C.S.H.B. 2238 78(R)    BILL ANALYSIS

C.S.H.B. 2238
By: Paxton
Judicial Affairs
Committee Report (Substituted)


Often, persons wish to allow others to manage a portion of their financial
affairs, but do not wish to grant a formal power of attorney.  For
instance, an elderly person may want to give the ability to pay bills to
an adult child without granting other powers to that child.  In response
to this concern, the 73rd Legislature in 1993 established convenience
accounts.  A convenience signer is a co-signer on such an account, but
does not have an ownership interest in the account.   

There is much confusion in the banking community regarding situations
where there are multiple parties to an account or multiple convenience
signers.  Many believe that current law limits convenience accounts to
one-party accounts only.  Thus, two parents who have a joint account would
be unable to designate a child as a convenience signer for that account.
Similarly, many believe that current law prohibits having two convenience
signers.  In such a situation, a parent would not be able to designate
both of her children as convenience signers. this has proven a source of
confusion and irritation for financial institutions and their customers.   

C.S.H.B. 2238 would clarify the law regarding convenience accounts and
convenience signers to make it clear that it applies to multiple-party
accounts and allows multiple convenience signers. 


It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or


C.S.H.B. 2238 amends the Probate Code to clarify that a convenience
account may be established by one or more parties in the names of the
parties and one or more convenience signers, and that a convenience signer
is not considered to have made a gift of any portion of the account to a
convenience signer.   

The bill also clarifies provisions regarding the liability of financial
institutions for payments made to a convenience signer after the death of
the last surviving party.   

The bill also amends the forms that financial institutions may use to
reflect changes made by this bill.  


September 1, 2003.


The substitute changes the term "cosigner" to "convenience signer" and
deletes provisions of the original made redundant by the substitute.