SRC-MSY S.B. 625 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 625
78R2000 ATP-DBy: Shapleigh
State Affairs
3/12/2003
As Filed


DIGEST AND PURPOSE 

Current Texas law prohibits any bank merger or acquisition that would
result in a single institution and its affiliates having control over
twenty percent or more of the total deposits in the state.  As proposed,
S.B. 625 further limits a bank's ability to grow through mergers and
acquisitions by decreasing the percentage of total deposits which a bank
may control following a merger or acquisition from twenty percent to
fifteen percent. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Provides that the legislature's intent in limiting the amount
of deposits that a financial institution may control as a result of a
merger or acquisition is to ensure access to financial services throughout
the state and to stimulate competition and increase financial markets. 

SECTION 2.  Amends Section 32.304(a), Finance Code, to prohibit a merger
under this subchapter if consummation of the transaction would give the
resulting state bank and its affiliates control over 15 percent or more,
rather than 20 percent or more, of the total amount of deposits in this
state held by all insured depository institutions in this state. 

SECTION 3.  Amends Section 32.406(a), Finance Code, to prohibit a purchase
of assets under Section 32.401 if consummation of the transaction would
give the acquiring state bank and its affiliates control over 15 percent
or more, rather than 20 percent or more, of the total amount of deposits
in this state held by all insured depository institutions in this state. 

SECTION 4.  Amends Section 202.002(a), Finance Code, to prohibit the
banking commissioner from approving an acquisition if consummation of the
transaction would give the applicant and its affiliates control over 15
percent or more, rather than 20 percent or more, of the total amount of
deposits in this state held by depository institutions in this state. 

SECTION 5.  Amends Section 203.004(a), Finance Code, to prohibit an
interstate merger transaction if consummation of the transaction would
give the resulting bank its affiliates control over 15 percent or more,
rather than 20 percent or more, of the total amount of deposits in this
state held by all depository institutions in this state. 

SECTION 6.  Effective date: September 1, 2003.