Texas 2015 - 84th Regular

Texas Senate Bill SB1549 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	84R8547 EES-F
2	2	By: Eltife S.B. No. 1549
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to certain administrative procedures and enforcement
8	8	authority relating to state banks, state trust companies, and bank
9	9	holding companies.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. The heading to Section 31.201, Finance Code, is
12	12	amended to read as follows:
13	13	Sec. 31.201. BANKING COMMISSIONER HEARING; INFORMAL
14	14	DISPOSITION.
15	15	SECTION 2. Section 31.201, Finance Code, is amended by
16	16	adding Subsection (d) to read as follows:
17	17	(d) The banking commissioner may informally dispose of a
18	18	matter within the jurisdiction of and before the banking
19	19	commissioner by consent order, agreed settlement, or default.
20	20	SECTION 3. Subchapter A, Chapter 35, Finance Code, is
21	21	amended by adding Section 35.0001 to read as follows:
22	22	Sec. 35.0001. APPLICABILITY TO BANK SUBSIDIARIES. This
23	23	subchapter applies to a subsidiary of a state bank, a present or
24	24	former officer, director, or employee of a subsidiary, or a
25	25	controlling shareholder or other person participating in the
26	26	affairs of a subsidiary in the same manner as the subchapter applies
27	27	to a state bank, a present or former officer, director, or employee
28	28	of a state bank, or a controlling shareholder or other person
29	29	participating in the affairs of a state bank.
30	30	SECTION 4. Section 35.002, Finance Code, is amended by
31	31	adding Subsection (b-1) to read as follows:
32	32	(b-1) A proposed cease and desist order may require an
33	33	officer, employee, or director of a state bank, or the bank itself
34	34	acting through an authorized person, to cease or desist from a
35	35	violation or other practice or to take affirmative action to
36	36	correct the conditions resulting from a violation or other
37	37	practice, including the payment of restitution or other action that
38	38	the banking commissioner determines is appropriate.
39	39	SECTION 5. Subchapter A, Chapter 35, Finance Code, is
40	40	amended by adding Section 35.0035 to read as follows:
41	41	Sec. 35.0035. REMOVAL OR PROHIBITION ORDERS IN RESPONSE TO
42	42	CERTAIN CRIMINAL OFFENSES. (a) For purposes of this section, a
43	43	person is considered to have been finally convicted of an offense if
44	44	the person's case is not subject to further appellate review and:
45	45	(1) a sentence was imposed on the person;
46	46	(2) the person received probation or community
47	47	supervision, including deferred adjudication community
48	48	supervision; or
49	49	(3) the court deferred final disposition of the
50	50	person's case.
51	51	(b) The banking commissioner has grounds to remove or
52	52	prohibit a present or former officer, director, or employee of a
53	53	state bank from office or employment in, or prohibit a controlling
54	54	shareholder or other person participating in the affairs of a state
55	55	bank from further participation in the affairs of, a state bank or
56	56	any other entity chartered, registered, permitted, or licensed by
57	57	the banking commissioner if the person has been finally convicted
58	58	of a felony offense involving:
59	59	(1) a bank or other financial institution;
60	60	(2) dishonesty; or
61	61	(3) breach of trust.
62	62	(c) If the banking commissioner has grounds for action under
63	63	Subsection (b), the banking commissioner may serve a removal or
64	64	prohibition order, as appropriate, on the person who has been
65	65	finally convicted of a felony offense. The banking commissioner
66	66	shall also serve a copy of the order on any state bank that the
67	67	person is affiliated with at the time of service of the order.
68	68	(d) An order issued under this section becomes effective
69	69	immediately on service and continues in effect unless the order is:
70	70	(1) stayed or terminated by the banking commissioner;
71	71	(2) set aside by the banking commissioner after a
72	72	hearing; or
73	73	(3) stayed or vacated on appeal.
74	74	(e) Not later than the 30th day after the date an order is
75	75	issued under this section, the person against whom the order is
76	76	issued may request in writing a hearing before the banking
77	77	commissioner to show that the person's continued service to a state
78	78	bank or participation in the affairs of a state bank does not, or is
79	79	unlikely to, threaten the interests of the depositors, creditors,
80	80	or shareholders of the state bank or the public confidence in the
81	81	state bank.
82	82	(f) Not later than the 30th day after the date the request
83	83	for a hearing is received under this section, the banking
84	84	commission shall hold the hearing, unless the party requesting the
85	85	hearing requests a later date. At the hearing, the party requesting
86	86	the hearing has the burden of proof.
87	87	(g) After the hearing, the banking commissioner may affirm,
88	88	modify, or set aside, in whole or in part, the order. An order
89	89	affirming or modifying the order is immediately final for purposes
90	90	of enforcement and appeal. The order may be appealed as provided by
91	91	Sections 31.202, 31.203, and 31.204.
92	92	SECTION 6. Subchapter B, Chapter 35, Finance Code, is
93	93	amended by adding Section 35.1001 to read as follows:
94	94	Sec. 35.1001. APPLICABILITY TO BANK SUBSIDIARIES. This
95	95	subchapter applies to a subsidiary of a state bank, a present or
96	96	former officer, director, or employee of a subsidiary, or a
97	97	controlling shareholder or other person participating in the
98	98	affairs of a subsidiary in the same manner as the subchapter applies
99	99	to a state bank, a present or former officer, director, or employee
100	100	of a state bank, or a controlling shareholder or other person
101	101	participating in the affairs of a state bank.
102	102	SECTION 7. The heading to Section 181.201, Finance Code, is
103	103	amended to read as follows:
104	104	Sec. 181.201. BANKING COMMISSIONER HEARING; INFORMAL
105	105	DISPOSITION.
106	106	SECTION 8. Section 181.201, Finance Code, is amended by
107	107	adding Subsection (d) to read as follows:
108	108	(d) The banking commissioner may informally dispose of a
109	109	matter within the jurisdiction of and before the banking
110	110	commissioner by consent order, agreed settlement, or default.
111	111	SECTION 9. Subchapter A, Chapter 185, Finance Code, is
112	112	amended by adding Section 185.0001 to read as follows:
113	113	Sec. 185.0001. APPLICABILITY TO STATE TRUST COMPANY
114	114	SUBSIDIARIES. This subchapter applies to a subsidiary of a state
115	115	trust company, a present or former officer, director, manager,
116	116	managing participant, or employee of a subsidiary, or a controlling
117	117	shareholder or other person participating in the affairs of a
118	118	subsidiary in the same manner as the subchapter applies to a state
119	119	trust company, a present or former officer, director, manager,
120	120	managing participant, or employee of a state trust company, or a
121	121	controlling shareholder or other person participating in the
122	122	affairs of a state trust company.
123	123	SECTION 10. Section 185.002, Finance Code, is amended by
124	124	adding Subsection (b-1) to read as follows:
125	125	(b-1) A proposed cease and desist order may require an
126	126	officer, employee, director, manager, or managing participant of a
127	127	state trust company, or the state trust company itself acting
128	128	through an authorized person, to cease or desist from a violation or
129	129	other practice or to take affirmative action to correct the
130	130	conditions resulting from a violation or other practice, including
131	131	the payment of restitution or other action that the banking
132	132	commissioner determines is appropriate.
133	133	SECTION 11. Section 185.003(a), Finance Code, is amended to
134	134	read as follows:
135	135	(a) The banking commissioner has grounds to remove or
136	136	prohibit a present or former officer, director, manager, managing
137	137	participant, or employee of a state trust company from office or
138	138	employment in, or prohibit a controlling shareholder or participant
139	139	or other person participating in the affairs of a state trust
140	140	company from further participation in the affairs of, the state
141	141	trust company or any other entity chartered, registered, permitted,
142	142	or licensed by the banking commissioner if the banking commissioner
143	143	determines from examination or other credible evidence that:
144	144	(1) the person:
145	145	(A) intentionally committed or participated in
146	146	the commission of an act described by Section 185.002(a) with
147	147	regard to the affairs of a financial institution, as defined by
148	148	Section 201.101;
149	149	(B) violated a final cease and desist order
150	150	issued by a state or federal regulatory agency against the person or
151	151	an entity in which the person is or was an officer, director, or
152	152	employee; or
153	153	(C) made, or caused to be made, false entries in
154	154	the records of a financial institution;
155	155	(2) because of this action by the person:
156	156	(A) the financial institution has suffered or
157	157	will probably suffer financial loss or expense, or other damage;
158	158	(B) the interests of the clients, depositors,
159	159	creditors, or shareholders of the financial institution have been
160	160	or could be prejudiced; or
161	161	(C) the person has received financial gain or
162	162	other benefit by reason of the action, or likely would have if the
163	163	action had not been discovered; and
164	164	(3) that action by the person:
165	165	(A) involves personal dishonesty on the part of
166	166	the person; or
167	167	(B) demonstrates wilful or continuing disregard
168	168	for the safety or soundness of the financial institution.
169	169	SECTION 12. Subchapter A, Chapter 185, Finance Code, is
170	170	amended by adding Section 185.0035 to read as follows:
171	171	Sec. 185.0035. REMOVAL OR PROHIBITION ORDERS IN RESPONSE TO
172	172	CERTAIN CRIMINAL OFFENSES. (a) For purposes of this section, a
173	173	person is considered to have been finally convicted of an offense if
174	174	the person's case is not subject to further appellate review and:
175	175	(1) a sentence was imposed on the person;
176	176	(2) the person received probation or community
177	177	supervision, including deferred adjudication community
178	178	supervision; or
179	179	(3) the court deferred final disposition of the
180	180	person's case.
181	181	(b) The banking commissioner has grounds to remove or
182	182	prohibit a present or former officer, director, manager, managing
183	183	participant, or employee of a state trust company from office or
184	184	employment in, or prohibit a controlling shareholder or participant
185	185	or other person participating in the affairs of a state trust
186	186	company from further participation in the affairs of, the state
187	187	trust company or any other entity chartered, registered, permitted,
188	188	or licensed by the banking commissioner if the person has been
189	189	finally convicted of a felony offense involving:
190	190	(1) a financial institution, as defined by Section
191	191	201.101;
192	192	(2) dishonesty; or
193	193	(3) breach of trust.
194	194	(c) If the banking commissioner has grounds for action under
195	195	Subsection (b), the banking commissioner may serve a removal or
196	196	prohibition order, as appropriate, on the person who has been
197	197	finally convicted of a felony offense. The banking commissioner
198	198	shall also serve a copy of the order on any state trust company that
199	199	the person is affiliated with at the time of service of the order.
200	200	(d) An order issued under this section becomes effective
201	201	immediately on service and continues in effect unless the order is:
202	202	(1) stayed or terminated by the banking commissioner;
203	203	(2) set aside by the banking commissioner after a
204	204	hearing; or
205	205	(3) stayed or vacated on appeal.
206	206	(e) Not later than the 30th day after the date an order is
207	207	issued under this section, the person against whom the order is
208	208	issued may request in writing a hearing before the banking
209	209	commissioner to show that the person's continued service to a state
210	210	trust company or participation in the affairs of a state trust
211	211	company does not, or is unlikely to, threaten the interests of the
212	212	clients, depositors, creditors, or shareholders of the state trust
213	213	company or the public confidence in the state trust company.
214	214	(f) Not later than the 30th day after the date a request for
215	215	a hearing is received under this section, the banking commissioner
216	216	shall hold the hearing, unless the party requesting the hearing
217	217	requests a later date. At the hearing, the party requesting the
218	218	hearing has the burden of proof.
219	219	(g) After the hearing, the banking commissioner may affirm,
220	220	modify, or set aside, in whole or in part, the order. An order
221	221	affirming or modifying the order is immediately final for purposes
222	222	of enforcement and appeal. The order may be appealed as provided by
223	223	Sections 181.202, 181.203, and 181.204.
224	224	SECTION 13. Subchapter B, Chapter 185, Finance Code, is
225	225	amended by adding Section 185.1001 to read as follows:
226	226	Sec. 185.1001. APPLICABILITY TO STATE TRUST COMPANY
227	227	SUBSIDIARIES. This subchapter applies to a subsidiary of a state
228	228	trust company, a present or former officer, director, manager,
229	229	managing participant, or employee of a subsidiary, or a controlling
230	230	shareholder or other person participating in the affairs of a
231	231	subsidiary in the same manner as the subchapter applies to a state
232	232	trust company, a present or former officer, director, manager,
233	233	managing participant, or employee of a state trust company, or a
234	234	controlling shareholder or other person participating in the
235	235	affairs of a state trust company.
236	236	SECTION 14. Section 202.005, Finance Code, is amended by
237	237	adding Subsection (a-1) to read as follows:
238	238	(a-1) The grounds, procedures, and effects of an
239	239	enforcement proceeding brought under this section apply to a bank
240	240	holding company, an officer, director, or employee of a bank
241	241	holding company, or a controlling shareholder or other person
242	242	participating in the affairs of a bank holding company in the same
243	243	manner as the grounds, procedures, and effects apply to a state
244	244	bank, an officer, director, or employee of a state bank, or a
245	245	controlling shareholder or other person participating in the
246	246	affairs of a state bank.
247	247	SECTION 15. This Act takes effect September 1, 2015.