Texas 2017 - 85th Regular

Texas House Bill HB2822 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	85R20222 EES-F
2	2	By: Dean H.B. No. 2822
3	3	Substitute the following for H.B. No. 2822:
4	4	By: Holland C.S.H.B. No. 2822
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the regulation of banks and trust companies.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 31.002(a), Finance Code, is amended by
12	12	adding Subdivision (55-a) to read as follows:
13	13	(55-a) "Third-party service provider" means a person,
14	14	company, or other legal entity that:
15	15	(A) provides data processing services;
16	16	(B) performs activities in support of the
17	17	provision of financial services, including lending, transferring
18	18	funds, fiduciary activities, trading activities, and deposit
19	19	taking activities;
20	20	(C) provides Internet-related services,
21	21	including web services, processing electronic bill payments,
22	22	developing and maintaining mobile applications, system and
23	23	software development and maintenance, and security monitoring; or
24	24	(D) performs activities relating to the business
25	25	of banking.
26	26	SECTION 2. Sections 31.107(a) and (b), Finance Code, are
27	27	amended to read as follows:
28	28	(a) The banking commissioner may regulate and examine, to
29	29	the same extent as if the services or activities were performed by a
30	30	state bank on its own premises:
31	31	(1) the activities of a state bank affiliate; and
32	32	(2) the [performance of data processing, electronic
33	33	fund transfers, or other bank] services or activities of a
34	34	third-party service provider that a state bank or state bank
35	35	affiliate has contracted for or otherwise arranged to be performed
36	36	on behalf of the [a] state bank or state bank affiliate [by a
37	37	third-party contractor, other than a national bank].
38	38	(b) The banking commissioner may collect a fee from an
39	39	examined third-party service provider [contractor] or affiliate in
40	40	connection with each examination to cover the cost of the
41	41	examination or may collect that fee from the state banks that use
42	42	the examined third-party service provider [contractor].
43	43	SECTION 3. Section 31.301(a), Finance Code, is amended to
44	44	read as follows:
45	45	(a) Except as expressly provided otherwise by this
46	46	subtitle, Chapter 11 or 12, or a rule adopted under this subtitle,
47	47	the following are confidential and may not be disclosed by the
48	48	banking commissioner or an employee of the department:
49	49	(1) information directly or indirectly obtained by the
50	50	department in any manner, including an application or examination,
51	51	concerning the financial condition or business affairs of a
52	52	financial institution, [or] a present, former, or prospective
53	53	shareholder, officer, director, or affiliate of a financial
54	54	institution, or a third-party service provider of a financial
55	55	institution or its affiliate, other than information in a published
56	56	statement or in the public portion of a call report or profit and
57	57	loss statement; and
58	58	(2) all related files and records of the department.
59	59	SECTION 4. Subchapter D, Chapter 31, Finance Code, is
60	60	amended by adding Section 31.3015 to read as follows:
61	61	Sec. 31.3015. DISCLOSURE TO STATE BANKS. The banking
62	62	commissioner may disclose to a state bank information about an
63	63	affiliate or third-party service provider of the state bank.
64	64	SECTION 5. Section 33.106, Finance Code, is amended to read
65	65	as follows:
66	66	Sec. 33.106. OFFICERS. (a) The board shall annually
67	67	appoint the officers of the bank, who serve at the will of the
68	68	board. Unless the banking commissioner consents otherwise in
69	69	writing, a person may not serve as an officer of the state bank if:
70	70	(1) the person is the subject of an order described by
71	71	Section 35.007(a); or
72	72	(2) the person has been convicted of a felony.
73	73	(b) The bank must have a principal executive officer
74	74	primarily responsible for the execution of board policies and
75	75	operation of the bank and an officer responsible for the
76	76	maintenance and storage of all corporate books and records of the
77	77	bank and for required attestation of signatures. Those positions
78	78	may not be held by the same person. The board may appoint other
79	79	officers of the bank as the board considers necessary.
80	80	SECTION 6. Section 35.007(a), Finance Code, is amended to
81	81	read as follows:
82	82	(a) Except as otherwise provided by law, without the prior
83	83	written approval of the banking commissioner, a person subject to a
84	84	final and enforceable removal or prohibition order issued by the
85	85	banking commissioner, or by another state, federal, or foreign
86	86	financial institution regulatory agency, may not:
87	87	(1) serve as a director, officer, or employee of a
88	88	state bank, state [or] trust company, or holding company of a state
89	89	bank, or as a director, officer, or employee with financial
90	90	responsibility of any other entity chartered, registered,
91	91	permitted, or licensed by the banking commissioner under the laws
92	92	of this state;
93	93	(2) directly or indirectly participate in any manner
94	94	in the management of such an entity;
95	95	(3) directly or indirectly vote for a director of such
96	96	an entity; or
97	97	(4) solicit, procure, transfer, attempt to transfer,
98	98	vote, or attempt to vote a proxy, consent, or authorization with
99	99	respect to voting rights in such an entity.
100	100	SECTION 7. Section 35.101, Finance Code, is amended by
101	101	amending Subsection (c) and adding Subsection (d) to read as
102	102	follows:
103	103	(c) Subject to Subsection (d), a [A] supervisor serves until
104	104	the earlier of:
105	105	(1) the expiration of the period stated in the order of
106	106	supervision; or
107	107	(2) the date the banking commissioner determines that
108	108	the requirements for abatement of the order have been satisfied.
109	109	(d) The banking commissioner may terminate an order of
110	110	supervision at any time.
111	111	SECTION 8. Section 35.206(a), Finance Code, is amended to
112	112	read as follows:
113	113	(a) On certification by the banking commissioner, a book,
114	114	record, paper, or document produced or testimony taken as provided
115	115	by Section 35.203 [35.204] and held by the department is admissible
116	116	as evidence in any case without prior proof of its correctness and
117	117	without other proof. The certified book, record, document, or
118	118	paper, or a certified copy, is prima facie evidence of the facts it
119	119	contains.
120	120	SECTION 9. Section 181.002(a), Finance Code, is amended by
121	121	adding Subdivision (47-b) and amending Subdivision (49) to read as
122	122	follows:
123	123	(47-b) "Third-party service provider" means a person,
124	124	company, or other legal entity that:
125	125	(A) provides data processing services;
126	126	(B) performs activities in support of the
127	127	provision of financial services, including lending, transferring
128	128	funds, fiduciary activities, trading activities, and deposit
129	129	taking activities;
130	130	(C) provides Internet-related services,
131	131	including web services, processing electronic bill payments,
132	132	developing and maintaining mobile applications, system and
133	133	software development and maintenance, and security monitoring; or
134	134	(D) performs activities relating to the trust
135	135	business.
136	136	(49) "Trust business" means the business of a company
137	137	holding itself out to the public as a fiduciary for hire or
138	138	compensation to hold or administer accounts. The term includes:
139	139	(A) the business of a trustee or custodian of an
140	140	individual retirement account described by Section 408(a),
141	141	Internal Revenue Code of 1986; and
142	142	(B) the business of an administrator or servicer
143	143	of individual retirement accounts described by Section 408(a),
144	144	Internal Revenue Code of 1986, who possesses or controls any
145	145	assets, including cash, of those accounts and who makes the
146	146	administrator's or servicer's services available to the public for
147	147	hire or compensation.
148	148	SECTION 10. Section 181.106, Finance Code, is amended to
149	149	read as follows:
150	150	Sec. 181.106. REGULATION AND EXAMINATION OF RELATED
151	151	ENTITIES. (a) The banking commissioner may regulate and examine,
152	152	to the same extent as if the services or activities were performed
153	153	by a state trust company on its own premises:
154	154	(1) the activities of a state trust company affiliate;
155	155	and
156	156	(2) the [performance of data processing, electronic
157	157	fund transfers, or other] services or activities of a third-party
158	158	service provider that a state trust company or state trust company
159	159	affiliate has contracted for or otherwise arranged to be performed
160	160	on behalf of the [a] state trust company or state trust company
161	161	affiliate [by a third-party contractor].
162	162	(b) The banking commissioner may collect a fee from an
163	163	examined third-party service provider or affiliate in connection
164	164	with each examination [the state trust company] to cover the cost of
165	165	the examination or may collect that fee from the state trust
166	166	companies that use the examined third-party service provider.
167	167	SECTION 11. Section 181.301(a), Finance Code, is amended to
168	168	read as follows:
169	169	(a) Except as expressly provided otherwise by this subtitle
170	170	or a rule adopted under this subtitle [Section 181.003(a)(1)], the
171	171	following are confidential and may not be disclosed by the banking
172	172	commissioner or an employee of the department:
173	173	(1) information directly or indirectly obtained by the
174	174	department in any manner, including through an application or
175	175	examination, concerning the financial condition or business
176	176	affairs of a state trust company, [or] a present, former, or
177	177	prospective shareholder, participant, officer, director, manager,
178	178	or affiliate of the state trust company, or a third-party service
179	179	provider of the state trust company or its affiliate, other than the
180	180	public portions of a report of condition or income statement; and
181	181	(2) each related file or record of the department.
182	182	SECTION 12. Subchapter D, Chapter 181, Finance Code, is
183	183	amended by adding Section 181.3015 to read as follows:
184	184	Sec. 181.3015. DISCLOSURE TO STATE TRUST COMPANIES. The
185	185	banking commissioner may disclose to a state trust company
186	186	information about an affiliate or third-party service provider of
187	187	the state trust company.
188	188	SECTION 13. Section 182.021, Finance Code, is amended to
189	189	read as follows:
190	190	Sec. 182.021. ACTIVITIES NOT REQUIRING CHARTER. Subject to
191	191	Subchapter C, Chapter 187, a company does not engage in the trust
192	192	business in a manner requiring a state charter by:
193	193	(1) acting in a manner authorized by law and in the
194	194	scope of authority as an agent of a trust institution;
195	195	(2) rendering a service customarily performed as an
196	196	attorney in a manner approved and authorized by the Supreme Court of
197	197	Texas or State Bar of Texas;
198	198	(3) acting as trustee under a deed of trust made only
199	199	as security for the payment of money or for the performance of
200	200	another act;
201	201	(4) conducting business as a trust institution if the
202	202	exercise of fiduciary powers in this state by the trust institution
203	203	is not otherwise prohibited by law;
204	204	(5) engaging in a business regulated by the Office of
205	205	Consumer Credit Commissioner, except as limited by rules adopted by
206	206	the finance commission;
207	207	(6) receiving and distributing rents and proceeds of
208	208	sale as a licensed real estate broker on behalf of a principal in a
209	209	manner authorized by the Texas Real Estate Commission;
210	210	(7) engaging in a securities transaction or providing
211	211	an investment advisory service as a licensed and registered dealer,
212	212	salesman, or advisor to the extent that the activity is regulated by
213	213	the State Securities Board or the Securities and Exchange
214	214	Commission;
215	215	(8) engaging in the sale and administration of an
216	216	insurance product by an insurance company or agent authorized or
217	217	licensed by the Texas Department of Insurance to the extent that the
218	218	activity is regulated by the Texas Department of Insurance;
219	219	(9) engaging in the lawful sale of prepaid funeral
220	220	benefits under a permit issued by the banking commissioner under
221	221	Chapter 154;
222	222	(10) engaging in the lawful business of a perpetual
223	223	care cemetery corporation under Chapter 712, Health and Safety
224	224	Code;
225	225	(11) engaging as a principal in the money services
226	226	business under a license issued by the banking commissioner under
227	227	Chapter 151;
228	228	(12) acting as trustee under a voting trust as
229	229	provided by Section 6.251, Business Organizations Code;
230	230	(13) acting as trustee by a public, private, or
231	231	independent institution of higher education or a university system,
232	232	as defined by Section 61.003, Education Code, including an
233	233	affiliated foundation or corporation of such an institution or
234	234	system acting as trustee as provided by the Education Code;
235	235	(14) engaging in another activity expressly excluded
236	236	from the application of this subtitle by rule of the finance
237	237	commission;
238	238	(15) rendering services customarily performed by a
239	239	certified accountant in a manner authorized by the Texas State
240	240	Board of Public Accountancy;
241	241	(16) serving as trustee of a charitable trust as
242	242	provided by Section 2.106, Business Organizations Code;
243	243	(17) performing escrow or settlement services if
244	244	licensed or authorized under Title 11, Insurance Code;
245	245	(18) acting as a qualified intermediary in a tax
246	246	deferred exchange under Section 1031, Internal Revenue Code of
247	247	1986, and applicable regulations; [or]
248	248	(19) providing permitted services at a trust
249	249	representative office established in this state pursuant to
250	250	Subchapter C, Chapter 187; or
251	251	(20) acting as a trustee or custodian approved by the
252	252	Internal Revenue Service under 26 C.F.R. Section 1.408-2(e) of an
253	253	individual retirement account described by Section 408(a),
254	254	Internal Revenue Code of 1986.
255	255	SECTION 14. Section 183.106(a), Finance Code, is amended to
256	256	read as follows:
257	257	(a) The board shall annually appoint the officers of the
258	258	state trust company, who serve at the will of the board. Unless the
259	259	banking commissioner consents otherwise in writing, a person may
260	260	not serve as an officer of a state trust company if:
261	261	(1) the person is the subject of an order described by
262	262	Section 185.007(a);
263	263	(2) the person has been convicted of a felony; or
264	264	(3) the person has violated, with respect to a trust
265	265	under which the state trust company has fiduciary responsibility,
266	266	Section 113.052 or 113.053(a), Property Code, relating to loan of
267	267	trust funds and purchase or sale of trust property by the trustee,
268	268	and the violation has not been corrected.
269	269	SECTION 15. Section 185.007(a), Finance Code, is amended to
270	270	read as follows:
271	271	(a) Except as provided by other law, without the prior
272	272	written approval of the banking commissioner, a person subject to a
273	273	final and enforceable removal or prohibition order issued by the
274	274	banking commissioner, or by another state, federal, or foreign
275	275	financial institution regulatory agency, may not:
276	276	(1) serve as a director, officer, or employee of a
277	277	state trust company, [or] state bank, or holding company of a state
278	278	bank, or as a director, officer, or employee with financial
279	279	responsibility of any other entity chartered, registered,
280	280	permitted, or licensed by the banking commissioner under the laws
281	281	of this state while the order is in effect;
282	282	(2) directly or indirectly participate in any manner
283	283	in the management of such an entity;
284	284	(3) directly or indirectly vote for a director of such
285	285	an entity; or
286	286	(4) solicit, procure, transfer, attempt to transfer,
287	287	vote, or attempt to vote a proxy, consent, or authorization with
288	288	respect to voting rights in such an entity.
289	289	SECTION 16. Section 185.101, Finance Code, is amended by
290	290	amending Subsection (c) and adding Subsection (d) to read as
291	291	follows:
292	292	(c) Subject to Subsection (d), the [The] supervisor serves
293	293	until the earlier of:
294	294	(1) the expiration of the period stated in the order of
295	295	supervision; or
296	296	(2) the date the banking commissioner determines that
297	297	the requirements for abatement of the order have been satisfied.
298	298	(d) The banking commissioner may terminate an order of
299	299	supervision at any time.
300	300	SECTION 17. This Act takes effect September 1, 2017.