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.