79R7807 HLT-D


By:  Giddings                                                     H.B. No. 2899



A BILL TO BE ENTITLED

AN ACT

relating to requiring a financial institution to notify check 
verification entities when a customer reports checks stolen; 
providing a civil penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter D, Chapter 35, Business & Commerce 
Code, is amended by adding Section 35.595 to read as follows:
	Sec. 35.595.  NOTIFICATION BY FINANCIAL INSTITUTION 
REQUIRED.  (a)  In this section:
		(1)  "Check verification" means a determination of 
whether the issuer of a check or similar sight order:
			(A)  has sufficient funds in or on deposit with 
the bank or other drawee for the payment in full of the check or 
order and all other checks or orders then outstanding; or
			(B)  has a history of issuing checks or other 
sight orders for which the issuer does not have sufficient funds in 
or on deposit with the bank or other drawee for the payment in full 
of the check or order and all other checks or orders then 
outstanding.
		(2)  "Check verification entity" means a business 
entity that provides check verification services to businesses in 
this state.
		(3)  "Financial institution" means a bank, savings 
association, savings bank, or credit union maintaining an office, 
branch, or agency office in this state.
	(b)  A financial institution shall notify each check 
verification entity, of which the financial institution has actual 
knowledge, if the financial institution is notified by a customer 
that the customer's unused checks were stolen and the customer 
presents to the financial institution:
		(1)  a copy of a police report, investigative report, 
or complaint concerning the alleged theft of the customer's unused 
checks; and
		(2)  an affidavit signed by the customer under penalty 
of perjury attesting to the theft of the unused checks.
	(c)  If a customer notifies a financial institution of a 
theft of the customer's unused checks and presents to the financial 
institution the information required by Subsection (b), the 
financial institution shall notify each check verification entity 
not later than 48 hours after the customer presents the information 
to the financial institution.
	(d)  The notification given by a financial institution under 
Subsection (b) must include the name of the customer who reported 
the theft and the allegation of theft by the customer.
	(e)  A financial institution that violates Subsection (b) is 
liable to the state for a civil penalty of up to $1,000.  The 
attorney general may sue to collect the penalty.
	(f)  The attorney general may recover reasonable expenses 
incurred in obtaining a civil penalty under this section, including 
court costs, reasonable attorney's fees, investigative costs, 
witness fees, and deposition expenses.
	SECTION 2.  This Act takes effect September 1, 2005.                           


COMMITTEE AMENDMENT NO. 1
	Amend H.B. No. 2899 by striking page 2, lines 5-11, and 
substituting:        

that the customer's unused checks were stolen and the customer:        
	(1)  presents to the financial institution:                             
		(A)  a copy of a police report, investigative report, 
or complaint concerning the alleged theft of the customer's unused 
checks; and
		(B)  an affidavit signed by the customer under penalty 
of perjury attesting to the theft of the unused checks; and
	(2)  agrees to pay reasonable charges.                                  

                                                                         Bohac