-39 state licensed by the banking commissioner pursuant to this
48-40 chapter; or
48-41 (4) a foreign bank with an office in this state that
48-42 is authorized to act as a fiduciary pursuant to Section 204.106,
48-43 Finance Code.
48-44 (b) Notwithstanding Subsection (a), a trust institution that
48-45 does not maintain a principal office, branch, or trust office in
48-46 this state may act as a fiduciary in this state to the extent
48-47 permitted by Section 105A, Probate Code.
48-48 (c) A company does not engage in the trust business in this
48-49 state in a manner requiring a charter or license under this Act by
48-50 engaging in an activity identified in Section 3.022 of this Act,
48-51 except that the registration requirements of Section 9.202 of this
48-52 Act may apply to a trust representative office engaging in the
48-53 activity.
48-54 Sec. 9.003. INTERSTATE TRUST BUSINESS OF STATE TRUST
48-55 COMPANY. Subject to the approval of the banking commissioner
48-56 pursuant to Section 3.203 of this Act, a state trust company may
48-57 engage in the trust business in another state or a foreign country
48-58 at a trust office or a trust representative office to the extent
48-59 permitted by and subject to applicable laws of the state or foreign
48-60 country.
48-61 Sec. 9.004. TRUST BUSINESS OF OUT-OF-STATE TRUST COMPANY.
48-62 (a) An out-of-state trust company that establishes or maintains an
48-63 office in this state under this chapter may conduct any activity at
48-64 the office that would be authorized under the laws of this state
48-65 for a state trust company to conduct at the office.
48-66 (b) Before establishing an office in this state, an
48-67 out-of-state trust company must comply with Section 201.102,
48-68 Finance Code.
48-69 Sec. 9.005. DESIGNATION OF TRUSTEE AND GOVERNING LAW. (a)
49-1 Unless another law restricts the designation of trustee, a person
49-2 residing in this state may designate a trust institution to act as
49-3 a fiduciary on behalf of the person.
49-4 (b) Unless another law specifies governing law and except as
49-5 provided in Subsection (c), if a trust or its subject matter bears
49-6 a reasonable relation to this state and also to another state or a
49-7 foreign country, a trust institution and its affected client may
49-8 agree that the law of this state or of the other state or country
49-9 governs their rights and duties, including the law of a state or a
49-10 foreign country where the affected client resides or where the
49-11 trust institution has its principal office.
49-12 (c) Notwithstanding Subsection (b), a trust institution is
49-13 subject to Sections 113.052 and 113.053, Property Code, with
49-14 respect to a trust if the trust is established by a client that
49-15 resides in this state and is solicited from or accepted by an
49-16 office of the trust institution in this state.
49-17 Sec. 9.006. TAXATION. An out-of-state trust institution
49-18 doing business in this state is subject to the franchise tax to the
49-19 extent provided by Chapter 171, Tax Code.
49-20 Sec. 9.007. SEVERABILITY. The provisions of this chapter or
49-21 applications of those provisions are severable as provided by
49-22 Section 312.013(c), Government Code.
49-23 SUBCHAPTER B. OUT-OF-STATE TRUST COMPANY TRUST OFFICE
49-24 Sec. 9.101. TRUST OFFICES IN THIS STATE. An out-of-state
49-25 trust company may engage in a trust business at an office in this
49-26 state only if it establishes and maintains a trust office in this
49-27 state as permitted by this subchapter.
49-28 Sec. 9.102. ESTABLISHING AN INTERSTATE TRUST OFFICE. (a)
49-29 An out-of-state trust company that does not operate a trust office
49-30 in this state may not establish and maintain a de novo trust office
49-31 in this state unless:
49-32 (1) a state trust company would be permitted to
49-33 establish a de novo trust office in the home state or foreign
49-34 country of the out-of-state trust company; and
49-35 (2) a bank whose home state is this state would be
49-36 permitted to establish a de novo branch in the home state or
49-37 foreign country of the out-of-state trust company.
49-38 (b) Subject to Subsection (a), a de novo trust office may be
49-39 established in this state under this section through the
49-40 acquisition of a trust office in this state of an existing trust
49-41 institution.
49-42 Sec. 9.103. ACQUIRING AN INTERSTATE TRUST OFFICE. (a) An
49-43 out-of-state trust company that does not operate a trust office in
49-44 this state and that meets the requirements of this subchapter may
49-45 acquire an existing trust institution in this state and after the
49-46 acquisition operate and maintain the acquired institution as a
49-47 trust office in this state, subject to Subchapter A, Chapter 4 of
49-48 this Act, or Subchapter A, Chapter 33, Finance Code, if applicable.
49-49 If the institution to be acquired is a bank or a state savings
49-50 bank, Section 203.005, Finance Code, applies to the transaction.
49-51 (b) An out-of-state trust institution that does not operate
49-52 a trust office in this state may not establish and maintain a trust
49-53 office in this state through the acquisition of a trust office of
49-54 an existing trust institution except as provided by Section 9.102
49-55 of this Act. This section does not affect or prohibit a trust
49-56 institution, other entity, or person from chartering a state trust
49-57 company pursuant to Section 3.001 of this Act.
49-58 Sec. 9.104. REQUIREMENT OF NOTICE. An out-of-state trust
49-59 company desiring to establish and maintain a de novo trust office
49-60 or acquire an existing trust institution in this state and to
49-61 operate and maintain the acquired institution as a trust office
49-62 pursuant to this subchapter shall provide written notice of the
49-63 proposed transaction to the banking commissioner on or after the
49-64 date on which the out-of-state trust company applies to the home
49-65 state regulator for approval to establish and maintain or acquire
49-66 the trust office. The filing of the notice shall be preceded or
49-67 accompanied by a copy of the resolution adopted by the board
49-68 authorizing the additional office and the filing fee, if any,
49-69 prescribed by law. The written notice must contain sufficient
50-1 information to enable an informed decision under Section 9.105 of
50-2 this Act.
50-3 Sec. 9.105. CONDITIONS FOR APPROVAL. (a) A trust office of
50-4 an out-of-state trust company may be acquired or established in
50-5 this state under this subchapter if:
50-6 (1) the out-of-state trust company confirms in writing
50-7 to the banking commissioner that while it maintains a trust office
50-8 in this state, it will comply with all applicable laws of this
50-9 state;
50-10 (2) the out-of-state trust company provides
50-11 satisfactory evidence to the banking commissioner of compliance
50-12 with Section 201.102, Finance Code, and the applicable requirements
50-13 of its home state regulator for acquiring or establishing and
50-14 maintaining the office;
50-15 (3) all filing fees have been paid as required by law;
50-16 and
50-17 (4) the banking commissioner finds that:
50-18 (A) applicable conditions of Section 9.102 or
50-19 9.103 of this Act have been met; and
50-20 (B) if a state bank is being acquired, the
50-21 applicable requirements of Subchapter A, Chapter 33, and Section
50-22 203.005, Finance Code, have been met, or if a state trust company
50-23 is being acquired, the applicable requirements of Subchapter A,
50-24 Chapter 4 of this Act have been met; and
50-25 (C) any conditions imposed by the banking
50-26 commissioner pursuant to Subsection (b) have been satisfied.
50-27 (b) The banking commissioner may condition approval of a
50-28 trust office on compliance by the out-of-state trust company with
50-29 any requirement applicable to formation of a state trust company
50-30 pursuant to Sections 3.003(b) and 3.007 of this Act.
50-31 (c) If all requirements of Subsection (a) have been met, the
50-32 out-of-state trust company may commence business at the trust
50-33 office on the 61st day after the date the banking commissioner
50-34 notifies the company that the notice required by Section 9.104 of
50-35 this Act has been accepted for filing, unless the banking
50-36 commissioner specifies an earlier or later date.
50-37 (d) The 60-day period of review may be extended by the
50-38 banking commissioner on a determination that the written notice
50-39 raises issues that require additional information or additional
50-40 time for analysis. If the period of review is extended, the
50-41 out-of-state trust company may establish the office only on prior
50-42 written approval by the banking commissioner.
50-43 (e) If all requirements of Subsection (a) have been met, the
50-44 banking commissioner may otherwise deny approval of the office if
50-45 the banking commissioner finds that the out-of-state trust company
50-46 lacks sufficient financial resources to undertake the proposed
50-47 expansion without adversely affecting its safety or soundness or
50-48 that the proposed office is contrary to the public interest. In
50-49 acting on the notice, the banking commissioner shall consider the
50-50 views of the appropriate supervisory agencies.
50-51 Sec. 9.106. ADDITIONAL TRUST OFFICES. An out-of-state trust
50-52 company that maintains a trust office in this state under this
50-53 subchapter may establish or acquire additional trust offices or
50-54 representative trust offices in this state to the same extent that
50-55 a state trust company may establish or acquire additional offices
50-56 in this state pursuant to the procedures for establishing or
50-57 acquiring the offices set forth in Section 3.203 of this Act.
50-58 SUBCHAPTER C. OUT-OF-STATE TRUST INSTITUTION
50-59 REPRESENTATIVE TRUST OFFICE
50-60 Sec. 9.201. REPRESENTATIVE TRUST OFFICE BUSINESS. (a) An
50-61 out-of-state trust institution may establish a representative trust
50-62 office as permitted by this subchapter to:
50-63 (1) solicit, but not accept, fiduciary appointments;
50-64 (2) act as a fiduciary in this state to the extent
50-65 permitted for a foreign corporate fiduciary by Section 105A,
50-66 Probate Code;
50-67 (3) perform ministerial duties with respect to
50-68 existing clients and accounts of the trust institution;
50-69 (4) engage in an activity permitted by Section 3.022
51-1 of this Act; and
51-2 (5) the extent not acting as a fiduciary:
51-3 (A) receive for safekeeping personal property of
51-4 every description;
51-5 (B) act as assignee, bailee, conservator,
51-6 custodian, escrow agent, registrar, receiver, or transfer agent;
51-7 and
51-8 (C) act as financial advisor, investment advisor
51-9 or manager, agent, or attorney-in-fact in any agreed capacity.
51-10 (b) Except as provided by Subsection (a), a trust
51-11 representative office may not act as a fiduciary or otherwise
51-12 engage in the trust business in this state.
51-13 (c) Subject to the requirements of this subchapter, an
51-14 out-of-state trust institution may establish and maintain
51-15 representative trust offices anywhere in this state.
51-16 Sec. 9.202. REGISTRATION OF REPRESENTATIVE TRUST OFFICE.
51-17 (a) Except as provided by Subsection (e) with respect to a credit
51-18 union, a savings association, or a savings bank, an out-of-state
51-19 trust institution that does not maintain a branch or trust office
51-20 in this state and that desires to establish or acquire and maintain
51-21 a representative trust office shall:
51-22 (1) file a notice on a form prescribed by the banking
51-23 commissioner, setting forth:
51-24 (A) the name of the out-of-state trust
51-25 institution;
51-26 (B) the location of the proposed office; and
51-27 (C) satisfactory evidence that the notificant is
51-28 a trust institution;
51-29 (2) pay the filing fee, if any, prescribed by law; and
51-30 (3) submit a copy of the resolution adopted by the
51-31 board authorizing the representative trust office and a copy of the
51-32 trust institution's registration filed with the secretary of state
51-33 pursuant to Section 201.102, Finance Code.
51-34 (b) The notificant may commence business at the
51-35 representative trust office on the 31st day after the date the
51-36 banking commissioner receives the notice unless the banking
51-37 commissioner specifies an earlier or later date.
51-38 (c) The 30-day period of review may be extended by the
51-39 banking commissioner on a determination that the written notice
51-40 raises issues that require additional information or additional
51-41 time for analysis. If the period of review is extended, the
51-42 out-of-state trust institution may establish the representative
51-43 trust office only on prior written approval by the banking
51-44 commissioner.
51-45 (d) The banking commissioner may deny approval of the
51-46 representative trust office if the banking commissioner finds that
51-47 the notificant lacks sufficient financial resources to undertake
51-48 the proposed expansion without adversely affecting its safety or
51-49 soundness or that the proposed office would be contrary to the
51-50 public interests. In acting on the notice, the banking commissioner
51-51 shall consider the views of the appropriate supervisory agencies.
51-52 (e) A credit union, savings association, or savings bank
51-53 that does not maintain a branch in this state and desires to
51-54 establish or acquire and maintain a representative trust office
51-55 shall comply with this section, except that the notice required by
51-56 Subsection (a) must be filed with, and the duties and
51-57 responsibilities of the banking commissioner under Subsections
51-58 (b)-(d) shall be performed by:
51-59 (1) the Texas credit union commissioner, with respect
51-60 to a credit union; or
51-61 (2) the Texas savings and loan commissioner, with
51-62 respect to a savings association or savings bank.
51-63 (f) An out-of-state trust institution that fails to register
51-64 as required by this section is subject to Subchapter C, Chapter 6
51-65 of this Act.
51-66 SUBCHAPTER D. SUPERVISION OF OUT-OF-STATE TRUST COMPANY
51-67 Sec. 9.301. COOPERATIVE AGREEMENTS; FEES. (a) To carry out
51-68 the purposes of this Act, the banking commissioner may:
51-69 (1) enter into cooperative, coordinating, or
52-1 information sharing agreements with another supervisory agency or
52-2 an organization affiliated with or representing one or more
52-3 supervisory agencies;
52-4 (2) with respect to periodic examination or other
52-5 supervision or investigation, accept reports of examination or
52-6 investigation by, and reports submitted to, another supervisory
52-7 agency in lieu of conducting examinations or investigations or
52-8 receiving reports as might otherwise be required or permissible
52-9 under this Act;
52-10 (3) enter into contracts with another supervisory
52-11 agency having concurrent regulatory or supervisory jurisdiction to
52-12 engage the services of the agency for reasonable compensation to
52-13 assist in connection with the banking commissioner's performance of
52-14 official duties under this Act or other law, or to provide services
52-15 to the agency for reasonable compensation in connection with the
52-16 agency's performance of official duties under law, except that
52-17 Chapter 2254, Government Code, does not apply to such contracts;
52-18 (4) enter into joint examinations or joint enforcement
52-19 actions with another supervisory agency having concurrent
52-20 regulatory or supervisory jurisdiction, except that the banking
52-21 commissioner may independently take action under Section 9.305 of
52-22 this Act if the banking commissioner determines that the action is
52-23 necessary to carry out the banking commissioner's responsibilities
52-24 under this Act or to enforce compliance with the laws of this
52-25 state; and
52-26 (5) assess supervisory and examination fees to be paid
52-27 by an out-of-state trust company that maintains one or more offices
52-28 in this state in connection with the banking commissioner's
52-29 performance of duties under this Act.
52-30 (b) Supervisory or examination fees assessed by the banking
52-31 commissioner in accordance with this Act may be shared with another
52-32 supervisory agency or an organization affiliated with or
52-33 representing one or more supervisory agencies in accordance with an
52-34 agreement between the banking commissioner and the agency or
52-35 organization. The banking commissioner may also receive a portion
52-36 of supervisory or examination fees assessed by another supervisory
52-37 agency in accordance with an agreement between the banking
52-38 commissioner and the agency.
52-39 Sec. 9.302. EXAMINATIONS; PERIODIC REPORTS. (a) To the
52-40 extent consistent with Section 9.301 of this Act, the banking
52-41 commissioner may make examinations of a trust office or trust
52-42 representative office established and maintained in this state by
52-43 an out-of-state trust company pursuant to this chapter as the
52-44 banking commissioner considers necessary to determine whether the
52-45 office is being operated in compliance with the laws of this state
52-46 and in accordance with safe and sound fiduciary practices. The
52-47 provisions of Section 2.002 of this Act apply to the examinations.
52-48 (b) The finance commission may by rule prescribe
52-49 requirements for periodic reports regarding a trust office or trust
52-50 representative office in this state. The required reports must be
52-51 provided by the trust institution maintaining the office.
52-52 Reporting requirements under this subsection must be appropriate
52-53 for the purpose of enabling the banking commissioner to discharge
52-54 the responsibilities of the banking commissioner under this
52-55 chapter.
52-56 Sec. 9.303. INTERPRETIVE STATEMENTS AND OPINIONS. (a)
52-57 Subject to Subsection (b), to encourage the effective coordination
52-58 and implementation of home state laws and host state laws with
52-59 respect to interstate trust business, the banking commissioner,
52-60 directly or through the deputy banking commissioner or a department
52-61 attorney in the manner provided by Sections 2.001 and 2.0011 of
52-62 this Act, and with the effect provided by Section 2.0012 of this
52-63 Act, may issue:
52-64 (1) an interpretive statement for the general guidance
52-65 of trust institutions in this state and the general public; or
52-66 (2) an opinion interpreting or determining the
52-67 applicability of laws of this state to the trust business and the
52-68 operation of a branch, trust office, or another office in this
52-69 state of an out-of-state trust institution, or in other states by
53-1 state trust companies.
53-2 (b) With respect to the trust business of a credit union,
53-3 savings association, or savings bank, the duties and
53-4 responsibilities of the banking commissioner under Subsection (a)
53-5 shall be performed by:
53-6 (1) the Texas credit union commissioner, with respect
53-7 to a credit union; or
53-8 (2) the Texas savings and loan commissioner, with
53-9 respect to a savings association or savings bank.
53-10 Sec. 9.304. CONFIDENTIAL INFORMATION. Information obtained
53-11 directly or indirectly by the banking commissioner relative to the
53-12 financial condition or business affairs of a trust institution,
53-13 other than the public portions of a report of condition or income
53-14 statement, or a present, former, or prospective shareholder,
53-15 participant, officer, director, manager, affiliate, or service
53-16 provider of the trust institution, whether obtained through
53-17 application, examination, or otherwise, and each related file or
53-18 record of the department is confidential and may not be disclosed
53-19 by the banking commissioner or an employee of the department except
53-20 as expressly provided by Subchapter B, Chapter 2 of this Act.
53-21 Sec. 9.305. ENFORCEMENT; APPEALS. (a) If the banking
53-22 commissioner determines that an out-of-state trust company has
53-23 violated this Act or other applicable law of this state, the
53-24 banking commissioner may take all enforcement actions the banking
53-25 commissioner would be empowered to take if the out-of-state trust
53-26 company were a state trust company, except that the banking
53-27 commissioner shall promptly give notice to the home state regulator
53-28 of each enforcement action to be taken against an out-of-state
53-29 trust company and, to the extent practicable, shall consult and
53-30 cooperate with the home state regulator in pursuing and resolving
53-31 the enforcement action. An out-of-state trust company may appeal a
53-32 final order or other decision of the banking commissioner under
53-33 this Act as provided by Section 3.010 of this Act.
53-34 (b) Notwithstanding Subsection (a) of this section, the
53-35 banking commissioner may enforce this Act against a trust
53-36 institution by appropriate action in the courts, including an
53-37 action for injunctive relief, if the banking commissioner concludes
53-38 the action is necessary or desirable.
53-39 Sec. 9.306. NOTICE OF SUBSEQUENT EVENT. Each out-of-state
53-40 trust company that has established and maintains an office in this
53-41 state pursuant to this Act shall give written notice, at least 30
53-42 days before the effective date of the event, or, in the case of an
53-43 emergency transaction, a shorter period before the effective date
53-44 consistent with applicable state or federal law, to the banking
53-45 commissioner of:
53-46 (1) a merger or other transaction that would cause a
53-47 change of control with respect to the trust company, with the
53-48 result that an application would be required to be filed with the
53-49 home state regulator or a federal supervisory agency;
53-50 (2) a transfer of all or substantially all of the
53-51 trust accounts or trust assets of the out-of-state trust company to
53-52 another person; or
53-53 (3) the closing or disposition of an office in this
53-54 state.
53-55 ARTICLE 4. CONFORMING AMENDMENTS TO TRUST LAW
53-56 SECTION 4.001. Sections 1.002(a)(11), (46), and (52)-(54),
53-57 Texas Trust Company Act (Article 342a-1.001 et seq., Vernon's Texas
53-58 Civil Statutes), are amended to read as follows:
53-59 (11) "Company" means a [includes a bank, trust
53-60 company,] corporation, partnership, association, business trust,
53-61 [or] another trust, or a similar organization, including a trust
53-62 institution.
53-63 (46) "State trust company" or "trust company" means a
53-64 trust association or limited trust association organized or
53-65 reorganized under this Act, including an association organized
53-66 under the laws of this state before September 1, 1997. If the
53-67 context or circumstances require, the term includes a trust company
53-68 organized under the laws of another state that lawfully maintains a
53-69 trust office in this state in accordance with Chapter 9 of this
54-1 Act.
54-2 (52) "Unauthorized trust activity" means an act or
54-3 practice within this state by a company [person] without a charter,
54-4 license, permit, registration, or other authority issued or granted
54-5 by the banking commissioner or other appropriate regulatory
54-6 authority for which such a charter, license, permit, registration,
54-7 or other authority is required to conduct trust business.
54-8 (53) "Trust institution" means a bank, credit union,
54-9 foreign bank, savings association, savings bank, or trust company
54-10 that is authorized by its charter to conduct a trust business.
54-11 (54) "Undivided profits" means the part of equity
54-12 capital of a state trust company equal to the balance of its net
54-13 profits, income, gains, and losses since the date of its formation
54-14 minus subsequent distributions to shareholders or participants and
54-15 transfers to surplus or capital under share dividends or
54-16 appropriate board resolutions. The term includes amounts allocated
54-17 to undivided profits as a result of a merger.
54-18 (55) [(54)] "Voting security" means a share,
54-19 participation share, or other evidence of proprietary interest in a
54-20 state trust company or other company that has as an attribute the
54-21 right to vote or participate in the election of the board of the
54-22 trust company or other company, regardless of whether the right is
54-23 limited to the election of fewer than all of the board members.
54-24 The term includes a security that is convertible or exchangeable
54-25 into a voting security and a nonvoting participation share of a
54-26 managing participant.
54-27 SECTION 4.002. Section 1.003(a), Texas Trust Company Act
54-28 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
54-29 amended to read as follows:
54-30 (a) The finance commission may adopt rules to accomplish the
54-31 purposes of this Act, including rules necessary or reasonable to:
54-32 (1) implement and clarify this Act;
54-33 (2) preserve or protect the safety and soundness of
54-34 state trust companies;
54-35 (3) grant the same rights and privileges to state
54-36 trust companies with respect to the exercise of fiduciary powers
54-37 that are or may be granted to a trust institution that maintains
54-38 its principal office or a branch or trust office [state or national
54-39 bank that is domiciled] in this state [and exercising fiduciary
54-40 powers];
54-41 (4) provide for recovery of the cost of maintenance
54-42 and operation of the department and the cost of enforcing this Act
54-43 through the imposition and collection of ratable and equitable fees
54-44 for notices, applications, and examinations; and
54-45 (5) facilitate the fair hearing and adjudication of
54-46 matters before the banking commissioner and the finance commission.
54-47 SECTION 4.003. Section 2.001, Texas Trust Company Act
54-48 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
54-49 amended to read as follows:
54-50 Sec. 2.001. ISSUANCE OF INTERPRETIVE STATEMENTS [AND
54-51 OPINIONS]. (a) The banking commissioner may issue interpretive
54-52 statements containing matters of general policy for the guidance of
54-53 the general public and state trust companies, and[. The banking
54-54 commissioner shall file the statements for publication in the Texas
54-55 Register. The banking commissioner] may amend or repeal a
54-56 published interpretive statement by issuing an amended statement or
54-57 notice of repeal of a statement [and filing the statement or notice
54-58 for publication in the Texas Register. The secretary of state
54-59 shall publish the filed statements and notices in the Texas
54-60 Register and in a designated chapter of the Texas Administrative
54-61 Code].
54-62 (b) An interpretive statement may be disseminated by
54-63 newsletter, via an electronic medium such as the internet, in a
54-64 volume of statutes or related materials published by the banking
54-65 commissioner or others, or by other means reasonably calculated to
54-66 notify persons affected by the interpretive statement. Notice of
54-67 an amended or withdrawn statement must be published in a
54-68 substantially similar manner as the affected statement was
54-69 originally published.
55-1 Sec. 2.0011. ISSUANCE OF OPINION. (a) In response to a
55-2 specific request from a member of the public or industry, the [The]
55-3 banking commissioner may issue an opinion [in response to a
55-4 specific request from a member of the public or the state trust
55-5 company industry] directly or through the deputy banking
55-6 commissioner or the department's attorneys.
55-7 (b) If the banking commissioner determines that the opinion
55-8 is useful for the general guidance of trust companies and the
55-9 general public, the banking commissioner may disseminate [file] the
55-10 opinion by newsletter, via an electronic medium such as the
55-11 internet, in a volume of statutes or related materials published by
55-12 the banking commissioner or others, or by other means reasonably
55-13 calculated to notify persons affected by the opinion [for
55-14 publication in the Texas Register]. A published opinion must be
55-15 redacted to preserve [in a manner that preserves] the
55-16 confidentiality of the requesting party, unless the requesting
55-17 party consents to be identified in the published opinion.
55-18 (c) The banking commissioner may amend or repeal a published
55-19 opinion by issuing an amended opinion or notice of repeal of an
55-20 opinion and disseminating [filing] the opinion or notice in a
55-21 substantially similar manner as the affected statement or opinion
55-22 was originally published. The [for publication in the Texas
55-23 Register, except that the] requesting party, however, may rely on
55-24 the original opinion if:
55-25 (1) all material facts were originally disclosed to
55-26 the banking commissioner;
55-27 (2) the[, considerations of] safety and soundness of
55-28 the affected trust company will not be affected by [companies are
55-29 not implicated with respect to] further [and prospective] reliance
55-30 on the original opinion; [,] and
55-31 (3) the text and interpretation of relevant governing
55-32 provisions of this Act have not been changed by legislative or
55-33 judicial action. [The secretary of state shall publish the filed
55-34 opinions and notices in the Texas Register and a designated chapter
55-35 of the Texas Administrative Code.]
55-36 Sec. 2.0012. EFFECT OF INTERPRETIVE STATEMENT OR OPINION.
55-37 [(c)] An interpretive statement or opinion issued under this
55-38 section does not have the force of law and is not a rule for the
55-39 purposes of Chapter 2001, Government Code, unless adopted by the
55-40 finance commission as provided by Chapter 2001, Government Code.
55-41 An interpretive statement or opinion is an administrative
55-42 construction of this Act entitled to great weight if the
55-43 construction is reasonable and does not conflict with this Act.
55-44 SECTION 4.004. Section 3.001(a), Texas Trust Company Act
55-45 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
55-46 amended to read as follows:
55-47 (a) Subject to the other provisions of this chapter, one or
55-48 more persons may organize and charter a state trust company as a
55-49 state trust association or a limited trust association. A state
55-50 trust company may engage in the trust business by [perform any act
55-51 as a fiduciary that a state bank or national bank exclusively
55-52 exercising trust powers may perform under the laws of this state,
55-53 including]:
55-54 (1) acting as trustee under a written agreement;
55-55 (2) receiving money and other property in its capacity
55-56 as trustee for investment in real or personal property;
55-57 (3) acting as trustee and performing the fiduciary
55-58 duties committed or transferred to it by order of a court of
55-59 competent jurisdiction;
55-60 (4) acting as executor, administrator, or trustee of
55-61 the estate of a deceased person;
55-62 (5) acting as a custodian, guardian, conservator, or
55-63 trustee for a minor or incapacitated person;
55-64 (6) acting as a successor fiduciary to a trust
55-65 [depository] institution or other fiduciary;
55-66 (7) receiving for safekeeping personal property;
55-67 (8) acting as custodian, assignee, transfer agent,
55-68 escrow agent, registrar, or receiver;
55-69 (9) acting as investment advisor, agent, or attorney
56-1 in fact according to an applicable agreement;
56-2 (10) exercising additional powers expressly conferred
56-3 by rule of the finance commission; and
56-4 (11) exercising any incidental power that is
56-5 reasonably necessary to enable it to fully exercise the powers
56-6 expressly conferred according to commonly accepted fiduciary
56-7 customs and usages.
56-8 SECTION 4.005. Section 3.005(e), Texas Trust Company Act
56-9 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
56-10 amended to read as follows:
56-11 (e) Chapter 2001, Government Code, does not apply to a
56-12 charter application filed for the purpose of assuming all or any
56-13 portion of the assets, liabilities, and accounts of a trust [any
56-14 depository] institution [or state trust company] considered by the
56-15 banking commissioner to be in hazardous condition.
56-16 SECTION 4.006. Section 3.022, Texas Trust Company Act
56-17 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
56-18 amended to read as follows:
56-19 Sec. 3.022. ACTIVITIES NOT REQUIRING CHARTER. Subject to
56-20 Subchapter C, Chapter 9 of this Act, a [A] company does not engage
56-21 in the trust business in a manner requiring a state charter by:
56-22 (1) acting in a manner authorized by law and in the
56-23 scope of authority as an agent of a trust institution [state trust
56-24 company];
56-25 (2) rendering a service customarily performed as an
56-26 attorney in a manner approved and authorized by the Supreme Court
56-27 of Texas or State Bar of Texas;
56-28 (3) acting as trustee under a deed of trust made only
56-29 as security for the payment of money or for the performance of
56-30 another act;
56-31 (4) conducting [a trust] business as a trust
56-32 institution [under a charter that authorizes the exercise of trust
56-33 powers as a depository institution,] if the exercise of fiduciary
56-34 [trust] powers in this state by the trust [depository] institution
56-35 is not otherwise prohibited by law;
56-36 (5) engaging in a business regulated by the Office of
56-37 Consumer Credit Commissioner, except as limited by rules adopted by
56-38 the finance commission;
56-39 (6) receiving and distributing rents and proceeds of
56-40 sale as a licensed real estate broker on behalf of a principal in a
56-41 manner authorized by the Texas Real Estate Commission;
56-42 (7) engaging in a securities transaction or providing
56-43 an investment advisory service as a licensed and registered dealer,
56-44 salesman, or advisor to the extent that the activity is regulated
56-45 by the State Securities Board or the Securities and Exchange
56-46 Commission;
56-47 (8) engaging in the sale and administration of an
56-48 insurance product by an insurance company or agent licensed by the
56-49 Texas Department of Insurance to the extent that the activity is
56-50 regulated by the Texas Department of Insurance;
56-51 (9) engaging in the lawful sale of prepaid funeral
56-52 benefits under a permit issued by the banking commissioner under
56-53 Chapter 154, Finance Code [512, Acts of the 54th Legislature,
56-54 Regular Session, 1955 (Article 548b, Vernon's Texas Civil
56-55 Statutes)];
56-56 (10) engaging in the lawful business of a perpetual
56-57 care cemetery corporation under Chapter 712, Health and Safety
56-58 Code;
56-59 (11) engaging as a principal or agent in the lawful
56-60 sale of checks under a license issued by the banking commissioner
56-61 under The Sale of Checks Act, Chapter 152, Finance Code [(Article
56-62 489d, Vernon's Texas Civil Statutes)];
56-63 (12) acting as trustee under a voting trust as
56-64 provided by Article 2.30, Texas Business Corporation Act;
56-65 (13) acting as trustee by a public, private, or
56-66 independent institution of higher education or a university system,
56-67 as defined by Section 61.003, Education Code, including an
56-68 affiliated foundation or corporation of such an institution or
56-69 system acting as trustee as provided by the Education Code;
57-1 (14) engaging in another activity expressly excluded
57-2 from the application of this Act by rule of the finance commission;
57-3 (15) rendering services customarily performed by a
57-4 certified accountant in a manner authorized by the Texas State
57-5 Board of Public Accountancy;
57-6 (16) serving as trustee of a charitable trust as
57-7 provided by Article 2.31, Texas Non-Profit Corporation Act (Article
57-8 1396-2.31, Vernon's Texas Civil Statutes);
57-9 (17) performing escrow or settlement services if
57-10 licensed under Chapter 9, Insurance Code; [or]
57-11 (18) acting as a qualified intermediary in a tax
57-12 deferred exchange under 26 U.S.C. Section 1031 and applicable
57-13 regulations; or
57-14 (19) providing permitted services at a trust
57-15 representative office established in this state pursuant to
57-16 Subchapter C, Chapter 9 of this Act.
57-17 SECTION 4.007. Section 3.203(a), Texas Trust Company Act
57-18 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
57-19 amended to read as follows:
57-20 (a) A state trust company may establish and maintain
57-21 additional offices [anywhere in this state] by filing a written
57-22 notice with the banking commissioner setting forth the name of the
57-23 state trust company, the street address of the proposed additional
57-24 office, a description of the activities proposed to be conducted at
57-25 the additional office, and a copy of the resolution adopted by the
57-26 board authorizing the additional office.
57-27 SECTION 4.008. Section 3.302(c), Texas Trust Company Act
57-28 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
57-29 amended to read as follows:
57-30 (c) The banking commissioner may approve the merger if:
57-31 (1) each resulting state trust company will be solvent
57-32 and have adequate capitalization for its business and location;
57-33 (2) each resulting state trust company has in all
57-34 respects complied with the statutes and rules relating to the
57-35 organization of a state trust company;
57-36 (3) all obligations and liabilities of each trust
57-37 company that is a party to the merger have been properly discharged
57-38 or otherwise lawfully assumed or retained by a trust institution
57-39 [company] or other fiduciary;
57-40 (4) each surviving, new, or acquiring person that is
57-41 not authorized to engage in the trust business will not engage in
57-42 the trust business and has in all respects complied with the laws
57-43 of this state; and
57-44 (5) all conditions imposed by the banking commissioner
57-45 have been satisfied or otherwise resolved.
57-46 SECTION 4.009. Section 3.401, Texas Trust Company Act
57-47 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
57-48 amended to read as follows:
57-49 Sec. 3.401. AUTHORITY TO PURCHASE ASSETS OF ANOTHER TRUST
57-50 INSTITUTION [COMPANY]. (a) A state trust company, with the prior
57-51 written approval of the banking commissioner, may purchase all or
57-52 substantially all of the assets of another trust [regulated
57-53 financial] institution, including the right to control accounts
57-54 established with the trust institution [state trust company].
57-55 Except as otherwise expressly provided by this section or another
57-56 statute, the purchase of all or part of the assets of the trust
57-57 institution does not make the purchasing state trust company
57-58 responsible for any liability or obligation of the selling trust
57-59 institution that the purchasing state trust company does not
57-60 expressly assume. Except as otherwise provided by this Act, this
57-61 subchapter does not govern or prohibit the purchase by a state
57-62 trust company of all or part of the assets of a corporation or
57-63 other entity that is not a trust institution [state trust company].
57-64 (b) To make a purchase under this section, an application in
57-65 the form required by the banking commissioner must be filed with
57-66 the banking commissioner. The banking commissioner shall
57-67 investigate the condition of the purchaser and seller and may
57-68 require the submission of additional information as considered
57-69 necessary to make an informed decision. The banking commissioner
58-1 shall approve the purchase if:
58-2 (1) the acquiring state trust company will be solvent
58-3 and have sufficient capitalization for its business and location;
58-4 (2) the acquiring state trust company has complied
58-5 with all applicable statutes and rules;
58-6 (3) all obligations and liabilities of each trust
58-7 institution [company] that is a party to the purchase or sale of
58-8 assets have been properly discharged or otherwise lawfully assumed
58-9 or retained by a trust institution [company] or other fiduciary;
58-10 (4) all conditions imposed by the banking commissioner
58-11 have been satisfied or otherwise resolved; and
58-12 (5) all fees and costs have been paid.
58-13 (c) A purchase is effective on the date of approval unless
58-14 the purchase agreement provides for and the banking commissioner
58-15 consents to a different effective date.
58-16 (d) The acquiring state trust company shall succeed by
58-17 operation of law to all of the rights, privileges, and obligations
58-18 of the selling trust institution under each account included in the
58-19 assets acquired.
58-20 SECTION 4.010. Section 3.405, Texas Trust Company Act
58-21 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
58-22 amended by adding Subsection (e) to read as follows:
58-23 (e) The acquiring trust institution shall succeed by
58-24 operation of law to all of the rights, privileges, and obligations
58-25 of the selling state trust company under each account included in
58-26 the assets acquired.
58-27 SECTION 4.011. Subchapter F, Chapter 3, Texas Trust Company
58-28 Act (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
58-29 amended to read as follows:
58-30 SUBCHAPTER F. [STATE TRUST REGULATORY SYSTEM:]
58-31 EXIT OF STATE TRUST COMPANY OR
58-32 ENTRY OF ANOTHER TRUST INSTITUTION
58-33 Sec. 3.501. MERGER[, REORGANIZATION,] OR CONVERSION OF STATE
58-34 TRUST COMPANY INTO ANOTHER TRUST INSTITUTION [NATIONAL BANK]
58-35 EXERCISING FIDUCIARY POWERS. (a) Subject to Chapter 9 of this
58-36 Act, a [A] state trust company may act as necessary and to the
58-37 extent permitted by [under] the laws of the United States, [or]
58-38 this state, another state, or another country to merge[,
58-39 reorganize,] or convert into another form of trust institution [a
58-40 national bank exercising fiduciary powers].
58-41 (b) The merger [, reorganization,] or conversion must be
58-42 made and approval of the state trust company's board, shareholders,
58-43 or participants must be obtained in accordance with the Texas
58-44 Business Corporation Act as if the state trust company were a
58-45 domestic corporation and all other parties to the transaction, if
58-46 any, were foreign corporations or other entities, except as may be
58-47 otherwise provided by rules. For purposes of this subsection, a
58-48 conversion is considered a merger into the successor trust
58-49 institution [national bank exercising fiduciary powers].
58-50 (c) The state trust company does not cease to be a state
58-51 trust company subject to the supervision of the banking
58-52 commissioner unless:
58-53 (1) the banking commissioner has been given written
58-54 notice of the intention to merge[, reorganize,] or convert before
58-55 the 31st day before the date of the proposed transaction;
58-56 (2) the state trust company has published notice of
58-57 the transaction, in the form and frequency specified by the banking
58-58 commissioner, in a newspaper of general circulation published in
58-59 the county of its home office or, if such a newspaper is not
58-60 published in the county, in an adjacent county and in other
58-61 locations that the banking commissioner considers appropriate;
58-62 (3) the state trust company has filed with the banking
58-63 commissioner:
58-64 (A) a copy of the application filed with the
58-65 successor regulatory authority, including a copy of each contract
58-66 evidencing or implementing the merger[, reorganization,] or
58-67 conversion, or other documents sufficient to show compliance with
58-68 applicable law;
58-69 (B) a certified copy of all minutes of board
59-1 meetings and shareholder or participant meetings at which action
59-2 was taken regarding the merger[, reorganization,] or conversion;
59-3 and
59-4 (C) a publisher's certificate showing
59-5 publication of the required notice;
59-6 (4) the banking commissioner determines that:
59-7 (A) all accounts and liabilities of the state
59-8 trust company are fully discharged, assumed, or otherwise retained
59-9 by the successor trust institution [national bank exercising
59-10 fiduciary powers];
59-11 (B) any conditions imposed by the banking
59-12 commissioner for the protection of clients and creditors have been
59-13 met or otherwise resolved; and
59-14 (C) any required filing fees have been paid; and
59-15 (5) the state trust company has received a certificate
59-16 of authority to do business as the successor trust institution [a
59-17 national bank exercising fiduciary powers].
59-18 Sec. 3.502. CONVERSION OF TRUST INSTITUTION INTO STATE TRUST
59-19 COMPANY. (a) A trust institution may apply to the banking
59-20 commissioner for conversion into a state trust company on a form
59-21 prescribed by the banking commissioner and accompanied by any
59-22 required fee if the trust institution follows the procedures
59-23 prescribed by the laws of the United States, this state, another
59-24 state, or another country governing the exit of the trust
59-25 institution for the purpose of conversion into a state trust
59-26 company from the regulatory system applicable before the
59-27 conversion. A trust association or limited trust association may
59-28 convert its organizational form under this section.
59-29 (b) A trust institution applying to convert into a state
59-30 trust company may receive a certificate of authority to do business
59-31 as a state trust company if the banking commissioner finds that:
59-32 (1) the trust institution is not engaging in a pattern
59-33 or practice of unsafe and unsound fiduciary or banking practices;
59-34 (2) the trust institution has adequate capitalization
59-35 for a state trust company to act as a fiduciary at the same
59-36 locations as the trust institution is acting as a fiduciary before
59-37 the conversion;
59-38 (3) the trust institution can be expected to operate
59-39 profitably after the conversion;
59-40 (4) the officers and directors of the trust
59-41 institution as a group have sufficient banking experience, ability,
59-42 standing, competence, trustworthiness, and integrity to justify a
59-43 belief that the trust institution will operate as a state trust
59-44 company in compliance with law; and
59-45 (5) each principal shareholder has sufficient
59-46 experience, ability, standing, competence, trustworthiness, and
59-47 integrity to justify a belief that the trust institution will be
59-48 free from improper or unlawful influence or interference with
59-49 respect to the trust institution's operation as a state trust
59-50 company in compliance with law.
59-51 (c) The banking commissioner may:
59-52 (1) request additional information considered
59-53 necessary to an informed decision under this section;
59-54 (2) perform an examination of the converting trust
59-55 institution at the expense of the converting trust institution; and
59-56 (3) require that examination fees be paid before a
59-57 certificate of authority is issued.
59-58 (d) In connection with the application, the converting trust
59-59 institution must:
59-60 (1) submit a statement of the law governing the exit
59-61 of the trust institution from the regulatory system applicable
59-62 before the conversion and the terms of the transition into a state
59-63 trust company; and
59-64 (2) demonstrate that all applicable law has been fully
59-65 satisfied.
59-66 SECTION 4.012. Section 6.003(a), Texas Trust Company Act
59-67 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
59-68 amended to read as follows:
59-69 (a) The banking commissioner has grounds to remove a present
60-1 or former officer, director, manager, managing participant, or
60-2 employee of a state trust company from office or employment in, or
60-3 prohibit a controlling shareholder or participant or other person
60-4 [participating in the affairs of the state trust company] from
60-5 further participation in the affairs of, the state trust company[,
60-6 state bank, or other entity chartered or licensed by the banking
60-7 commissioner under the laws of this state,] if the banking
60-8 commissioner determines from examination or other credible evidence
60-9 that:
60-10 (1) the person committed, participated, or acted, in
60-11 other than an inadvertent or unintentional manner, as described by
60-12 Section 6.002(a) of this Act with regard to the affairs of the
60-13 state trust company, or violated a final cease and desist order
60-14 issued in response to the same or a similar act;
60-15 (2) because of this action by the person:
60-16 (A) the state trust company has suffered or will
60-17 probably suffer financial loss or other damage;
60-18 (B) the interests of the trust company's clients
60-19 have been or could be prejudiced; or
60-20 (C) the person has received financial gain or
60-21 other benefit by reason of the violation; and
60-22 (3) this action by the person:
60-23 (A) involves personal dishonesty on the part of
60-24 the person; or
60-25 (B) demonstrates wilful or continuing disregard
60-26 for the safety or soundness of the state trust company.
60-27 SECTION 4.013. Section 6.007(a), Texas Trust Company Act
60-28 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
60-29 amended to read as follows:
60-30 (a) Without the prior written approval of the banking
60-31 commissioner, a person subject to a final and enforceable removal
60-32 or prohibition order issued by the banking commissioner:
60-33 (1) may not serve as a director, officer, or employee
60-34 of a [any] state trust company, state bank, or other entity
60-35 chartered or licensed by the banking commissioner under the laws of
60-36 this state while the order is in effect, including an interstate
60-37 branch, trust office, or representative office in this state of an
60-38 out-of-state state bank, trust company, or foreign bank;
60-39 (2) may not directly or indirectly participate in any
60-40 manner in the management of such an entity;
60-41 (3) may not directly or indirectly vote for a director
60-42 of such an entity;
60-43 (4) may not solicit, procure, transfer, attempt to
60-44 transfer, vote, or attempt to vote a proxy, consent, or
60-45 authorization with respect to voting rights in such an entity; and
60-46 (5) remains entitled to receive dividends or a share
60-47 of profits, return of contribution, or other distributive benefit
60-48 from such an entity with respect to voting securities in the entity
60-49 owned by the person.
60-50 SECTION 4.014. Section 6.202(b), Texas Trust Company Act
60-51 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
60-52 amended to read as follows:
60-53 (b) This section does not apply to:
60-54 (1) a trust institution [state or national bank, a
60-55 state or federal savings bank, a state or federal savings
60-56 association, a state or federal credit union, or a depository or
60-57 trust company institution] authorized under this Act to conduct a
60-58 trust business in this state; and
60-59 (2) another entity organized under the laws of this
60-60 state, another state, the United States, or a foreign sovereign
60-61 state to the extent that:
60-62 (A) the entity is authorized under its charter
60-63 or the laws of this state or the United States to use a term, word,
60-64 character, ideogram, phonogram, or phrase prohibited by Subsection
60-65 (a) of this section; and
60-66 (B) the entity is authorized by the laws of this
60-67 state or the United States to conduct the activities in which the
60-68 entity is engaged in this state.
60-69 SECTION 4.015. Section 7.101(b), Texas Trust Company Act
61-1 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
61-2 amended to read as follows:
61-3 (b) Unless the banking commissioner directs or consents
61-4 otherwise, the home office and all additional trust [branch]
61-5 offices of the state trust company shall remain open for business
61-6 during normal business hours until the last date specified in
61-7 published notices for presentation of claims, withdrawal of
61-8 accounts, and redemption of property.
61-9 SECTION 4.016. Section 7.102(c), Texas Trust Company Act
61-10 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
61-11 amended to read as follows:
61-12 (c) The state trust company shall publish notice in a
61-13 newspaper of general circulation in each community where its home
61-14 office or an additional trust office [a branch] is located at least
61-15 once each week for eight consecutive weeks or at other times
61-16 specified by the banking commissioner or rules adopted under this
61-17 Act. The notice must state that the state trust company is
61-18 liquidating, that clients, depositors, and creditors must present
61-19 their claims for payment on or before a specific date, and that all
61-20 safe deposit box holders and bailors of property left with the
61-21 state trust company should remove their property on or before a
61-22 specified date. The dates selected by the state trust company must
61-23 be approved by the banking commissioner and must allow the affairs
61-24 of the state trust company to be wound up as quickly as feasible
61-25 and allow creditors, clients, and owners of property adequate time
61-26 for presentation of claims, withdrawal of accounts, and redemption
61-27 of property. The banking commissioner may adjust the dates with or
61-28 without republication of notice if additional time appears needed
61-29 for these activities.
61-30 SECTION 4.017. Section 7.105(d), Texas Trust Company Act
61-31 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
61-32 amended to read as follows:
61-33 (d) After distribution of all remaining assets, the state
61-34 trust company shall:
61-35 (1) file with the department, under the oath or
61-36 affirmation of a majority of its board or managing participants,
61-37 another affidavit accompanied by schedules showing the distribution
61-38 to each shareholder, participant, or participant-transferee; and
61-39 (2) tender to the department:
61-40 (A) all copies of reports of examination of the
61-41 state trust company in its possession; and
61-42 (B) its original charter, or an affidavit
61-43 stating that the original charter is lost, and any [branch]
61-44 certificates of authority for additional trust offices.
61-45 SECTION 4.018. Section 7.205(a), Texas Trust Company Act
61-46 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
61-47 amended to read as follows:
61-48 (a) As soon as reasonably practicable after initiation of
61-49 the receivership proceeding, the receiver shall publish notice, in
61-50 a newspaper of general circulation in each community where the
61-51 state trust company's home office or any additional trust office is
61-52 [and a branch are] located. The notice must state that the state
61-53 trust company has been closed for liquidation, that clients and
61-54 creditors must present their claims for payment on or before a
61-55 specific date, and that all safe deposit box holders and bailors of
61-56 property left with the state trust company should remove their
61-57 property not later than a specified date. The receiver shall
61-58 select the dates to allow the affairs of the state trust company to
61-59 be wound up as quickly as feasible while allowing creditors,
61-60 clients, and owners of property adequate time for presentation of
61-61 claims, withdrawal of accounts, and redemption of property, but may
61-62 not select a date before the 121st day after the date of the
61-63 notice. The receiver may adjust the dates with the approval of the
61-64 court with or without republication of notice if additional time
61-65 appears needed for these activities.
61-66 SECTION 4.019. Section 8.002, Texas Trust Company Act
61-67 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
61-68 amended to read as follows:
61-69 Sec. 8.002. ATTACHMENT, INJUNCTION, OR EXECUTION. [(a)] An
62-1 attachment, injunction, or execution for the purpose of collecting
62-2 a money judgment or securing a prospective money judgment against a
62-3 trust institution, including a state trust company or a trust
62-4 institution organized under the laws of another state that lawfully
62-5 maintains an office in this state, or against a client of or client
62-6 account in the trust institution, is governed by Sections 59.007
62-7 and 59.008, Finance Code [may not be issued against a state trust
62-8 company located in this state before the judgment is final and all
62-9 appeals have been exhausted or foreclosed by law.]
62-10 [(b) This section does not affect an attachment, injunction,
62-11 execution, or writ of garnishment issued to or served on a state
62-12 trust company for the purpose of collecting a money judgment or
62-13 securing a prospective money judgment against a client of or client
62-14 account in the state trust company].
62-15 SECTION 4.020. Section 8.004, Texas Trust Company Act
62-16 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
62-17 amended to read as follows:
62-18 Sec. 8.004. AUTHORITY TO ACT AS NOTARY PUBLIC. A notary
62-19 public is not disqualified from taking an acknowledgement or proof
62-20 of a written instrument as provided by Section 406.016, Government
62-21 Code, solely because of the person's ownership of stock or
62-22 participation interest in or employment by a [state] trust
62-23 institution [company] that is an interested party in the underlying
62-24 transaction, including a state trust company or a trust institution
62-25 organized under the laws of another state that lawfully maintains
62-26 an office in this state.
62-27 SECTION 4.021. Section 8.005(a), Texas Trust Company Act
62-28 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
62-29 amended to read as follows:
62-30 (a) An officer, director, manager, managing participant, or
62-31 employee of a [state] trust institution [company] with fewer than
62-32 500 shareholders or participants, including a state trust company
62-33 or a trust institution organized under the laws of another state
62-34 that lawfully maintains an office in this state, or a holding
62-35 company with fewer than 500 shareholders or participants that
62-36 controls a [state] trust institution, [company] is exempt from the
62-37 registration and licensing provisions of The Securities Act
62-38 (Article 581-1 et seq., Vernon's Texas Civil Statutes) with respect
62-39 to that person's participation in a sale or other transaction
62-40 involving securities issued by the [state] trust institution
62-41 [company] or the holding company of which that person is an
62-42 officer, director, manager, managing participant, or employee.
62-43 SECTION 4.022. Section 8.006, Texas Trust Company Act
62-44 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
62-45 amended to read as follows:
62-46 Sec. 8.006. SUCCESSION OF TRUST POWERS. (a) If, [a
62-47 reorganizing or selling state trust company] at the time of a
62-48 merger, reorganization, conversion, [or] sale of substantially all
62-49 of its assets under Chapter 3 or Chapter 9 of this Act or other
62-50 applicable law, or sale of substantially all of its trust accounts
62-51 and related activities at a separate branch or trust office, a
62-52 reorganizing or selling trust institution is acting as trustee,
62-53 guardian, executor, or administrator, or in another fiduciary
62-54 capacity, a [the] successor or purchasing trust institution with
62-55 sufficient fiduciary authority may [entity with fiduciary powers
62-56 may, without the necessity of judicial action or action by the
62-57 creator of the trust,] continue the office, trust, or fiduciary
62-58 relationship:
62-59 (1) without the necessity of judicial action or action
62-60 by the creator of the office, trust, or fiduciary relationship; and
62-61 (2) without regard to whether the successor or
62-62 purchasing trust institution meets qualification requirements
62-63 specified in an instrument creating the office, trust, or fiduciary
62-64 relationship other than a requirement related to geographic locale
62-65 of account administration, including requirements as to
62-66 jurisdiction of incorporation, location of principal office, or
62-67 type of financial institution.
62-68 (b) The successor or purchasing trust institution [entity]
62-69 may perform all the duties and exercise all the powers connected
63-1 with or incidental to the fiduciary relationship in the same manner
63-2 as if the successor or purchasing trust institution [entity] had
63-3 been originally designated as the fiduciary.
63-4 SECTION 4.023. Section 8.007, Texas Trust Company Act
63-5 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
63-6 amended to read as follows:
63-7 Sec. 8.007. DISCOVERY OF CLIENT RECORDS. Civil discovery of
63-8 a client record maintained by a trust institution, including a
63-9 state trust company or a trust institution organized under the laws
63-10 of another state that lawfully maintains an office in this state,
63-11 is governed by Section 59.006, Finance Code [30.007, Civil Practice
63-12 and Remedies Code, as added by Chapter 914, Acts of the 74th
63-13 Legislature, Regular Session, 1995].
63-14 SECTION 4.024. Section 8.008, Texas Trust Company Act
63-15 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
63-16 amended to read as follows:
63-17 Sec. 8.008. COMPLIANCE REVIEW COMMITTEE. A trust company
63-18 may establish a compliance review committee as provided by Section
63-19 59.009, Finance Code [(a) In this section:]
63-20 [(1) "Civil action" means a civil proceeding pending
63-21 in a court or other adjudicatory tribunal with jurisdiction to
63-22 issue a request or subpoena for records, including an alternative
63-23 dispute resolution mechanism, voluntary or required, under which a
63-24 party may compel the production of records. The term does not
63-25 include an examination or enforcement proceeding initiated by the
63-26 Federal Deposit Insurance Corporation or its successor and the
63-27 board of governors of the Federal Reserve System or its successor,
63-28 in exercise of their jurisdiction.]
63-29 [(2) "Compliance review document" means a document
63-30 prepared for or created by a compliance review committee.]
63-31 [(b) A state trust company or an affiliate of a state trust
63-32 company, including its holding company, may establish a compliance
63-33 review committee to test, review, or evaluate the institution's
63-34 conduct, transactions, or potential transactions for the purpose of
63-35 monitoring and improving or enforcing compliance with:]
63-36 [(1) a statutory or regulatory requirement;]
63-37 [(2) financial reporting to a governmental agency;]
63-38 [(3) the policies and procedures of the state trust
63-39 company or its affiliates; or]
63-40 [(4) safe, sound, and fair lending practices.]
63-41 [(c) Except as provided by Subsection (d) of this section:]
63-42 [(1) a compliance review document is confidential and
63-43 is not discoverable or admissible in evidence in a civil action;]
63-44 [(2) an individual serving on a compliance review
63-45 committee or acting under the direction of a compliance review
63-46 committee may not be required to testify in a civil action as to
63-47 the contents or conclusions of a compliance review document or as
63-48 to an action taken or discussions conducted by or for a compliance
63-49 review committee; and]
63-50 [(3) a compliance review document or an action taken
63-51 or discussion conducted by or for a compliance review committee
63-52 that is disclosed to a governmental agency remains confidential and
63-53 is not discoverable or admissible in a civil action.]
63-54 [(d) Subsection (c)(2) of this section does not apply to an
63-55 individual that has management responsibility for the operations,
63-56 records, employees, or activities being examined or evaluated by
63-57 the compliance review committee.]
63-58 [(e) This section does not limit the discovery or
63-59 admissibility in a civil action of a document that is not a
63-60 compliance review document].
63-61 SECTION 4.025. Section 8.009, Texas Trust Company Act
63-62 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
63-63 amended to read as follows:
63-64 Sec. 8.009. PARITY. (a) A state trust company has the same
63-65 rights and privileges with respect to the exercise of fiduciary
63-66 powers that are or may be granted to a trust institution [state or
63-67 national bank] that maintains its principal office or a branch or
63-68 trust office [is domiciled] in this state, except that this section
63-69 may not be used by a state trust company to:
64-1 (1) diminish its otherwise applicable fiduciary duties
64-2 to a client under the laws of this state; or
64-3 (2) avoid otherwise applicable consumer protection
64-4 laws of this state [and exercising fiduciary powers].
64-5 (b) A state trust company that intends to exercise a right
64-6 or privilege with respect to the exercise of fiduciary powers
64-7 granted to a trust [regulated financial] institution described in
64-8 Subsection (a) of this section that is not authorized for state
64-9 trust companies under the statutes and rules of this state shall
64-10 submit a letter to the banking commissioner, describing in detail
64-11 the activity in which the state trust company intends to engage and
64-12 the specific authority for the trust [regulated financial]
64-13 institution described in Subsection (a) to undertake the proposed
64-14 activity and shall attach copies, if available, of relevant state
64-15 and federal law, including regulations and interpretive letters.
64-16 The state trust company may begin to perform the proposed activity
64-17 after the 30th day after the date the banking commissioner receives
64-18 the state trust company's letter unless the banking commissioner
64-19 specifies an earlier or later date or prohibits the activity. The
64-20 banking commissioner may prohibit the state trust company from
64-21 performing the activity only if the banking commissioner finds
64-22 that:
64-23 (1) a trust [regulated financial] institution
64-24 described in Subsection (a) of this section [that is domiciled in
64-25 this state] does not possess the specific right or privilege to
64-26 perform the activity the state trust company seeks to perform; or
64-27 (2) the performance of the activity by the state trust
64-28 company would adversely affect the safety and soundness of the
64-29 requesting state trust company.
64-30 (c) The banking commissioner may extend the 30-day period
64-31 under Subsection (b) of this section if the banking commissioner
64-32 determines that the state trust company's letter raises issues
64-33 requiring additional information or additional time for analysis.
64-34 If the 30-day period is extended, the state trust company may
64-35 perform the proposed activity only on prior written approval by the
64-36 banking commissioner, except that the banking commissioner must
64-37 approve or prohibit the proposed activity or convene a hearing
64-38 under Section 3.009 of this Act not later than the 60th day after
64-39 the date the commissioner receives the state trust company's
64-40 letter. If a hearing is covened under Section 3.009 of this Act,
64-41 the banking commissioner must approve or prohibit the proposed
64-42 activity not later than the 30th day after the date the hearing is
64-43 completed.
64-44 (d) A state trust company that is denied the requested right
64-45 or privilege to engage in an activity by the banking commissioner
64-46 under this section may appeal as provided by Section 3.010 of this
64-47 Act or may resubmit a letter under this subsection with additional
64-48 information or authority relevant to the banking commissioner's
64-49 determination. A denial is immediately final for purposes of
64-50 appeal.
64-51 (e) The finance commission may adopt rules implementing the
64-52 method or manner in which a state trust company exercises specific
64-53 rights and privileges, including rules regarding the exercise of
64-54 rights and privileges that would be prohibited to state trust
64-55 companies under state law except as provided by this section. The
64-56 finance commission may not adopt rules under this subsection unless
64-57 it finds that:
64-58 (1) trust [regulated financial] institutions described
64-59 in Subsection (a) [of this section that are domiciled in this
64-60 state] possess the rights or privileges to perform activities the
64-61 rules would permit state trust companies to perform; and
64-62 (2) if the rights and privileges would be prohibited
64-63 to state trust companies under other state law, the rules contain
64-64 adequate safeguards and controls, consistent with safety and
64-65 soundness, to address the concern of the legislature evidenced by
64-66 the state law the rules would impact.
64-67 (f) The exercise of rights and privileges by a state trust
64-68 company in compliance with and in the manner authorized by this
64-69 section is not a violation of any statute of this state.
65-1 SECTION 4.026. Section 115.002, Property Code, is amended to
65-2 read as follows:
65-3 Sec. 115.002. VENUE. (a) The venue of an action under
65-4 Section 115.001 of this Act is determined according to this
65-5 section.
65-6 (b) If there is a single, noncorporate trustee, an action
65-7 shall be brought [venue is] in the county in which:
65-8 (1) the trustee resides or has resided at any time
65-9 during the four-year period preceding the date the action is filed;
65-10 or
65-11 (2) the situs of administration of the trust is
65-12 maintained or has been maintained at any time during the four-year
65-13 period preceding the date the action is filed [the trustee's
65-14 residence is located].
65-15 (c) If there are multiple trustees or a corporate [any]
65-16 trustee, an action shall be brought [is a corporation, venue is] in
65-17 the county in which the situs of administration of the trust is
65-18 maintained or has been maintained at any time during the four-year
65-19 period preceding the date the action is filed, provided that an
65-20 action against a corporate trustee as defendant may be brought in
65-21 the county in which the corporate trustee maintains its principal
65-22 office in this state [the corporation's principal office is
65-23 located, or, if two or more corporations are trustees of the trust,
65-24 venue is in the county in which the principal office of any of the
65-25 corporations is located].
65-26 (d) For just and reasonable cause, including the location of
65-27 the records and the convenience of the parties and witnesses, the
65-28 court may transfer an action from a county of proper venue under
65-29 this section to another county of proper venue:
65-30 (1) on motion of a defendant or joined party, filed
65-31 concurrently with or before the filing of the answer or other
65-32 initial responsive pleading, and served in accordance with law; or
65-33 (2) on motion of an intervening party, filed not later
65-34 than the 20th day after the court signs the order allowing the
65-35 intervention, and served in accordance with law.
65-36 (e) Notwithstanding any other provision of this section, on
65-37 agreement by all parties the court may transfer an action from a
65-38 county of proper venue under this section to any other county.
65-39 (f) For the purposes of this section:
65-40 (1) "Corporate trustee" means an entity organized as a
65-41 financial institution or a corporation with the authority to act in
65-42 a fiduciary capacity.
65-43 (2) "Principal office" means an office of a corporate
65-44 trustee in this state where the decision makers for the corporate
65-45 trustee within this state conduct the daily affairs of the
65-46 corporate trustee. The mere presence of an agent or representative
65-47 of the corporate trustee does not establish a principal office.
65-48 The principal office of the corporate trustee may also be but is
65-49 not necessarily the same as the situs of administration of the
65-50 trust.
65-51 (3) "Situs of administration" means the location in
65-52 this state where the trustee maintains the office that is primarily
65-53 responsible for dealing with the settlor and beneficiaries of the
65-54 trust. The situs of administration may also be but is not
65-55 necessarily the same as the principal office of a corporate trustee
65-56 [If there are two or more trustees, none of which is a corporation,
65-57 venue is in the county in which the principal office of the trust
65-58 is maintained].
65-59 ARTICLE 5. PUBLIC DEPOSITS
65-60 SECTION 5.001. Section 4.102, Business & Commerce Code, is
65-61 amended by adding Subsection (c) to read as follows:
65-62 (c) Notwithstanding Section 1.105, the laws of this state
65-63 govern a deposit contract between a bank and a consumer account
65-64 holder if the branch or separate office of the bank that accepts
65-65 the deposit contract is located in this state. For purposes of
65-66 this subsection, "consumer account holder" means a natural person
65-67 who holds a deposit account primarily for personal, family, or
65-68 household purposes but does not include a natural person who holds
65-69 an account for another in a professional capacity.
66-1 SECTION 5.002. Section 45.201(2), Education Code, is amended
66-2 to read as follows:
66-3 (2) "Bank" means a [state bank authorized and
66-4 regulated under the laws of this state pertaining to banking, in
66-5 particular The Texas Banking Code (Article 342-101 et seq.,
66-6 Vernon's Texas Civil Statutes), a national] bank, a savings and
66-7 loan association, or a savings bank [authorized and regulated by
66-8 federal law, or a savings and loan association or savings bank]
66-9 organized under the laws of this state, another state, or federal
66-10 law that has its main office or a branch office in this state. The
66-11 term does not include any bank the deposits of which are not
66-12 insured by the Federal Deposit Insurance Corporation.
66-13 SECTION 5.003. Section 404.023, Government Code, is amended
66-14 to read as follows:
66-15 Sec. 404.023. DESIGNATION. The comptroller shall designate
66-16 one or more state depository banks that have main offices or
66-17 branches in centrally located cities in this state to be used for
66-18 clearing checks and other obligations due the state.
66-19 SECTION 5.004. Section 404.024(g), Government Code, is
66-20 amended to read as follows:
66-21 (g) To the extent practicable, the comptroller shall give
66-22 first consideration to [Texas] banks that maintain main offices or
66-23 branch offices in this state when investing in direct security
66-24 repurchase agreements.
66-25 SECTION 5.005. Section 404.031(f), Government Code, is
66-26 amended to read as follows:
66-27 (f) Instead of depositing pledged securities with the
66-28 comptroller, a state depository may deposit pledged securities with
66-29 a [the] Federal Reserve Bank [of Dallas] or a [the] Federal Home
66-30 Loan Bank [of Dallas]. The securities shall be held by the bank to
66-31 secure funds deposited by the comptroller in the state depository
66-32 pledging the securities. When the pledged securities are
66-33 deposited, the bank may apply book entry to the securities. The
66-34 records of the bank shall at all times reflect the name of the
66-35 state depository depositing the pledged securities, and the bank
66-36 shall issue an advice of transaction to the comptroller and the
66-37 state depository pledging the securities.
66-38 SECTION 5.006. Section 2257.024(a), Government Code, is
66-39 amended to read as follows:
66-40 (a) A public entity may contract with a bank that has its
66-41 main office or a branch office [domiciled] in this state to secure
66-42 a deposit of public funds.
66-43 SECTION 5.007. Section 2257.041(d), Government Code, is
66-44 amended to read as follows:
66-45 (d) A custodian must be approved by the public entity and
66-46 be:
66-47 (1) a state or national bank that:
66-48 (A) is designated by the comptroller as a state
66-49 depository;
66-50 (B) has its main office or a branch office [is
66-51 domiciled] in this state; and
66-52 (C) has a capital stock and permanent surplus of
66-53 $5 million or more;
66-54 (2) the Texas Treasury Safekeeping Trust Company;
66-55 (3) a Federal Reserve Bank or a branch of a Federal
66-56 Reserve Bank; or
66-57 (4) a federal home loan bank.
66-58 SECTION 5.008. Sections 105.001(1), (12), and (13), Local
66-59 Government Code, are amended to read as follows:
66-60 (1) "Bank" means a state bank or a national bank that
66-61 has its main office or a branch office [domiciled] in this state.
66-62 (12) "Savings association" means a [state] savings
66-63 association or savings bank organized under the laws of this state,
66-64 another state, or federal law that has its main office or a branch
66-65 office [or a federal savings association domiciled] in this state.
66-66 (13) "State bank" means a bank organized under the
66-67 laws of this state or another state [has the meaning assigned by
66-68 Section 1.002(a), Texas Banking Act].
66-69 SECTION 5.009. Section 116.001(1), Local Government Code,
67-1 is amended to read as follows:
67-2 (1) "Bank" means a:
67-3 (A) bank organized under the laws of this state,
67-4 another state, or federal law that has its main office or a branch
67-5 office in this state; or
67-6 (B) [banking corporation, association or an
67-7 individual banker,] savings and loan association or savings bank
67-8 organized under the laws of this state, another state, or [a
67-9 savings and loan association or savings bank organized under]
67-10 federal law that has its main office or a branch office in this
67-11 state.
67-12 SECTION 5.010. Section 131.001, Local Government Code, is
67-13 amended to read as follows:
67-14 Sec. 131.001. SPECIAL DEPOSITORY AUTHORIZED. If a financial
67-15 institution [bank] that is a depository under state law for the
67-16 public funds of a county, municipality, or district suspends
67-17 business or is taken charge of by a state or federal bank
67-18 regulatory agency [the banking commissioner of Texas or the federal
67-19 comptroller of the currency], the local government authority
67-20 authorized to select the original depository may select by contract
67-21 a special depository for the public funds in the suspended
67-22 financial institution [bank].
67-23 SECTION 5.011. Section 131.005(a), Local Government Code, is
67-24 amended to read as follows:
67-25 (a) The comptroller shall determine the amount of state
67-26 funds held by a county depository that suspends business or is
67-27 taken charge of by a state or federal bank regulatory agency [the
67-28 Banking Commissioner of Texas or the federal comptroller of the
67-29 currency]. The comptroller may:
67-30 (1) contract with a special depository selected by the
67-31 county authorities as provided by this subchapter for the custody
67-32 and payment of those funds; and
67-33 (2) approve a bond for the deposit contract.
67-34 SECTION 5.012. Section 131.901(a), Local Government Code, is
67-35 amended to read as follows:
67-36 (a) The governing body of a political subdivision, including
67-37 a county, municipality, school district, or other district, may not
67-38 designate a financial institution located outside the state as a
67-39 depository for funds under the governing body's jurisdiction. An
67-40 out-of-state financial institution is not considered to be located
67-41 outside this state to the extent the governing body designates a
67-42 branch office of such institution that is located in this state.
67-43 SECTION 5.013. Section 161.173(a), Natural Resources Code,
67-44 is amended to read as follows:
67-45 (a) Money in the fund that is not immediately committed to
67-46 paying principal of and interest on the bonds, to the purchase of
67-47 land, or to the payment of expenses as provided in this chapter may
67-48 be invested in:
67-49 (1) direct security repurchase agreements and reverse
67-50 security repurchase agreements made with state or national banks
67-51 that have main offices or branch offices [domiciled] in this state
67-52 or with primary dealers as approved by the Federal Reserve System;
67-53 (2) direct obligations of or obligations the principal
67-54 and interest of which are guaranteed by the United States;
67-55 (3) direct obligations of or obligations guaranteed by
67-56 the Federal Home Loan Banks, the Federal National Mortgage
67-57 Association, the Federal Farm Credit System, the Student Loan
67-58 Marketing Association, the Federal Home Loan Mortgage Corporation,
67-59 or a successor organization to one of those organizations;
67-60 (4) bankers' acceptances that:
67-61 (A) are eligible for purchase by members of the
67-62 Federal Reserve System;
67-63 (B) do not exceed 270 days to maturity; and
67-64 (C) are issued by a bank that has received the
67-65 highest short-term credit rating by a nationally recognized
67-66 investment rating firm;
67-67 (5) commercial paper that:
67-68 (A) does not exceed 270 days to maturity; and
67-69 (B) has received the highest short-term credit
68-1 rating by a nationally recognized investment rating firm;
68-2 (6) contracts written by the board in which the board
68-3 grants the purchaser the right to purchase securities in the
68-4 board's marketable securities portfolio at a specified price over a
68-5 specified period and for which the board is paid a fee and
68-6 specifically prohibits naked-option or uncovered option trading;
68-7 (7) obligations of a state or an agency, county, city,
68-8 or other political subdivision of a state and mutual funds composed
68-9 of these obligations;
68-10 (8) an investment instrument, obligation, or other
68-11 evidence of indebtedness the payment of which is directly or
68-12 indirectly guaranteed by the full faith and credit of the United
68-13 States;
68-14 (9) an investment, account, depository receipt, or
68-15 deposit that is fully:
68-16 (A) insured by the Federal Deposit Insurance
68-17 Corporation or its[, the Federal Savings and Loan Insurance
68-18 Corporation, or a] successor [organization to one of those
68-19 organizations]; or
68-20 (B) secured by securities described by
68-21 Subdivision (2), (3), or (8) of this subsection;
68-22 (10) a collateralized mortgage obligation fully
68-23 secured by securities or mortgages issued or guaranteed by the
68-24 Government National Mortgage Association (GNMA) or any entity
68-25 described by Subdivision (3) of this subsection;
68-26 (11) a security or evidence of indebtedness issued by
68-27 the Farm Credit System Financial Assistance Corporation, the
68-28 Private Export Funding Corporation, or the Export-Import Bank; and
68-29 (12) any other investment authorized for investment of
68-30 state funds by the comptroller under Section 404.024, Government
68-31 Code.
68-32 SECTION 5.014. Sections 223.010(b) and (d), Transportation
68-33 Code, are amended to read as follows:
68-34 (b) At the request of the contractor and with the approval
68-35 of the department and the comptroller, the amount retained may be
68-36 deposited under a trust agreement with a state or national bank
68-37 that has its main office or a branch office [domiciled] in this
68-38 state and is selected by the contractor.
68-39 (d) The bank, acting as escrow agent and by instructions
68-40 from the contractor, may reinvest the retained amount in a
68-41 certificate of deposit issued by a state or national bank that has
68-42 its main office or a branch office [domiciled] in this state, bank
68-43 time deposit, or other similar investment prescribed by the trust
68-44 agreement.
68-45 SECTION 5.015. Section 361.178, Transportation Code, is
68-46 amended to read as follows:
68-47 Sec. 361.178. FURNISHING OF INDEMNIFYING BONDS OR PLEDGE OF
68-48 SECURITIES. A bank or trust company that has its main office or a
68-49 branch office in [incorporated under the laws of] this state and
68-50 that acts as depository of the proceeds of bonds or of revenue may
68-51 furnish indemnifying bonds or pledge securities that the authority
68-52 requires.
68-53 ARTICLE 6. AMENDMENTS TO PROBATE CODE
68-54 SECTION 6.001. Section 3(d), Probate Code, is amended to
68-55 read as follows:
68-56 (d) "Corporate fiduciary" means a financial institution as
68-57 defined by Section 201.101, Finance Code, [trust company or bank]
68-58 having trust powers, existing or doing business under the laws of
68-59 this state, another state, or [of] the United States, which is
68-60 authorized by law to act under the order or appointment of any
68-61 court of record, without giving bond, as receiver, trustee,
68-62 executor, administrator, or, although without general depository
68-63 powers, depository for any moneys paid into court, or to become
68-64 sole guarantor or surety in or upon any bond required to be given
68-65 under the laws of this state.
68-66 SECTION 6.002. Section 105A, Probate Code, is amended to
68-67 read as follows:
68-68 Sec. 105A. APPOINTMENT AND SERVICE OF FOREIGN BANKS AND
68-69 TRUST COMPANIES IN FIDUCIARY CAPACITY. (a) A corporate fiduciary
69-1 that does not have its main office or a branch office in this
69-2 state, hereinafter called "foreign corporate fiduciaries" [Any bank
69-3 or trust company organized under the laws of, and having its
69-4 principal office in, the District of Columbia or any territory or
69-5 state of the United States of America, other than the State of
69-6 Texas, and any national bank having its principal office in the
69-7 District of Columbia or such territory or other state (all such
69-8 banks or trust companies being hereinafter sometimes called
69-9 "foreign banks or trust companies")], having the corporate power to
69-10 so act, may be appointed and may serve in the State of Texas as
69-11 trustee (whether of a personal or corporate trust), executor,
69-12 administrator, guardian of the estate, or in any other fiduciary
69-13 capacity, whether the appointment be by will, deed, agreement,
69-14 declaration, indenture, court order or decree, or otherwise, when
69-15 and to the extent that the home state of the corporate fiduciary
69-16 [District of Columbia or territory or other state in which such
69-17 foreign bank or trust company is organized and has its principal
69-18 office] grants authority to serve in like fiduciary capacity to a
69-19 corporate fiduciary whose home state is this state [bank or trust
69-20 company organized under the laws of, and having its principal
69-21 office in, the State of Texas, or to a national bank having its
69-22 principal office in the State of Texas].
69-23 (b) Before qualifying or serving in the State of Texas in
69-24 any fiduciary capacity, as aforesaid, such a foreign corporate
69-25 fiduciary [bank or trust company] shall file in the office of the
69-26 Secretary of the State of the State of Texas (1) a copy of its
69-27 charter, articles of incorporation or of association, and all
69-28 amendments thereto, certified by its secretary under its corporate
69-29 seal; (2) a duly executed instrument in writing, by its terms of
69-30 indefinite duration and irrevocable, appointing the Secretary of
69-31 State and his successors its agent for service of process upon whom
69-32 all notices and processes issued by any court of this state may be
69-33 served in any action or proceeding relating to any trust, estate,
69-34 fund or other matter within this state with respect to which such
69-35 foreign corporate fiduciary [bank or trust company] is acting in
69-36 any fiduciary capacity, including the acts or defaults of such
69-37 foreign corporate fiduciary [bank or trust company] with respect to
69-38 any such trust, estate or fund; and (3) a written certificate of
69-39 designation, which may be changed from time to time thereafter by
69-40 the filing of a new certificate of designation, specifying the name
69-41 and address of the officer, agent or other person to whom such
69-42 notice or process shall be forwarded by the Secretary of State.
69-43 Upon receipt of such notice or process, it shall be the duty of the
69-44 Secretary of State forthwith to forward same by registered or
69-45 certified mail to the officer, agent or other person so designated.
69-46 Service of notice or process upon the Secretary of State as agent
69-47 for such a foreign corporate fiduciary [bank or trust company]
69-48 shall in all ways and for all purposes have the same effect as if
69-49 personal service had been had within this state upon such foreign
69-50 corporate fiduciary [bank or trust company].
69-51 (c) [No foreign bank or trust company shall establish or
69-52 maintain any branch office, agency or other place of business
69-53 within this state, or shall in any way solicit, directly or
69-54 indirectly, any fiduciary business in this state of the types
69-55 embraced by subdivision (a) hereof. Except as authorized herein or
69-56 as may otherwise be authorized by the laws of this state, no
69-57 foreign bank or trust company shall act in a fiduciary capacity in
69-58 this state. Nothing in this Section shall be construed to authorize
69-59 foreign banks and trust companies to issue or to sell or otherwise
69-60 market or distribute in this state any investment certificates,
69-61 trust certificates, or other types of securities (including without
69-62 limiting the generality of the foregoing any securities of the
69-63 types authorized by Chapter 7 of the Insurance Code of 1951 prior
69-64 to the repeal thereof), or to conduct any activities or exercise
69-65 any powers of the type embraced and regulated by the Texas Banking
69-66 Act (Article 342-1.001 et seq., Vernon's Texas Civil Statutes) or
69-67 the Texas Trust Company Act other than those conducted and
69-68 exercised in a fiduciary capacity under the terms and conditions
69-69 hereof.]
70-1 [(d)] Any foreign corporate fiduciary [bank or trust
70-2 company] acting in a fiduciary capacity in this state in strict
70-3 accordance with the provisions of this Section shall not be deemed
70-4 to be doing business in the State of Texas within the meaning of
70-5 Article 8.01 of the Texas Business Corporation Act; and shall be
70-6 deemed qualified to serve in such capacity under the provisions of
70-7 Section 105 of this Code. [; and notwithstanding other law shall
70-8 not be prohibited from using in its name and stationery the terms
70-9 "bank," "trust," or "bank and trust."]
70-10 (d) [(e)] The provisions hereof are in addition to, and not
70-11 a limitation on, the provisions of Subtitle G, Finance Code, and
70-12 the Texas Trust Company Act (Article 342a-1.001 et seq., Vernon's
70-13 Texas Civil Statutes) [Section 2 of Chapter 388, Acts of the 55th
70-14 Legislature, Regular Session, 1957].
70-15 (e) [(f)] Any foreign corporate fiduciary [bank or trust
70-16 Company] which shall violate any provision of this Section 105a
70-17 shall be guilty of a misdemeanor and, upon conviction thereof,
70-18 shall be subject to a fine of not exceeding Five Thousand Dollars
70-19 ($5,000.00), and may, in the discretion of the court, be prohibited
70-20 from thereafter serving in this state in any fiduciary capacity.
70-21 SECTION 6.003. Subsection 5, Section 194, Probate Code, is
70-22 amended to read as follows:
70-23 5. Agreement as to Deposit of Assets. It shall be
70-24 lawful, and the court may require such action when deemed in the
70-25 best interest of an estate, for a personal representative to agree
70-26 with the surety or sureties, either corporate or personal, for the
70-27 deposit of any or all cash, and safekeeping of other assets of the
70-28 estate in a financial institution as defined by Section 201.101,
70-29 Finance Code, with its main office or a branch office in this state
70-30 [domestic state or national bank, trust company, savings and loan
70-31 association, or other domestic corporate depository, duly
70-32 incorporated] and qualified to act as a depository in this State
70-33 [such] under the laws of this State or of the United States, if
70-34 such deposit is otherwise proper, in such manner as to prevent the
70-35 withdrawal of such moneys or other assets without the written
70-36 consent of the surety, or an order of the court made on such notice
70-37 to the surety as the court shall direct. No such agreement shall in
70-38 any manner release from or change the liability of the principal or
70-39 sureties as established by the terms of the bond.
70-40 SECTION 6.004. Section 389(b), Probate Code, is amended to
70-41 read as follows:
70-42 (b) If, at any time, the guardian of the estate shall have
70-43 on hand money belonging to the ward beyond that which may be
70-44 necessary for the education and maintenance of such ward or wards,
70-45 he shall invest such money as follows:
70-46 (1) In bonds or other obligations of the United
70-47 States;
70-48 (2) In tax-supported bonds of the State of Texas;
70-49 (3) In tax-supported bonds of any county, district,
70-50 political subdivision, or incorporated city or town in the State of
70-51 Texas; provided, that the bonds of counties, districts,
70-52 subdivisions, cities, and towns may be purchased only subject to
70-53 the following restrictions: the net funded debt of said issuing
70-54 unit shall not exceed ten per cent of the assessed value of taxable
70-55 property therein, "net funded debt" meaning the total funded debt
70-56 less sinking funds on hand; and further, in the case of cities or
70-57 towns, less that part of the debt incurred for acquisition or
70-58 improvement of revenue-producing utilities, the revenues of which
70-59 are not pledged to support other obligations; provided, however,
70-60 that these restrictions shall not apply to bonds issued for road
70-61 purposes in this state under authority of Section 52 of Article III
70-62 of the Constitution of Texas, which bonds are supported by a tax
70-63 unlimited as to rate or amount;
70-64 (4) In shares or share accounts of any state savings
70-65 [building] and loan association or savings bank with its main
70-66 office or a branch office in [organized under the laws of] this
70-67 state, provided the payment of such shares or share accounts is
70-68 insured by the Federal Deposit [Savings & Loan] Insurance
70-69 Corporation;
71-1 (5) In the shares or share accounts of any federal
71-2 savings and loan association or savings bank with its main office
71-3 or a branch office [domiciled] in this state, where the payment of
71-4 such shares or share accounts is insured by the Federal Deposit
71-5 [Savings & Loan] Insurance Corporation;
71-6 (6) In collateral bonds of companies incorporated
71-7 under the laws of the State of Texas, having a paid-in capital of
71-8 One Million Dollars or more, when such bonds are a direct
71-9 obligation of the company issuing them, and are specifically
71-10 secured by first mortgage real estate notes or other securities
71-11 pledged with a trustee; or
71-12 (7) In interest-bearing time deposits which may be
71-13 withdrawn on or before one year after demand in any bank doing
71-14 business in Texas where the payment of such time deposits is
71-15 insured by the Federal Deposit Insurance Corporation.
71-16 SECTION 6.005. Section 601(5), Probate Code, is amended to
71-17 read as follows:
71-18 (5) "Corporate fiduciary" means a financial
71-19 institution as defined by Section 201.101, Finance Code, [trust
71-20 company or bank] having trust powers, existing or doing business
71-21 under the laws of this state, another state, or [of] the United
71-22 States, that is authorized by law to act under the order or
71-23 appointment of any court of record, without giving bond, as a
71-24 guardian, receiver, trustee, executor, or administrator, or,
71-25 although without general depository powers, as a depository for any
71-26 money paid into court, or to become sole guarantor or surety in or
71-27 on any bond required to be given under the laws of this state.
71-28 SECTION 6.006. Sections 703(e) and (g), Probate Code, are
71-29 amended to read as follows:
71-30 (e) If the court considers it to be in the best interests of
71-31 the ward, the court may require that the guardian and the corporate
71-32 or personal sureties on the bond of the guardian of the ward agree
71-33 to deposit any or all cash and safekeeping of other assets of the
71-34 guardianship estate in a financial institution as defined by
71-35 Section 201.101, Finance Code, with its main office or a branch
71-36 office in this state [domestic state or national bank, trust
71-37 company, savings and loan association, or other domestic corporate
71-38 depository, duly incorporated] and qualified to act as a depository
71-39 in this state [national bank, trust company, savings and loan
71-40 association, or other domestic corporate depository] under the laws
71-41 of this state or of the United States, and, if the depository is
71-42 otherwise proper, the court may require the deposit to be made in a
71-43 manner so as to prevent the withdrawal of the money or other assets
71-44 in the guardianship estate without the written consent of the
71-45 surety or on court order made on the notice to the surety. An
71-46 agreement made by a guardian and the sureties on the bond of the
71-47 guardian under this section does not release from liability or
71-48 change the liability of the principal or sureties as established by
71-49 the terms of the bond.
71-50 (g) In lieu of giving a surety or sureties on a bond that is
71-51 required of the guardian, or for purposes of reducing the amount of
71-52 the bond, the guardian of an estate may deposit out of the
71-53 guardian's own assets cash or securities that are acceptable to the
71-54 court with a financial institution as defined by Section 201.101,
71-55 Finance Code, with its main office or a branch office in this state
71-56 [domestic state or national bank, trust company, savings and loan
71-57 association, or other domestic corporate depository or with any
71-58 other corporate depository approved by the court]. If the deposit
71-59 is otherwise proper, the deposit must be equal in amount or value
71-60 to the amount of the bond required or the bond shall be reduced by
71-61 the value of assets that are deposited.
71-62 SECTION 6.007. Section 855(b), Probate Code, is amended to
71-63 read as follows:
71-64 (b) If the guardian of the estate has on hand money that
71-65 belongs to the ward that exceeds that amount of money that may be
71-66 necessary for the education and maintenance of the ward, the
71-67 guardian shall invest the money as follows:
71-68 (1) in bonds or other obligations of the United
71-69 States;
72-1 (2) in tax-supported bonds of this state;
72-2 (3) except as limited by Subsections (c) and (d) of
72-3 this section, in tax-supported bonds of a county, district,
72-4 political subdivision, or incorporated city or town in this state;
72-5 (4) in shares or share accounts of a state savings
72-6 [building] and loan association or savings bank with its main
72-7 office or a branch office in [organized under the laws of] this
72-8 state if the payment of the shares or share accounts is insured by
72-9 the Federal Deposit [Savings and Loan] Insurance Corporation;
72-10 (5) in the shares or share accounts of a federal
72-11 savings and loan association or savings bank with its main office
72-12 or a branch office [domiciled] in this state if the payment of the
72-13 shares or share accounts is insured by the Federal Deposit [Savings
72-14 and Loan] Insurance Corporation;
72-15 (6) in collateral bonds of companies incorporated
72-16 under the laws of this state, having a paid-in capital of
72-17 $1,000,000 or more, when the bonds are a direct obligation of the
72-18 company that issues the bonds and are specifically secured by first
72-19 mortgage real estate notes or other securities pledged with a
72-20 trustee; or
72-21 (7) in interest-bearing time deposits that may be
72-22 withdrawn on or before one year after demand in a bank that does
72-23 business in this state where the payment of the time deposits is
72-24 insured by the Federal Deposit Insurance Corporation.
72-25 ARTICLE 7. CIVIL PROCESS
72-26 SECTION 7.001. Section 30.007, Civil Practice and Remedies
72-27 Code, is amended to read as follows:
72-28 Sec. 30.007. PRODUCTION OF FINANCIAL INSTITUTION RECORDS.
72-29 Civil discovery of a customer record maintained by a financial
72-30 institution is governed by Section 59.006, Finance Code.
72-31 [(a) In this section:]
72-32 [(1) "Customer" means a person who uses, purchases, or
72-33 obtains an account, extension of credit, or product of a financial
72-34 institution or for whom a financial institution acts as a
72-35 fiduciary, agent, or custodian or in another representative
72-36 capacity.]
72-37 [(2) "Financial institution" means a state or national
72-38 bank, state or federal savings and loan association, state or
72-39 federal savings bank, state or federal credit union, foreign bank,
72-40 foreign bank agency, or trust company.]
72-41 [(3) "Record" means financial or other information of
72-42 a customer maintained by a financial institution.]
72-43 [(4) "Record request" means a valid and enforceable
72-44 subpoena, request for production, or other instrument issued under
72-45 authority of a tribunal that compels production of a customer
72-46 record.]
72-47 [(5) "Tribunal" means a court or other adjudicatory
72-48 tribunal with jurisdiction to issue a request for records,
72-49 including a government agency exercising adjudicatory functions and
72-50 an alternative dispute resolution mechanism, voluntary or required,
72-51 under which a party may compel the production of records.]
72-52 [(b) This section provides the exclusive method for
72-53 compelled discovery of a record of a financial institution relating
72-54 to one or more customers, does not create a right of privacy in a
72-55 record, and does not apply to:]
72-56 [(1) a demand or inquiry from a state or federal
72-57 government agency authorized by law to conduct an examination of
72-58 the financial institution;]
72-59 [(2) a record request from a state or federal
72-60 government agency or instrumentality under statutory or
72-61 administrative authority that provides for, or is accompanied by, a
72-62 specific mechanism for discovery and protection of a customer
72-63 record of a financial institution, including a record request from
72-64 a federal agency subject to the Right to Financial Privacy Act of
72-65 1978 (12 U.S.C. Section 3401 et seq.) or from the Internal Revenue
72-66 Service under 26 U.S.C. Section 7609;]
72-67 [(3) a record request from or report to a government
72-68 agency arising out of the investigation or prosecution of a
72-69 criminal offense;]
73-1 [(4) a record request in connection with a garnishment
73-2 proceeding in which the financial institution is garnishee and the
73-3 customer is debtor;]
73-4 [(5) an investigative demand or inquiry from a state
73-5 legislative investigating committee;]
73-6 [(6) an investigative demand or inquiry from the
73-7 attorney general of this state as authorized by law other than the
73-8 procedural law governing discovery in civil cases; or]
73-9 [(7) the voluntary use or disclosure of a record by a
73-10 financial institution subject to other applicable state or federal
73-11 law.]
73-12 [(c) A financial institution shall produce a record in
73-13 response to a record request only if:]
73-14 [(1) it is served with the record request not later
73-15 than the 24th day before the date that compliance with the record
73-16 request is required;]
73-17 [(2) before the financial institution complies with
73-18 the record request the requesting party pays the financial
73-19 institution's reasonable costs of complying with the record
73-20 request, including costs of reproduction, postage, research,
73-21 delivery, and attorney's fees, or posts a cost bond in an amount
73-22 estimated by the financial institution to cover those costs; and]
73-23 [(3) when the customer is not a party to the
73-24 proceeding in which the request was issued, the requesting party
73-25 complies with Subsections (d) and (e) and:]
73-26 [(A) the financial institution receives the
73-27 customer's written consent to release the record after a request
73-28 under Subsection (d)(3); or]
73-29 [(B) the tribunal takes further action based on
73-30 action initiated by the requesting party under Subsection (e).]
73-31 [(d) If the affected customer is not a party to the
73-32 proceeding in which the record request was issued, in addition to
73-33 serving the financial institution with a record request, the
73-34 requesting party shall:]
73-35 [(1) give notice stating the rights of the customer
73-36 under Subsection (f) and a copy of the request to each affected
73-37 customer in the manner and within the time provided by Rule 21a,
73-38 Texas Rules of Civil Procedure;]
73-39 [(2) file a certificate of service indicating that the
73-40 customer has been mailed or served with the notice and a copy of
73-41 the record request as required by this subsection with the tribunal
73-42 and the financial institution; and]
73-43 [(3) request the customer's written consent
73-44 authorizing the financial institution to comply with the request.]
73-45 [(e) If the customer refuses to execute the written consent
73-46 or fails to respond to the requesting party's request under
73-47 Subsection (d)(3) on or before the date that compliance with the
73-48 request is required, the requesting party may by written motion
73-49 seek an in camera inspection of the requested record as its sole
73-50 means of obtaining access to the requested record. In response to
73-51 a motion for in camera inspection, the tribunal may inspect the
73-52 requested record to determine its relevance to the matter before
73-53 the tribunal. The tribunal may order redaction of portions of the
73-54 records that the tribunal determines should not be produced and
73-55 shall enter a protective order preventing the record that it orders
73-56 produced from being:]
73-57 [(1) disclosed to a person who is not a party to the
73-58 proceeding before the tribunal; and]
73-59 [(2) used by a person for any purpose other than
73-60 resolving the dispute before the tribunal.]
73-61 [(f) The customer bears the burden of preventing or limiting
73-62 the financial institution's compliance with a record request
73-63 subject to this section by seeking an appropriate remedy, including
73-64 filing a motion to quash the record request or a motion for a
73-65 protective order. The customer has standing to appear before the
73-66 tribunal for that purpose if the customer is not otherwise a party.
73-67 Any motion filed shall be served on the financial institution and
73-68 the requesting party before the date that compliance with the
73-69 request is required. A financial institution is not liable to its
74-1 customer or another person for disclosure of a record in compliance
74-2 with this section.]
74-3 [(g) A financial institution may not be required to produce
74-4 a record under this section before the later of:]
74-5 [(1) the 24th day after the date of receipt of the
74-6 record request as provided by Subsection (c)(1);]
74-7 [(2) the 15th day after the date of receipt of a
74-8 customer consent to disclose a record as provided by Subsection
74-9 (c)(3); or]
74-10 [(3) the 15th day after the date a court orders
74-11 production of a record after an in camera inspection of a requested
74-12 record as provided by Subsection (e).]
74-13 [(h) An order to quash or for protection or other remedy
74-14 entered or denied by the tribunal under Subsection (e) or (f) is
74-15 not a final order and an interlocutory appeal may not be taken.]
74-16 SECTION 7.002. Section 31.002, Civil Practice and Remedies
74-17 Code, is amended by adding Subsection (g) to read as follows:
74-18 (g) With respect to turnover of property held by a financial
74-19 institution in the name of or on behalf of the judgment debtor as
74-20 customer of the financial institution, the rights of a receiver
74-21 appointed under Subsection (b)(3) do not attach until the financial
74-22 institution receives service of a certified copy of the order of
74-23 receivership in the manner specified by Section 59.008, Finance
74-24 Code.
74-25 SECTION 7.003. Subchapter C, Chapter 61, Civil Practice and
74-26 Remedies Code, is amended by adding Section 61.045 to read as
74-27 follows:
74-28 Sec. 61.045. ATTACHMENT OF PERSONALTY HELD BY FINANCIAL
74-29 INSTITUTION. Service of a writ of attachment on a financial
74-30 institution relating to personal property held by the financial
74-31 institution in the name of or on behalf of a customer of the
74-32 financial institution is governed by Section 59.008, Finance Code.
74-33 SECTION 7.004. Chapter 63, Civil Practice and Remedies Code,
74-34 is amended by adding Section 63.008 to read as follows:
74-35 Sec. 63.008. FINANCIAL INSTITUTION AS GARNISHEE. Service of
74-36 a writ of garnishment on a financial institution named as the
74-37 garnishee in the writ is governed by Section 59.008, Finance Code.
74-38 SECTION 7.005. Subchapter C, Chapter 64, Civil Practice and
74-39 Remedies Code, is amended by adding Section 64.036 to read as
74-40 follows:
74-41 Sec. 64.036. RECEIVERSHIP PROPERTY HELD BY FINANCIAL
74-42 INSTITUTION. Service or delivery of a notice of receivership, or a
74-43 demand or instruction by or on behalf of a receiver, relating to
74-44 receivership property held by a financial institution in the name
74-45 of or on behalf of a customer of the financial institution is
74-46 governed by Section 59.008, Finance Code.
74-47 SECTION 7.006. Subchapter A, Chapter 65, Civil Practice and
74-48 Remedies Code, is amended by adding Section 65.002 to read as
74-49 follows:
74-50 Sec. 65.002. RESTRAINING ORDER OR INJUNCTION AFFECTING
74-51 CUSTOMER OF FINANCIAL INSTITUTION. Service or delivery of a
74-52 restraining order or injunction affecting property held by a
74-53 financial institution in the name of or on behalf of a customer of
74-54 the financial institution is governed by Section 59.008, Finance
74-55 Code.
74-56 SECTION 7.007. Section 157.317(a), Family Code, is amended
74-57 to read as follows:
74-58 (a) A lien attaches to all real and personal property not
74-59 exempt under the Texas Constitution, including a claim for
74-60 negligence, personal injury, or workers' compensation, or an
74-61 insurance award for the claim, owned by the obligor on or after the
74-62 date the lien notice or abstract of judgment is filed with the
74-63 county clerk of the county in which the property is located, with
74-64 the court clerk as to property or claims in litigation, or, as to
74-65 property of the obligor in the possession or control of a third
74-66 party, from the date the lien notice is filed with that party.
74-67 Service of a lien notice on a financial institution relating to
74-68 property held by the financial institution in the name of or on
74-69 behalf of an obligor who is a customer of the financial institution
75-1 is governed by Section 59.008, Finance Code.
75-2 SECTION 7.008. Section 111.017, Tax Code, is amended to read
75-3 as follows:
75-4 Sec. 111.017. SEIZURE AND SALE OF PROPERTY. Before the
75-5 expiration of three years after a person becomes delinquent in the
75-6 payment of any amount under this title, the comptroller may seize
75-7 and sell at public auction real and personal property of the
75-8 person. A seizure made to collect the tax is limited only to
75-9 property of the person that is not exempt from execution. Service
75-10 or delivery of a notice of seizure under this section affecting
75-11 property held by a financial institution in the name of or on
75-12 behalf of a delinquent who is a customer of the financial
75-13 institution is governed by Section 59.008, Finance Code.
75-14 SECTION 7.009. Section 111.021(e), Tax Code, is amended to
75-15 read as follows:
75-16 (e) A notice under this section that attempts to prohibit
75-17 the transfer or disposal of an asset possessed or controlled by a
75-18 bank or other financial institution is governed by Section 59.008,
75-19 Finance Code, and also is effective if it is delivered or mailed to
75-20 the principal or any branch office of the bank or other financial
75-21 institution including any office of the bank or other financial
75-22 institution at which the deposit is carried or the credit or
75-23 property is held.
75-24 ARTICLE 8. AMENDMENTS TO TEXAS NON-PROFIT CORPORATION ACT
75-25 SECTION 8.001. Article 2.31, Texas Non-Profit Corporation
75-26 Act (Article 1396-2.31, Vernon's Texas Civil Statutes), is amended
75-27 to read as follows:
75-28 Art. 2.31. Power to Serve as Trustee
75-29 A. A corporation that is described by Section 501(c)(3) or
75-30 170(c), Internal Revenue Code of 1986, or a corresponding provision
75-31 of a subsequent federal tax law, or a corporation listed by the
75-32 Internal Revenue Service in the Cumulative List of Organizations
75-33 Described in Section 170(c) of the Internal Revenue Code of 1986,
75-34 I.R.S. Publication 78, may serve as the trustee of a trust:
75-35 (1) of which the corporation is a beneficiary; or
75-36 (2) benefiting another organization described by one
75-37 of those sections of the Internal Revenue Code of 1986, or a
75-38 corresponding provision of a subsequent federal tax law, or listed
75-39 by the Internal Revenue Service in the Cumulative List of
75-40 Organizations Described in Section 170(c) of the Internal Revenue
75-41 Code of 1986, I.R.S. Publication 78.
75-42 B. Any corporation (or person or entity assisting such
75-43 corporation) described in this article shall have immunity from
75-44 suit (including both a defense to liability and the right not to
75-45 bear the cost, burden, and risk of discovery and trial) as to any
75-46 claim alleging that the corporation's role as trustee of a trust
75-47 described in this article constitutes engaging in the trust
75-48 business in a manner requiring a state charter as defined in
75-49 Section 1.002(9), Texas Trust Company Act (Article 342a-1.002,
75-50 Vernon's Texas Civil Statutes). An interlocutory appeal may be
75-51 taken if a court denies or otherwise fails to grant a motion for
75-52 summary judgment that is based on an assertion of the immunity
75-53 provided in this section.
75-54 SECTION 8.002. (a) Article 2.31, Texas Non-Profit
75-55 Corporation Act (Article 1396-2.31, Vernon's Texas Civil Statutes),
75-56 as that section exists on the effective date of this article,
75-57 applies to any trust created before, on, or after the effective
75-58 date of this article, including any trust that is the subject of
75-59 litigation or another proceeding that is pending before, on, or
75-60 after the effective date of this article.
75-61 (b) This section applies without regard to the effective
75-62 date of the legislation enacting Article 2.31, Texas Non-Profit
75-63 Corporation Act (Article 1396-2.31, Vernon's Texas Civil Statutes),
75-64 or any other legislation enacted by any legislature that amended
75-65 the provisions of Article 2.31, Texas Non-Profit Corporation Act
75-66 (Article 1396-2.31, Vernon's Texas Civil Statutes).
75-67 SECTION 8.003. This article applies to any trust created
75-68 before, on, or after the effective date of this article, including
75-69 any trust that is the subject of litigation or another proceeding
76-1 that is pending before, on, or after the effective date of this
76-2 article.
76-3 ARTICLE 9. TRANSITION, EFFECTIVE DATE, EMERGENCY
76-4 SECTION 9.001. DATE FOR CERTAIN FILINGS. (a) With respect
76-5 to an interstate branch or other office of an out-of-state
76-6 financial institution that exists in this state on the effective
76-7 date of this Act, regardless of whether the out-of-state financial
76-8 institution has filed a designation pursuant to or was not
76-9 previously subject to Section 39.003 or 59.001, Finance Code, as
76-10 those sections existed before the effective date of this Act, the
76-11 out-of-state financial institution must file the documentation and
76-12 information required by Section 201.102, Finance Code, as added by
76-13 this Act, before January 1, 2000.
76-14 (b) With respect to an out-of-state trust institution that
76-15 does not maintain a branch or trust office in this state but
76-16 maintains a representative trust office in this state on the
76-17 effective date of this Act, the out-of-state trust institution must
76-18 file the documentation and information required by Section 9.202,
76-19 Texas Trust Company Act (Article 342a-1.001 et seq., Vernon's Texas
76-20 Civil Statutes), as added by this Act, before January 1, 2000.
76-21 SECTION 9.002. REPEALER. (a) The following provisions of
76-22 the Finance Code are repealed:
76-23 (1) Sections 31.002(a)(26) and (27);
76-24 (2) Sections 31.008 and 32.0095; and
76-25 (3) Chapters 38, 39, and 272.
76-26 (b) The following provisions of the Texas Trust Company Act
76-27 (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes) are
76-28 repealed:
76-29 (1) Sections 1.002(a)(3), (6), (16), and (20); and
76-30 (2) Section 3.021.
76-31 SECTION 9.003. RELATIONSHIP TO OTHER LAWS. If this Act
76-32 conflicts with an Act of the 76th Legislature, Regular Session,
76-33 1999, adopting a nonsubstantive revision of statutes relating to
76-34 financial institutions and practices, this Act prevails.
76-35 SECTION 9.004. EFFECTIVE DATE. (a) Except as provided by
76-36 Subsection (b), this Act takes effect immediately.
76-37 (b) Articles 1-7 of this Act take effect September 1, 1999.
76-38 SECTION 9.005. EMERGENCY. The importance of this
76-39 legislation and the crowded condition of the calendars in both
76-40 houses create an emergency and an imperative public necessity that
76-41 the constitutional rule requiring bills to be read on three several
76-42 days in each house be suspended, and this rule is hereby suspended,
76-43 and that this Act take effect and be in force according to its
76-44 terms, and it is so enacted.
76-45 * * * * *