By Grusendorf H.B. No. 1768
77R4418 DWS-F
A BILL TO BE ENTITLED
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.
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 11.102(e), Finance Code, is amended to
1-8 read as follows:
1-9 (e) For the purposes of this section:
1-10 (1) "Banking executive" means a person who:
1-11 (A) has had five years' or more executive
1-12 experience in a bank during the seven-year period preceding the
1-13 person's appointment; and
1-14 (B) [at the time of the person's appointment] is
1-15 an officer of a state bank.
1-16 (2) "Savings executive" means a person who:
1-17 (A) has had five years' or more executive
1-18 experience in a savings association or savings bank during the
1-19 seven-year period preceding the person's appointment; and
1-20 (B) [at the time of the person's appointment] is
1-21 an officer of a state savings association or savings bank.
1-22 SECTION 1.02. Section 12.102, Finance Code, is amended to
1-23 read as follows:
1-24 Sec. 12.102. DEPUTY BANKING COMMISSIONERS [COMMISSIONER].
2-1 (a) The banking commissioner shall appoint one or more [a] deputy
2-2 banking commissioners as necessary to the efficient operation of
2-3 the department. The banking commissioner shall prescribe [who must
2-4 have] the qualifications and duties of a deputy [required of the]
2-5 banking commissioner.
2-6 (b) During the banking commissioner's absence or inability
2-7 to serve, a [the] deputy banking commissioner has the powers and
2-8 shall perform the duties of the banking commissioner.
2-9 SECTION 1.03. Section 12.104, Finance Code, is amended to
2-10 read as follows:
2-11 Sec. 12.104. OATH OF OFFICE. Before assuming the duties of
2-12 office, each [the] deputy banking commissioner, [each] examiner,
2-13 assistant examiner, conservator, supervisor, and special agent, and
2-14 each other officer or employee specified by the banking
2-15 commissioner, must take an oath of office to:
2-16 (1) discharge faithfully the duties assigned; and
2-17 (2) uphold the constitution and laws of this state and
2-18 of the United States.
2-19 SECTION 1.04. Section 12.106(a), Finance Code, is amended to
2-20 read as follows:
2-21 (a) The banking commissioner, a member of the finance
2-22 commission, a [the] deputy banking commissioner, [or] an examiner,
2-23 assistant examiner, supervisor, conservator, agent, or other
2-24 officer or employee of the department, or an agent of the banking
2-25 commissioner is not personally liable for damages arising from the
2-26 person's official act or omission unless the act or omission is
2-27 corrupt or malicious.
3-1 SECTION 1.05. Section 12.107, Finance Code, is amended to
3-2 read as follows:
3-3 Sec. 12.107. CONFLICT OF INTEREST. (a) An officer or
3-4 employee of the department may not [be]:
3-5 (1) be an officer, employee, or paid consultant of:
3-6 (A) a person regulated by the department; or
3-7 (B) a trade association in an industry regulated
3-8 by the department; [or]
3-9 (2) be related within the second degree by affinity or
3-10 consanguinity, as determined under Chapter 573, Government Code, to
3-11 a person who is an officer, employee, or paid consultant of a trade
3-12 association in an industry regulated by the department;
3-13 (3) purchase an asset owned by a person regulated by
3-14 the department in the possession of the banking commissioner or
3-15 other receiver for purposes of liquidation, unless the asset is
3-16 purchased at public auction or with the approval of the
3-17 receivership court;
3-18 (4) except as provided by Subsection (b), become
3-19 directly or indirectly indebted to a person regulated by the
3-20 department;
3-21 (5) except as provided by Subsection (c), become
3-22 directly or indirectly financially interested in a person regulated
3-23 by the department; or
3-24 (6) obtain a product or service from a person
3-25 regulated by the department, or an affiliate of a person regulated
3-26 by the department, on terms or rates that are more favorable to the
3-27 officer or employee than those prevailing at the time for
4-1 comparable transactions with or involving other similarly situated
4-2 consumers.
4-3 (b) Subject to Subsection (a)(6) and except as otherwise
4-4 provided by employment policies adopted by the banking
4-5 commissioner, Subsection (a)(4) does not prohibit indebtedness of:
4-6 (1) a clerical or administrative employee to a person
4-7 regulated by the department, if the employee does not exercise
4-8 discretionary decision-making authority with respect to the person;
4-9 or
4-10 (2) an officer or employee of the department, other
4-11 than a clerical or administrative employee, if the indebtedness was
4-12 permissible when incurred and became prohibited indebtedness under
4-13 Subsection (a)(4) as a result of employment by the department or a
4-14 circumstance over which the officer or employee has no control,
4-15 including a merger, acquisition, purchase or sale of assets, or
4-16 assumption of liabilities involving a regulated person, if the
4-17 officer or employee:
4-18 (A) repays the indebtedness; or
4-19 (B) does not knowingly participate in or
4-20 consider any matter concerning the person to whom the officer or
4-21 employee is indebted.
4-22 (c) Except as otherwise provided by employment policies
4-23 adopted by the banking commissioner, Subsection (a)(5) does not
4-24 prohibit a financial interest of an officer or employee of the
4-25 department solely because:
4-26 (1) the officer or employee owns publicly traded
4-27 shares of a registered investment company (mutual fund) that owns
5-1 publicly traded equity securities issued by a person regulated by
5-2 the department; or
5-3 (2) the spouse of or other person related to the
5-4 officer or employee is employed by a person regulated by the
5-5 department and receives equity securities of the person through
5-6 participation in an employee benefit plan, including an employee
5-7 stock option, bonus, or ownership plan, if:
5-8 (A) the sole purpose of the plan is to
5-9 compensate employees with an ownership interest in the person for
5-10 services rendered; and
5-11 (B) the officer or employee does not knowingly
5-12 participate in or consider any matter concerning the person until
5-13 the spouse or other related person no longer owns equity securities
5-14 issued by the person.
5-15 (d) The banking commissioner may adopt employment policies
5-16 relating to this section, including policies to:
5-17 (1) require employees to notify the department of
5-18 possible conflicts of interest;
5-19 (2) specify the manner or extent of required recusal;
5-20 (3) define the circumstances under which adverse
5-21 employment action may be taken; and
5-22 (4) impose more restrictive requirements on senior
5-23 officers of the department for whom recusal is not viable or
5-24 consistent with the prudent exercise of the department's
5-25 responsibilities.
5-26 (e) The finance commission may adopt rules to administer
5-27 this section, including rules to:
6-1 (1) codify employment policies of the banking
6-2 commissioner adopted under Subsection (d);
6-3 (2) define or further define terms used by this
6-4 section; and
6-5 (3) establish limits, requirements, or exemptions
6-6 other than those specified by this section, except that an exempted
6-7 officer or employee must be recused from participation in or
6-8 consideration of all regulatory matters specifically concerning the
6-9 person to whom the exempted indebtedness is owed or the financial
6-10 interest relates.
6-11 (f) Before the 11th day after the date on which an employee
6-12 begins employment with the department, the employee shall read the
6-13 conflict-of-interest statutes, rules, and policies applicable to
6-14 employees of the department and sign a notarized affidavit stating
6-15 that the employee has read those statutes, rules, and policies.
6-16 SECTION 1.06. Section 12.110, Finance Code, is repealed.
6-17 ARTICLE 2. CHANGES TO SUBTITLE A, TITLE 3, FINANCE CODE
6-18 SECTION 2.01. Section 31.101, Finance Code, is amended to
6-19 read as follows:
6-20 Sec. 31.101. GENERAL DUTIES OF BANKING COMMISSIONER. The
6-21 banking commissioner shall:
6-22 (1) supervise and regulate, as provided by this
6-23 subtitle, Subtitles [Subtitle] F and G, and Chapter 12, state
6-24 banks, trust companies, and state-licensed foreign bank branches,
6-25 agencies, and representative offices;
6-26 (2) administer and enforce this subtitle, Subtitles F
6-27 and G, and Chapter 12 in person, [or] through a [the] deputy
7-1 banking commissioner or another officer or employee of the
7-2 department, or through a [an examiner,] supervisor, conservator, or
7-3 other agent; and
7-4 (3) administer and enforce laws other than this
7-5 subtitle, Subtitles F and G, and Chapter 12 as directed by those
7-6 other laws.
7-7 SECTION 2.02. Section 31.103(a), Finance Code, is amended to
7-8 read as follows:
7-9 (a) In response to a specific request from a member of the
7-10 public or the banking industry, the banking commissioner may issue
7-11 an opinion directly or through a [the] deputy banking commissioner
7-12 or [a] department attorney.
7-13 SECTION 2.03. Section 31.105, Finance Code, is amended to
7-14 read as follows:
7-15 Sec. 31.105. EXAMINATION REQUIRED. (a) The banking
7-16 commissioner shall examine each state bank annually, on another
7-17 periodic basis as may be required by rule or policy, or[.]
7-18 [(b) The banking commissioner may examine a state bank more
7-19 often than annually] as the commissioner considers necessary to:
7-20 (1) safeguard the interests of depositors, creditors,
7-21 shareholders, participants, and participant-transferees; and
7-22 (2) efficiently enforce this subtitle, [and] Chapter
7-23 12, and other applicable law.
7-24 (b) [(c)] The banking commissioner may defer an examination
7-25 for not more than six months if the commissioner considers the
7-26 deferment necessary for the efficient enforcement of this subtitle,
7-27 [or] Chapter 12, or other applicable law.
8-1 (c) A report of an examination under this section is
8-2 confidential and may be disclosed only under the circumstances
8-3 provided by this subtitle.
8-4 (d) Disclosure of information to the banking commissioner
8-5 pursuant to an examination request does not constitute a waiver of
8-6 or otherwise affect or diminish a privilege to which the
8-7 information is otherwise subject.
8-8 (e) [(d)] The banking commissioner may:
8-9 (1) accept an examination of a state bank by a federal
8-10 or other governmental agency instead of an examination under this
8-11 section; or
8-12 (2) conduct an examination of a state bank jointly
8-13 with a federal or other governmental agency.
8-14 (f) [(e)] The banking commissioner may administer oaths and
8-15 examine persons under oath on any subject that the commissioner
8-16 considers pertinent to the financial condition or the safety and
8-17 soundness of the activities of a state bank.
8-18 SECTION 2.04. Section 31.201(a), Finance Code, is amended to
8-19 read as follows:
8-20 (a) The banking commissioner may convene a hearing to
8-21 receive evidence and argument regarding any matter within the
8-22 jurisdiction of and before the banking commissioner for decision or
8-23 review [under this subtitle or Chapter 12]. The hearing must be
8-24 conducted under Chapter 2001, Government Code. A matter made
8-25 confidential by law must be considered by the banking commissioner
8-26 in a closed hearing.
8-27 SECTION 2.05. Section 31.301, Finance Code, is amended by
9-1 adding Subsections (c) and (d) to read as follows:
9-2 (c) The banking commissioner or an officer or employee of
9-3 the department commits an offense if the person:
9-4 (1) discloses information or permits access to a file
9-5 or record of the department; and
9-6 (2) knows at the time of disclosure or permission that
9-7 the disclosure or permission violates this subchapter.
9-8 (d) An offense under this section is a Class A misdemeanor.
9-9 SECTION 2.06. Section 31.305, Finance Code, is amended to
9-10 read as follows:
9-11 Sec. 31.305. CIVIL DISCOVERY. Civil discovery [Discovery] of
9-12 confidential information from a person subject to Section 31.304
9-13 [this subchapter] under subpoena or other legal process must comply
9-14 with rules adopted under this subtitle and other applicable law.
9-15 The rules may:
9-16 (1) restrict release of confidential information to
9-17 the portion directly relevant to the legal dispute at issue; and
9-18 (2) require that a protective order, in form and under
9-19 circumstances specified by the rules, be issued by a court before
9-20 release of the confidential information.
9-21 SECTION 2.07. Section 32.004(a), Finance Code, is amended to
9-22 read as follows:
9-23 (a) The [banking commissioner shall notify the organizers
9-24 when the application is complete and accepted for filing and all
9-25 required fees and deposits have been paid. Promptly after this
9-26 notification the] organizers shall solicit comments and protests by
9-27 publishing [publish] notice of the application, its date of filing,
10-1 and the identity of the organizers [and solicit comments and
10-2 protests], in the form and frequency specified by the banking
10-3 commissioner, in a newspaper of general circulation in the county
10-4 in which the bank is to be located, or in another publication or
10-5 location as directed by the banking commissioner.
10-6 SECTION 2.08. Section 32.204(a), Finance Code, is amended to
10-7 read as follows:
10-8 (a) A state bank may establish one or more loan production
10-9 offices [solely] for the purpose of soliciting loans or equivalent
10-10 transactions, accepting loan applications, and performing
10-11 ministerial duties related to consummating a granted loan, such as
10-12 execution of loan documents and dispensation of loan proceeds by
10-13 check or other draft, including a certified or cashier's check, but
10-14 not by cash. A credit decision, commitment to make a loan, and
10-15 preparation of a check or other draft to dispense loan proceeds
10-16 must occur at the bank's home office or a branch office and may not
10-17 occur at a loan production office.
10-18 SECTION 2.09. Section 33.002, Finance Code, is amended to
10-19 read as follows:
10-20 Sec. 33.002. APPLICATION REGARDING ACQUISITION OF CONTROL.
10-21 (a) The proposed transferee in an acquisition of control of a
10-22 state bank or of a person that controls a state bank must file an
10-23 application for approval of the acquisition. The application must:
10-24 (1) be under oath and in a form prescribed by the
10-25 banking commissioner;
10-26 (2) contain all information that:
10-27 (A) is required by rules adopted under this
11-1 subtitle; or
11-2 (B) the banking commissioner requires in a
11-3 particular application as necessary to an informed decision to
11-4 approve or reject the proposed acquisition; and
11-5 (3) be accompanied by any filing fee required by law.
11-6 (b) If a person proposing to acquire voting securities in a
11-7 transaction subject to this section includes any group of persons
11-8 acting in concert, the information required by the banking
11-9 commissioner may be required of each member of the group.
11-10 (c) [Information obtained by the banking commissioner under
11-11 this section is confidential and may not be disclosed by the
11-12 banking commissioner or any employee of the department except as
11-13 provided by Subchapter D, Chapter 31.]
11-14 [(d)] The applicant shall publish notice of the application,
11-15 its date of filing, and the identity of the applicant and, if the
11-16 applicant includes a group, the identity of each group member. The
11-17 notice must be published[:]
11-18 [(1) promptly after the banking commissioner notifies
11-19 the applicant that the application is complete and accepted for
11-20 filing;]
11-21 [(2)] in the form and frequency specified by the
11-22 banking commissioner[;] and
11-23 [(3)] in a newspaper of general circulation in the
11-24 county in which the bank's home office is located, or in another
11-25 publication or location as directed by the banking commissioner.
11-26 (d) [(e)] The applicant may defer publication of the notice
11-27 until not later than the 34th day after the date the application is
12-1 filed if:
12-2 (1) the application is filed in contemplation of a
12-3 public tender offer subject to 15 U.S.C. Section 78n(d)(1);
12-4 (2) the applicant requests confidential treatment and
12-5 represents that a public announcement of the tender offer and the
12-6 filing of appropriate forms with the Securities and Exchange
12-7 Commission or the appropriate federal banking agency, as
12-8 applicable, will occur within the period of deferral; and
12-9 (3) the banking commissioner determines that the
12-10 public interest will not be harmed by the requested confidential
12-11 treatment.
12-12 (e) [(f)] The banking commissioner may waive the requirement
12-13 that a notice be published or permit delayed publication on a
12-14 determination that waiver or delay is in the public interest. If
12-15 publication of notice is waived under this subsection, the
12-16 information that would be contained in a published notice becomes
12-17 public information under Chapter 552, Government Code, on the 35th
12-18 day after the date the application is filed.
12-19 SECTION 2.10. Section 33.103(b), Finance Code, is amended to
12-20 read as follows:
12-21 (b) Unless the banking commissioner consents otherwise in
12-22 writing, a person may not serve as director, manager, or managing
12-23 participant of a state bank if:
12-24 (1) the bank incurs an unreimbursed loss attributable
12-25 to a charged-off obligation of or holds a judgment against:
12-26 (A) the person; or
12-27 (B) an entity that was controlled by the person
13-1 at the time of funding and at the time of default on the loan that
13-2 gave rise to the judgment or charged-off obligation; [or]
13-3 (2) the person is the subject of an order described by
13-4 Section 35.007(a); or
13-5 (3) the person has been convicted of a felony.
13-6 SECTION 2.11. Section 33.109, Finance Code, is amended to
13-7 read as follows:
13-8 Sec. 33.109. TRANSACTIONS WITH MANAGEMENT AND AFFILIATES.
13-9 (a) Without the prior approval of a disinterested majority of the
13-10 board recorded in the minutes or, if a disinterested majority
13-11 cannot be obtained, the prior written approval of the banking
13-12 commissioner, a state bank may not directly or indirectly:
13-13 (1) sell or lease an asset of the bank to an officer,
13-14 director, manager, managing participant, or principal shareholder
13-15 or participant of the bank or an affiliate of the bank; or
13-16 (2) purchase or lease an asset in which an officer,
13-17 director, manager, managing participant, or principal shareholder
13-18 or participant of the bank or an affiliate of the bank has an
13-19 interest.
13-20 (b) [Notwithstanding Subsection (a), a lease transaction
13-21 described by Subsection (a)(2) involving real property may not be
13-22 consummated, renewed, or extended without the prior written
13-23 approval of the banking commissioner. For purposes of this
13-24 subsection only, an affiliate of the bank does not include a
13-25 subsidiary of the bank.]
13-26 [(c)] An officer, director, manager, or managing participant
13-27 of the bank who knowingly participates in or permits a violation of
14-1 this section commits an offense. An offense under this subsection
14-2 is a felony of the third degree.
14-3 SECTION 2.12. Section 34.102(d), Finance Code, is amended to
14-4 read as follows:
14-5 (d) A state bank may make loans on the collateral security
14-6 of securities issued by an affiliate, if the loan is subject to and
14-7 in compliance with the provisions of Sections 23A and 23B, Federal
14-8 Reserve Act (12 U.S.C. Sections 371c and 371c-1), as amended,
14-9 applicable to nonmember insured state banks by virtue of Section
14-10 18(j)(1), Federal Deposit Insurance Act (12 U.S.C. Section
14-11 1828(j)(1)), as amended. [For purposes of this section and except
14-12 as otherwise provided by rules adopted under this subtitle, equity
14-13 securities in a bank holding company that are not publicly held and
14-14 traded on a national securities exchange or automated quotation
14-15 system are considered to be shares or participation shares of each
14-16 of the bank holding company's subsidiary state banks.]
14-17 SECTION 2.13. Section 34.106(a), Finance Code, is amended to
14-18 read as follows:
14-19 (a) A state bank may make investments of a predominantly
14-20 civic, community, or public nature, including investments providing
14-21 housing, services, or jobs or promoting[, that are:]
14-22 [(1) of a predominantly civic, community, or public
14-23 nature; and]
14-24 [(2) designed primarily to promote the public welfare,
14-25 including] the welfare of low-income and moderate-income
14-26 communities or families.
14-27 SECTION 2.14. Section 35.007(a), Finance Code, is amended to
15-1 read as follows:
15-2 (a) Except as otherwise provided by law, without [Without]
15-3 the prior written approval of the banking commissioner, a person
15-4 subject to a final and enforceable removal or prohibition order
15-5 issued by the banking commissioner, or by another state, federal,
15-6 or foreign financial institution regulatory agency, may not:
15-7 (1) serve as a director, officer, or employee of a
15-8 state bank, trust company, or other entity chartered or licensed by
15-9 the banking commissioner under the laws of this state, including an
15-10 interstate branch, trust office, or representative office in this
15-11 state of an out-of-state state bank, trust company, or foreign
15-12 bank;
15-13 (2) directly or indirectly participate in any manner
15-14 in the management of such an entity;
15-15 (3) directly or indirectly vote for a director of such
15-16 an entity; or
15-17 (4) solicit, procure, transfer, attempt to transfer,
15-18 vote, or attempt to vote a proxy, consent, or authorization with
15-19 respect to voting rights in such an entity.
15-20 SECTION 2.15. Section 35.203(c), Finance Code, is amended to
15-21 read as follows:
15-22 (c) The subpoena must be signed and issued by the banking
15-23 commissioner or a [the] deputy banking commissioner.
15-24 SECTION 2.16. Section 59.201(a), Finance Code, is amended to
15-25 read as follows:
15-26 (a) A [Subject to Chapter 153, a] person may install,
15-27 maintain, and operate one or more electronic terminals at any
16-1 location [in this state] for the convenience of customers of
16-2 financial institutions.
16-3 ARTICLE 3. CHANGES TO SUBTITLE F, TITLE 3, FINANCE CODE
16-4 SECTION 3.01. Section 181.102(a), Finance Code, is amended to
16-5 read as follows:
16-6 (a) In response to a specific request from a member of the
16-7 public or industry, the banking commissioner may issue an opinion
16-8 directly or through a [the] deputy banking commissioner or
16-9 department attorney [the department's attorneys].
16-10 SECTION 3.02. Section 181.104, Finance Code, is amended to
16-11 read as follows:
16-12 Sec. 181.104. EXAMINATION REQUIREMENT. (a) The banking
16-13 commissioner shall examine each state trust company annually, on
16-14 another periodic basis as may be required by rule or policy, or[.]
16-15 [(b) The banking commissioner may examine a state trust
16-16 company] more often [than annually] as the banking commissioner
16-17 considers necessary to:
16-18 (1) safeguard the interests of clients, creditors,
16-19 shareholders, participants, or participant-transferees; and
16-20 (2) efficiently enforce this subtitle and other
16-21 applicable law.
16-22 (b) [(c)] The banking commissioner may defer an examination
16-23 for not more than six months if the banking commissioner considers
16-24 the deferment necessary for the efficient enforcement of this
16-25 subtitle, Chapter 12, or other applicable law.
16-26 (c) [(d) The banking commissioner shall report the results
16-27 of the examination in writing to the officers and directors,
17-1 managers, or managing participants of the state trust company.] A
17-2 report of an examination under this section is confidential and may
17-3 be disclosed only under the circumstances provided by this subtitle
17-4 [subchapter].
17-5 (d) [(e)] The banking commissioner may:
17-6 (1) accept an examination of a state trust company, a
17-7 third-party contractor, or an affiliate of the state trust company
17-8 by a federal or other governmental agency in lieu of an examination
17-9 under this section; or
17-10 (2) conduct an examination of a state trust company, a
17-11 third-party contractor, or an affiliate of the state trust company
17-12 jointly with a federal or other governmental agency.
17-13 (e) [(f)] The banking commissioner may administer oaths and
17-14 examine persons under oath on any subject that the banking
17-15 commissioner considers pertinent to the financial condition or the
17-16 safety and soundness of the activities of a state trust company.
17-17 (f) Disclosure of information to the banking commissioner
17-18 pursuant to an examination request does not constitute a waiver of
17-19 or otherwise affect or diminish a privilege to which the
17-20 information is otherwise subject.
17-21 SECTION 3.03. Section 181.108(a), Finance Code, is amended to
17-22 read as follows:
17-23 (a) The banking commissioner, a member of the finance
17-24 commission, a [the] deputy banking commissioner, [or] an examiner,
17-25 assistant examiner, supervisor, conservator, agent, or other
17-26 officer or employee of the department, or an agent of the banking
17-27 commissioner is not personally liable for damages arising from the
18-1 person's official act or omission[,] unless the act or omission is
18-2 corrupt or malicious.
18-3 SECTION 3.04. Section 181.201(a), Finance Code, is amended to
18-4 read as follows:
18-5 (a) The banking commissioner may convene a hearing to
18-6 receive evidence and argument regarding any matter within the
18-7 jurisdiction of and before the banking commissioner for decision or
18-8 review [under this subtitle]. The hearing must be conducted under
18-9 Chapter 2001, Government Code. A matter made confidential by law
18-10 must be considered by the banking commissioner in a closed hearing.
18-11 SECTION 3.05. Section 181.301, Finance Code, is amended by
18-12 adding Subsections (c) and (d) to read as follows:
18-13 (c) The banking commissioner or an officer or employee of
18-14 the department commits an offense if the person:
18-15 (1) discloses information or permits access to a file
18-16 or record of the department; and
18-17 (2) knows at the time of disclosure or permission that
18-18 the disclosure or permission violates this subchapter.
18-19 (d) An offense under this section is a Class A misdemeanor.
18-20 SECTION 3.06. Section 181.305, Finance Code, is amended to
18-21 read as follows:
18-22 Sec. 181.305. CIVIL DISCOVERY. Civil discovery [Discovery]
18-23 of confidential information from a person subject to Section
18-24 181.304 [this subchapter] under subpoena or other legal process in
18-25 a civil proceeding must comply with rules adopted under this
18-26 subtitle and other applicable law. The rules may:
18-27 (1) restrict release of confidential information to
19-1 the portion directly relevant to the legal dispute at issue; and
19-2 (2) require that a protective order, in the form and
19-3 under circumstances specified by the rules, be issued by a court
19-4 before release of the confidential information.
19-5 SECTION 3.07. Section 182.004(a), Finance Code, is amended to
19-6 read as follows:
19-7 (a) The [banking commissioner shall notify the organizers
19-8 when the application is complete and accepted for filing and all
19-9 required fees and deposits have been paid. Promptly after the
19-10 notification, the] organizers shall solicit comments and protests
19-11 by publishing [publish] notice of the application, its date of
19-12 filing, and the identity of the organizers [and solicit comments
19-13 and protests], in the form and frequency specified by the banking
19-14 commissioner, in a newspaper of general circulation in the county
19-15 where the initial home office of the proposed state trust company
19-16 is to be located, or in another publication or location as directed
19-17 by the banking commissioner. The banking commissioner may require
19-18 the organizers to publish the notice at other locations reasonably
19-19 necessary to solicit the views of potentially affected persons.
19-20 SECTION 3.08. Section 183.002, Finance Code, is amended to
19-21 read as follows:
19-22 Sec. 183.002. APPLICATION REGARDING ACQUISITION OF CONTROL.
19-23 (a) The transferee in an acquisition of control of a state trust
19-24 company or of a person that controls a state trust company must
19-25 file an application for approval of the acquisition. The
19-26 application must:
19-27 (1) be under oath and on a form prescribed by the
20-1 banking commissioner;
20-2 (2) contain all information that:
20-3 (A) is required by rules adopted under this
20-4 subtitle; or
20-5 (B) the banking commissioner requires in a
20-6 particular application as necessary to an informed decision to
20-7 approve or reject the acquisition; and
20-8 (3) be accompanied by any filing fee required by
20-9 statute or rule.
20-10 (b) If a person proposing to acquire voting securities in a
20-11 transaction subject to this section includes a group of persons
20-12 acting in concert, the information required by the banking
20-13 commissioner may be required of each member of the group.
20-14 (c) [Information obtained by the banking commissioner under
20-15 this section is confidential and may not be disclosed by the
20-16 banking commissioner or any employee of the department except as
20-17 provided by Subchapter D, Chapter 181.]
20-18 [(d)] The applicant shall publish notice of the application,
20-19 its date of filing, the identity of each applicant, and, if the
20-20 applicant includes a group, the identity of each group member. The
20-21 notice must be published[:]
20-22 [(1) promptly after the banking commissioner notifies
20-23 the applicant that the application is complete and accepted for
20-24 filing;]
20-25 [(2)] in the form and frequency specified by the
20-26 banking commissioner[;] and
20-27 [(3)] in a newspaper of general circulation in the
21-1 county where the state trust company's home office is located, or
21-2 in another publication or location as directed by the banking
21-3 commissioner.
21-4 (d) [(e)] The applicant may defer publication of the notice
21-5 until not later than the 34th day after the date the application is
21-6 filed if:
21-7 (1) the application is filed in contemplation of a
21-8 public tender offer subject to 15 U.S.C. Section 78n(d)(1);
21-9 (2) the applicant requests confidential treatment and
21-10 represents that a public announcement of the tender offer and the
21-11 filing of appropriate forms with the Securities and Exchange
21-12 Commission or the appropriate federal banking agency, as
21-13 applicable, will occur within the period of deferral; and
21-14 (3) the banking commissioner determines that the
21-15 public interest will not be harmed by the requested confidential
21-16 treatment.
21-17 (e) [(f)] The banking commissioner may waive the requirement
21-18 that a notice be published or permit delayed publication on a
21-19 determination that waiver or delay is in the public interest. If
21-20 publication of notice is waived under this subsection, the
21-21 information that would be contained in a published notice becomes
21-22 public information under Chapter 552, Government Code, on the 35th
21-23 day after the date the application is filed.
21-24 SECTION 3.09. Section 183.103(b), Finance Code, is amended to
21-25 read as follows:
21-26 (b) Unless the banking commissioner consents otherwise in
21-27 writing, a person may not serve as director, manager, or managing
22-1 participant of a state trust company if:
22-2 (1) the state trust company incurs an unreimbursed
22-3 loss attributable to a charged-off obligation of or holds a
22-4 judgment against:
22-5 (A) the person; or
22-6 (B) an entity that was controlled by the person
22-7 at the time of funding and at the time of default on the loan that
22-8 gave rise to the judgment or charged-off obligation;
22-9 (2) the person is the subject of an order described by
22-10 Section 185.007(a);
22-11 (3) the person has been convicted of a felony; or
22-12 (4) [(3)] the person has violated, with respect to a
22-13 trust under which the state trust company has fiduciary
22-14 responsibility, Section 113.052 or 113.053(a), Property Code,
22-15 relating to loan of trust funds and purchase or sale of trust
22-16 property by the trustee, and the violation has not been corrected.
22-17 SECTION 3.10. Section 185.007(a), Finance Code, is amended to
22-18 read as follows:
22-19 (a) Except as provided by other law, without [Without] the
22-20 prior written approval of the banking commissioner, a person
22-21 subject to a final and enforceable removal or prohibition order
22-22 issued by the banking commissioner, or by another state, federal,
22-23 or foreign financial institution regulatory agency, [under this
22-24 subchapter] may not:
22-25 (1) serve as a director, officer, or employee of a
22-26 state trust company, state bank, or other entity chartered or
22-27 licensed by the banking commissioner under the laws of this state
23-1 while the order is in effect, including an interstate branch, trust
23-2 office, or representative office in this state of an out-of-state
23-3 bank, trust company, or foreign bank;
23-4 (2) directly or indirectly participate in any manner
23-5 in the management of such an entity;
23-6 (3) directly or indirectly vote for a director of such
23-7 an entity; or
23-8 (4) solicit, procure, transfer, attempt to transfer,
23-9 vote, or attempt to vote a proxy, consent, or authorization with
23-10 respect to voting rights in such an entity.
23-11 SECTION 3.11. Section 185.202(c), Finance Code, is amended to
23-12 read as follows:
23-13 (c) The subpoena must be signed and issued by the banking
23-14 commissioner or a [the] deputy banking commissioner.
23-15 SECTION 3.12. Section 186.201(a), Finance Code, is amended to
23-16 read as follows:
23-17 (a) The banking commissioner may by written order close and
23-18 liquidate a state trust company on finding that:
23-19 (1) the interests of its clients and creditors are
23-20 jeopardized by the state trust company's insolvency or imminent
23-21 insolvency; and
23-22 (2) the best interests of clients and creditors would
23-23 be served by requiring that the state trust company be closed and
23-24 its assets liquidated.
23-25 SECTION 3.13. Sections 186.202(a) and (b), Finance Code, are
23-26 amended to read as follows:
23-27 (a) After closing a state trust company under Section
24-1 186.201, the banking commissioner shall attach to or otherwise
24-2 display [place a sign] at its main entrance a copy of the written
24-3 closing order issued under Section 186.201(a) and containing
24-4 [stating that the state trust company has been closed and] the
24-5 findings on which the closing of the state trust company is based.
24-6 A correspondent bank of the closed state trust company may not pay
24-7 an item drawn on the account of the closed state trust company that
24-8 is presented for payment after the correspondent has received
24-9 actual notice of closing unless it previously certified the item
24-10 for payment.
24-11 (b) As soon as practicable after posting the closing order
24-12 [sign] at the state trust company's main entrance, the banking
24-13 commissioner shall tender the state trust company to the Federal
24-14 Deposit Insurance Corporation as provided by Section 186.003 or
24-15 initiate a receivership proceeding by filing a certified copy of
24-16 the closing order [notice contained on the sign] in district court
24-17 in Travis County, subject to Subsection (c) [the county where the
24-18 state trust company's home office is located]. The court in which
24-19 the closing order [notice] is filed shall docket it as a case
24-20 styled, "In re liquidation of ____" (inserting the name of the
24-21 state trust company). When the closing order [notice] is filed,
24-22 the court has constructive custody of all the state trust company's
24-23 assets and any action that seeks to directly or indirectly affect
24-24 state trust company assets is considered an intervention in the
24-25 receivership proceeding and subject to this subchapter and
24-26 Subchapter D.
24-27 SECTION 3.14. Section 187.303(a), Finance Code, as added by
25-1 the Act of the 77th Legislature, Regular Session, 2001, relating to
25-2 nonsubstantive additions to and corrections in enacted codes, is
25-3 amended to read as follows:
25-4 (a) Subject to Subsection (b), to encourage the effective
25-5 coordination and implementation of home state laws and host state
25-6 laws with respect to interstate trust business, the banking
25-7 commissioner, directly or through a [the] deputy banking
25-8 commissioner or [a] department attorney in the manner provided by
25-9 Sections 181.101 and 181.102, and with the effect provided by
25-10 Section 181.103, may issue:
25-11 (1) an interpretive statement for the general guidance
25-12 of trust institutions in this state and the public; or
25-13 (2) an opinion interpreting or determining the
25-14 applicability of the laws of this state to the trust business and
25-15 the operation of a branch, trust office, or another office in this
25-16 state of an out-of-state trust institution, or in other states by
25-17 state trust companies.
25-18 ARTICLE 4. CHANGES TO TEXAS TRUST COMPANY ACT
25-19 SECTION 4.01. Section 9.303(a), Texas Trust Company Act
25-20 (Article 342a-9.303, Vernon's Texas Civil Statutes), is amended to
25-21 read as follows:
25-22 (a) Subject to Subsection (b), to encourage the effective
25-23 coordination and implementation of home state laws and host state
25-24 laws with respect to interstate trust business, the banking
25-25 commissioner, directly or through a [the] deputy banking
25-26 commissioner or [a] department attorney in the manner provided by
25-27 Sections 2.001 and 2.0011 of this Act, and with the effect provided
26-1 by Section 2.0012 of this Act, may issue:
26-2 (1) an interpretive statement for the general guidance
26-3 of trust institutions in this state and the general public; or
26-4 (2) an opinion interpreting or determining the
26-5 applicability of laws of this state to the trust business and the
26-6 operation of a branch, trust office, or another office in this
26-7 state of an out-of-state trust institution, or in other states by
26-8 state trust companies.
26-9 ARTICLE 5. CHANGES TO SUBTITLE G, TITLE 3, FINANCE CODE
26-10 SECTION 5.01. Section 201.006(a), Finance Code, is amended to
26-11 read as follows:
26-12 (a) To encourage the effective coordination and
26-13 implementation of home state laws and host state laws with respect
26-14 to interstate branching, the commissioner, directly or through a
26-15 [the] deputy commissioner or [a] department attorney, may:
26-16 (1) issue interpretive statements containing matters
26-17 of general policy to guide the public and banks and bank holding
26-18 companies subject to this subtitle;
26-19 (2) amend or repeal a published interpretive statement
26-20 by issuing an amended statement or notice of repeal of a statement
26-21 and publishing the statement or notice;
26-22 (3) issue, in response to specific requests from the
26-23 public or the banking industry, opinions interpreting this subtitle
26-24 or determining the applicability of laws of this state to the
26-25 operation of interstate branches or other offices in this state by
26-26 out-of-state banks or in other states by Texas banks; and
26-27 (4) amend or repeal an opinion by issuing an amended
27-1 opinion or notice of repeal of an opinion, except that the
27-2 requesting party may rely on the original opinion if:
27-3 (A) all material facts were originally disclosed
27-4 to the commissioner;
27-5 (B) the safety and soundness of the affected
27-6 bank or bank holding company will not be affected by further
27-7 reliance on the original opinion; and
27-8 (C) the text and interpretation of relevant,
27-9 governing provisions of applicable home state, host state, and
27-10 federal law have not been changed by legislative or judicial
27-11 action.
27-12 ARTICLE 6. EFFECTIVE DATE; CHANGES FROM 76TH LEGISLATURE
27-13 SECTION 6.01. (a) Except as provided by Subsections (b) and
27-14 (c) of this section, this Act takes effect September 1, 2001.
27-15 (b) Section 3.14 of this Act takes effect only if the Act of
27-16 the 77th Legislature, Regular Session, 2001, relating to
27-17 nonsubstantive additions to and corrections in enacted codes takes
27-18 effect.
27-19 (c) Article 4 of this Act takes effect only if the Act of
27-20 the 77th Legislature, Regular Session, 2001, relating to
27-21 nonsubstantive additions to and corrections in enacted codes, does
27-22 not take effect.
27-23 SECTION 6.02. (a) In accordance with Section 311.031(c),
27-24 Government Code, which gives effect to substantive amendments
27-25 enacted by the same legislature that codifies the amended statute:
27-26 (1) the text of Section 181.102(a), Finance Code, as
27-27 set out in Section 3.01 of this Act, gives effect to changes made
28-1 by Section 4.003, Chapter 344, Acts of the 76th Legislature,
28-2 Regular Session, 1999; and
28-3 (2) the text of Section 185.007(a), Finance Code, as
28-4 set out in Section 3.10 of this Act, gives effect to changes made
28-5 by Section 4.013, Chapter 344, Acts of the 76th Legislature,
28-6 Regular Session, 1999.
28-7 (b) To the extent of any conflict, this Act prevails over
28-8 another Act of the 77th Legislature, Regular Session, 2001,
28-9 relating to nonsubstantive additions to and corrections in enacted
28-10 codes.