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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of banks and trust companies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 31.002(a), Finance Code, is amended by |
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adding Subdivision (55-a) to read as follows: |
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(55-a) "Third-party service provider" means a person, |
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company, or other legal entity that: |
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(A) provides data processing services; |
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(B) performs activities in support of the |
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provision of financial services, including lending, transferring |
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funds, fiduciary activities, trading activities, and deposit |
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taking activities; |
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(C) provides Internet-related services, |
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including web services, processing electronic bill payments, |
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developing and maintaining mobile applications, system and |
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software development and maintenance, and security monitoring; or |
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(D) performs activities relating to the business |
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of banking. |
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SECTION 2. Sections 31.107(a) and (b), Finance Code, are |
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amended to read as follows: |
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(a) The banking commissioner may regulate and examine, to |
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the same extent as if the services or activities were performed by a |
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state bank on its own premises: |
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(1) the activities of a state bank affiliate; and |
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(2) the [performance of data processing, electronic
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fund transfers, or other bank] services or activities of a |
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third-party service provider that a state bank or state bank |
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affiliate has contracted for or otherwise arranged to be performed |
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on behalf of the [a] state bank or state bank affiliate [by a
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third-party contractor, other than a national bank]. |
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(b) The banking commissioner may collect a fee from an |
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examined third-party service provider [contractor] or affiliate in |
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connection with each examination to cover the cost of the |
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examination or may collect that fee from the state banks that use |
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the examined third-party service provider [contractor]. |
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SECTION 3. Section 31.301(a), Finance Code, is amended to |
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read as follows: |
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(a) Except as expressly provided otherwise by this |
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subtitle, Chapter 11 or 12, or a rule adopted under this subtitle, |
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the following are confidential and may not be disclosed by the |
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banking commissioner or an employee of the department: |
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(1) information directly or indirectly obtained by the |
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department in any manner, including an application or examination, |
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concerning the financial condition or business affairs of a |
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financial institution, [or] a present, former, or prospective |
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shareholder, officer, director, or affiliate of a financial |
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institution, or a third-party service provider of a financial |
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institution or its affiliate, other than information in a published |
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statement or in the public portion of a call report or profit and |
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loss statement; and |
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(2) all related files and records of the department. |
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SECTION 4. Subchapter D, Chapter 31, Finance Code, is |
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amended by adding Section 31.3015 to read as follows: |
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Sec. 31.3015. DISCLOSURE TO STATE BANKS. The banking |
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commissioner may disclose to a state bank information about an |
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affiliate or third-party service provider of the state bank. |
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SECTION 5. Section 33.106, Finance Code, is amended to read |
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as follows: |
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Sec. 33.106. OFFICERS. (a) The board shall annually |
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appoint the officers of the bank, who serve at the will of the |
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board. Unless the banking commissioner consents otherwise in |
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writing, a person may not serve as an officer of the state bank if: |
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(1) the person is the subject of an order described by |
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Section 35.007(a); or |
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(2) the person has been convicted of a felony. |
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(b) The bank must have a principal executive officer |
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primarily responsible for the execution of board policies and |
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operation of the bank and an officer responsible for the |
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maintenance and storage of all corporate books and records of the |
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bank and for required attestation of signatures. Those positions |
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may not be held by the same person. The board may appoint other |
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officers of the bank as the board considers necessary. |
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SECTION 6. Section 35.007(a), Finance Code, is amended to |
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read as follows: |
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(a) Except as otherwise provided by law, without the prior |
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written approval of the banking commissioner, a person subject to a |
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final and enforceable removal or prohibition order issued by the |
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banking commissioner, or by another state, federal, or foreign |
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financial institution regulatory agency, may not: |
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(1) serve as a director, officer, or employee of a |
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state bank, state [or] trust company, or holding company of a state |
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bank, or as a director, officer, or employee with financial |
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responsibility of any other entity chartered, registered, |
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permitted, or licensed by the banking commissioner under the laws |
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of this state; |
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(2) directly or indirectly participate in any manner |
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in the management of such an entity; |
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(3) directly or indirectly vote for a director of such |
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an entity; or |
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(4) solicit, procure, transfer, attempt to transfer, |
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vote, or attempt to vote a proxy, consent, or authorization with |
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respect to voting rights in such an entity. |
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SECTION 7. Section 35.101, Finance Code, is amended by |
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amending Subsection (c) and adding Subsection (d) to read as |
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follows: |
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(c) Subject to Subsection (d), a [A] supervisor serves until |
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the earlier of: |
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(1) the expiration of the period stated in the order of |
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supervision; or |
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(2) the date the banking commissioner determines that |
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the requirements for abatement of the order have been satisfied. |
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(d) The banking commissioner may terminate an order of |
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supervision at any time. |
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SECTION 8. Section 35.206(a), Finance Code, is amended to |
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read as follows: |
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(a) On certification by the banking commissioner, a book, |
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record, paper, or document produced or testimony taken as provided |
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by Section 35.203 [35.204] and held by the department is admissible |
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as evidence in any case without prior proof of its correctness and |
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without other proof. The certified book, record, document, or |
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paper, or a certified copy, is prima facie evidence of the facts it |
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contains. |
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SECTION 9. Section 181.002(a), Finance Code, is amended by |
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adding Subdivision (47-b) and amending Subdivision (49) to read as |
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follows: |
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(47-b) "Third-party service provider" means a person, |
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company, or other legal entity that: |
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(A) provides data processing services; |
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(B) performs activities in support of the |
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provision of financial services, including lending, transferring |
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funds, fiduciary activities, trading activities, and deposit |
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|
taking activities; |
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(C) provides Internet-related services, |
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including web services, processing electronic bill payments, |
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developing and maintaining mobile applications, system and |
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software development and maintenance, and security monitoring; or |
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(D) performs activities relating to the trust |
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business. |
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(49) "Trust business" means the business of a company |
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holding itself out to the public as a fiduciary for hire or |
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compensation to hold or administer accounts. The term includes: |
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(A) the business of a trustee or custodian of an |
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individual retirement account described by Section 408(a), |
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Internal Revenue Code of 1986; and |
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(B) the business of an administrator or servicer |
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of individual retirement accounts described by Section 408(a), |
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Internal Revenue Code of 1986, who possesses or controls any |
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assets, including cash, of those accounts and who makes the |
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administrator's or servicer's services available to the public for |
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hire or compensation. |
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SECTION 10. Section 181.106, Finance Code, is amended to |
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read as follows: |
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Sec. 181.106. REGULATION AND EXAMINATION OF RELATED |
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ENTITIES. (a) The banking commissioner may regulate and examine, |
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to the same extent as if the services or activities were performed |
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by a state trust company on its own premises: |
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(1) the activities of a state trust company affiliate; |
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and |
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(2) the [performance of data processing, electronic
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fund transfers, or other] services or activities of a third-party |
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service provider that a state trust company or state trust company |
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affiliate has contracted for or otherwise arranged to be performed |
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on behalf of the [a] state trust company or state trust company |
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affiliate [by a third-party contractor]. |
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(b) The banking commissioner may collect a fee from an |
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examined third-party service provider or affiliate in connection |
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with each examination [the state trust company] to cover the cost of |
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the examination or may collect that fee from the state trust |
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companies that use the examined third-party service provider. |
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SECTION 11. Section 181.301(a), Finance Code, is amended to |
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read as follows: |
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(a) Except as expressly provided otherwise by this subtitle |
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or a rule adopted under this subtitle [Section 181.003(a)(1)], the |
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following are confidential and may not be disclosed by the banking |
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commissioner or an employee of the department: |
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(1) information directly or indirectly obtained by the |
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department in any manner, including through an application or |
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examination, concerning the financial condition or business |
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affairs of a state trust company, [or] a present, former, or |
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prospective shareholder, participant, officer, director, manager, |
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or affiliate of the state trust company, or a third-party service |
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provider of the state trust company or its affiliate, other than the |
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public portions of a report of condition or income statement; and |
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(2) each related file or record of the department. |
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SECTION 12. Subchapter D, Chapter 181, Finance Code, is |
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amended by adding Section 181.3015 to read as follows: |
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Sec. 181.3015. DISCLOSURE TO STATE TRUST COMPANIES. The |
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banking commissioner may disclose to a state trust company |
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information about an affiliate or third-party service provider of |
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the state trust company. |
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SECTION 13. Section 182.021, Finance Code, is amended to |
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read as follows: |
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Sec. 182.021. ACTIVITIES NOT REQUIRING CHARTER. Subject to |
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Subchapter C, Chapter 187, a company does not engage in the trust |
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business in a manner requiring a state charter by: |
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(1) acting in a manner authorized by law and in the |
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scope of authority as an agent of a trust institution; |
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(2) rendering a service customarily performed as an |
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attorney in a manner approved and authorized by the Supreme Court of |
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Texas or State Bar of Texas; |
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(3) acting as trustee under a deed of trust made only |
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as security for the payment of money or for the performance of |
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another act; |
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(4) conducting business as a trust institution if the |
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exercise of fiduciary powers in this state by the trust institution |
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is not otherwise prohibited by law; |
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(5) engaging in a business regulated by the Office of |
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Consumer Credit Commissioner, except as limited by rules adopted by |
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the finance commission; |
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(6) receiving and distributing rents and proceeds of |
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sale as a licensed real estate broker on behalf of a principal in a |
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manner authorized by the Texas Real Estate Commission; |
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(7) engaging in a securities transaction or providing |
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an investment advisory service as a licensed and registered dealer, |
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salesman, or advisor to the extent that the activity is regulated by |
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the State Securities Board or the Securities and Exchange |
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Commission; |
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(8) engaging in the sale and administration of an |
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insurance product by an insurance company or agent authorized or |
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licensed by the Texas Department of Insurance to the extent that the |
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activity is regulated by the Texas Department of Insurance; |
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(9) engaging in the lawful sale of prepaid funeral |
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benefits under a permit issued by the banking commissioner under |
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Chapter 154; |
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(10) engaging in the lawful business of a perpetual |
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care cemetery corporation under Chapter 712, Health and Safety |
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Code; |
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(11) engaging as a principal in the money services |
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business under a license issued by the banking commissioner under |
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Chapter 151; |
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(12) acting as trustee under a voting trust as |
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provided by Section 6.251, Business Organizations Code; |
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(13) acting as trustee by a public, private, or |
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independent institution of higher education or a university system, |
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as defined by Section 61.003, Education Code, including an |
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affiliated foundation or corporation of such an institution or |
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system acting as trustee as provided by the Education Code; |
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(14) engaging in another activity expressly excluded |
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from the application of this subtitle by rule of the finance |
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commission; |
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(15) rendering services customarily performed by a |
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certified accountant in a manner authorized by the Texas State |
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Board of Public Accountancy; |
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(16) serving as trustee of a charitable trust as |
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provided by Section 2.106, Business Organizations Code; |
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(17) performing escrow or settlement services if |
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licensed or authorized under Title 11, Insurance Code; |
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(18) acting as a qualified intermediary in a tax |
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deferred exchange under Section 1031, Internal Revenue Code of |
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1986, and applicable regulations; [or] |
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(19) providing permitted services at a trust |
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representative office established in this state pursuant to |
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Subchapter C, Chapter 187; or |
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(20) acting as a trustee or custodian approved by the |
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Internal Revenue Service under 26 C.F.R. Section 1.408-2(e) of an |
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individual retirement account described by Section 408(a), |
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Internal Revenue Code of 1986. |
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SECTION 14. Section 183.106(a), Finance Code, is amended to |
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read as follows: |
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(a) The board shall annually appoint the officers of the |
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state trust company, who serve at the will of the board. Unless the |
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banking commissioner consents otherwise in writing, a person may |
|
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not serve as an officer of a state trust company if: |
|
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(1) the person is the subject of an order described by |
|
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Section 185.007(a); |
|
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(2) the person has been convicted of a felony; or |
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(3) the person has violated, with respect to a trust |
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under which the state trust company has fiduciary responsibility, |
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Section 113.052 or 113.053(a), Property Code, relating to loan of |
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trust funds and purchase or sale of trust property by the trustee, |
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and the violation has not been corrected. |
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SECTION 15. Section 185.007(a), Finance Code, is amended to |
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read as follows: |
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(a) Except as provided by other law, without the prior |
|
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written approval of the banking commissioner, a person subject to a |
|
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final and enforceable removal or prohibition order issued by the |
|
|
banking commissioner, or by another state, federal, or foreign |
|
|
financial institution regulatory agency, may not: |
|
|
(1) serve as a director, officer, or employee of a |
|
|
state trust company, [or] state bank, or holding company of a state |
|
|
bank, or as a director, officer, or employee with financial |
|
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responsibility of any other entity chartered, registered, |
|
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permitted, or licensed by the banking commissioner under the laws |
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of this state while the order is in effect; |
|
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(2) directly or indirectly participate in any manner |
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in the management of such an entity; |
|
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(3) directly or indirectly vote for a director of such |
|
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an entity; or |
|
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(4) solicit, procure, transfer, attempt to transfer, |
|
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vote, or attempt to vote a proxy, consent, or authorization with |
|
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respect to voting rights in such an entity. |
|
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SECTION 16. Section 185.101, Finance Code, is amended by |
|
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amending Subsection (c) and adding Subsection (d) to read as |
|
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follows: |
|
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(c) Subject to Subsection (d), the [The] supervisor serves |
|
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until the earlier of: |
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(1) the expiration of the period stated in the order of |
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supervision; or |
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(2) the date the banking commissioner determines that |
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the requirements for abatement of the order have been satisfied. |
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(d) The banking commissioner may terminate an order of |
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supervision at any time. |
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SECTION 17. This Act takes effect September 1, 2017. |