By Averitt H.B. No. 2155
77R4462 JMG-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the operation of state banks, state trust companies,
1-3 and certain financial holding companies in the financial services
1-4 industry.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Sections 31.002(a)(5), (8), (32), and (33),
1-7 Finance Code, are amended to read as follows:
1-8 (5) "Banking association" means a state bank that is
1-9 organized under this subtitle as a corporation [banking
1-10 association], authorized to issue shares of stock, and controlled
1-11 by its shareholders.
1-12 (8) "Branch" means a location of a bank, other than
1-13 the bank's home office, at which the bank engages the public in the
1-14 business of banking. The term does not include:
1-15 (A) a drive-in facility located not more than
1-16 2,000 feet from the nearest wall of the home office or an approved
1-17 branch office of the bank;
1-18 (B) a night depository;
1-19 (C) an electronic terminal [subject to Section
1-20 59.201];
1-21 (D) a loan production office as described by
1-22 [subject to] Section 32.204;
1-23 (E) a state or federally licensed armored car
1-24 service or other courier service transporting items for deposit or
2-1 payment, unless:
2-2 (i) the risk of loss of items in the
2-3 custody of the service is borne by the employing bank; or
2-4 (ii) the items in the custody of the
2-5 service are considered to be in customer accounts at the employing
2-6 bank or federally insured through the employing bank;
2-7 (F) a location at which the bank offers
2-8 exclusively nondepository financial products or services to the
2-9 public, including financial, investment, or economic advisory
2-10 services [a bank acting as an agent for another depository
2-11 institution as provided by Section 59.005(a)]; [or]
2-12 (G) a location that combines permissible
2-13 non-branch functions or facilities; or
2-14 (H) another office or facility as provided by
2-15 this subtitle or a rule adopted under this subtitle [other offices
2-16 as determined by rule].
2-17 (32) "Investment security" means a marketable
2-18 obligation evidencing indebtedness of a person in the form of a
2-19 bond, note, debenture, or commonly known as an investment security,
2-20 subject to further definition by rule adopted under this subtitle
2-21 [other debt instrument not otherwise classified as a loan or
2-22 extension of credit].
2-23 (33) "Limited banking association" means a state bank
2-24 that is organized under this subtitle as a limited liability
2-25 company [banking association], authorized to issue participation
2-26 shares, and controlled by its participants.
2-27 SECTION 2. Sections 31.003(a) and (b), Finance Code, are
3-1 amended to read as follows:
3-2 (a) The finance commission may adopt rules to accomplish the
3-3 purposes of this subtitle and Chapters 11, 12, and 13, including
3-4 rules necessary or reasonable to:
3-5 (1) implement and clarify this subtitle and Chapters
3-6 11, 12, and 13;
3-7 (2) preserve or protect the safety and soundness of
3-8 state banks;
3-9 (3) grant at least the same rights and privileges to
3-10 state banks that are or may be granted to national banks domiciled
3-11 in this state;
3-12 (4) recover the cost of maintaining and operating the
3-13 department and the cost of enforcing this subtitle and other
3-14 applicable law [Chapters 11, 12, and 13] by imposing and collecting
3-15 ratable and equitable fees for notices, applications, and
3-16 examinations; and
3-17 (5) facilitate the fair hearing and adjudication of
3-18 matters before the banking commissioner and the finance commission.
3-19 (b) In adopting rules, the finance commission shall consider
3-20 the need to:
3-21 (1) promote a stable banking environment;
3-22 (2) provide the public with convenient, safe, and
3-23 competitive banking services;
3-24 (3) preserve and promote the competitive position
3-25 [parity] of state banks with regard to national banks and other
3-26 depository institutions in this state consistent with the safety
3-27 and soundness of state banks and the state bank system; and
4-1 (4) allow for economic development in this state.
4-2 SECTION 3. Section 31.303, Finance Code, is amended to read
4-3 as follows:
4-4 Sec. 31.303. DISCLOSURE TO OTHER AGENCIES. (a) For purposes
4-5 of this section:
4-6 (1) "Affiliated group" means two or more persons
4-7 affiliated through common ownership or a contractual common
4-8 undertaking involving the sharing of customer information among
4-9 those persons.
4-10 (2) "Agency" means a department or agency of this
4-11 state, another state, the United States, or a foreign government
4-12 with whom the United States currently maintains diplomatic
4-13 relations, or any related agency or instrumentality.
4-14 (3) "Functional regulatory agency" means an agency
4-15 that regulates and charters, licenses, or registers persons engaged
4-16 in financial activities or activities incidental or complimentary
4-17 to financial activities, including activities related to banking,
4-18 insurance, or securities, within the jurisdiction of the agency.
4-19 (4) "Privilege" includes any work-product,
4-20 attorney-client, or other privilege recognized under federal or
4-21 state law [On request and on execution of an appropriate
4-22 confidentiality agreement approved by the banking commissioner, the
4-23 commissioner may:]
4-24 [(1) disclose to a federal banking regulatory agency
4-25 confidential information concerning a financial institution within
4-26 the agency's jurisdiction or an affiliate or service provider of
4-27 the financial institution; and]
5-1 [(2) permit the agency access to files and records or
5-2 reports concerning the financial institution or its affiliate or
5-3 service provider].
5-4 (b) The banking commissioner may, as the commissioner
5-5 considers necessary or proper to the enforcement of the laws of
5-6 this state, another state, the United States, or a foreign
5-7 sovereign state with whom the United States currently maintains
5-8 diplomatic relations, or in the best interest of the public,
5-9 disclose [or authorize release of confidential] information in the
5-10 possession of the department to another [department of this state,
5-11 another state, the United States, a foreign sovereign state, or any
5-12 related] agency [or instrumentality]. The banking commissioner may
5-13 not disclose information under this section that is confidential
5-14 under applicable state or federal law unless:
5-15 (1) the recipient agency agrees to maintain the
5-16 confidentiality and take all reasonable steps to oppose an effort
5-17 to secure disclosure of the information from the agency; or
5-18 (2) the banking commissioner determines in the
5-19 exercise of discretion that the interest of law enforcement
5-20 outweighs and justifies the potential for disclosure of the
5-21 information by the recipient agency.
5-22 (c) The banking commissioner by agreement may establish an
5-23 information sharing and exchange program with a functional
5-24 regulatory agency that has overlapping regulatory jurisdiction with
5-25 the department, with respect to all or part of an affiliated group
5-26 that includes a financial institution, to reduce the potential for
5-27 duplicative and burdensome filings, examinations, and other
6-1 regulatory activities. Each agency party to the agreement must
6-2 agree to maintain confidentiality of information that is
6-3 confidential under applicable state or federal law and take all
6-4 reasonable steps to oppose any effort to secure disclosure of the
6-5 information from the agency. An agreement may also specify
6-6 procedures regarding use and handling of confidential information
6-7 and identify types of information to be shared and procedures for
6-8 sharing on a recurring basis.
6-9 (d) Disclosure of information by or to the banking
6-10 commissioner under this section does not constitute a waiver of or
6-11 otherwise affect or diminish an evidentiary privilege to which the
6-12 information is otherwise subject, whether or not the disclosure is
6-13 governed by a confidentiality agreement.
6-14 (e) Notwithstanding other law, an agency of this state:
6-15 (1) may execute, honor, and comply with an agreement
6-16 to maintain confidentiality and oppose disclosure of information
6-17 obtained from the banking commissioner as provided in this section;
6-18 and
6-19 (2) shall treat as confidential any information
6-20 obtained from the banking commissioner that is entitled to
6-21 confidential treatment under applicable state or federal law and
6-22 take all reasonable steps to oppose an effort to secure disclosure
6-23 of the information from the agency.
6-24 SECTION 4. Section 32.001, Finance Code, is amended by
6-25 amending Subsections (b), (c), and (e), and by adding Subsection
6-26 (f) to read as follows:
6-27 (b) A state bank may:
7-1 (1) receive and pay deposits with or without interest,
7-2 discount and negotiate promissory notes, borrow or lend money with
7-3 or without security or interest, invest and deal in securities, buy
7-4 and sell exchange, coin, and bullion, and exercise incidental
7-5 powers as necessary to carry on the business of banking as provided
7-6 by this subtitle;
7-7 (2) act as agent, or in a substantially similar
7-8 capacity, with respect to a financial activity or an activity
7-9 incidental or complementary to a financial activity [including a
7-10 fiscal agent, registrar, or transfer agent, and in that capacity
7-11 receive and disburse money and transfer securities];
7-12 (3) act in a fiduciary capacity, without giving bond,
7-13 as guardian, receiver, executor, administrator, or trustee,
7-14 including a mortgage or indenture trustee; [and]
7-15 (4) provide financial, investment, or economic
7-16 advisory services;
7-17 (5) issue or sell instruments representing pools of
7-18 assets in which a bank may invest directly;
7-19 (6) with prior written approval of the banking
7-20 commissioner, engage in a financial activity or an activity that is
7-21 incidental or complementary to a financial activity; and
7-22 (7) engage in any other activity, directly or through
7-23 a subsidiary, authorized by this subtitle or rules adopted under
7-24 this subtitle [or determined by the banking commissioner to be
7-25 closely related to banking].
7-26 (c) For purposes of other state law, a banking association
7-27 is considered a corporation and a limited banking association is
8-1 considered a limited liability company. To the extent consistent
8-2 with this subtitle [Subject to Section 32.008], a banking
8-3 association [state bank] may exercise the powers of a Texas
8-4 business corporation and a limited banking association may exercise
8-5 the powers of a Texas limited liability company as reasonably
8-6 necessary to enable exercise of [its] specific powers under this
8-7 subtitle.
8-8 (e) A state bank may be organized or reorganized as a
8-9 community development financial institution or may serve as a
8-10 community development partner, as those terms are defined by the
8-11 Riegle Community Development and Regulatory Improvement Act of 1994
8-12 (Pub. L. No. 103-325).
8-13 (f) In the exercise of discretion consistent with the
8-14 purposes of this subtitle, the banking commissioner may require a
8-15 state bank to conduct an otherwise authorized activity through a
8-16 subsidiary.
8-17 SECTION 5. Section 32.003(b), Finance Code, is amended to
8-18 read as follows:
8-19 (b) The banking commissioner shall grant a state bank
8-20 charter only if the commissioner determines that the organizers
8-21 have established that public convenience and advantage will be
8-22 promoted by the establishment of the state bank. In determining
8-23 whether public convenience and advantage will be promoted, the
8-24 banking commissioner shall consider the convenience of the public
8-25 to be served and whether:
8-26 (1) [a public necessity exists for the bank;]
8-27 [(2)] the organizational and capital structure and
9-1 amount of initial capitalization is adequate for the business plan
9-2 [and location];
9-3 (2) [(3)] the anticipated volume and nature of
9-4 business indicates a reasonable probability of success and
9-5 profitability based on the market sought to be served [profitable
9-6 operation];
9-7 (3) [(4)] the officers, directors, managers, and
9-8 managing participants as a group have sufficient banking
9-9 experience, ability, standing, competence, trustworthiness, and
9-10 integrity to justify a belief that the bank will operate in
9-11 compliance with law and that success of the bank is probable;
9-12 (4) [(5)] each principal shareholder or participant
9-13 has sufficient experience, ability, standing, competence,
9-14 trustworthiness, and integrity to justify a belief that the bank
9-15 will be free from improper or unlawful influence or interference
9-16 with respect to the bank's operation in compliance with law; and
9-17 (5) [(6)] the organizers are acting in good faith.
9-18 SECTION 6. Section 32.008, Finance Code, is amended to read
9-19 as follows:
9-20 Sec. 32.008. APPLICATION OF [LAWS RELATING TO] GENERAL
9-21 CORPORATE LAW [BUSINESS CORPORATION]. (a) The Texas Business
9-22 Corporation Act and the Texas Miscellaneous Corporation Laws Act
9-23 (Article 1302-1.01 et seq., Vernon's Texas Civil Statutes) apply to
9-24 a banking association, and the Texas Limited Liability Company Act
9-25 (Article 1528n, Vernon's Texas Civil Statutes) applies to a limited
9-26 banking association, [state bank] to the extent not inconsistent
9-27 with this subtitle or the proper business of a state bank, except
10-1 that:
10-2 (1) a reference in those Acts to the secretary of
10-3 state means the banking commissioner unless the context requires
10-4 otherwise; and
10-5 (2) the right of shareholders or participants to
10-6 cumulative voting in the election of directors or managers exists
10-7 only if granted by the bank's articles of association.
10-8 (b) The finance commission may adopt rules to limit or
10-9 refine the applicability of the laws listed by Subsection (a) to a
10-10 state bank or to alter or supplement the procedures and
10-11 requirements of those laws [the Texas Business Corporation Act]
10-12 applicable to an action taken under this chapter.
10-13 (c) Unless expressly authorized by this subtitle or a rule
10-14 adopted under this subtitle, a state bank may not take an action
10-15 authorized by a law listed by Subsection (a) [the Texas Business
10-16 Corporation Act] regarding its corporate status, its capital
10-17 structure, or a matter of corporate governance, of the type for
10-18 which those laws [the Texas Business Corporation Act] would require
10-19 a filing with the secretary of state if the bank were a business
10-20 corporation, without submitting the filing to the banking
10-21 commissioner and obtaining the banking commissioner's prior written
10-22 approval of the action.
10-23 SECTION 7. Sections 32.010(a) and (b), Finance Code, are
10-24 amended to read as follows:
10-25 (a) Notwithstanding another law, a Texas state bank may
10-26 perform an act, own property, or offer a product or service that is
10-27 at the time permissible within the United States for a depository
11-1 institution organized under federal law or the law of this state or
11-2 another state, if the banking commissioner approves the exercise of
11-3 the power as provided by this section, subject to the same
11-4 limitations and restrictions applicable to the other depository
11-5 institution by pertinent law, except to the extent the limitations
11-6 and restrictions are modified by rules adopted under Subsection
11-7 (e). This section may not be used by a Texas state bank to alter
11-8 or negate the application of the laws of this state with respect
11-9 to:
11-10 (1) establishment and maintenance of a branch in this
11-11 state or another state or country;
11-12 (2) [sale of insurance products and services in this
11-13 state;]
11-14 [(3)] permissible interest rates and loan fees
11-15 chargeable in this state;
11-16 (3) [(4)] fiduciary duties owed to a client or
11-17 customer by the bank in its capacity as fiduciary in this state;
11-18 (4) [(5)] consumer protection laws applicable to
11-19 transactions in this state; or
11-20 (5) licensing and regulatory requirements administered
11-21 by a functional regulatory agency in this state, as defined by
11-22 Section 31.303, including licensing and regulatory requirements
11-23 pertaining to:
11-24 (A) insurance activities;
11-25 (B) securities activities; and
11-26 (C) [(6)] real estate development, marketing,
11-27 and sales activities [in this state].
12-1 (b) A state bank that intends to exercise a power, directly
12-2 or through a subsidiary, granted by Subsection (a) that is not
12-3 otherwise authorized for state banks under the statutes of this
12-4 state shall submit a letter to the banking commissioner describing
12-5 in detail the power that the bank proposes to exercise and the
12-6 specific authority of another depository institution to exercise
12-7 the power. The bank shall attach copies, if available, of relevant
12-8 law, regulations, and interpretive letters. The bank may begin to
12-9 exercise the proposed power after the 30th day after the date the
12-10 banking commissioner receives the bank's letter unless the banking
12-11 commissioner specifies an earlier or later date or prohibits the
12-12 activity. The banking commissioner may prohibit the bank from
12-13 exercising the power only if the banking commissioner finds that:
12-14 (1) specific authority does not exist for another
12-15 depository institution to exercise the proposed power;
12-16 (2) if the state bank is insured by the Federal
12-17 Deposit Insurance Corporation, the state bank is prohibited from
12-18 exercising the power pursuant to Section 24, Federal Deposit
12-19 Insurance Act (12 U.S.C. Section 1831a), [as amended,] and related
12-20 regulations [12 C.F.R. Part 362]; or
12-21 (3) the exercise of the power by the bank would
12-22 adversely affect the safety and soundness of the bank.
12-23 SECTION 8. Subchapter A, Chapter 32, Finance Code, is amended
12-24 by adding Section 32.011 to read as follows:
12-25 Sec. 32.011. FINANCIAL ACTIVITIES. (a) A state bank may
12-26 request a determination from the banking commissioner that an
12-27 activity not otherwise approved or authorized under this subchapter
13-1 or other law is:
13-2 (1) a financial activity;
13-3 (2) incidental to a financial activity; or
13-4 (3) complementary to a financial activity.
13-5 (b) A request under this section must be submitted in
13-6 writing and identify and define the nature of the activity for
13-7 which the determination is sought. A state bank shall submit
13-8 information requested by the banking commissioner to assist the
13-9 commissioner in making a determination under this section.
13-10 (c) In making a determination under Subsection (a), the
13-11 banking commissioner shall consider:
13-12 (1) the purposes of this subtitle and the
13-13 Gramm-Leach-Bliley Act (Pub. L. No. 106-102);
13-14 (2) changes or reasonably expected changes in the
13-15 marketplace in which state banks compete;
13-16 (3) changes or reasonably expected changes in the
13-17 technology for delivering financial services;
13-18 (4) whether the activity is necessary or appropriate
13-19 to allow a state bank to:
13-20 (A) compete effectively with another company
13-21 seeking to provide financial services;
13-22 (B) efficiently deliver information and services
13-23 that are financial in nature through the use of technological
13-24 means, including an application necessary to protect the security
13-25 or efficacy of systems for the transmission of data or financial
13-26 transactions; and
13-27 (C) offer customers available or emerging
14-1 technological means for using financial services or for the
14-2 document imaging of data; and
14-3 (5) whether the proposed activity would pose a
14-4 substantial risk to the safety or soundness of a state bank or the
14-5 financial system generally.
14-6 (d) If, after evaluating the factors in Subsection (c), the
14-7 banking commissioner determines that an activity is permissible for
14-8 a state bank, the banking commissioner may:
14-9 (1) approve the conduct of the activity without
14-10 qualification;
14-11 (2) qualify the conduct of the activity by state banks
14-12 generally or by the requesting state bank by imposing conditions on
14-13 the activity as may be reasonable or necessary to protect the
14-14 public and to require appropriate regard for safety and soundness
14-15 of the bank or state banks generally; or
14-16 (3) prohibit the requesting state bank from engaging
14-17 in the activity only if the banking commissioner finds that:
14-18 (A) the state bank is prohibited from engaging
14-19 in the activity under 12 U.S.C. Section 1831a, and related
14-20 regulations; or
14-21 (B) the conduct of the activity by the
14-22 requesting state bank would adversely affect the safety and
14-23 soundness of the bank.
14-24 (e) The banking commissioner shall make a determination
14-25 regarding the proposed activity with respect to the requesting bank
14-26 or convene a hearing not later than the 60th day after the date the
14-27 banking commissioner receives the bank's request. If a hearing is
15-1 convened, the banking commissioner shall make a determination
15-2 regarding the proposed activity not later than the 30th day after
15-3 the date the hearing is completed and a proposal for decision is
15-4 issued.
15-5 (f) A state bank that is denied the requested activity or
15-6 that objects to the conditions imposed on the activity by the
15-7 banking commissioner may appeal as provided by Sections 31.202,
15-8 31.203, and 31.204 or may resubmit a request under this section
15-9 with additional information or authority relevant to the banking
15-10 commissioner's determination. A denial is final for purposes of
15-11 appeal.
15-12 (g) A determination by the banking commissioner under this
15-13 section does not alter or negate applicable licensing and
15-14 regulatory requirements administered by a functional regulatory
15-15 agency of this state, as defined by Section 31.303, including
15-16 licensing and regulatory requirements pertaining to:
15-17 (1) insurance activities;
15-18 (2) securities activities; and
15-19 (3) real estate development, marketing, and sales
15-20 activities.
15-21 (h) The finance commission may adopt rules for the
15-22 implementation of this section, including rules prescribing the
15-23 manner in which a state bank may exercise specific powers granted
15-24 under this section.
15-25 SECTION 9. Section 34.101, Finance Code, is amended to read
15-26 as follows:
15-27 Sec. 34.101. SECURITIES. (a) A state bank may purchase and
16-1 sell [equity and investment] securities without recourse solely on
16-2 the order and for the account of a customer.
16-3 (b) Except as otherwise provided by this subtitle or rules
16-4 adopted under this subtitle, a [A] state bank may not:
16-5 (1) underwrite an issue of securities; or
16-6 (2) [except as otherwise provided by this subtitle or
16-7 rules adopted under this subtitle.]
16-8 [(c) Except as otherwise provided by this subtitle or rules
16-9 adopted under this subtitle, a state bank may not] invest its money
16-10 in equity securities except as necessary to avoid or minimize a
16-11 loss on a loan or investment previously made in good faith.
16-12 (c) [(d)] A state bank may purchase investment securities
16-13 for its own account under limitations and restrictions prescribed
16-14 by rules adopted under this subtitle. Except as otherwise provided
16-15 by this section, the amount of the investment securities of any one
16-16 obligor or maker held by the bank for its own account may not
16-17 exceed an amount equal to the lesser of 15 percent of the bank's
16-18 capital and certified surplus or the bank's total equity capital.
16-19 The banking commissioner may authorize investments in excess of
16-20 this limitation on written application if the banking commissioner
16-21 determines that:
16-22 (1) the excess investment is not prohibited by other
16-23 applicable law; and
16-24 (2) the safety and soundness of the requesting state
16-25 bank is not adversely affected.
16-26 (d) [(e)] Notwithstanding Subsections (a)-(c) [(a)-(d)], a
16-27 state bank may, without limit and subject to the exercise of [with]
17-1 prudent banking judgment, deal in, underwrite, or purchase for its
17-2 own account:
17-3 (1) bonds and other legally created general
17-4 obligations of a state, an agency or political subdivision of a
17-5 state, the United States, or an instrumentality of the United
17-6 States;
17-7 (2) obligations [investment securities] that this
17-8 state, an agency or political subdivision of this state, the United
17-9 States, or an instrumentality of the United States has
17-10 unconditionally agreed to purchase, insure, or guarantee;
17-11 (3) securities that are offered and sold under 15
17-12 U.S.C. Section 77d(5);
17-13 (4) mortgage related securities or small business
17-14 related securities, as those terms are defined by 15 U.S.C. Section
17-15 78c(a)[, except that notwithstanding Section 347 of the Riegle
17-16 Community Development and Regulatory Improvement Act of 1994 (Pub.
17-17 L. 103-325) a note or obligation that is secured by a first lien on
17-18 one or more parcels of real property on which is located one or
17-19 more commercial structures is subject to the limitations of
17-20 Subsection (d)];
17-21 (5) mortgages, obligations, or other securities that
17-22 are or ever have been sold [investment securities issued or
17-23 guaranteed] by the Federal Home Loan Mortgage Corporation under 12
17-24 U.S.C. Sections 1434 and 1455;
17-25 (6) obligations, participation, or other instruments
17-26 of or issued by[,] the Federal National Mortgage Association or[,]
17-27 the Government National Mortgage Association;
18-1 (7) obligations issued by [,] the Federal Agricultural
18-2 Mortgage Corporation, [or] the Federal Farm Credit Banks Funding
18-3 Corporation, or a Federal Home Loan Bank;
18-4 (8) obligations of the Federal Financing Bank or the
18-5 Environmental Financing Authority;
18-6 (9) obligations or other instruments or securities of
18-7 the Student Loan Marketing Association;
18-8 (10) qualified Canadian government obligations, as
18-9 defined by 12 U.S.C. Section 24; or
18-10 (11) if the state bank is well capitalized, as defined
18-11 by Section 38, Federal Deposit Insurance Act (12 U.S.C. Section
18-12 1831o), obligations, including limited obligation bonds, revenue
18-13 bonds, and obligations that satisfy the requirements of 26 U.S.C.
18-14 Section 142(b)(1), issued by or on behalf of a state or a political
18-15 subdivision of a state, including a municipal corporate
18-16 instrumentality of one or more states or a public agency or
18-17 authority of a state or political subdivision of a state.
18-18 (e) Notwithstanding Subsections (a) and (b), subject to the
18-19 exercise of prudent banking judgment, a state bank may deal in,
18-20 underwrite, or purchase for its own account, including for purposes
18-21 of Subsection (c) obligations as to which the bank is under
18-22 commitment, the following:
18-23 (1) obligations [(6) investment securities] issued
18-24 [or guaranteed] by a development bank, corporation, or other entity
18-25 created by international agreement if the United States is a member
18-26 and a capital stock shareholder;
18-27 (2) obligations issued by a state or political
19-1 subdivision or an agency of a state or political subdivision for
19-2 housing, university, or dormitory purposes, that are at the time
19-3 eligible for purchase by a state bank for its own account [the
19-4 North American Development Bank]; or
19-5 (3) bonds, notes, and other obligations issued by the
19-6 Tennessee Valley Authority or by the United States Postal Service
19-7 [(7) securities issued by a Federal Home Loan Bank].
19-8 (f) [Subsection (b) does not apply to an obligation issued
19-9 by a state or an agency or political subdivision of a state for
19-10 housing, higher education, health care, or public welfare purposes
19-11 if, before dealing in, underwriting, or purchasing the obligation,
19-12 the bank evaluates the obligation to determine whether the
19-13 obligation is of sufficient investment quality and marketability
19-14 for investment by the bank and whether the obligation has been
19-15 issued for the appropriate purpose by a qualifying issuer. A bank
19-16 that has made a firm commitment to underwrite an obligation is
19-17 considered to hold the obligation for purposes of the limitations
19-18 of Subsection (d).]
19-19 [(g) Notwithstanding 15 U.S.C. Section 77r-1(c), Subsection
19-20 (d) applies to investments in small business related securities as
19-21 defined by 15 U.S.C. Section 78c(a).]
19-22 [(h)] A state bank may not invest more than an amount equal
19-23 to the lesser of 25 percent of the bank's [its] capital and
19-24 certified surplus or the bank's total equity capital in investment
19-25 grade adjustable rate preferred stock and money market (auction
19-26 rate) preferred stock.
19-27 (g) [(i)] A state bank may deposit money in a federally
20-1 insured financial institution, a Federal Reserve Bank, or a Federal
20-2 Home Loan Bank without limitation.
20-3 (h) [(j)] The finance commission may adopt rules to
20-4 administer and carry out this section, including rules to:
20-5 (1) define or further define terms used by this
20-6 section;
20-7 (2) establish limits, requirements, or exemptions
20-8 other than those specified by this section for particular classes
20-9 or categories of [investment] securities; and [or]
20-10 (3) limit or expand investment authority for state
20-11 banks for particular classes or categories of [investment]
20-12 securities.
20-13 SECTION 10. Sections 34.103(a)-(d), Finance Code, are amended
20-14 to read as follows:
20-15 (a) Subject to this section and except [Except] as otherwise
20-16 provided by this subtitle or rules adopted under this subtitle, a
20-17 state bank may conduct any activity or make any investment through
20-18 an operating subsidiary that a state bank or a bank holding
20-19 company, including a financial holding company, is authorized to
20-20 conduct or make under [the laws of this] state or federal law if
20-21 the operating subsidiary is adequately empowered and appropriately
20-22 licensed to conduct its business.
20-23 (b) Except for investment in a subsidiary engaging solely in
20-24 activities that may be engaged in directly by the bank and that are
20-25 conducted on the same terms and conditions that govern the conduct
20-26 of the activities by the bank, a state bank without the prior
20-27 written approval of the banking commissioner may not invest more
21-1 than an amount equal to 10 percent of the lesser of its capital and
21-2 certified surplus or the bank's total equity capital in a single
21-3 subsidiary [and may not invest more than the amount of its equity
21-4 capital in all subsidiaries]. For purposes of this subsection, the
21-5 [The] amount of a state bank's investment in a subsidiary is the
21-6 sum of the amount of the bank's investment in [equity or
21-7 investment] securities issued by the subsidiary and any loans and
21-8 extensions of credit from the bank to the subsidiary.
21-9 (c) A state bank may not establish or acquire a subsidiary
21-10 or a controlling interest in a subsidiary that engages in
21-11 activities as principal in which [as provided by 12 C.F.R. Section
21-12 337.4 to conduct securities activities that] the bank is prohibited
21-13 from engaging [conducting] directly unless:
21-14 (1) the state bank's investment in the subsidiary has
21-15 been approved by the Federal Deposit Insurance Corporation under
21-16 Section 24, Federal Deposit Insurance Act (12 U.S.C. Section
21-17 1831a); or
21-18 (2) with respect to a subsidiary engaged in activities
21-19 as principal that a national bank may conduct only through a
21-20 financial subsidiary, including firm underwriting of equity
21-21 securities other than as permitted by Section 34.101, and not
21-22 otherwise engaged in activities as principal that are impermissible
21-23 for a state bank or a financial subsidiary of a national bank, the
21-24 subsidiary's activities and the bank's investment are in compliance
21-25 with the restrictions and requirements of Section 46, Federal
21-26 Deposit Insurance Act (12 U.S.C. Section 1831w).
21-27 (d) Except as otherwise provided by this subtitle or a rule
22-1 adopted under this subtitle, a state bank may not make a
22-2 non-controlling minority investment in equity securities of a
22-3 company unless:
22-4 (1) the investment or company is described by
22-5 Subsection (c)(2) or Section 34.104 or 34.105;
22-6 (2) the company engages solely in activities that are
22-7 part of or incidental to the permissible business of a state bank
22-8 under this subtitle and:
22-9 (A) the state bank is adequately empowered to
22-10 prevent the company from engaging in activities not part of or
22-11 incidental to the permissible business of a state bank or, as a
22-12 practical matter, is otherwise enabled to withdraw or liquidate its
22-13 investment in the company in such an event;
22-14 (B) as a legal and accounting matter, the loss
22-15 exposure of the state bank with respect to the activities of the
22-16 company is limited and does not include any open-ended liability
22-17 for an obligation of the company; and
22-18 (C) the investment is convenient or useful to
22-19 the state bank in carrying out its business and is not a mere
22-20 passive investment unrelated to the bank's banking business; or
22-21 (3) the investment is made indirectly through an
22-22 operating subsidiary in equity securities issued by [of]:
22-23 (A) [(1)] another bank;
22-24 (B) [(2)] a company that engages solely in an
22-25 activity that is permissible for a bank service corporation or a
22-26 bank holding company subsidiary; or
22-27 (C) [(3)] a company that engages solely in
23-1 activities as agent or trustee or in a brokerage, custodial,
23-2 advisory, or administrative capacity, or in a substantially similar
23-3 capacity.
23-4 SECTION 11. Section 34.107, Finance Code, is amended to read
23-5 as follows:
23-6 Sec. 34.107. ENGAGING IN COMMERCE PROHIBITED. (a) A state
23-7 bank may not buy, sell, or otherwise deal in goods in trade or
23-8 commerce or own or operate a business not part of the business of
23-9 banking except:
23-10 (1) as necessary to avoid or minimize a loss on a loan
23-11 or investment previously made in good faith; or
23-12 (2) as otherwise provided by this subtitle or rules
23-13 adopted under this subtitle.
23-14 (b) Engaging in an approved activity, directly or through a
23-15 subsidiary, that is a financial activity or incidental or
23-16 complementary to a financial activity, whether as principal or
23-17 agent, is not considered to be engaging in commerce.
23-18 SECTION 12. Section 34.201(a), Finance Code, is amended to
23-19 read as follows:
23-20 (a) Without the prior written approval of the banking
23-21 commissioner, the total loans and extensions of credit by a state
23-22 bank to a person outstanding at one time may not exceed an amount
23-23 equal to 25 percent of the lesser of the bank's capital and
23-24 certified surplus or the bank's total equity capital. This
23-25 limitation does not apply to:
23-26 (1) liability as endorser or guarantor of commercial
23-27 or business paper discounted by or assigned to the bank by its
24-1 owner who has acquired it in the ordinary course of business;
24-2 (2) indebtedness evidenced by bankers' acceptances as
24-3 described by 12 U.S.C. Section 372 and issued by other banks;
24-4 (3) indebtedness secured by a bill of lading,
24-5 warehouse receipt, or similar document transferring or securing
24-6 title to readily marketable goods, except that:
24-7 (A) the goods must be insured if it is customary
24-8 to insure those goods; and
24-9 (B) the aggregate indebtedness of a person under
24-10 this subdivision may not exceed an amount equal to 50 percent of
24-11 the lesser of the bank's capital and certified surplus or the
24-12 bank's total equity capital;
24-13 (4) indebtedness evidenced by notes or other paper
24-14 secured by liens on agricultural products in secure and properly
24-15 documented storage in bonded warehouses or elevators if the value
24-16 of the collateral is not less than 125 percent of the amount of the
24-17 indebtedness and the bank's interest in the collateral is
24-18 adequately insured against loss, except that the aggregate
24-19 indebtedness of a person under this subdivision may not exceed an
24-20 amount equal to 50 percent of the lesser of the bank's capital and
24-21 certified surplus or the bank's total equity capital;
24-22 (5) indebtedness of another depository institution
24-23 arising out of loans with settlement periods of less than one week;
24-24 (6) indebtedness arising out of the daily transaction
24-25 of the business of a clearinghouse association in this state;
24-26 (7) liability under an agreement by a third party to
24-27 repurchase from the bank an investment security listed in Section
25-1 34.101(d) [34.101(e)] to the extent that the agreed repurchase
25-2 price does not exceed the original purchase price to the bank or
25-3 the market value of the investment security;
25-4 (8) the portion of an indebtedness that this state, an
25-5 agency or political subdivision of this state, the United States,
25-6 or an instrumentality of the United States has unconditionally
25-7 agreed to repay, purchase, insure, or guarantee;
25-8 (9) indebtedness secured by [investment] securities
25-9 listed in Section 34.101(d) [34.101(e)] to the extent that the
25-10 market value of the [investment] securities equals or exceeds the
25-11 indebtedness;
25-12 (10) the portion of an indebtedness that is fully
25-13 secured by a segregated deposit account in the lending bank;
25-14 (11) loans and extensions of credit arising from the
25-15 purchase of negotiable or nonnegotiable installment consumer paper
25-16 that carries a full recourse endorsement or unconditional guarantee
25-17 by the person transferring the paper if:
25-18 (A) the bank's files or the knowledge of its
25-19 officers of the financial condition of each maker of the consumer
25-20 paper is reasonably adequate; and
25-21 (B) an officer of the bank designated for that
25-22 purpose by the board certifies in writing that the bank is relying
25-23 primarily on the responsibility of each maker for payment of the
25-24 loans or extensions of credit and not on a full or partial recourse
25-25 endorsement or guarantee by the transferor;
25-26 (12) the portion of an indebtedness in excess of the
25-27 limitation of this subsection that is fully secured by marketable
26-1 securities or bullion with a market value at least equal to the
26-2 amount of the overage, as determined by reliable and continuously
26-3 available price quotations, except that the exempted indebtedness
26-4 or overage of a person under this subdivision may not exceed an
26-5 amount equal to 15 percent of the lesser of the bank's capital and
26-6 certified surplus or the bank's total equity capital;
26-7 (13) indebtedness of an affiliate of the bank if the
26-8 transaction with the affiliate is subject to the restrictions and
26-9 limitations of 12 U.S.C. Section 371c;
26-10 (14) indebtedness of an operating subsidiary of the
26-11 bank other than a subsidiary described by Section 34.103(c)(2); and
26-12 (15) the portion of the indebtedness of a person
26-13 secured in good faith by a purchase money lien taken by the bank in
26-14 exchange for the sale of real or personal property owned by the
26-15 bank if the sale is in the best interest of the bank.
26-16 SECTION 13. Sections 34.204(a) and (b) , Finance Code, are
26-17 amended to read as follows:
26-18 (a) [A state bank may purchase or construct a public
26-19 facility and, as holder of legal title, lease the facility to a
26-20 public authority having sufficient resources to pay all rentals as
26-21 they become due. A lease under this subsection must provide that
26-22 legal title to the property transfers to the lessee on consummation
26-23 and expiration of the lease.]
26-24 [(b)] Subject to rules adopted under this subtitle, a state
26-25 bank may, directly or indirectly through an operating subsidiary,
26-26 provide the equivalent of a financing transaction by acting as
26-27 lessor under a lease for the benefit [become the owner and lessor
27-1 of tangible personal property for lease financing transactions on a
27-2 net lease basis on the specific request and for the use] of a
27-3 customer.
27-4 (b) Without the written approval of the banking commissioner
27-5 to continue holding property acquired for leasing purposes under
27-6 this subsection, the bank may not hold personal [the] property more
27-7 than six months or real property more than two years after the date
27-8 of expiration of the original or any extended or renewed lease
27-9 period agreed to by the customer for whom the property was acquired
27-10 or by a subsequent lessee.
27-11 SECTION 14. Section 59.005, Finance Code, is amended to read
27-12 as follows:
27-13 Sec. 59.005. AGENCY ACTIVITIES. (a) A financial institution
27-14 [state bank] may[, on compliance with this section, agree to]
27-15 receive deposits, renew time deposits, close loans, service loans,
27-16 receive payments on loans and other obligations, and perform other
27-17 services[, with the prior approval of the banking commissioner,] as
27-18 an agent for another financial institution under a written agency
27-19 agreement.
27-20 (b) [A state bank that proposes to enter into an agency
27-21 agreement under this section shall file a letter with the banking
27-22 commissioner, not later than 30 days before the effective date of
27-23 the agreement, setting forth:]
27-24 [(1) a notice of intention to enter into an agency
27-25 agreement with a financial institution;]
27-26 [(2) a description of the services proposed to be
27-27 performed under the agency agreement;]
28-1 [(3) a copy of the agency agreement; and]
28-2 [(4) other information the banking commissioner
28-3 requests.]
28-4 [(c) If a proposed service is not specifically designated in
28-5 Subsection (a) and has not previously been approved by rule or in
28-6 an opinion or interpretation issued by the banking commissioner,
28-7 the banking commissioner shall decide whether to approve the
28-8 offering of the service on or before the 30th day after the date of
28-9 receipt of the notice required by Subsection (b). In deciding
28-10 whether to approve a proposed service that is not specifically
28-11 designated by Subsection (a) or in a rule or prior opinion or
28-12 interpretation, the banking commissioner shall consider whether the
28-13 service would be consistent with applicable federal and state law
28-14 and the safety and soundness of the principal and agent.]
28-15 [(d) A proposed service subject to Subsection (c) is
28-16 considered approved if the banking commissioner does not take
28-17 action on the notice required by Subsection (b) within the time
28-18 limits specified by Subsection (c). The banking commissioner may
28-19 extend the 30-day period on a determination that the bank's letter
28-20 raises issues that require additional information or additional
28-21 time for analysis. If the period is extended, the bank may engage
28-22 in the proposed service only on prior written approval of the
28-23 banking commissioner.]
28-24 [(e)] A financial institution [state bank] may not under an
28-25 agency agreement:
28-26 (1) conduct an activity as agent that it would be
28-27 prohibited from conducting as a principal under applicable state or
29-1 federal law; or
29-2 (2) have an agent conduct an activity that the bank as
29-3 principal would be prohibited from conducting under applicable
29-4 state or federal law.
29-5 (c) [(f)] The banking commissioner may order a state bank or
29-6 another financial institution subject to the banking commissioner's
29-7 enforcement powers to cease acting as an agent or principal under
29-8 an agency agreement in a manner that the banking commissioner finds
29-9 to be inconsistent with safe and sound banking practices or
29-10 governing law.
29-11 (d) [(g)] Notwithstanding another law, a financial
29-12 institution [state bank] acting as an agent for another [a]
29-13 financial institution in accordance with this section is not
29-14 considered to be a branch of the [that] institution acting as
29-15 principal[, and a financial institution acting as an agent for a
29-16 state bank in accordance with this section is not considered to be
29-17 a branch of the state bank].
29-18 (e) [(h)] This section does not affect:
29-19 (1) authority under another law for a financial
29-20 [depository] institution to act as an agent on behalf of another
29-21 person or to act as a principal in employing another person as
29-22 agent; or
29-23 (2) whether an agent's activities on behalf of a
29-24 financial [depository] institution under another law would cause
29-25 the agent to be considered a branch of the financial [depository]
29-26 institution.
29-27 SECTION 15. Section 59.006(a), Finance Code, is amended to
30-1 read as follows:
30-2 (a) This section provides the exclusive method for compelled
30-3 discovery of a record of a financial institution relating to one or
30-4 more customers but[. This section] does not create a right of
30-5 privacy in a record. This section [and] does not apply to and does
30-6 not require or authorize a financial institution to give a customer
30-7 notice of:
30-8 (1) a demand or inquiry from a state or federal
30-9 government agency authorized by law to conduct an examination of
30-10 the financial institution;
30-11 (2) a record request from a state or federal
30-12 government agency or instrumentality under statutory or
30-13 administrative authority that provides for, or is accompanied by, a
30-14 specific mechanism for discovery and protection of a customer
30-15 record of a financial institution, including a record request from
30-16 a federal agency subject to the Right to Financial Privacy Act of
30-17 1978 (12 U.S.C. Section 3401 et seq.), as amended, or from the
30-18 Internal Revenue Service under Section 1205, Internal Revenue Code
30-19 of 1986;
30-20 (3) a record request from or report to a government
30-21 agency arising out of the investigation or prosecution of a
30-22 criminal offense;
30-23 (4) a record request in connection with a garnishment
30-24 proceeding in which the financial institution is garnishee and the
30-25 customer is debtor;
30-26 (5) a record request by a duly appointed receiver for
30-27 the customer;
31-1 (6) an investigative demand or inquiry from a state
31-2 legislative investigating committee;
31-3 (7) an investigative demand or inquiry from the
31-4 attorney general of this state as authorized by law other than the
31-5 procedural law governing discovery in civil cases; or
31-6 (8) the voluntary use or disclosure of a record by a
31-7 financial institution subject to other applicable state or federal
31-8 law.
31-9 SECTION 16. Subchapter A, Chapter 59, Finance Code, is
31-10 amended by adding Section 59.010 to read as follows:
31-11 Sec. 59.010. CONFIDENTIALITY OF ADMINISTRATIVE SUBPOENA. (a)
31-12 Except to the extent disclosure is necessary to locate and produce
31-13 responsive records, an administrative subpoena served on a
31-14 financial institution may provide that the financial institution to
31-15 whom the subpoena is directed may not:
31-16 (1) disclose that the subpoena has been issued;
31-17 (2) identify or describe any records requested in the
31-18 subpoena; or
31-19 (3) disclose whether records have been furnished in
31-20 response to the subpoena.
31-21 (b) The government agency issuing the subpoena may prohibit
31-22 the disclosure of information described in Subsection (a) if:
31-23 (1) the records relate to an ongoing criminal
31-24 investigation by the agency; and
31-25 (2) the agency concludes that disclosure could
31-26 significantly impede or jeopardize the investigation.
31-27 (c) For purposes of this section, "administrative subpoena"
32-1 means a valid and enforceable subpoena requesting customer records,
32-2 issued under the laws of this state by a government agency
32-3 exercising investigatory or adjudicative functions with respect to
32-4 a matter within the agency's jurisdiction.
32-5 SECTION 17. Section 59.202, Finance Code, is amended by
32-6 amending Subsection (a) and adding Subsection (d) to read as
32-7 follows:
32-8 (a) The owner of an electronic terminal that is located in
32-9 this state and that is connected to a shared network may impose a
32-10 fee for the use of that terminal if imposition of the fee is
32-11 disclosed at a time and in a manner that allows a user to avoid the
32-12 transaction without incurring the transaction fee. If a fee is
32-13 imposed for the use of an electronic terminal:
32-14 (1) notice that a fee is imposed must be posted in a
32-15 prominent and conspicuous location on or at the electronic terminal
32-16 at which a user initiates the transaction; and
32-17 (2) notice of the amount of the fee imposed must
32-18 appear on the screen of the electronic terminal or on a paper
32-19 notice issued from the terminal before the fee is charged,
32-20 notifying the user of the option of accepting or rejecting the fee.
32-21 (d) Compliance with the ATM Fee Reform Act of 1999 (Pub. L.
32-22 No. 106-102) constitutes compliance with this section.
32-23 SECTION 18. Sections 181.002(a)(1), (9), (10), (18), (26),
32-24 (27), (48), and (50), Finance Code, are amended to read as follows:
32-25 (1) "Account" means the client relationship
32-26 established with a trust institution [company] involving the
32-27 transfer of funds or property to the trust institution [company],
33-1 including a relationship in which the trust institution [company]
33-2 acts as trustee, executor, administrator, guardian, custodian,
33-3 conservator, receiver, registrar, or agent.
33-4 (9) "Charter" means a [corporate] charter issued under
33-5 this subtitle to engage in a trust business.
33-6 (10) "Client" means a person to whom a trust
33-7 institution [company] owes a duty or obligation under a trust or
33-8 other account administered by the trust institution [company],
33-9 regardless of whether the trust institution [company] owes a
33-10 fiduciary duty to the person. The term includes a beneficiary of a
33-11 trust for whom the trust institution [company] acts as trustee and
33-12 a person for whom the trust institution [company] acts as agent,
33-13 custodian, or bailee.
33-14 (18) "Fiduciary record" means a matter written,
33-15 transcribed, recorded, received, or otherwise in the possession of
33-16 a trust institution [company] that is necessary to preserve
33-17 information concerning an act or event relevant to an account of a
33-18 trust institution [company].
33-19 (26) "Investment security" means a marketable
33-20 obligation evidencing indebtedness of a person in the form of a
33-21 bond, note, debenture, or investment security [other debt
33-22 instrument not otherwise classified as a loan or extension of
33-23 credit].
33-24 (27) "Limited trust association" means a state trust
33-25 company organized under this subtitle as a limited liability
33-26 company [trust association], authorized to issue participation
33-27 shares, and controlled by its participants.
34-1 (48) "Trust association" means a trust company
34-2 organized under this subtitle as a corporation [trust association],
34-3 authorized to issue shares of stock, and controlled by its
34-4 shareholders.
34-5 (50) "Trust deposits" means client funds held by a
34-6 [state] trust institution [company] and authorized to be deposited
34-7 with itself as a permanent investment or pending investment,
34-8 distribution, or payment of debts on behalf of the client.
34-9 SECTION 19. Section 181.003(a), Finance Code, is amended to
34-10 read as follows:
34-11 (a) The finance commission may adopt rules to accomplish the
34-12 purposes of this subtitle, including rules necessary or reasonable
34-13 to:
34-14 (1) implement and clarify this subtitle;
34-15 (2) preserve or protect the safety and soundness of
34-16 state trust companies;
34-17 (3) grant the same rights and privileges to state
34-18 trust companies with respect to the exercise of fiduciary powers
34-19 and the conducting of financial activities or activities incidental
34-20 or complementary to financial activities that are or may be granted
34-21 to a trust institution that maintains its principal office or a
34-22 branch or trust office in this state;
34-23 (4) provide for recovery of the cost of maintenance
34-24 and operation of the department and the cost of enforcing this
34-25 subtitle through the imposition and collection of ratable and
34-26 equitable fees for notices, applications, and examinations; and
34-27 (5) facilitate the fair hearing and adjudication of
35-1 matters before the banking commissioner and the finance commission.
35-2 SECTION 20. Section 181.303, Finance Code, is amended to read
35-3 as follows:
35-4 Sec. 181.303. DISCLOSURE TO OTHER AGENCIES. (a) For
35-5 purposes of this section, "affiliated group," "agency," "functional
35-6 regulatory agency," and "privilege" have the meanings assigned by
35-7 Section 31.303 [On request and on execution of an appropriate
35-8 confidentiality agreement approved by the banking commissioner, the
35-9 banking commissioner may:]
35-10 [(1) disclose to a federal banking regulatory agency
35-11 confidential information concerning a state trust company within
35-12 the agency's jurisdiction or an affiliate or service provider of
35-13 the state trust company; and]
35-14 [(2) permit the agency access to files and records or
35-15 reports relating to the state trust company or its affiliate or
35-16 service provider].
35-17 (b) The banking commissioner may, as the banking
35-18 commissioner considers necessary or proper to the enforcement of
35-19 the laws of this state, another state, the United States, or a
35-20 foreign sovereign state with whom the United States currently
35-21 maintains diplomatic relations, or in the best interest of the
35-22 public, disclose [or authorize release of confidential] information
35-23 in the possession of the department to another [department of this
35-24 state, another state, the United States, a foreign sovereign state,
35-25 or any related] agency [or instrumentality]. The banking
35-26 commissioner may not disclose information under this section that
35-27 is confidential under applicable state or federal law unless:
36-1 (1) the recipient agency agrees to maintain the
36-2 confidentiality and take all reasonable steps to oppose an effort
36-3 to secure disclosure of the information from the agency; or
36-4 (2) the banking commissioner determines in the
36-5 exercise of discretion that the interest of law enforcement
36-6 outweighs and justifies the potential for disclosure of the
36-7 information by the recipient agency.
36-8 (c) The banking commissioner by agreement may establish an
36-9 information sharing and exchange program with a functional
36-10 regulatory agency that has overlapping regulatory jurisdiction with
36-11 the department, with respect to all or part of an affiliated group,
36-12 including a financial institution, to reduce the potential for
36-13 duplicative and burdensome filings, examinations, and other
36-14 regulatory activities. Each agency party to the agreement must
36-15 agree to maintain confidentiality of information that is
36-16 confidential under applicable state or federal law and take all
36-17 reasonable steps to oppose any effort to secure disclosure of the
36-18 information from the agency. An agreement may also specify
36-19 procedures regarding use and handling of confidential information
36-20 and identify types of information to be shared and procedures for
36-21 sharing on a recurring basis.
36-22 (d) Disclosure of information by or to the banking
36-23 commissioner under this section does not constitute a waiver of or
36-24 otherwise affect or diminish an evidentiary privilege to which the
36-25 information is otherwise subject, whether or not the disclosure is
36-26 governed by a confidentiality agreement.
36-27 (e) Notwithstanding other law, an agency of this state:
37-1 (1) may execute, honor, and comply with an agreement
37-2 to maintain confidentiality and oppose disclosure of information
37-3 obtained from the banking commissioner as provided in this section;
37-4 and
37-5 (2) shall treat as confidential any information
37-6 obtained from the banking commissioner that is entitled to
37-7 confidential treatment under applicable state or federal law and
37-8 take all reasonable steps to oppose an effort to secure disclosure
37-9 of the information from the agency.
37-10 SECTION 21. Section 182.001, Finance Code, is amended by
37-11 amending Subsections (a)-(c) and adding Subsection (g) to read as
37-12 follows:
37-13 (a) Subject to Subsection (b) and the other provisions of
37-14 this chapter, one or more persons may organize and charter a state
37-15 trust company as a state trust association or a limited trust
37-16 association.
37-17 (b) A state trust company may engage in the trust business
37-18 by:
37-19 (1) acting as trustee under a written agreement;
37-20 (2) receiving money and other property in its capacity
37-21 as trustee for investment in real or personal property;
37-22 (3) acting as trustee and performing the fiduciary
37-23 duties committed or transferred to it by order of a court;
37-24 (4) acting as executor, administrator, or trustee of
37-25 the estate of a deceased person;
37-26 (5) acting as a custodian, guardian, conservator, or
37-27 trustee for a minor or incapacitated person;
38-1 (6) acting as a successor fiduciary to a trust
38-2 institution or other fiduciary;
38-3 (7) receiving for safekeeping personal property;
38-4 (8) acting as custodian, assignee, transfer agent,
38-5 escrow agent, registrar, or receiver;
38-6 (9) acting as investment advisor, agent, or attorney
38-7 in fact according to an applicable agreement;
38-8 (10) with the prior written approval of the banking
38-9 commissioner and to the extent consistent with applicable fiduciary
38-10 principles, engaging in a financial activity or an activity
38-11 incidental or complementary to a financial activity, directly or
38-12 through a subsidiary;
38-13 (11) exercising additional powers expressly conferred
38-14 by rule of the finance commission; and
38-15 (12) [(11)] exercising any incidental power that is
38-16 reasonably necessary to enable it to fully exercise the powers
38-17 expressly conferred according to commonly accepted fiduciary
38-18 customs and usages.
38-19 (c) For purposes of other state law, a trust association is
38-20 considered a corporation and a limited trust association is
38-21 considered a limited liability company. To the extent consistent
38-22 with this subtitle [Subject to Section 182.009], a [state] trust
38-23 association [company] may exercise the powers of a Texas business
38-24 corporation and a limited trust association may exercise the powers
38-25 of a Texas limited liability company as [that are] reasonably
38-26 necessary to enable exercise of [its] specific powers under this
38-27 subtitle.
39-1 (g) In the exercise of discretion consistent with the
39-2 purposes of this subtitle, the banking commissioner may require a
39-3 state trust company to conduct an otherwise authorized activity
39-4 through a subsidiary.
39-5 SECTION 22. Section 182.009, Finance Code, is amended to read
39-6 as follows:
39-7 Sec. 182.009. APPLICATION OF [LAWS RELATING TO] GENERAL
39-8 CORPORATE LAW [BUSINESS CORPORATIONS]. (a) The Texas Business
39-9 Corporation Act and the Texas Miscellaneous Corporation Laws Act
39-10 (Article 1302-1.01 et seq., Vernon's Texas Civil Statutes) are
39-11 incorporated into this chapter and apply to a [state] trust
39-12 association, and the Texas Limited Liability Company Act (Article
39-13 1528n, Vernon's Texas Civil Statutes) applies to a limited trust
39-14 association, [company] as if they were part of this subtitle to the
39-15 extent not inconsistent with this subtitle or the proper business
39-16 of a state trust company, except that:
39-17 (1) a reference to the secretary of state means the
39-18 banking commissioner unless the context requires otherwise; and
39-19 (2) the right of shareholders or participants to
39-20 cumulative voting in the election of directors or managers exists
39-21 only if granted by the state trust company's articles of
39-22 association.
39-23 (b) Unless expressly authorized by this subtitle or a rule
39-24 of the finance commission, a state trust company may not take an
39-25 action authorized by a law listed under Subsection (a) [the Texas
39-26 Business Corporation Act] regarding its corporate status, capital
39-27 structure, or a matter of corporate governance, of the type for
40-1 which a law listed under Subsection (a) [the Texas Business
40-2 Corporation Act] would require a filing with the secretary of state
40-3 if the state trust company were a business corporation or a limited
40-4 liability company, without submitting the filing to the banking
40-5 commissioner for prior written approval of the action.
40-6 (c) The finance commission may adopt rules to alter or
40-7 supplement the procedures and requirements of the laws listed by
40-8 Subsection (a) [Texas Business Corporation Act or the Texas
40-9 Miscellaneous Corporation Laws Act (Article 1302-1.01 et seq.,
40-10 Vernon's Texas Civil Statutes)] applicable to an action taken under
40-11 this chapter by a state trust company.
40-12 [(d) This chapter may not be construed to mean that a state
40-13 trust company is a corporation incorporated under or governed by
40-14 the Texas Business Corporation Act or the Texas Miscellaneous
40-15 Corporation Laws Act (Article 1302-1.01 et seq., Vernon's Texas
40-16 Civil Statutes).]
40-17 SECTION 23. Subchapter A, Chapter 182, Finance Code, is
40-18 amended by adding Section 182.0105 to read as follows:
40-19 Sec. 182.0105. FINANCIAL ACTIVITIES. (a) A state trust
40-20 company may request a determination from the banking commissioner
40-21 that an activity not otherwise approved or authorized under this
40-22 subtitle or another law is:
40-23 (1) a financial activity;
40-24 (2) incidental to a financial activity; or
40-25 (3) complementary to a financial activity.
40-26 (b) A request under this section must be submitted in
40-27 writing and identify and define the nature of the activity for
41-1 which the determination is sought. A state trust company shall
41-2 submit information requested by the banking commissioner to assist
41-3 the commissioner in making a determination under this section.
41-4 (c) In making a determination under Subsection (a), the
41-5 banking commissioner shall consider:
41-6 (1) the purposes of this subtitle and the
41-7 Gramm-Leach-Bliley Act (Pub. L. No. 106-102);
41-8 (2) changes or reasonably expected changes in the
41-9 marketplace in which state trust companies compete;
41-10 (3) changes or reasonably expected changes in the
41-11 technology for delivering fiduciary and financial services;
41-12 (4) whether the activity is necessary or appropriate
41-13 to allow a state trust company to:
41-14 (A) compete effectively with another company
41-15 seeking to provide fiduciary and financial services;
41-16 (B) efficiently deliver information and services
41-17 that are financial in nature through the use of technological
41-18 means, including an application necessary to protect the security
41-19 or efficacy of systems for the transmission of data or financial
41-20 transactions; and
41-21 (C) offer customers available or emerging
41-22 technological means for using fiduciary and financial services or
41-23 for the document imaging of data; and
41-24 (5) whether the proposed activity would violate
41-25 applicable fiduciary duties or otherwise pose a substantial risk to
41-26 the safety and soundness of a state trust company or the fiduciary
41-27 and financial system generally.
42-1 (d) If, after evaluating the factors in Subsection (c), the
42-2 banking commissioner determines that an activity is permissible for
42-3 a state trust company, the banking commissioner may:
42-4 (1) approve the conduct of the activity without
42-5 qualification;
42-6 (2) qualify the conduct of the activity by state trust
42-7 companies generally or by the requesting state trust company by
42-8 imposing conditions on the activity as may be reasonable or
42-9 necessary to protect the public and to require appropriate regard
42-10 for safety and soundness of the trust company and state trust
42-11 companies generally; or
42-12 (3) prohibit the requesting state trust company from
42-13 engaging in the activity only if the banking commissioner finds
42-14 that the conduct of the activity by the requesting state trust
42-15 company would adversely affect the safety and soundness of the
42-16 trust company.
42-17 (e) The banking commissioner shall make a determination
42-18 regarding the proposed activity or with respect to the requesting
42-19 trust company convene a hearing not later than the 60th day after
42-20 the date the banking commissioner receives the trust company's
42-21 request. If a hearing is convened, the banking commissioner shall
42-22 make a determination regarding the proposed activity not later than
42-23 the 30th day after the date the hearing is completed and a proposal
42-24 for decision is issued.
42-25 (f) A state trust company that is denied the requested
42-26 activity or that objects to the conditions imposed on the activity
42-27 by the banking commissioner under this section may appeal as
43-1 provided by Sections 181.202, 181.203, and 181.204 or may resubmit
43-2 a request under this section with additional information or
43-3 authority relevant to the banking commissioner's determination. A
43-4 denial is final for purposes of appeal.
43-5 (g) A determination by the banking commissioner under this
43-6 section does not alter or negate applicable licensing and
43-7 regulatory requirements administered by a functional regulatory
43-8 agency of this state, as defined by Section 31.303, including
43-9 licensing and regulatory requirements pertaining to:
43-10 (1) insurance activities;
43-11 (2) securities activities; and
43-12 (3) real estate development, marketing, and sales
43-13 activities.
43-14 (h) The finance commission may adopt rules for the
43-15 implementation of this section, including rules prescribing the
43-16 manner in which a state trust company may exercise specific powers
43-17 granted under this section.
43-18 SECTION 24. Sections 184.101(d)-(h), Finance Code, are
43-19 amended to read as follows:
43-20 (d) Notwithstanding Subsection (c), a state trust company
43-21 may invest its restricted capital, without limit [limitation and]
43-22 subject [only] to the exercise of prudent judgment, in:
43-23 (1) bonds and other legally created general
43-24 obligations of a state, an agency or political subdivision of a
43-25 state, the United States, or an agency or instrumentality of the
43-26 United States;
43-27 (2) obligations [investment securities] that this
44-1 state, an agency or political subdivision of this state, the United
44-2 States, or an agency or instrumentality of the United States has
44-3 unconditionally agreed to purchase, insure, or guarantee;
44-4 (3) securities that are offered and sold under 15
44-5 U.S.C. Section 77d(5);
44-6 (4) mortgage related securities or small business
44-7 related securities, as those terms are defined by [in] 15 U.S.C.
44-8 Section 78c(a)[, except that notwithstanding Section 347 of the
44-9 Riegle Community Development and Regulatory Improvement Act of
44-10 1994, a note or obligation that is secured by a first lien on one
44-11 or more parcels of real property on which is located one or more
44-12 commercial structures is subject to the limitations of Subsection
44-13 (c)];
44-14 (5) mortgages, obligations, or other securities that
44-15 are or ever have been sold [investment securities issued or
44-16 guaranteed] by the Federal Home Loan Mortgage Corporation under
44-17 Section 305 or 306, Federal Home Loan Mortgage Corporation Act (12
44-18 U.S.C. Sections 1434 and 1455);
44-19 (6) obligations, participations, or other instruments
44-20 of or issued by[,] the Federal National Mortgage Association or[,]
44-21 the Government National Mortgage Association;
44-22 (7) obligations issued by[,] the Federal Agricultural
44-23 Mortgage Corporation, [or] the Federal Farm Credit Banks Funding
44-24 Corporation, or a Federal Home Loan Bank;
44-25 (8) obligations of the Federal Financing Bank or the
44-26 Environmental Financing Authority;
44-27 (9) obligations or other instruments or securities of
45-1 the Student Loan Marketing Association; or
45-2 (10) qualified Canadian government obligations, as
45-3 defined by 12 U.S.C. Section 24
45-4 [(6) investment securities issued or guaranteed by the
45-5 North American Development Bank; or]
45-6 [(7) securities issued by a Federal Home Loan Bank].
45-7 (e) [Notwithstanding 15 U.S.C. Section 77r-1(c), Subsection
45-8 (c) applies to investments in small business related securities as
45-9 defined by 15 U.S.C. Section 78c(a).]
45-10 [(f)] In the exercise of prudent judgment, a state trust
45-11 company shall, at a minimum:
45-12 (1) exercise care and caution to make and implement
45-13 investment and management decisions for the entire investment
45-14 portfolio, taking into consideration the safety and soundness of
45-15 the state trust company;
45-16 (2) pursue an overall investment strategy to enable
45-17 management to make appropriate present and future decisions; and
45-18 (3) consider, to the extent relevant to the decision
45-19 or action:
45-20 (A) the size, diversification, and liquidity of
45-21 its corporate assets;
45-22 (B) the general economic conditions;
45-23 (C) the possible effect of inflation or
45-24 deflation;
45-25 (D) the expected tax consequences of the
45-26 investment decisions or strategies;
45-27 (E) the role that each investment or course of
46-1 action plays within the investment portfolio; and
46-2 (F) the expected total return of the portfolio.
46-3 (f) [(g)] A state trust company may invest its secondary
46-4 capital in any type or character of [equity or investment]
46-5 securities subject to the exercise of prudent judgment according to
46-6 the standards provided by Subsection (e) [(f)].
46-7 (g) [(h)] The finance commission may adopt rules to
46-8 administer and carry out this section, including rules to:
46-9 (1) establish limits, requirements, or exemptions
46-10 other than those specified by this section for particular classes
46-11 or categories of investment; or
46-12 (2) limit or expand investment authority for state
46-13 trust companies for particular classes or categories of securities
46-14 or other property.
46-15 SECTION 25. Section 184.103(a), Finance Code, is amended to
46-16 read as follows:
46-17 (a) Except as otherwise provided by this subtitle or rules
46-18 adopted under this subtitle, and subject to the exercise of prudent
46-19 judgment, a state trust company may invest its secondary capital to
46-20 acquire or establish one or more subsidiaries to conduct any
46-21 activity that may lawfully be conducted through the form of
46-22 organization chosen for the subsidiary. The factors to be
46-23 considered by a state trust company in exercise of prudent judgment
46-24 include the factors contained in Section 184.101(e) [184.101(f)].
46-25 SECTION 26. Section 184.104(c), Finance Code, is amended to
46-26 read as follows:
46-27 (c) Subject to Subsections (a) and (b), to Section 184.105,
47-1 and to the exercise of prudent judgment, a state trust company may
47-2 invest its secondary capital in any type or character of investment
47-3 for the purpose of generating income or profit. The factors to be
47-4 considered by a state trust company in exercise of prudent judgment
47-5 include the factors contained in Section 184.101(e) [184.101(f)].
47-6 SECTION 27. Section 184.105, Finance Code, is amended to read
47-7 as follows:
47-8 Sec. 184.105. ENGAGING IN COMMERCE PROHIBITED. (a) Except
47-9 as otherwise provided by this subtitle or rules adopted under this
47-10 subtitle, a state trust company may not invest its funds in trade
47-11 or commerce by buying, selling, or otherwise dealing goods or by
47-12 owning or operating a business not part of the state trust
47-13 business, except as necessary to fulfill a fiduciary obligation to
47-14 a client.
47-15 (b) Under this section, engaging in an approved financial
47-16 activity or an activity incidental or complementary to a financial
47-17 activity, whether as principal or agent, is not considered to be
47-18 engaging in commerce.
47-19 SECTION 28. Section 201.002(a), Finance Code, is amended by
47-20 amending Subdivisions (5), (19), (30), and (40), and adding
47-21 Subdivisions (46) and (47) to read as follows:
47-22 (5) "Bank holding company" has the meaning assigned by
47-23 Section 2(a), Bank Holding Company Act (12 U.S.C. Section 1841(a)),
47-24 and includes a financial [Texas bank] holding company[, an
47-25 out-of-state bank holding company, and a foreign bank holding
47-26 company unless the context requires otherwise].
47-27 (19) "Foreign bank holding company" means a bank
48-1 holding company that is organized under the laws of a country other
48-2 than the United States or a territory or possession of the United
48-3 States, and includes a foreign financial holding company.
48-4 (30) "Out-of-state bank holding company" means a bank
48-5 holding company whose home state is another state, and includes an
48-6 out-of-state financial holding company.
48-7 (40) "Texas bank holding company" means a bank holding
48-8 company whose home state is this state and that is not controlled
48-9 by a bank holding company other than a Texas bank holding company,
48-10 and includes a Texas financial holding company.
48-11 (46) "Financial holding company" means a bank holding
48-12 company that has elected to be treated as a financial holding
48-13 company under 12 U.S.C. Section 1843(l).
48-14 (47) "Functional regulatory agency" means a department
48-15 or agency of this state, another state, the United States, or a
48-16 foreign government with whom the United States currently maintains
48-17 diplomatic relations that regulates and charters, licenses, or
48-18 registers persons engaged in financial activities or activities
48-19 incidental or complementary to financial activities, including
48-20 activities related to banking, insurance, or securities.
48-21 SECTION 29. Sections 201.003(a) and (b), Finance Code, are
48-22 amended to read as follows:
48-23 (a) The finance commission may adopt rules to accomplish the
48-24 purposes of this subtitle, including rules necessary or reasonable
48-25 to:
48-26 (1) implement and clarify this subtitle in a manner
48-27 consistent with and to the extent permitted by applicable federal
49-1 law;
49-2 (2) preserve or protect the safety and soundness of
49-3 banking in this state;
49-4 (3) grant at least the same rights and privileges to
49-5 Texas state banks that are or may be granted to other depository
49-6 institutions;
49-7 (4) recover the cost of maintaining and operating the
49-8 department and the cost of enforcing this subtitle by imposing and
49-9 collecting ratable and equitable fees for supervision and
49-10 regulation, including fees for notices, applications, and
49-11 examinations; and
49-12 (5) facilitate the fair hearing and adjudication of
49-13 matters before the commissioner and the finance commission.
49-14 (b) In adopting rules, the finance commission shall consider
49-15 the need to:
49-16 (1) coordinate with applicable federal law;
49-17 (2) promote a stable banking environment;
49-18 (3) provide the public with convenient, safe, and
49-19 competitive banking services;
49-20 (4) preserve and promote the competitive position
49-21 [parity] of Texas state banks with regard to other depository
49-22 institutions consistent with the safety and soundness of Texas
49-23 state banks and the Texas state bank system; and
49-24 (5) allow for economic development in this state.
49-25 SECTION 30. Section 201.005, Finance Code, is amended to read
49-26 as follows:
49-27 Sec. 201.005. COOPERATIVE AGREEMENTS; FEES. (a) To carry
50-1 out the purposes of this subtitle, to the extent permitted by
50-2 federal law, the commissioner may:
50-3 (1) enter into cooperative, coordinating, or
50-4 information sharing agreements with another bank supervisory
50-5 agency, a functional regulatory agency, or an organization
50-6 affiliated with or representing one or more bank supervisory
50-7 agencies;
50-8 (2) with respect to periodic examination or other
50-9 supervision or investigation, accept reports of examination or
50-10 investigation by, and reports submitted to, another bank
50-11 supervisory agency or functional regulatory agency in lieu of
50-12 conducting examinations or investigations or receiving reports as
50-13 might otherwise be required or permissible under this subtitle;
50-14 (3) enter into contracts with another bank supervisory
50-15 agency or functional regulatory agency having concurrent regulatory
50-16 or supervisory jurisdiction to engage the services of the agency
50-17 for reasonable compensation to assist in connection with the
50-18 commissioner's performance of official duties under this subtitle
50-19 or other law, or to provide services to the agency for reasonable
50-20 compensation in connection with the agency's performance of
50-21 official duties under law, except that Chapter 2254, Government
50-22 Code, does not apply to the contracts;
50-23 (4) enter into joint examinations or joint enforcement
50-24 actions with another bank supervisory agency or functional
50-25 regulatory agency having concurrent regulatory or supervisory
50-26 jurisdiction, except that the commissioner may independently take
50-27 action under Section 201.009 if the commissioner determines that
51-1 the action is necessary to carry out the commissioner's
51-2 responsibilities under this subtitle or to enforce compliance with
51-3 the laws of this state; and
51-4 (5) assess supervisory and examination fees to be paid
51-5 by a state bank, state savings bank, bank holding company, or
51-6 foreign bank in connection with the commissioner's performance of
51-7 duties under this subtitle.
51-8 (b) Supervisory or examination fees assessed by the
51-9 commissioner in accordance with this subtitle may be shared with
51-10 another bank supervisory agency, a functional regulatory agency, or
51-11 an organization affiliated with or representing one or more bank
51-12 supervisory agencies in accordance with an agreement between the
51-13 commissioner and the agency or organization. The commissioner may
51-14 also receive a portion of supervisory or examination fees assessed
51-15 by another bank supervisory agency or functional regulatory agency
51-16 in accordance with an agreement between the commissioner and the
51-17 agency.
51-18 SECTION 31. Section 202.004, Finance Code, is amended to read
51-19 as follows:
51-20 Sec. 202.004. NONBANKING ACQUISITION, ELECTION, OR ACTIVITY
51-21 [OF NONBANKING INSTITUTION]. (a) A bank holding company doing
51-22 business in this state that submits an application, election, or
51-23 notice to the Board of Governors of the Federal Reserve System
51-24 under [regarding an acquisition or activity regulated by] Section
51-25 4, Bank Holding Company Act (12 U.S.C. Section 1843), that involves
51-26 or will involve an office location in this state shall submit to
51-27 the commissioner a copy of the application, election, or notice
52-1 when the application, election, or notice is submitted to the board
52-2 of governors, including a notice or application to acquire a
52-3 nonbanking institution, an election to be treated as a financial
52-4 holding company, or a request, proposal, or application to engage
52-5 in an activity that is or may be a financial activity or an
52-6 activity incidental or complementary to a financial activity. The
52-7 bank holding company shall submit other information reasonably
52-8 requested by the commissioner to determine the manner in which the
52-9 acquisition, election, or activity will directly or indirectly
52-10 affect residents of this state.
52-11 (b) To assist in determining whether to disapprove the
52-12 proposed acquisition, election, or activity, the commissioner may
52-13 hold a public hearing as provided by Section 31.201, regardless of
52-14 whether requested to do so by a person, regarding the proposed
52-15 acquisition, election, or activity and its effect on this state.
52-16 The commissioner shall convene a hearing if the bank holding
52-17 company requests a hearing in writing when it submits the
52-18 application, election, or notice to the commissioner.
52-19 (c) The commissioner shall disapprove the proposed
52-20 acquisition, election, or activity if the commissioner determines
52-21 that the acquisition, election, or activity would be detrimental to
52-22 the public interest as a result of probable adverse effects,
52-23 including undue concentration of resources, decreased or unfair
52-24 competition, conflicts of interest, or unsound banking practices.
52-25 (d) If the commissioner determines to disapprove the
52-26 proposed acquisition, election, or activity, the commissioner may
52-27 prepare and file a response to the application, election, or notice
53-1 with the board of governors and may request that a hearing be held.
53-2 If the board of governors grants the request, the commissioner
53-3 shall appear and present evidence at the hearing regarding the
53-4 reasons the proposed acquisition, election, or activity should be
53-5 denied.
53-6 (e) If the board of governors approves a proposed
53-7 acquisition, election, or activity that the commissioner
53-8 disapproved, the commissioner may accept the decision or seek to
53-9 overturn the decision on appeal as provided by Section 9, Bank
53-10 Holding Company Act (12 U.S.C. Section 1848).
53-11 SECTION 32. Chapter 202, Finance Code, is amended by adding
53-12 Section 202.006 to read as follows:
53-13 Sec. 202.006. FINANCIAL ACTIVITIES. (a) A financial holding
53-14 company that controls a Texas state bank may request a
53-15 determination from the commissioner that an activity not otherwise
53-16 approved or authorized under this chapter, federal law, or other
53-17 law is:
53-18 (1) a financial activity;
53-19 (2) incidental to a financial activity; or
53-20 (3) complementary to a financial activity.
53-21 (b) A request under this section must be in writing and
53-22 identify and define the nature of the activity for which the
53-23 determination is sought. A financial holding company that has
53-24 filed a request for determination with the board of governors may
53-25 designate the copy of the request that is filed with the
53-26 commissioner under Section 202.004(a) as its submission under this
53-27 section. A financial holding company shall submit information
54-1 requested by the commissioner to assist the commissioner in making
54-2 a determination under this section.
54-3 (c) In making a determination under Subsection (a), the
54-4 commissioner shall consider:
54-5 (1) the purposes of this subtitle and the
54-6 Gramm-Leach-Bliley Act (Pub. L. No. 106-102);
54-7 (2) changes or reasonably expected changes in the
54-8 marketplace in which financial holding companies compete;
54-9 (3) changes or reasonably expected changes in the
54-10 technology for delivering financial services; and
54-11 (4) whether the activity is necessary or appropriate
54-12 to allow a financial holding company to:
54-13 (A) compete effectively with another company
54-14 seeking to provide financial services;
54-15 (B) efficiently deliver information and services
54-16 that are financial in nature through the use of technological
54-17 means, including an application necessary to protect the security
54-18 or efficacy of systems for the transmission of data or financial
54-19 transactions; and
54-20 (C) offer customers available or emerging
54-21 technological means for using financial services or for the
54-22 document imaging of data.
54-23 (d) Except as provided by applicable licensing and
54-24 regulatory requirements administered by a functional regulatory
54-25 agency, a request under this section is not a precondition to:
54-26 (1) submitting a similar request to the Board of
54-27 Governors of the Federal Reserve System under 12 U.S.C. Section
55-1 1843(k), subject to Section 202.004; or
55-2 (2) engaging in an activity in this state that the
55-3 board of governors determines to be a financial activity or an
55-4 activity incidental or complementary to a financial activity.
55-5 (e) A determination by the commissioner under this section
55-6 that an activity is a financial activity or an activity incidental
55-7 or complementary to a financial activity does not alter or negate
55-8 applicable licensing and regulatory requirements administered by a
55-9 functional regulatory agency of this state.
55-10 SECTION 33. (a) In accordance with Section 311.031(c),
55-11 Government Code, which gives effect to a substantive amendment
55-12 enacted by the same legislature that codifies the amended statute,
55-13 the text of Sections 181.003(a) and 182.001(b), Finance Code, as
55-14 set out in Sections 19 and 21 of this Act, respectively, give
55-15 effect to the changes made by Chapter 344, Acts of the 76th
55-16 Legislature, Regular Session, 1999.
55-17 (b) To the extent of any conflict, this Act prevails over
55-18 another Act of the 77th Legislature, Regular Session, 2001,
55-19 relating to nonsubstantive additions to and corrections in enacted
55-20 codes.
55-21 SECTION 34. This Act takes effect September 1, 2001.