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78R630 ATP-D
By: Wise H.B. No. 56
A BILL TO BE ENTITLED
AN ACT
relating to the disclosure of a customer's personal information by
a financial institution.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by
adding Chapter 278 to read as follows:
CHAPTER 278. DISCLOSURE OF CUSTOMER INFORMATION
Sec. 278.001. DEFINITIONS. In this chapter:
(1) "Customer" means:
(A) a person who has transacted or is transacting
business with, or has used or is using the services of, a financial
institution; or
(B) a person for whom a financial institution has
acted as a fiduciary with respect to trust property.
(2) "Customer information" means:
(A) an original or a copy of a record held by a
financial institution relating to a customer's relationship with
the financial institution; or
(B) any information derived from a record
described by Paragraph (A).
(3) "Financial institution" has the meaning assigned
by Section 201.101.
(4) "Financial institution regulatory agency" means
the:
(A) Federal Deposit Insurance Corporation;
(B) National Credit Union Administration;
(C) Board of Governors of the Federal Reserve
System;
(D) Office of the Comptroller of the Currency;
(E) Texas Department of Banking;
(F) Savings and Loan Department;
(G) Credit Union Department; or
(H) Federal Housing Finance Board.
(5) "Law enforcement agency" means the Department of
Public Safety or a local police or sheriff department.
Sec. 278.002. EXEMPTIONS. (a) This chapter does not apply
to:
(1) the preparation, examination, handling, or
maintenance of customer information by an officer, employee, or
agent of the financial institution that has custody of the
customer's information;
(2) the examination of customer information by an
accountant performing an audit for the financial institution that
has custody of the customer's information;
(3) the examination of customer information by, or the
furnishing of customer information to, an officer, employee, or
agent of a financial institution regulatory agency for use only in
the exercise of that person's duties;
(4) the publication of data derived from customer
information that cannot be identified to a particular customer or
account;
(5) an act required of the financial institution by
the Internal Revenue Code;
(6) a disclosure authorized under Title 1, Business &
Commerce Code, concerning the dishonor of a negotiable instrument;
(7) the exchange in the regular course of business of
customer information relating to a customer's credit between a
financial institution and another financial institution or
commercial entity, directly or through a consumer reporting agency;
(8) the examination of customer information by a
governmental or law enforcement agency for purposes of verifying
information necessary in a licensing process under state law, if
the agency obtains consent to the disclosure from the person
seeking the license and the customer before examining the
customer's information;
(9) the compelled discovery of customer information
under Section 59.006;
(10) the disclosure of customer information by a
financial institution to which Section 59.006 does not apply to a
law enforcement or governmental agency in response to a warrant,
court order, or subpoena, including an administrative subpoena
issued under a law of this state, another state, or the United
States;
(11) the disclosure by a financial institution to any
other financial institution or other entity that controls, is
controlled by, or is under common control with the financial
institution; or
(12) the disclosure of customer information to a
governmental agency to satisfy any reporting requirement imposed on
the financial institution under other law.
(b) An entity that receives customer information under
Subsection (a)(11) shall comply with this chapter as if the entity
were a financial institution to which this chapter applies.
Sec. 278.003. DISCLOSURE OF CUSTOMER INFORMATION
PROHIBITED. A financial institution may not disclose customer
information to any person, except as provided by this chapter.
Sec. 278.004. CONSENT TO DISCLOSURE. (a) A customer may
authorize a financial institution to disclose the customer's
information to any person.
(b) A customer's consent must be in writing and signed by
the customer. The consent may specify:
(1) the time during which the consent is effective;
(2) the customer information that may be disclosed;
and
(3) the persons to whom disclosure may be made.
(c) A financial institution may not require a customer's
consent to disclosure of the customer's information as a condition
of doing business with the financial institution. A consent or
waiver obtained from a customer as a condition of doing business
with a financial institution is not valid.
Sec. 278.005. DISCLOSURE OF CUSTOMER INFORMATION
AUTHORIZED: UNLAWFUL ACTIVITY OR FRAUD. (a) A financial
institution may initiate contact with and disclose customer
information to a law enforcement agency if the financial
institution reasonably believes that the customer to whom the
disclosed information relates is engaged in unlawful activity or is
defrauding the financial institution.
(b) The burden is on the financial institution to show that
a disclosure made under this section was reasonable at the time the
disclosure was made. The conviction of the customer for the offense
or the admission by the customer that the customer committed the
offense for which the financial institution disclosed the
information is conclusive proof of the reasonableness of the
financial institution's disclosure for purposes of this
subsection.
Sec. 278.006. REIMBURSEMENT OF COSTS. (a) A financial
institution that assembles or provides customer information may
require the person requesting the information to pay a fee for the
reimbursement of reasonable and necessary costs incurred by the
financial institution in assembling or providing the information.
(b) A financial institution shall deliver the customer
information as soon as practicable notwithstanding any dispute
concerning the amount of reimbursement due under this section.
(c) A financial institution may bring an action for recovery
of reimbursement under this section.
Sec. 278.007. LIABILITY. A person is liable to a customer
for an intentional violation of this chapter in an amount equal to
the greater of:
(1) $1,000; or
(2) actual damages caused by the disclosure of the
customer information.
SECTION 2. This Act takes effect September 1, 2003.