| 1 | 1 | | 88R50 SRA-F |
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| 2 | 2 | | By: Slawson H.B. No. 1186 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the requirements for the conversion of a trust |
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| 8 | 8 | | institution into a state trust company. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 182.502(b), Finance Code, is amended to |
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| 11 | 11 | | read as follows: |
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| 12 | 12 | | (b) A trust institution applying to convert into a state |
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| 13 | 13 | | trust company may receive a certificate of authority to do business |
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| 14 | 14 | | as a state trust company if the banking commissioner finds that: |
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| 15 | 15 | | (1) the trust institution is not engaging in a pattern |
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| 16 | 16 | | or practice of unsafe and unsound fiduciary or banking practices; |
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| 17 | 17 | | (2) the trust institution has adequate capitalization |
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| 18 | 18 | | for a state trust company to act as a fiduciary at the same |
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| 19 | 19 | | locations as the trust institution is acting as a fiduciary before |
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| 20 | 20 | | the conversion; |
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| 21 | 21 | | (3) the trust institution can be expected to operate |
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| 22 | 22 | | profitably after the conversion; |
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| 23 | 23 | | (4) the officers and directors of the trust |
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| 24 | 24 | | institution as a group have sufficient fiduciary [banking] |
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| 25 | 25 | | experience, ability, standing, competence, trustworthiness, and |
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| 26 | 26 | | integrity to justify a belief that the trust institution will |
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| 27 | 27 | | operate as a state trust company in compliance with law; and |
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| 28 | 28 | | (5) each principal shareholder has sufficient |
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| 29 | 29 | | experience, ability, standing, competence, trustworthiness, and |
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| 30 | 30 | | integrity to justify a belief that the trust institution will be |
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| 31 | 31 | | free from improper or unlawful influence or interference with |
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| 32 | 32 | | respect to the trust institution's operation as a state trust |
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| 33 | 33 | | company in compliance with law. |
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| 34 | 34 | | SECTION 2. The change in law made by this Act applies only |
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| 35 | 35 | | to an application for conversion filed on or after the effective |
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| 36 | 36 | | date of this Act. An application for conversion filed before the |
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| 37 | 37 | | effective date of this Act is governed by the law in effect on the |
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| 38 | 38 | | date the application was filed, and the former law is continued in |
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| 39 | 39 | | effect for that purpose. |
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| 40 | 40 | | SECTION 3. This Act takes effect September 1, 2023. |
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