By Marchant H.B. No. 2068
76R5145 CLG-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to conversion of savings and loan associations to savings
1-3 banks and the powers, duties, and name of the Savings and Loan
1-4 Department.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Sections 11.102(b)-(f), Finance Code, are amended
1-7 to read as follows:
1-8 (b) Two members of the finance commission must be banking
1-9 executives and two members of the finance commission must be
1-10 savings bank executives.
1-11 (c) Five members of the finance commission may not be
1-12 banking executives, savings bank executives, or controlling
1-13 shareholders in a bank, savings association, or savings bank but
1-14 must be selected by the governor on the basis of recognized
1-15 business ability. At least one of those members must be a
1-16 certified public accountant.
1-17 (d) A member or employee of the finance commission may not
1-18 be:
1-19 (1) an officer, employee, or paid consultant of a
1-20 trade association representing an industry regulated by the finance
1-21 commission, the banking commissioner, the savings bank [and loan]
1-22 commissioner, or the consumer credit commissioner;
1-23 (2) a person required to register as a lobbyist under
1-24 Chapter 305, Government Code, because of activities for a member of
2-1 an industry described by Subdivision (1); or
2-2 (3) related within the second degree by affinity or
2-3 consanguinity, as determined under Chapter 573, Government Code, to
2-4 a person who is an officer, employee, or paid consultant of a trade
2-5 association representing an industry described by Subdivision (1).
2-6 (e) For the purposes of this section:
2-7 (1) "Banking executive" means a person who:
2-8 (A) has had five years' or more executive
2-9 experience in a bank during the seven-year period preceding the
2-10 person's appointment; and
2-11 (B) at the time of the person's appointment is
2-12 an officer of a state bank.
2-13 (2) "Savings bank executive" means a person who:
2-14 (A) has had five years' or more executive
2-15 experience in a savings association or savings bank during the
2-16 seven-year period preceding the person's appointment; and
2-17 (B) at the time of the person's appointment is
2-18 an officer of a state [savings association or] savings bank.
2-19 (f) Experience as banking commissioner, deputy banking
2-20 commissioner, examiner, or supervisor of examiners for a state or
2-21 federal banking regulatory agency is considered executive
2-22 experience in a bank for the purposes of Subsection (e)(1)(A).
2-23 Experience as savings bank [and loan] commissioner, deputy savings
2-24 bank [and loan] commissioner, examiner, or supervisor of examiners
2-25 for a state or federal savings institution [and loan] regulatory
2-26 agency is considered executive experience in a savings association
2-27 or savings bank for the purposes of Subsection (e)(2)(A).
3-1 SECTION 2. Section 11.107(c), Finance Code, is amended to
3-2 read as follows:
3-3 (c) The presiding officer may:
3-4 (1) adopt rules and procedures as the presiding
3-5 officer considers necessary for the orderly operation of the
3-6 finance commission and for communication among the finance
3-7 commission, the department, the Savings Bank [and Loan] Department,
3-8 and the Office of Consumer Credit Commissioner;
3-9 (2) adopt internal procedures governing the time and
3-10 place of meetings, the type of notice for special public meetings,
3-11 the manner in which public meetings are to be conducted, and other
3-12 similar matters; and
3-13 (3) appoint committees composed of finance commission
3-14 members as the presiding officer considers necessary to carry out
3-15 the commission's business.
3-16 SECTION 3. Section 11.201(a), Finance Code, is amended to
3-17 read as follows:
3-18 (a) The finance commission may designate the banking
3-19 commissioner, savings bank [and loan] commissioner, consumer credit
3-20 commissioner, or another person to serve full-time or part-time as
3-21 executive director of the finance commission to facilitate its
3-22 oversight of the department, Savings Bank [and Loan] Department,
3-23 and Office of Consumer Credit Commissioner.
3-24 SECTION 4. Section 11.202(a), Finance Code, is amended to
3-25 read as follows:
3-26 (a) The finance commission may employ a hearings officer and
3-27 an internal auditor to provide services to and facilitate
4-1 commission oversight and control over the Texas Department of
4-2 Banking, Savings Bank [and Loan] Department, and Office of Consumer
4-3 Credit Commissioner.
4-4 SECTION 5. Sections 11.203, 11.204, 11.302, and 11.303,
4-5 Finance Code, are amended to read as follows:
4-6 Sec. 11.203. LIMITATION ON DIRECTION OF STAFF. The
4-7 executive director, hearings officer, internal auditor, and any
4-8 other staff employed under this subchapter are not subject to
4-9 direction by the Texas Department of Banking, Savings Bank [and
4-10 Loan] Department, or Office of Consumer Credit Commissioner.
4-11 Sec. 11.204. SHARING OF STAFF; ALLOCATION OF COSTS. (a)
4-12 The finance commission shall reduce administrative costs by sharing
4-13 of support staff, equipment, and facilities among the Texas
4-14 Department of Banking, Savings Bank [and Loan] Department, and
4-15 Office of Consumer Credit Commissioner to the extent that the
4-16 sharing contributes to cost efficiency without detracting from the
4-17 staff expertise needed for individual areas of agency
4-18 responsibility. The finance commission may employ staff and
4-19 purchase equipment and facilities to meet these objectives and pay
4-20 for its activities from appropriations or as provided by Chapter
4-21 771, Government Code.
4-22 (b) An interagency agreement regarding shared staff must
4-23 provide that the cost of each member of shared staff other than the
4-24 executive director is to be charged to the Texas Department of
4-25 Banking, Savings Bank [and Loan] Department, or Office of Consumer
4-26 Credit Commissioner in proportion to the amount of time devoted to
4-27 each agency's business. The cost of the executive director and the
5-1 unallocated cost of operation of the finance commission is to be
5-2 shared by the department, Savings Bank [and Loan] Department, and
5-3 Office of Consumer Credit Commissioner in proportion to the amount
5-4 of cash receipts of each of those agencies.
5-5 Sec. 11.302. [SAVINGS ASSOCIATION AND] SAVINGS BANK RULES.
5-6 (a) The finance commission may adopt rules applicable to state
5-7 [savings associations or to] savings banks and may authorize state
5-8 [savings associations and] savings banks to invest money of state
5-9 [savings associations or] savings banks in any manner permitted for
5-10 a federal savings association or federal savings bank domiciled in
5-11 this state. This subsection does not authorize the finance
5-12 commission to diminish or limit a right or power specifically given
5-13 to state [savings associations or] savings banks by state law.
5-14 (b) The finance commission may adopt rules to:
5-15 (1) prevent state [savings associations or] savings
5-16 banks from concentrating an excessive or unreasonable portion of
5-17 the resources of state [savings associations or] savings banks in a
5-18 type or character of loan or security authorized by Subtitle [B or]
5-19 C, Title 3; and
5-20 (2) establish standards for investments by state
5-21 [savings associations or] savings banks, including limits on the
5-22 amount that a state [savings association or] savings bank may
5-23 invest in a type or character of investment to an amount or
5-24 percentage of the [savings association's or] savings bank's assets
5-25 or net worth.
5-26 Sec. 11.303. DISCLOSURE OF CERTAIN INFORMATION TO FINANCE
5-27 COMMISSION PROHIBITED. Information regarding the financial
6-1 condition of a state [savings association or] savings bank obtained
6-2 through examination or otherwise may not be disclosed to a member
6-3 of the finance commission, except that the savings bank [and loan]
6-4 commissioner may disclose to the finance commission a file or
6-5 record pertinent to a hearing or matter pending before the
6-6 commission.
6-7 SECTION 6. Chapter 13, Finance Code, is amended to read as
6-8 follows:
6-9 CHAPTER 13. SAVINGS BANK [AND LOAN] DEPARTMENT
6-10 Sec. 13.001. DEFINITIONS. The definitions provided by
6-11 Section 31.002 apply to this chapter.
6-12 Sec. 13.002. SAVINGS BANK [AND LOAN] COMMISSIONER. (a) The
6-13 savings bank [and loan] commissioner is the chief executive officer
6-14 of the Savings Bank [and Loan] Department. The finance commission,
6-15 by at least five affirmative votes, shall appoint the savings bank
6-16 [and loan] commissioner. The savings bank [and loan] commissioner
6-17 serves at the will of the finance commission, is an employee of the
6-18 finance commission, and is subject to the finance commission's
6-19 orders and direction.
6-20 (b) The savings bank [and loan] commissioner must have not
6-21 less than seven years' experience in the executive management of a
6-22 savings association or savings bank or in savings association or
6-23 savings bank supervision.
6-24 (c) The finance commission shall set the compensation of the
6-25 savings bank [and loan] commissioner. The compensation shall be
6-26 paid from money of the Savings Bank [and Loan] Department.
6-27 Sec. 13.003. DEPUTY COMMISSIONERS. (a) The savings bank
7-1 [and loan] commissioner may [shall] appoint one or more deputy
7-2 savings bank [and loan] commissioners.
7-3 (b) If the savings bank commissioner appoints one or more
7-4 deputy savings bank commissioners, at least one [One] deputy
7-5 savings bank [and loan] commissioner must have the qualifications
7-6 required of the savings bank [and loan] commissioner. During the
7-7 savings bank [and loan] commissioner's absence or inability to
7-8 serve, that deputy savings bank [and loan] commissioner has the
7-9 powers and shall perform the duties of the savings bank [and loan]
7-10 commissioner.
7-11 Sec. 13.004. EXAMINERS. The savings bank [and loan]
7-12 commissioner shall appoint [savings association and] savings bank
7-13 examiners.
7-14 Sec. 13.005. COMPENSATION OF OFFICERS AND EMPLOYEES. (a)
7-15 Subject to Subsection (b), each officer and employee of the Savings
7-16 Bank [and Loan] Department is entitled to compensation set by the
7-17 finance commission. The compensation shall be paid from the money
7-18 of the Savings Bank [and Loan] Department.
7-19 (b) Chapter 654, Government Code, applies to a position of
7-20 the Savings Bank [and Loan] Department only if it is classified in
7-21 salary groups 1-10 under the General Appropriations Act. The
7-22 legislature in the General Appropriations Act may determine the
7-23 total amount appropriated to the Savings Bank [and Loan] Department
7-24 but may not determine the number or salaries of employees other
7-25 than the positions specifically subject to Chapter 654, Government
7-26 Code, as provided by this section. The finance commission, subject
7-27 to the limits provided by this section, shall otherwise determine
8-1 the number of employees of the Savings Bank [and Loan] Department
8-2 and the salaries of those employees. The Savings Bank [and Loan]
8-3 Department may use money appropriated to it for any purpose to pay
8-4 the salaries determined by the finance commission.
8-5 Sec. 13.006. OATH OF OFFICE. Before assuming the duties of
8-6 office, each deputy savings bank [and loan] commissioner, examiner,
8-7 assistant examiner, conservator, supervisor, and special agent and
8-8 each other officer or employee specified by the savings bank [and
8-9 loan] commissioner must take an oath of office to discharge
8-10 faithfully the duties assigned and uphold the constitution and laws
8-11 of this state and the United States.
8-12 Sec. 13.007. GENERAL POWERS AND DUTIES OF COMMISSIONER. The
8-13 savings bank [and loan] commissioner shall:
8-14 (1) supervise and regulate the organization,
8-15 operation, and liquidation of [state savings associations, as
8-16 provided by Subtitle B, Title 3, and state] savings banks, as
8-17 provided by Subtitle C, Title 3; and
8-18 (2) enforce that subtitle [those subtitles] personally
8-19 or through a deputy savings bank [and loan] commissioner, examiner,
8-20 supervisor, conservator, or other agent.
8-21 Sec. 13.008. FEES, REVENUE, AND EXPENSES; AUDIT. (a) The
8-22 savings bank [and loan] commissioner and the finance commission
8-23 shall establish reasonable and necessary fees for the
8-24 administration of Subtitle [Subtitles B and] C, Title 3, and for
8-25 the support of the finance commission as provided by Subchapter C,
8-26 Chapter 11.
8-27 (b) The savings bank [and loan] commissioner shall:
9-1 (1) collect all fees, penalties, charges, and revenue
9-2 required to be paid by state savings associations and savings
9-3 banks; and
9-4 (2) periodically submit to the finance commission, as
9-5 directed by the finance commission, a complete report of the
9-6 receipts and expenditures of the Savings Bank [and Loan]
9-7 Department.
9-8 (c) The cost of an audit of the financial transactions of
9-9 the Savings Bank [and Loan] Department under Chapter 321,
9-10 Government Code, shall be paid to the state auditor from the money
9-11 of the Savings Bank [and Loan] Department.
9-12 Sec. 13.009. CONFLICTS OF LAW. If this chapter conflicts
9-13 with Subtitle [B or] C, Title 3, this chapter controls.
9-14 Sec. 13.010. CONFLICTS OF INTEREST. (a) An officer or
9-15 employee of the Savings Bank [and Loan] Department may not be:
9-16 (1) an officer, employee, or paid consultant of a
9-17 trade association in the savings association industry or the
9-18 savings bank industry; or
9-19 (2) related within the second degree by affinity or
9-20 consanguinity, as determined under Chapter 573, Government Code, to
9-21 a person who is an officer, employee, or paid consultant of a trade
9-22 association in the savings association industry or the savings bank
9-23 industry.
9-24 (b) Before the 11th day after the date on which an employee
9-25 begins employment with the Savings Bank [and Loan] Department, the
9-26 employee shall read the conflict-of-interest statutes applicable to
9-27 employees of the Savings Bank [and Loan] Department and sign a
10-1 notarized affidavit stating that the employee has read those
10-2 statutes.
10-3 Sec. 13.011. CONSUMER INFORMATION AND COMPLAINTS. (a) The
10-4 savings bank [and loan] commissioner shall prepare information of
10-5 consumer interest describing:
10-6 (1) the regulatory functions of the Savings Bank [and
10-7 Loan] Department; and
10-8 (2) the procedures by which consumer complaints are
10-9 filed with and resolved by the Savings Bank [and Loan] Department.
10-10 (b) The information under Subsection (a) must be made
10-11 available to the public and appropriate state agencies.
10-12 (c) The Savings Bank [and Loan] Department shall keep an
10-13 information file about each filed complaint relating to a state
10-14 [savings association or] savings bank.
10-15 (d) At least quarterly until final disposition of any
10-16 written complaint that is filed with the Savings Bank [and Loan]
10-17 Department relating to a state [savings association or] savings
10-18 bank, the Savings Bank [and Loan] Department shall notify the
10-19 parties to the complaint of the status of the complaint unless the
10-20 notice would jeopardize an undercover investigation.
10-21 Sec. 13.012. SUNSET PROVISION. The office of savings bank
10-22 [and loan] commissioner and the Savings Bank [and Loan] Department
10-23 are subject to Chapter 325, Government Code (Texas Sunset Act).
10-24 Unless continued in existence as provided by that chapter, the
10-25 office and department are abolished September 1, 2001.
10-26 SECTION 7. Section 91.002(15), Finance Code, is amended to
10-27 read as follows:
11-1 (15) "Foreign savings bank" means a savings bank or
11-2 savings and loan association:
11-3 (A) organized under the laws of:
11-4 (i) a state of the United States other
11-5 than this state; or
11-6 (ii) the United States; and
11-7 (B) the principal office of which is located
11-8 outside this state.
11-9 SECTION 8. Subtitle B, Title 3, Finance Code, is repealed.
11-10 SECTION 9. (a) On the effective date of this Act, each
11-11 savings and loan association organized under the laws of this state
11-12 shall convert into a state-chartered savings bank as provided by
11-13 Subchapter G, Chapter 92, Finance Code, except that a savings and
11-14 loan association may not be required to submit an application for
11-15 conversion and is entitled to retain and continue to use the
11-16 association's corporate name.
11-17 (b) The Finance Commission of Texas by rule shall provide
11-18 for a plan of conversion relating to the conversion of savings and
11-19 loan associations as required by this section.
11-20 (c) Any reference in the law to a savings and loan
11-21 association organized under the laws of this state, including a
11-22 reference to a savings and loan association or state savings
11-23 association, means a state-chartered savings bank as provided by
11-24 Subtitle C, Title 3, Finance Code.
11-25 SECTION 10. (a) This Act takes effect September 1, 1999.
11-26 (b) The name of the Savings and Loan Department is changed
11-27 to the Savings Bank Department, and the name of the savings and
12-1 loan commissioner is changed to the savings bank commissioner. Any
12-2 reference in the law to the Savings and Loan Department or savings
12-3 and loan commissioner means the Savings Bank Department and savings
12-4 bank commissioner, respectively.
12-5 (c) Before using new stationery or other supplies printed
12-6 with the department's name as changed by this Act, the Savings Bank
12-7 Department shall use all stationery and other supplies that are
12-8 printed with the department's former name and that are in its
12-9 possession on the effective date of this Act.
12-10 (d) The validity of a form, procedure adopted, proceeding
12-11 begun, or other action taken by or in connection with the authority
12-12 of the Savings and Loan Department before the change of its name
12-13 under Subsection (b) of this section is not affected by this Act.
12-14 To the extent those actions continue to have any effect on or after
12-15 September 1, 1999, they are considered to be the actions of the
12-16 Savings Bank Department.
12-17 (e) Any appropriation made to the Savings and Loan
12-18 Department is available to the department under its name as changed
12-19 by this Act.
12-20 SECTION 11. The importance of this legislation and the
12-21 crowded condition of the calendars in both houses create an
12-22 emergency and an imperative public necessity that the
12-23 constitutional rule requiring bills to be read on three several
12-24 days in each house be suspended, and this rule is hereby suspended.