Texas 2019 - 86th Regular

Texas House Bill HB2173 Compare Versions

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

Old	New	Differences
1	1	86R11590 ATP-F
2	2	By: Murphy H.B. No. 2173
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the regulation of state banks, state trust companies,
8	8	and third-party service providers of state banks and state trust
9	9	companies.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 31.002(a)(55-a), Finance Code, is
12	12	amended to read as follows:
13	13	(55-a) "Third-party service provider" means a person
14	14	who performs activities relating to the business of banking on
15	15	behalf of a depository institution for the depository institution's
16	16	customers or on behalf of another person directly engaged in
17	17	providing financial services for the person's customers. The term:
18	18	(A) includes a person who:
19	19	(i) provides data processing services;
20	20	(ii) performs activities in support of the
21	21	provision of financial services, including lending, transferring
22	22	funds, fiduciary activities, trading activities, and deposit
23	23	taking activities; [or]
24	24	(iii) engages wholly or partly in the
25	25	practice of assembling or evaluating consumer credit information or
26	26	other information on consumers for the purpose of furnishing
27	27	consumer reports to third parties, including depository
28	28	institutions; or
29	29	(iv) provides Internet-related services,
30	30	including web services, processing electronic bill payments,
31	31	developing and maintaining mobile applications, system and
32	32	software development and maintenance, and security monitoring; and
33	33	(B) does not include a provider of an interactive
34	34	computer service or a general audience Internet or communications
35	35	platform, except to the extent that the service or platform is
36	36	specially designed or adapted for the business of banking and
37	37	activities relating to the business of banking.
38	38	SECTION 2. Section 31.105, Finance Code, is amended by
39	39	adding Subsections (f) and (g) to read as follows:
40	40	(f) Except to the extent disclosure is necessary to locate
41	41	and produce responsive records or obtain legal representation and
42	42	subject to Subsection (g), a subpoena issued under this section may
43	43	provide that the person to whom the subpoena is directed or any
44	44	person who comes into receipt of the subpoena may not:
45	45	(1) disclose that the subpoena has been issued;
46	46	(2) disclose or describe any records requested in the
47	47	subpoena;
48	48	(3) disclose whether records have been furnished in
49	49	response to the subpoena; or
50	50	(4) if the subpoena requires a person to be examined
51	51	under oath, disclose or describe the examination, including the
52	52	questions asked, the testimony given, or the transcript produced.
53	53	(g) A subpoena issued under this section may prohibit the
54	54	disclosure of information described by Subsection (f) only if the
55	55	banking commissioner finds, and the subpoena states, that:
56	56	(1) the subpoena, the examination, or the records
57	57	relate to an ongoing investigation; and
58	58	(2) the disclosure could significantly impede or
59	59	jeopardize the investigation.
60	60	SECTION 3. Section 31.107, Finance Code, is amended by
61	61	adding Subsection (e) to read as follows:
62	62	(e) A third-party service provider that refuses to submit to
63	63	examination or to pay an assessed fee for examination under this
64	64	section is subject to an enforcement action under Chapter 35. With
65	65	respect to a third-party service provider's refusal to submit to
66	66	examination, the banking commissioner may notify all state banks of
67	67	the refusal and warn that continued use of the third-party service
68	68	provider may constitute an unsafe and unsound banking practice.
69	69	SECTION 4. Section 33.005, Finance Code, is amended to read
70	70	as follows:
71	71	Sec. 33.005. EXEMPTIONS. The following acquisitions are
72	72	exempt from Section 33.001:
73	73	(1) an acquisition of securities in connection with
74	74	the exercise of a security interest or otherwise in full or partial
75	75	satisfaction of a debt previously contracted for in good faith and
76	76	the acquiring person files written notice of acquisition with the
77	77	banking commissioner before the person votes the securities
78	78	acquired;
79	79	(2) an acquisition of voting securities in any class
80	80	or series by a controlling person who has previously complied with
81	81	and received approval under this subchapter or who was identified
82	82	as a controlling person in a prior application filed with and
83	83	approved by the banking commissioner;
84	84	(3) an acquisition or transfer by operation of law,
85	85	will, or intestate succession and the acquiring person files
86	86	written notice of acquisition with the banking commissioner before
87	87	the person votes the securities acquired;
88	88	(4) a transaction subject to Chapter 202 if:
89	89	(A) the acquiring bank holding company currently
90	90	owns and controls a state bank; or
91	91	(B) the post-transaction controlling person:
92	92	(i) has previously complied with and
93	93	received approval as a controlling person under this subchapter; or
94	94	(ii) is identified as the controlling
95	95	person in a merger or other acquisition-related application filed
96	96	with the banking commissioner concurrently with the submission
97	97	required by Section 202.001; and
98	98	(5) a transaction exempted by the banking commissioner
99	99	or by rules adopted under this subtitle because the transaction is
100	100	not within the purposes of this subchapter or the regulation of the
101	101	transaction is not necessary or appropriate to achieve the
102	102	objectives of this subchapter.
103	103	SECTION 5. Section 35.010(c), Finance Code, is amended to
104	104	read as follows:
105	105	(c) If the banking commissioner determines after the
106	106	hearing that the alleged conduct occurred and that the conduct
107	107	constitutes a violation, the banking commissioner may impose an
108	108	administrative penalty against a bank or other person, as
109	109	applicable, in an amount:
110	110	(1) if imposed against a bank, [not less than $500 and]
111	111	not more than $10,000 for each violation for each day the violation
112	112	continues, except that the maximum administrative penalty that may
113	113	be imposed is the lesser of $500,000 or one percent of the bank's
114	114	assets; or
115	115	(2) if imposed against a person other than a bank, [not
116	116	less than $500 and] not more than $5,000 for each violation for each
117	117	day the violation continues, except that the maximum administrative
118	118	penalty that may be imposed is $250,000.
119	119	SECTION 6. Section 35.203, Finance Code, is amended by
120	120	adding Subsections (h) and (i) to read as follows:
121	121	(h) Except to the extent disclosure is necessary to locate
122	122	and produce responsive records or obtain legal representation and
123	123	subject to Subsection (i), a subpoena issued under this section may
124	124	provide that the person to whom the subpoena is directed or any
125	125	person who comes into receipt of the subpoena may not:
126	126	(1) disclose that the subpoena has been issued;
127	127	(2) disclose or describe any records requested in the
128	128	subpoena;
129	129	(3) disclose whether records have been furnished in
130	130	response to the subpoena; or
131	131	(4) if the subpoena requires a person to be examined
132	132	under oath, disclose or describe the examination, including the
133	133	questions asked, the testimony given, or the transcript produced.
134	134	(i) A subpoena issued under this section may prohibit the
135	135	disclosure of information described by Subsection (h) only if the
136	136	banking commissioner finds, and the subpoena states, that:
137	137	(1) the subpoena, the examination, or the records
138	138	relate to an ongoing investigation; and
139	139	(2) the disclosure could significantly impede or
140	140	jeopardize the investigation.
141	141	SECTION 7. Sections 181.002(a)(47-b) and (49), Finance
142	142	Code, are amended to read as follows:
143	143	(47-b) "Third-party service provider" means a person
144	144	who performs activities relating to the trust business on behalf of
145	145	a trust institution for the trust institution's customers or on
146	146	behalf of another person directly engaged in providing financial
147	147	services for the person's customers. The term:
148	148	(A) includes a person who:
149	149	(i) provides data processing services;
150	150	(ii) performs activities in support of the
151	151	provision of financial services, including lending, transferring
152	152	funds, fiduciary activities, trading activities, and deposit
153	153	taking activities; [or]
154	154	(iii) engages wholly or partly in the
155	155	practice of assembling or evaluating consumer credit information or
156	156	other information on consumers for the purpose of furnishing
157	157	consumer reports to third parties, including trust institutions; or
158	158	(iv) provides Internet-related services,
159	159	including web services, processing electronic bill payments,
160	160	developing and maintaining mobile applications, system and
161	161	software development and maintenance, and security monitoring; and
162	162	(B) does not include a provider of an interactive
163	163	computer service or a general audience Internet or communications
164	164	platform, except to the extent that the service or platform is
165	165	specially designed or adapted for the trust business and activities
166	166	relating to the trust business.
167	167	(49) "Trust business" means the business of a company
168	168	holding itself out to the public as a fiduciary for hire or
169	169	compensation to hold or administer accounts. The term includes:
170	170	(A) the business of a trustee or custodian of an
171	171	individual retirement account described by Section 408(a),
172	172	Internal Revenue Code of 1986; and
173	173	(B) the business of an administrator or servicer
174	174	of individual retirement accounts described by Section 408(a),
175	175	Internal Revenue Code of 1986, who [possesses or controls any
176	176	assets, including cash, of those accounts and who] makes the
177	177	administrator's or servicer's services available to the public for
178	178	hire or compensation.
179	179	SECTION 8. Section 181.104, Finance Code, is amended by
180	180	adding Subsections (h) and (i) to read as follows:
181	181	(h) Except to the extent disclosure is necessary to locate
182	182	and produce responsive records or obtain legal representation and
183	183	subject to Subsection (i), a subpoena issued under this section may
184	184	provide that the person to whom the subpoena is directed or any
185	185	person who comes into receipt of the subpoena may not:
186	186	(1) disclose that the subpoena has been issued;
187	187	(2) disclose or describe any records requested in the
188	188	subpoena;
189	189	(3) disclose whether records have been furnished in
190	190	response to the subpoena; or
191	191	(4) if the subpoena requires a person to be examined
192	192	under oath, disclose or describe the examination, including the
193	193	questions asked, the testimony given, or the transcript produced.
194	194	(i) A subpoena issued under this section may prohibit the
195	195	disclosure of information described by Subsection (h) only if the
196	196	banking commissioner finds, and the subpoena states, that:
197	197	(1) the subpoena, the examination, or the records
198	198	relate to an ongoing investigation; and
199	199	(2) the disclosure could significantly impede or
200	200	jeopardize the investigation.
201	201	SECTION 9. Section 181.106, Finance Code, is amended by
202	202	adding Subsection (d) to read as follows:
203	203	(d) A third-party service provider that refuses to submit to
204	204	examination or to pay an assessed fee for examination under this
205	205	section is subject to an enforcement action under Chapter 185. With
206	206	respect to a third-party service provider's refusal to submit to
207	207	examination, the banking commissioner may notify all state trust
208	208	companies of the refusal and warn that continued use of the
209	209	third-party service provider may constitute an unsafe and unsound
210	210	fiduciary practice.
211	211	SECTION 10. Section 185.010(c), Finance Code, is amended to
212	212	read as follows:
213	213	(c) If the banking commissioner determines after the
214	214	hearing that the alleged conduct occurred and that the conduct
215	215	constitutes a violation, the banking commissioner may impose an
216	216	administrative penalty against a state trust company or other
217	217	person, as applicable, in an amount:
218	218	(1) if imposed against a state trust company, [not
219	219	less than $500 and] not more than $10,000 for each violation for
220	220	each day the violation continues, except that the maximum
221	221	administrative penalty that may be imposed is the lesser of
222	222	$500,000 or one percent of the state trust company's assets; or
223	223	(2) if imposed against a person other than a state
224	224	trust company, [not less than $500 and] not more than $5,000 for
225	225	each violation for each day the violation continues, except that
226	226	the maximum administrative penalty that may be imposed is $250,000.
227	227	SECTION 11. Section 185.202, Finance Code, is amended by
228	228	adding Subsections (h) and (i) to read as follows:
229	229	(h) Except to the extent disclosure is necessary to locate
230	230	and produce responsive records or obtain legal representation and
231	231	subject to Subsection (i), a subpoena issued under this section may
232	232	provide that the person to whom the subpoena is directed or any
233	233	person who comes into receipt of the subpoena may not:
234	234	(1) disclose that the subpoena has been issued;
235	235	(2) disclose or describe any records requested in the
236	236	subpoena;
237	237	(3) disclose whether records have been furnished in
238	238	response to the subpoena; or
239	239	(4) if the subpoena requires a person to be examined
240	240	under oath, disclose or describe the examination, including the
241	241	questions asked, the testimony given, or the transcript produced.
242	242	(i) A subpoena issued under this section may prohibit the
243	243	disclosure of information described by Subsection (h) only if the
244	244	banking commissioner finds, and the subpoena states, that:
245	245	(1) the subpoena, the examination, or the records
246	246	relate to an ongoing investigation; and
247	247	(2) the disclosure could significantly impede or
248	248	jeopardize the investigation.
249	249	SECTION 12. This Act takes effect September 1, 2019.