Texas 2015 - 84th Regular

Texas House Bill HB3555 Compare Versions

Version 1 (Old)

Version 2 (New)

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1		-	By: Parker (Senate Sponsor - Eltife) H.B. No. 3555
2		-	(In the Senate - Received from the House May 4, 2015;
3		-	May 4, 2015, read first time and referred to Committee on Business
4		-	and Commerce; May 12, 2015, reported favorably by the following
5		-	vote: Yeas 7, Nays 0; May 12, 2015, sent to printer.)
6		-	Click here to see the committee vote
	1	+	H.B. No. 3555
7	2
8	3
9		-	A BILL TO BE ENTITLED
10	4		AN ACT
11	5		relating to certain administrative procedures and enforcement
12	6		authority relating to state banks, state trust companies, and bank
13	7		holding companies.
14	8		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	9		SECTION 1. The heading to Section 31.201, Finance Code, is
16	10		amended to read as follows:
17	11		Sec. 31.201. BANKING COMMISSIONER HEARING; INFORMAL
18	12		DISPOSITION.
19	13		SECTION 2. Section 31.201, Finance Code, is amended by
20	14		adding Subsection (d) to read as follows:
21	15		(d) The banking commissioner may informally dispose of a
22	16		matter within the jurisdiction of and before the banking
23	17		commissioner by consent order, agreed settlement, or default.
24	18		SECTION 3. Subchapter A, Chapter 35, Finance Code, is
25	19		amended by adding Section 35.0001 to read as follows:
26	20		Sec. 35.0001. APPLICABILITY TO BANK SUBSIDIARIES. This
27	21		subchapter applies to a subsidiary of a state bank, a present or
28	22		former officer, director, or employee of a subsidiary, or a
29	23		controlling shareholder or other person participating in the
30	24		affairs of a subsidiary in the same manner as the subchapter applies
31	25		to a state bank, a present or former officer, director, or employee
32	26		of a state bank, or a controlling shareholder or other person
33	27		participating in the affairs of a state bank.
34	28		SECTION 4. Section 35.002, Finance Code, is amended by
35	29		adding Subsection (b-1) to read as follows:
36	30		(b-1) A proposed cease and desist order may require an
37	31		officer, employee, or director of a state bank, or the bank itself
38	32		acting through an authorized person, to cease or desist from a
39	33		violation or other practice or to take affirmative action to
40	34		correct the conditions resulting from a violation or other
41	35		practice, including the payment of restitution or other action that
42	36		the banking commissioner determines is appropriate.
43	37		SECTION 5. Subchapter A, Chapter 35, Finance Code, is
44	38		amended by adding Section 35.0035 to read as follows:
45	39		Sec. 35.0035. REMOVAL OR PROHIBITION ORDERS IN RESPONSE TO
46	40		CERTAIN CRIMINAL OFFENSES. (a) For purposes of this section, a
47	41		person is considered to have been finally convicted of an offense if
48	42		the person's case is not subject to further appellate review and:
49	43		(1) a sentence was imposed on the person;
50	44		(2) the person received probation or community
51	45		supervision, including deferred adjudication community
52	46		supervision; or
53	47		(3) the court deferred final disposition of the
54	48		person's case.
55	49		(b) The banking commissioner has grounds to remove or
56	50		prohibit a present or former officer, director, or employee of a
57	51		state bank from office or employment in, or prohibit a controlling
58	52		shareholder or other person participating in the affairs of a state
59	53		bank from further participation in the affairs of, a state bank or
60	54		any other entity chartered, registered, permitted, or licensed by
61	55		the banking commissioner if the person has been finally convicted
62	56		of a felony offense involving:
63	57		(1) a bank or other financial institution;
64	58		(2) dishonesty; or
65	59		(3) breach of trust.
66	60		(c) If the banking commissioner has grounds for action under
67	61		Subsection (b), the banking commissioner may serve a removal or
68	62		prohibition order, as appropriate, on the person who has been
69	63		finally convicted of a felony offense. The banking commissioner
70	64		shall also serve a copy of the order on any state bank that the
71	65		person is affiliated with at the time of service of the order.
72	66		(d) An order issued under this section becomes effective
73	67		immediately on service and continues in effect unless the order is:
74	68		(1) stayed or terminated by the banking commissioner;
75	69		(2) set aside by the banking commissioner after a
76	70		hearing; or
77	71		(3) stayed or vacated on appeal.
78	72		(e) Not later than the 30th day after the date an order is
79	73		served under this section, the person against whom the order is
80	74		issued may request in writing a hearing before the banking
81	75		commissioner to show that the person's continued service to a state
82	76		bank or participation in the affairs of a state bank does not, or is
83	77		unlikely to, threaten the interests of the depositors, creditors,
84	78		or shareholders of the state bank or the public confidence in the
85	79		state bank.
86	80		(f) Not later than the 30th day after the date the request
87	81		for a hearing is received under this section, the banking
88	82		commissioner shall hold the hearing, unless the party requesting
89	83		the hearing requests a later date. At the hearing, the party
90	84		requesting the hearing has the burden of proof.
91	85		(g) After the hearing, the banking commissioner may affirm,
92	86		modify, or set aside, in whole or in part, the order. An order
93	87		affirming or modifying the order is immediately final for purposes
94	88		of enforcement and appeal. The order may be appealed as provided by
95	89		Sections 31.202, 31.203, and 31.204.
96	90		SECTION 6. Subchapter B, Chapter 35, Finance Code, is
97	91		amended by adding Section 35.1001 to read as follows:
98	92		Sec. 35.1001. APPLICABILITY TO BANK SUBSIDIARIES. This
99	93		subchapter applies to a subsidiary of a state bank, a present or
100	94		former officer, director, or employee of a subsidiary, or a
101	95		controlling shareholder or other person participating in the
102	96		affairs of a subsidiary in the same manner as the subchapter applies
103	97		to a state bank, a present or former officer, director, or employee
104	98		of a state bank, or a controlling shareholder or other person
105	99		participating in the affairs of a state bank.
106	100		SECTION 7. The heading to Section 181.201, Finance Code, is
107	101		amended to read as follows:
108	102		Sec. 181.201. BANKING COMMISSIONER HEARING; INFORMAL
109	103		DISPOSITION.
110	104		SECTION 8. Section 181.201, Finance Code, is amended by
111	105		adding Subsection (d) to read as follows:
112	106		(d) The banking commissioner may informally dispose of a
113	107		matter within the jurisdiction of and before the banking
114	108		commissioner by consent order, agreed settlement, or default.
115	109		SECTION 9. Subchapter A, Chapter 185, Finance Code, is
116	110		amended by adding Section 185.0001 to read as follows:
117	111		Sec. 185.0001. APPLICABILITY TO STATE TRUST COMPANY
118	112		SUBSIDIARIES. This subchapter applies to a subsidiary of a state
119	113		trust company, a present or former officer, director, manager,
120	114		managing participant, or employee of a subsidiary, or a controlling
121	115		shareholder or other person participating in the affairs of a
122	116		subsidiary in the same manner as the subchapter applies to a state
123	117		trust company, a present or former officer, director, manager,
124	118		managing participant, or employee of a state trust company, or a
125	119		controlling shareholder or other person participating in the
126	120		affairs of a state trust company.
127	121		SECTION 10. Section 185.002, Finance Code, is amended by
128	122		adding Subsection (b-1) to read as follows:
129	123		(b-1) A proposed cease and desist order may require an
130	124		officer, employee, director, manager, or managing participant of a
131	125		state trust company, or the state trust company itself acting
132	126		through an authorized person, to cease or desist from a violation or
133	127		other practice or to take affirmative action to correct the
134	128		conditions resulting from a violation or other practice, including
135	129		the payment of restitution or other action that the banking
136	130		commissioner determines is appropriate.
137	131		SECTION 11. Section 185.003(a), Finance Code, is amended to
138	132		read as follows:
139	133		(a) The banking commissioner has grounds to remove or
140	134		prohibit a present or former officer, director, manager, managing
141	135		participant, or employee of a state trust company from office or
142	136		employment in, or prohibit a controlling shareholder or participant
143	137		or other person participating in the affairs of a state trust
144	138		company from further participation in the affairs of, the state
145	139		trust company or any other entity chartered, registered, permitted,
146	140		or licensed by the banking commissioner if the banking commissioner
147	141		determines from examination or other credible evidence that:
148	142		(1) the person:
149	143		(A) intentionally committed or participated in
150	144		the commission of an act described by Section 185.002(a) with
151	145		regard to the affairs of a financial institution, as defined by
152	146		Section 201.101;
153	147		(B) violated a final cease and desist order
154	148		issued by a state or federal regulatory agency against the person or
155	149		an entity in which the person is or was an officer, director, or
156	150		employee; or
157	151		(C) made, or caused to be made, false entries in
158	152		the records of a financial institution;
159	153		(2) because of this action by the person:
160	154		(A) the financial institution has suffered or
161	155		will probably suffer financial loss or expense, or other damage;
162	156		(B) the interests of the clients, depositors,
163	157		creditors, or shareholders of the financial institution have been
164	158		or could be prejudiced; or
165	159		(C) the person has received financial gain or
166	160		other benefit by reason of the action, or likely would have if the
167	161		action had not been discovered; and
168	162		(3) that action by the person:
169	163		(A) involves personal dishonesty on the part of
170	164		the person; or
171	165		(B) demonstrates wilful or continuing disregard
172	166		for the safety or soundness of the financial institution.
173	167		SECTION 12. Subchapter A, Chapter 185, Finance Code, is
174	168		amended by adding Section 185.0035 to read as follows:
175	169		Sec. 185.0035. REMOVAL OR PROHIBITION ORDERS IN RESPONSE TO
176	170		CERTAIN CRIMINAL OFFENSES. (a) For purposes of this section, a
177	171		person is considered to have been finally convicted of an offense if
178	172		the person's case is not subject to further appellate review and:
179	173		(1) a sentence was imposed on the person;
180	174		(2) the person received probation or community
181	175		supervision, including deferred adjudication community
182	176		supervision; or
183	177		(3) the court deferred final disposition of the
184	178		person's case.
185	179		(b) The banking commissioner has grounds to remove or
186	180		prohibit a present or former officer, director, manager, managing
187	181		participant, or employee of a state trust company from office or
188	182		employment in, or prohibit a controlling shareholder or participant
189	183		or other person participating in the affairs of a state trust
190	184		company from further participation in the affairs of, the state
191	185		trust company or any other entity chartered, registered, permitted,
192	186		or licensed by the banking commissioner if the person has been
193	187		finally convicted of a felony offense involving:
194	188		(1) a financial institution, as defined by Section
195	189		201.101;
196	190		(2) dishonesty; or
197	191		(3) breach of trust.
198	192		(c) If the banking commissioner has grounds for action under
199	193		Subsection (b), the banking commissioner may serve a removal or
200	194		prohibition order, as appropriate, on the person who has been
201	195		finally convicted of a felony offense. The banking commissioner
202	196		shall also serve a copy of the order on any state trust company that
203	197		the person is affiliated with at the time of service of the order.
204	198		(d) An order issued under this section becomes effective
205	199		immediately on service and continues in effect unless the order is:
206	200		(1) stayed or terminated by the banking commissioner;
207	201		(2) set aside by the banking commissioner after a
208	202		hearing; or
209	203		(3) stayed or vacated on appeal.
210	204		(e) Not later than the 30th day after the date an order is
211	205		served under this section, the person against whom the order is
212	206		issued may request in writing a hearing before the banking
213	207		commissioner to show that the person's continued service to a state
214	208		trust company or participation in the affairs of a state trust
215	209		company does not, or is unlikely to, threaten the interests of the
216	210		clients, depositors, creditors, or shareholders of the state trust
217	211		company or the public confidence in the state trust company.
218	212		(f) Not later than the 30th day after the date a request for
219	213		a hearing is received under this section, the banking commissioner
220	214		shall hold the hearing, unless the party requesting the hearing
221	215		requests a later date. At the hearing, the party requesting the
222	216		hearing has the burden of proof.
223	217		(g) After the hearing, the banking commissioner may affirm,
224	218		modify, or set aside, in whole or in part, the order. An order
225	219		affirming or modifying the order is immediately final for purposes
226	220		of enforcement and appeal. The order may be appealed as provided by
227	221		Sections 181.202, 181.203, and 181.204.
228	222		SECTION 13. Subchapter B, Chapter 185, Finance Code, is
229	223		amended by adding Section 185.1001 to read as follows:
230	224		Sec. 185.1001. APPLICABILITY TO STATE TRUST COMPANY
231	225		SUBSIDIARIES. This subchapter applies to a subsidiary of a state
232	226		trust company, a present or former officer, director, manager,
233	227		managing participant, or employee of a subsidiary, or a controlling
234	228		shareholder or other person participating in the affairs of a
235	229		subsidiary in the same manner as the subchapter applies to a state
236	230		trust company, a present or former officer, director, manager,
237	231		managing participant, or employee of a state trust company, or a
238	232		controlling shareholder or other person participating in the
239	233		affairs of a state trust company.
240	234		SECTION 14. Section 202.005, Finance Code, is amended by
241	235		adding Subsection (a-1) to read as follows:
242	236		(a-1) The grounds, procedures, and effects of an
243	237		enforcement proceeding brought under this section apply to a bank
244	238		holding company, an officer, director, or employee of a bank
245	239		holding company, or a controlling shareholder or other person
246	240		participating in the affairs of a bank holding company in the same
247	241		manner as the grounds, procedures, and effects apply to a state
248	242		bank, an officer, director, or employee of a state bank, or a
249	243		controlling shareholder or other person participating in the
250	244		affairs of a state bank.
251	245		SECTION 15. This Act takes effect September 1, 2015.
252		-	* * * * *
	246	+	______________________________ ______________________________
	247	+	President of the Senate Speaker of the House
	248	+	I certify that H.B. No. 3555 was passed by the House on April
	249	+	30, 2015, by the following vote: Yeas 138, Nays 1, 1 present, not
	250	+	voting.
	251	+	______________________________
	252	+	Chief Clerk of the House
	253	+	I certify that H.B. No. 3555 was passed by the Senate on May
	254	+	20, 2015, by the following vote: Yeas 31, Nays 0.
	255	+	______________________________
	256	+	Secretary of the Senate
	257	+	APPROVED: _____________________
	258	+	Date
	259	+	_____________________
	260	+	Governor