1-1 AN ACT
1-2 relating to clarifications in finance law and regulatory authority
1-3 and efficient administration by the Finance Commission of Texas and
1-4 the Texas Department of Banking; providing penalties.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 ARTICLE 1. CHANGES TO TITLE 2, FINANCE CODE
1-7 SECTION 1.01. Section 12.102, Finance Code, is amended to
1-8 read as follows:
1-9 Sec. 12.102. DEPUTY BANKING COMMISSIONERS [COMMISSIONER].
1-10 (a) The banking commissioner shall appoint one or more [a] deputy
1-11 banking commissioners as necessary to the efficient operation of
1-12 the department. The banking commissioner shall prescribe [who must
1-13 have] the qualifications and duties of a deputy [required of the]
1-14 banking commissioner.
1-15 (b) During the banking commissioner's absence or inability
1-16 to serve, a [the] deputy banking commissioner has the powers and
1-17 shall perform the duties of the banking commissioner.
1-18 SECTION 1.02. Section 12.104, Finance Code, is amended to
1-19 read as follows:
1-20 Sec. 12.104. OATH OF OFFICE. Before assuming the duties of
1-21 office, each [the] deputy banking commissioner, [each] examiner,
1-22 assistant examiner, conservator, supervisor, and special agent, and
1-23 each other officer or employee specified by the banking
1-24 commissioner, must take an oath of office to:
2-1 (1) discharge faithfully the duties assigned; and
2-2 (2) uphold the constitution and laws of this state and
2-3 of the United States.
2-4 SECTION 1.03. Section 12.106(a), Finance Code, is amended to
2-5 read as follows:
2-6 (a) The banking commissioner, a member of the finance
2-7 commission, a [the] deputy banking commissioner, [or] an examiner,
2-8 assistant examiner, supervisor, conservator, agent, or other
2-9 officer or employee of the department, or an agent of the banking
2-10 commissioner is not personally liable for damages arising from the
2-11 person's official act or omission unless the act or omission is
2-12 corrupt or malicious.
2-13 SECTION 1.04. Section 12.107, Finance Code, is amended to
2-14 read as follows:
2-15 Sec. 12.107. CONFLICT OF INTEREST. (a) In this section,
2-16 "Texas trade association" means a cooperative and voluntarily
2-17 joined association of business or professional competitors in this
2-18 state that:
2-19 (1) is primarily designed to assist its members and
2-20 its industry or profession in dealing with mutual business or
2-21 professional problems and in promoting their common interest; and
2-22 (2) includes business and professional competitors
2-23 located in this state among its members.
2-24 (b) A person may not be a department employee if:
2-25 (1) the person is an officer, employee, or paid
2-26 consultant of a Texas trade association in an industry regulated by
2-27 the department; or
3-1 (2) the person's spouse is an officer, manager, or
3-2 paid consultant of a Texas trade association in an industry
3-3 regulated by the department.
3-4 (c) A person may not act as the general counsel to the
3-5 department if the person is required to register as a lobbyist
3-6 under Chapter 305, Government Code, because of the person's
3-7 activities for compensation on behalf of a profession related to
3-8 the operation of the department.
3-9 (d) A department employee may not:
3-10 (1) purchase an asset owned by a person regulated by
3-11 the department in the possession of the banking commissioner or
3-12 other receiver for purposes of liquidation, unless the asset is
3-13 purchased at public auction or with the approval of the
3-14 receivership court;
3-15 (2) except as provided by Subsection (e), become
3-16 directly or indirectly indebted to a person regulated by the
3-17 department;
3-18 (3) except as provided by Subsection (f), become
3-19 directly or indirectly financially interested in a person regulated
3-20 by the department; or
3-21 (4) obtain a product or service from a person
3-22 regulated by the department, or an affiliate of a person regulated
3-23 by the department, on terms or rates that are more favorable to the
3-24 employee than those prevailing at the time for comparable
3-25 transactions with or involving other similarly situated consumers.
3-26 (e) Subject to Subsection (d)(4) and except as otherwise
3-27 provided by employment policies adopted by the banking
4-1 commissioner, Subsection (d)(2) does not prohibit indebtedness of:
4-2 (1) a clerical or administrative employee to a person
4-3 regulated by the department, if the employee does not exercise
4-4 discretionary decision-making authority with respect to the person;
4-5 or
4-6 (2) an employee of the department, other than a
4-7 clerical or administrative employee, if the indebtedness was
4-8 permissible when incurred and became prohibited indebtedness under
4-9 Subsection (d)(2) as a result of employment by the department or a
4-10 circumstance over which the employee has no control, including a
4-11 merger, acquisition, purchase or sale of assets, or assumption of
4-12 liabilities involving a regulated person, if the employee:
4-13 (A) repays the indebtedness; or
4-14 (B) does not knowingly participate in or
4-15 consider any matter concerning the person to whom the employee is
4-16 indebted.
4-17 (f) Except as otherwise provided by employment policies
4-18 adopted by the banking commissioner, Subsection (d)(3) does not
4-19 prohibit a financial interest of an employee of the department
4-20 solely because:
4-21 (1) the employee owns publicly traded shares of a
4-22 registered investment company (mutual fund) that owns publicly
4-23 traded equity securities issued by a person regulated by the
4-24 department; or
4-25 (2) the spouse of or other person related to the
4-26 employee is employed by a person regulated by the department and
4-27 receives equity securities of the person through participation in
5-1 an employee benefit plan, including an employee stock option,
5-2 bonus, or ownership plan, if:
5-3 (A) the sole purpose of the plan is to
5-4 compensate employees with an ownership interest in the person for
5-5 services rendered; and
5-6 (B) the employee does not knowingly participate
5-7 in or consider any matter concerning the person until the spouse or
5-8 other related person no longer owns equity securities issued by the
5-9 person.
5-10 (g) The banking commissioner may adopt employment policies
5-11 relating to this section, including policies to:
5-12 (1) require employees to notify the department of
5-13 possible conflicts of interest;
5-14 (2) specify the manner or extent of required recusal;
5-15 (3) define the circumstances under which adverse
5-16 employment action may be taken; and
5-17 (4) impose more restrictive requirements on senior
5-18 officers of the department for whom recusal is not viable or
5-19 consistent with the prudent exercise of the department's
5-20 responsibilities.
5-21 (h) The finance commission may adopt rules to administer
5-22 this section, including rules to:
5-23 (1) codify employment policies of the banking
5-24 commissioner adopted under Subsection (g);
5-25 (2) define or further define terms used by this
5-26 section; and
5-27 (3) establish limits, requirements, or exemptions
6-1 other than those specified by this section, except that an exempted
6-2 employee must be recused from participation in or consideration of
6-3 all regulatory matters specifically concerning the person to whom
6-4 the exempted indebtedness is owed or the financial interest
6-5 relates.
6-6 (i) [An officer or employee of the department may not be:]
6-7 [(1) an officer, employee, or paid consultant of a
6-8 trade association in an industry regulated by the department; or]
6-9 [(2) related within the second degree by affinity or
6-10 consanguinity, as determined under Chapter 573, Government Code, to
6-11 a person who is an officer, employee, or paid consultant of a trade
6-12 association in an industry regulated by the department.]
6-13 [(b)] Before the 11th day after the date on which an
6-14 employee begins employment with the department, the employee shall
6-15 read the conflict-of-interest statutes, rules, and policies
6-16 applicable to employees of the department and sign a notarized
6-17 affidavit stating that the employee has read those statutes, rules,
6-18 and policies.
6-19 SECTION 1.05. Section 12.110, Finance Code, is repealed.
6-20 ARTICLE 2. CHANGES TO SUBTITLE A, TITLE 3, FINANCE CODE
6-21 SECTION 2.01. Section 31.101, Finance Code, is amended to
6-22 read as follows:
6-23 Sec. 31.101. GENERAL DUTIES OF BANKING COMMISSIONER. The
6-24 banking commissioner shall:
6-25 (1) supervise and regulate, as provided by this
6-26 subtitle, Subtitles [Subtitle] F and G, and Chapter 12, state
6-27 banks, trust companies, and state-licensed foreign bank branches,
7-1 agencies, and representative offices;
7-2 (2) administer and enforce this subtitle, Subtitles F
7-3 and G, and Chapter 12 in person, [or] through a [the] deputy
7-4 banking commissioner or another officer or employee of the
7-5 department, or through a [an examiner,] supervisor, conservator, or
7-6 other agent; and
7-7 (3) administer and enforce laws other than this
7-8 subtitle, Subtitles F and G, and Chapter 12 as directed by those
7-9 other laws.
7-10 SECTION 2.02. Section 31.103(a), Finance Code, is amended to
7-11 read as follows:
7-12 (a) In response to a specific request from a member of the
7-13 public or the banking industry, the banking commissioner may issue
7-14 an opinion directly or through a [the] deputy banking commissioner
7-15 or [a] department attorney.
7-16 SECTION 2.03. Section 31.105, Finance Code, is amended by
7-17 amending Subsections (a)-(c) and adding Subsection (f) to read as
7-18 follows:
7-19 (a) The banking commissioner shall examine each state bank
7-20 not less than once during each 12-month period, except that this
7-21 examination is required not less than once during each 18-month
7-22 period if the state bank:
7-23 (1) has total assets of less than $250 million;
7-24 (2) is well capitalized, as defined by Section 38,
7-25 Federal Deposit Insurance Act (12 U.S.C. Section 1831o);
7-26 (3) was found to be well managed at its most recent
7-27 examination, and its composite condition:
8-1 (A) was found to be outstanding; or
8-2 (B) was found to be outstanding or good, in the
8-3 case of a state bank that has total assets of not more than $100
8-4 million;
8-5 (4) is not currently subject to a formal enforcement
8-6 proceeding or order by the banking commissioner or by a federal
8-7 banking agency; and
8-8 (5) was not the subject of a change of control under
8-9 Section 33.001 during the 12-month period in which a full-scope,
8-10 on-site examination would be required but for Subdivisions (1)-(4)
8-11 [annually].
8-12 (b) The banking commissioner may examine a state bank more
8-13 often than required by Subsection (a) [annually] as the
8-14 commissioner considers necessary to:
8-15 (1) safeguard the interests of depositors, creditors,
8-16 shareholders, participants, and participant-transferees; and
8-17 (2) efficiently enforce applicable law [this subtitle
8-18 and Chapter 12].
8-19 (c) The banking commissioner may defer an examination for
8-20 not more than six months if the commissioner considers the
8-21 deferment necessary for the efficient enforcement of applicable law
8-22 [this subtitle or Chapter 12].
8-23 (f) Disclosure of information to the banking commissioner
8-24 pursuant to an examination request does not constitute a waiver of
8-25 or otherwise affect or diminish an evidentiary privilege to which
8-26 the information is otherwise subject. A report of an examination
8-27 under this section is confidential and may be disclosed only under
9-1 the circumstances provided by this subtitle.
9-2 SECTION 2.04. Section 31.201(a), Finance Code, is amended to
9-3 read as follows:
9-4 (a) The banking commissioner may convene a hearing to
9-5 receive evidence and argument regarding any matter within the
9-6 jurisdiction of and before the banking commissioner for decision or
9-7 review [under this subtitle or Chapter 12]. The hearing must be
9-8 conducted under Chapter 2001, Government Code. A matter made
9-9 confidential by law must be considered by the banking commissioner
9-10 in a closed hearing.
9-11 SECTION 2.05. Section 31.301, Finance Code, is amended by
9-12 adding Subsections (c) and (d) to read as follows:
9-13 (c) The banking commissioner or an officer or employee of
9-14 the department commits an offense if the person:
9-15 (1) discloses information or permits access to a file
9-16 or record of the department; and
9-17 (2) knows at the time of disclosure or permission that
9-18 the disclosure or permission violates this subchapter.
9-19 (d) An offense under this section is a Class A misdemeanor.
9-20 SECTION 2.06. Section 31.305, Finance Code, is amended to
9-21 read as follows:
9-22 Sec. 31.305. CIVIL DISCOVERY. Civil discovery [Discovery] of
9-23 confidential information from a person subject to Section 31.304
9-24 [this subchapter] under subpoena or other legal process must comply
9-25 with rules adopted under this subtitle and other applicable law.
9-26 The rules may:
9-27 (1) restrict release of confidential information to
10-1 the portion directly relevant to the legal dispute at issue; and
10-2 (2) require that a protective order, in form and under
10-3 circumstances specified by the rules, be issued by a court before
10-4 release of the confidential information.
10-5 SECTION 2.07. Section 32.004(a), Finance Code, is amended to
10-6 read as follows:
10-7 (a) The [banking commissioner shall notify the organizers
10-8 when the application is complete and accepted for filing and all
10-9 required fees and deposits have been paid. Promptly after this
10-10 notification the] organizers shall solicit comments and protests by
10-11 publishing [publish] notice of the application, its date of filing,
10-12 and the identity of the organizers [and solicit comments and
10-13 protests], in the form and frequency specified by the banking
10-14 commissioner, in a newspaper of general circulation in the county
10-15 in which the bank is to be located, or in another publication or
10-16 location as directed by the banking commissioner.
10-17 SECTION 2.08. Section 32.204(a), Finance Code, is amended to
10-18 read as follows:
10-19 (a) A state bank may establish one or more loan production
10-20 offices [solely] for the purpose of soliciting loans or equivalent
10-21 transactions, accepting loan applications, and performing
10-22 ministerial duties related to consummating a granted loan, such as
10-23 execution of loan documents and dispensation of loan proceeds by
10-24 check or other draft, including a certified or cashier's check, but
10-25 not by cash. A credit decision, commitment to make a loan, and
10-26 preparation of a check or other draft to dispense loan proceeds
10-27 must occur at the bank's home office or a branch office and may not
11-1 occur at a loan production office.
11-2 SECTION 2.09. Section 33.002(d), Finance Code, is amended to
11-3 read as follows:
11-4 (d) The applicant shall publish notice of the application,
11-5 its date of filing, and the identity of the applicant and, if the
11-6 applicant includes a group, the identity of each group member. The
11-7 notice must be published[:]
11-8 [(1) promptly after the banking commissioner notifies
11-9 the applicant that the application is complete and accepted for
11-10 filing;]
11-11 [(2)] in the form and frequency specified by the
11-12 banking commissioner[;] and
11-13 [(3)] in a newspaper of general circulation in the
11-14 county in which the bank's home office is located, or in another
11-15 publication or location as directed by the banking commissioner.
11-16 SECTION 2.10. Section 33.103(b), Finance Code, is amended to
11-17 read as follows:
11-18 (b) Unless the banking commissioner consents otherwise in
11-19 writing, a person may not serve as director, manager, or managing
11-20 participant of a state bank if:
11-21 (1) the bank incurs an unreimbursed loss attributable
11-22 to a charged-off obligation of or holds a judgment against:
11-23 (A) the person; or
11-24 (B) an entity that was controlled by the person
11-25 at the time of funding and at the time of default on the loan that
11-26 gave rise to the judgment or charged-off obligation; [or]
11-27 (2) the person is the subject of an order described by
12-1 Section 35.007(a); or
12-2 (3) the person has been convicted of a felony.
12-3 SECTION 2.11. Section 33.109, Finance Code, is amended to
12-4 read as follows:
12-5 Sec. 33.109. TRANSACTIONS WITH MANAGEMENT AND AFFILIATES.
12-6 (a) Without the prior approval of a disinterested majority of the
12-7 board recorded in the minutes or, if a disinterested majority
12-8 cannot be obtained, the prior written approval of the banking
12-9 commissioner, a state bank may not directly or indirectly:
12-10 (1) sell or lease an asset of the bank to an officer,
12-11 director, manager, managing participant, or principal shareholder
12-12 or participant of the bank or an affiliate of the bank; or
12-13 (2) purchase or lease an asset in which an officer,
12-14 director, manager, managing participant, or principal shareholder
12-15 or participant of the bank or an affiliate of the bank has an
12-16 interest.
12-17 (b) [Notwithstanding Subsection (a), a lease transaction
12-18 described by Subsection (a)(2) involving real property may not be
12-19 consummated, renewed, or extended without the prior written
12-20 approval of the banking commissioner. For purposes of this
12-21 subsection only, an affiliate of the bank does not include a
12-22 subsidiary of the bank.]
12-23 [(c)] An officer, director, manager, or managing participant
12-24 of the bank who knowingly participates in or permits a violation of
12-25 this section commits an offense. An offense under this subsection
12-26 is a felony of the third degree.
12-27 SECTION 2.12. Section 34.102(d), Finance Code, is amended to
13-1 read as follows:
13-2 (d) A state bank may make loans on the collateral security
13-3 of securities issued by an affiliate, if the loan is subject to and
13-4 in compliance with the provisions of Sections 23A and 23B, Federal
13-5 Reserve Act (12 U.S.C. Sections 371c and 371c-1), as amended,
13-6 applicable to nonmember insured state banks by virtue of Section
13-7 18(j)(1), Federal Deposit Insurance Act (12 U.S.C. Section
13-8 1828(j)(1)), as amended. [For purposes of this section and except
13-9 as otherwise provided by rules adopted under this subtitle, equity
13-10 securities in a bank holding company that are not publicly held and
13-11 traded on a national securities exchange or automated quotation
13-12 system are considered to be shares or participation shares of each
13-13 of the bank holding company's subsidiary state banks.]
13-14 SECTION 2.13. Section 34.106(a), Finance Code, is amended to
13-15 read as follows:
13-16 (a) A state bank may make investments of a predominantly
13-17 civic, community, or public nature, including investments providing
13-18 housing, services, or jobs or promoting[, that are:]
13-19 [(1) of a predominantly civic, community, or public
13-20 nature; and]
13-21 [(2) designed primarily to promote the public welfare,
13-22 including] the welfare of low-income and moderate-income
13-23 communities or families.
13-24 SECTION 2.14. Section 35.007(a), Finance Code, is amended to
13-25 read as follows:
13-26 (a) Except as otherwise provided by law, without [Without]
13-27 the prior written approval of the banking commissioner, a person
14-1 subject to a final and enforceable removal or prohibition order
14-2 issued by the banking commissioner, or by another state, federal,
14-3 or foreign financial institution regulatory agency, may not:
14-4 (1) serve as a director, officer, or employee of a
14-5 state bank, trust company, or other entity chartered or licensed by
14-6 the banking commissioner under the laws of this state, including an
14-7 interstate branch, trust office, or representative office in this
14-8 state of an out-of-state state bank, trust company, or foreign
14-9 bank;
14-10 (2) directly or indirectly participate in any manner
14-11 in the management of such an entity;
14-12 (3) directly or indirectly vote for a director of such
14-13 an entity; or
14-14 (4) solicit, procure, transfer, attempt to transfer,
14-15 vote, or attempt to vote a proxy, consent, or authorization with
14-16 respect to voting rights in such an entity.
14-17 SECTION 2.15. Section 35.203(c), Finance Code, is amended to
14-18 read as follows:
14-19 (c) The subpoena must be signed and issued by the banking
14-20 commissioner or a [the] deputy banking commissioner.
14-21 SECTION 2.16. Section 59.201(a), Finance Code, is amended to
14-22 read as follows:
14-23 (a) A [Subject to Chapter 153, a] person may install,
14-24 maintain, and operate one or more electronic terminals at any
14-25 location [in this state] for the convenience of customers of
14-26 financial institutions.
14-27 ARTICLE 3. CHANGES TO SUBTITLE F, TITLE 3, FINANCE CODE
15-1 SECTION 3.01. Section 181.102(a), Finance Code, is amended to
15-2 read as follows:
15-3 (a) In response to a specific request from a member of the
15-4 public or industry, the banking commissioner may issue an opinion
15-5 directly or through a [the] deputy banking commissioner or
15-6 department attorney [the department's attorneys].
15-7 SECTION 3.02. Section 181.104(d), Finance Code, is amended to
15-8 read as follows:
15-9 (d) Disclosure of information to the banking commissioner
15-10 pursuant to an examination request does not constitute a waiver of
15-11 or otherwise affect or diminish an evidentiary privilege to which
15-12 the information is otherwise subject. [The banking commissioner
15-13 shall report the results of the examination in writing to the
15-14 officers and directors, managers, or managing participants of the
15-15 state trust company.] A report of an examination under this
15-16 section is confidential and may be disclosed only under the
15-17 circumstances provided by this subtitle [subchapter].
15-18 SECTION 3.03. Section 181.108(a), Finance Code, is amended to
15-19 read as follows:
15-20 (a) The banking commissioner, a member of the finance
15-21 commission, a [the] deputy banking commissioner, [or] an examiner,
15-22 assistant examiner, supervisor, conservator, agent, or other
15-23 officer or employee of the department, or an agent of the banking
15-24 commissioner is not personally liable for damages arising from the
15-25 person's official act or omission[,] unless the act or omission is
15-26 corrupt or malicious.
15-27 SECTION 3.04. Section 181.201(a), Finance Code, is amended to
16-1 read as follows:
16-2 (a) The banking commissioner may convene a hearing to
16-3 receive evidence and argument regarding any matter within the
16-4 jurisdiction of and before the banking commissioner for decision or
16-5 review [under this subtitle]. The hearing must be conducted under
16-6 Chapter 2001, Government Code. A matter made confidential by law
16-7 must be considered by the banking commissioner in a closed hearing.
16-8 SECTION 3.05. Section 181.301, Finance Code, is amended by
16-9 adding Subsections (c) and (d) to read as follows:
16-10 (c) The banking commissioner or an officer or employee of
16-11 the department commits an offense if the person:
16-12 (1) discloses information or permits access to a file
16-13 or record of the department; and
16-14 (2) knows at the time of disclosure or permission that
16-15 the disclosure or permission violates this subchapter.
16-16 (d) An offense under this section is a Class A misdemeanor.
16-17 SECTION 3.06. Section 181.305, Finance Code, is amended to
16-18 read as follows:
16-19 Sec. 181.305. CIVIL DISCOVERY. Civil discovery [Discovery]
16-20 of confidential information from a person subject to Section
16-21 181.304 [this subchapter] under subpoena or other legal process in
16-22 a civil proceeding must comply with rules adopted under this
16-23 subtitle and other applicable law. The rules may:
16-24 (1) restrict release of confidential information to
16-25 the portion directly relevant to the legal dispute at issue; and
16-26 (2) require that a protective order, in the form and
16-27 under circumstances specified by the rules, be issued by a court
17-1 before release of the confidential information.
17-2 SECTION 3.07. Section 182.004(a), Finance Code, is amended to
17-3 read as follows:
17-4 (a) The [banking commissioner shall notify the organizers
17-5 when the application is complete and accepted for filing and all
17-6 required fees and deposits have been paid. Promptly after the
17-7 notification, the] organizers shall solicit comments and protests
17-8 by publishing [publish] notice of the application, its date of
17-9 filing, and the identity of the organizers [and solicit comments
17-10 and protests], in the form and frequency specified by the banking
17-11 commissioner, in a newspaper of general circulation in the county
17-12 where the initial home office of the proposed state trust company
17-13 is to be located, or in another publication or location as directed
17-14 by the banking commissioner. The banking commissioner may require
17-15 the organizers to publish the notice at other locations reasonably
17-16 necessary to solicit the views of potentially affected persons.
17-17 SECTION 3.08. Section 183.002(d), Finance Code, is amended to
17-18 read as follows:
17-19 (d) The applicant shall publish notice of the application,
17-20 its date of filing, the identity of each applicant, and, if the
17-21 applicant includes a group, the identity of each group member. The
17-22 notice must be published[:]
17-23 [(1) promptly after the banking commissioner notifies
17-24 the applicant that the application is complete and accepted for
17-25 filing;]
17-26 [(2)] in the form and frequency specified by the
17-27 banking commissioner[;] and
18-1 [(3)] in a newspaper of general circulation in the
18-2 county where the state trust company's home office is located, or
18-3 in another publication or location as directed by the banking
18-4 commissioner.
18-5 SECTION 3.09. Section 183.103(b), Finance Code, is amended to
18-6 read as follows:
18-7 (b) Unless the banking commissioner consents otherwise in
18-8 writing, a person may not serve as director, manager, or managing
18-9 participant of a state trust company if:
18-10 (1) the state trust company incurs an unreimbursed
18-11 loss attributable to a charged-off obligation of or holds a
18-12 judgment against:
18-13 (A) the person; or
18-14 (B) an entity that was controlled by the person
18-15 at the time of funding and at the time of default on the loan that
18-16 gave rise to the judgment or charged-off obligation;
18-17 (2) the person is the subject of an order described by
18-18 Section 185.007(a);
18-19 (3) the person has been convicted of a felony; or
18-20 (4) [(3)] the person has violated, with respect to a
18-21 trust under which the state trust company has fiduciary
18-22 responsibility, Section 113.052 or 113.053(a), Property Code,
18-23 relating to loan of trust funds and purchase or sale of trust
18-24 property by the trustee, and the violation has not been corrected.
18-25 SECTION 3.10. Section 185.007(a), Finance Code, is amended to
18-26 read as follows:
18-27 (a) Except as provided by other law, without [Without] the
19-1 prior written approval of the banking commissioner, a person
19-2 subject to a final and enforceable removal or prohibition order
19-3 issued by the banking commissioner, or by another state, federal,
19-4 or foreign financial institution regulatory agency, [under this
19-5 subchapter] may not:
19-6 (1) serve as a director, officer, or employee of a
19-7 state trust company, state bank, or other entity chartered or
19-8 licensed by the banking commissioner under the laws of this state
19-9 while the order is in effect, including an interstate branch, trust
19-10 office, or representative office in this state of an out-of-state
19-11 bank, trust company, or foreign bank;
19-12 (2) directly or indirectly participate in any manner
19-13 in the management of such an entity;
19-14 (3) directly or indirectly vote for a director of such
19-15 an entity; or
19-16 (4) solicit, procure, transfer, attempt to transfer,
19-17 vote, or attempt to vote a proxy, consent, or authorization with
19-18 respect to voting rights in such an entity.
19-19 SECTION 3.11. Section 185.202(c), Finance Code, is amended to
19-20 read as follows:
19-21 (c) The subpoena must be signed and issued by the banking
19-22 commissioner or a [the] deputy banking commissioner.
19-23 SECTION 3.12. Section 186.201(a), Finance Code, is amended to
19-24 read as follows:
19-25 (a) The banking commissioner may by written order close and
19-26 liquidate a state trust company on finding that:
19-27 (1) the interests of its clients and creditors are
20-1 jeopardized by the state trust company's insolvency or imminent
20-2 insolvency; and
20-3 (2) the best interests of clients and creditors would
20-4 be served by requiring that the state trust company be closed and
20-5 its assets liquidated.
20-6 SECTION 3.13. Sections 186.202(a) and (b), Finance Code, are
20-7 amended to read as follows:
20-8 (a) After closing a state trust company under Section
20-9 186.201, the banking commissioner shall attach to or otherwise
20-10 display [place a sign] at its main entrance a copy of the written
20-11 closing order issued under Section 186.201(a) and containing
20-12 [stating that the state trust company has been closed and] the
20-13 findings on which the closing of the state trust company is based.
20-14 A correspondent bank of the closed state trust company may not pay
20-15 an item drawn on the account of the closed state trust company that
20-16 is presented for payment after the correspondent has received
20-17 actual notice of closing unless it previously certified the item
20-18 for payment.
20-19 (b) As soon as practicable after posting the closing order
20-20 [sign] at the state trust company's main entrance, the banking
20-21 commissioner shall tender the state trust company to the Federal
20-22 Deposit Insurance Corporation as provided by Section 186.003 or
20-23 initiate a receivership proceeding by filing a certified copy of
20-24 the closing order [notice contained on the sign] in district court
20-25 in Travis County, subject to Subsection (c) [the county where the
20-26 state trust company's home office is located]. The court in which
20-27 the closing order [notice] is filed shall docket it as a case
21-1 styled, "In re liquidation of ____" (inserting the name of the
21-2 state trust company). When the closing order [notice] is filed,
21-3 the court has constructive custody of all the state trust company's
21-4 assets and any action that seeks to directly or indirectly affect
21-5 state trust company assets is considered an intervention in the
21-6 receivership proceeding and subject to this subchapter and
21-7 Subchapter D.
21-8 SECTION 3.14. Section 187.303(a), Finance Code, as added by
21-9 the Act of the 77th Legislature, Regular Session, 2001, relating to
21-10 nonsubstantive additions to and corrections in enacted codes, is
21-11 amended to read as follows:
21-12 (a) Subject to Subsection (b), to encourage the effective
21-13 coordination and implementation of home state laws and host state
21-14 laws with respect to interstate trust business, the banking
21-15 commissioner, directly or through a [the] deputy banking
21-16 commissioner or [a] department attorney in the manner provided by
21-17 Sections 181.101 and 181.102, and with the effect provided by
21-18 Section 181.103, may issue:
21-19 (1) an interpretive statement for the general guidance
21-20 of trust institutions in this state and the public; or
21-21 (2) an opinion interpreting or determining the
21-22 applicability of the laws of this state to the trust business and
21-23 the operation of a branch, trust office, or another office in this
21-24 state of an out-of-state trust institution, or in other states by
21-25 state trust companies.
21-26 ARTICLE 4. CHANGES TO TEXAS TRUST COMPANY ACT
21-27 SECTION 4.01. Section 9.303(a), Texas Trust Company Act
22-1 (Article 342a-9.303, Vernon's Texas Civil Statutes), is amended to
22-2 read as follows:
22-3 (a) Subject to Subsection (b), to encourage the effective
22-4 coordination and implementation of home state laws and host state
22-5 laws with respect to interstate trust business, the banking
22-6 commissioner, directly or through a [the] deputy banking
22-7 commissioner or [a] department attorney in the manner provided by
22-8 Sections 2.001 and 2.0011 of this Act, and with the effect provided
22-9 by Section 2.0012 of this Act, may issue:
22-10 (1) an interpretive statement for the general guidance
22-11 of trust institutions in this state and the general public; or
22-12 (2) an opinion interpreting or determining the
22-13 applicability of laws of this state to the trust business and the
22-14 operation of a branch, trust office, or another office in this
22-15 state of an out-of-state trust institution, or in other states by
22-16 state trust companies.
22-17 ARTICLE 5. CHANGES TO SUBTITLE G, TITLE 3, FINANCE CODE
22-18 SECTION 5.01. Section 201.006(a), Finance Code, is amended to
22-19 read as follows:
22-20 (a) To encourage the effective coordination and
22-21 implementation of home state laws and host state laws with respect
22-22 to interstate branching, the commissioner, directly or through a
22-23 [the] deputy commissioner or [a] department attorney, may:
22-24 (1) issue interpretive statements containing matters
22-25 of general policy to guide the public and banks and bank holding
22-26 companies subject to this subtitle;
22-27 (2) amend or repeal a published interpretive statement
23-1 by issuing an amended statement or notice of repeal of a statement
23-2 and publishing the statement or notice;
23-3 (3) issue, in response to specific requests from the
23-4 public or the banking industry, opinions interpreting this subtitle
23-5 or determining the applicability of laws of this state to the
23-6 operation of interstate branches or other offices in this state by
23-7 out-of-state banks or in other states by Texas banks; and
23-8 (4) amend or repeal an opinion by issuing an amended
23-9 opinion or notice of repeal of an opinion, except that the
23-10 requesting party may rely on the original opinion if:
23-11 (A) all material facts were originally disclosed
23-12 to the commissioner;
23-13 (B) the safety and soundness of the affected
23-14 bank or bank holding company will not be affected by further
23-15 reliance on the original opinion; and
23-16 (C) the text and interpretation of relevant,
23-17 governing provisions of applicable home state, host state, and
23-18 federal law have not been changed by legislative or judicial
23-19 action.
23-20 ARTICLE 6. EFFECTIVE DATE; CHANGES FROM 76TH LEGISLATURE
23-21 SECTION 6.01. (a) Except as provided by Subsections (b) and
23-22 (c) of this section, this Act takes effect September 1, 2001.
23-23 (b) Section 3.14 of this Act takes effect only if the Act of
23-24 the 77th Legislature, Regular Session, 2001, relating to
23-25 nonsubstantive additions to and corrections in enacted codes takes
23-26 effect.
23-27 (c) Article 4 of this Act takes effect only if the Act of
24-1 the 77th Legislature, Regular Session, 2001, relating to
24-2 nonsubstantive additions to and corrections in enacted codes, does
24-3 not take effect.
24-4 SECTION 6.02. (a) In accordance with Section 311.031(c),
24-5 Government Code, which gives effect to substantive amendments
24-6 enacted by the same legislature that codifies the amended statute:
24-7 (1) the text of Section 181.102(a), Finance Code, as
24-8 set out in Section 3.01 of this Act, gives effect to changes made
24-9 by Section 4.003, Chapter 344, Acts of the 76th Legislature,
24-10 Regular Session, 1999; and
24-11 (2) the text of Section 185.007(a), Finance Code, as
24-12 set out in Section 3.10 of this Act, gives effect to changes made
24-13 by Section 4.013, Chapter 344, Acts of the 76th Legislature,
24-14 Regular Session, 1999.
24-15 (b) To the extent of any conflict, this Act prevails over
24-16 another Act of the 77th Legislature, Regular Session, 2001,
24-17 relating to nonsubstantive additions to and corrections in enacted
24-18 codes.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1768 was passed by the House on April
18, 2001, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1768 was passed by the Senate on May
15, 2001, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: __________________________
Date
__________________________
Governor