Texas Senate Bill SB50

Texas 2021 - 87th 3rd C.S.

Caption

Relating to prohibiting the disclosure of certain customer account information by a financial institution.

Impact

The proposed bill fosters significant implications for state laws regarding the confidentiality and protection of financial data. By restricting the disclosure of customer information, SB50 enhances consumer privacy rights while countering federal mandates that may require such disclosures. Supporters of the bill argue that it empowers customers by safeguarding their financial information from government surveillance and potential misuse. However, critics contend that these measures could hinder efforts to monitor illicit activities, such as money laundering and tax evasion, thus unintentionally creating loopholes that could be exploited by criminal enterprises.

Summary

Senate Bill 50 (SB50) aims to prohibit financial institutions in Texas from disclosing certain customer account information to the federal government, specifically the United States Department of the Treasury. The bill amends the Finance Code by introducing Chapter 282, which defines customer accounts broadly and sets forth limitations on required disclosures. In particular, the bill states that financial institutions shall not provide data on gross annual inflow or outflow of funds for accounts exceeding $600 in balance or transactions over that threshold. This legislation reflects a growing trend of advocating for customer privacy, especially in the context of federal compliance and oversight, which many see as intrusive.

Contention

Notable points of contention arise around the balance between privacy and regulatory oversight. While proponents assert that the bill offers much-needed protection for customer data, opponents highlight the potential negative consequences for law enforcement and regulatory agencies needing access to account information for legitimate investigations. The bill holds that compliance with federal disclosure laws is unwarranted for accounts below the stipulated thresholds, which raises questions about the effectiveness of such a 'customer-friendly' approach in ensuring that financial institutions maintain transparency while also protecting customer interests.