82R12668 KFF-F
By: Orr H.B. No. 3274
A BILL TO BE ENTITLED
AN ACT
relating to the use of proceeds of an extension of credit as
collateral for the extension of credit.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Chapter 276, Finance Code, is
amended to read as follows:
CHAPTER 276. FINANCIAL INSTITUTION AND OTHER LENDER ACCOUNTS
SECTION 2. The heading to Section 276.003, Finance Code, is
amended to read as follows:
Sec. 276.003. USE OF PROCEEDS OF EXTENSION OF CREDIT AS
COLLATERAL [FOR FINANCIAL INSTITUTION ACCOUNT].
SECTION 3. Section 276.003, Finance Code, is amended by
amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) An obligor may use proceeds of an extension of credit
made by a financial institution or other lender [for business,
commercial, investment, or similar purposes] to establish
collateral for the extension of credit by:
(1) making deposits;
(2) purchasing certificates of deposit; or
(3) establishing other accounts:
(A) at the financial institution; or
(B) if the extension of credit is made by a lender
other than a financial institution, with the lender or with a
financial institution in accordance with Subsection (a-1).
(a-1) If the extension of credit is made by a lender other
than a financial institution, the obligor must have the contractual
right to, on request:
(1) use the collateral to repay the extension of
credit; and
(2) to the extent the collateral amount exceeds the
outstanding balance of the extension of credit, have that amount
deposited and maintained in an account at a financial institution.
SECTION 4. This Act takes effect September 1, 2011.