TX
Texas House Bill HB3574

Texas 2023 - 88th Regular

Texas House Bill HB3574

Filed
3/6/23  
Out of House Committee
4/14/23  
Voted on by House
4/27/23  
Out of Senate Committee
5/16/23  
Voted on by Senate
5/17/23  
Governor Action
6/18/23  

Caption

Relating to the regulation of state banks.

Impact

The primary impact of HB 3574 is to fortify the regulatory structure surrounding state banks, enhancing the Texas Department of Banking's ability to supervise and enforce compliance among financial institutions. By allowing for stronger oversight during supervisory periods, the bill seeks to prevent potential financial mismanagement and to protect the interests of depositors and the financial system at large. These amendments aim to close existing loopholes and mitigate risks associated with bank operations without strong regulatory oversight.

Summary

House Bill 3574 addresses the regulation of state banks in Texas, implementing updates and technical corrections to existing statutory language that has become outdated. The bill emerges as a response to regulatory concerns identified by the Texas Department of Banking, involving statutory changes designed to enhance enforcement authority over problem banks and individuals engaged in illicit activities. Notably, it includes provisions that tighten the operational rules during a period of supervision for banks, ensuring that they cannot undertake certain actions without prior approval from the banking commissioner.

Sentiment

The sentiment around HB 3574 has generally been positive, with unanimous support in both the House and Senate voting processes, indicating a strong bipartisan consensus on the necessity of improving banking oversight. The lack of public testimony opposing the bill during committee discussions further reflects a prevailing view that the bill is a necessary step for maintaining financial stability in the state. Stakeholders in the banking sector have welcomed the updates, viewing them as essential to adapting to the evolving financial landscape.

Contention

While HB 3574 faced little contention during its legislative journey—passing with a significant majority in both chambers—there remains a broader discourse regarding the balance between regulatory oversight and the operational flexibility of financial institutions. Critics of extensive regulatory measures express concerns that overregulation could stifle innovation and economic growth within the banking sector. However, the prevailing argument supports that effective regulation is vital for ensuring the integrity and safety of the banking system.

Texas Constitutional Statutes Affected

Finance Code

  • Chapter 31. General Provisions
    • Section: New Section
    • Section: New Section
    • Section: New Section
  • Chapter 33. Ownership And Management Of State Bank
    • Section: New Section
    • Section: New Section
    • Section: New Section
  • Chapter 34. Investments, Loans, And Deposits
    • Section: 103
    • Section: 103
  • Chapter 35. Enforcement Actions
    • Section: New Section
    • Section: 106
    • Section: New Section
    • Section: 106
    • Section: New Section
    • Section: 106
  • Chapter 281. Protection Of Vulnerable Adults From Financial Exploitation
    • Section: New Section
    • Section: New Section
    • Section: New Section

Latest HB3574 Activity

Companion Bills

TX SB1644

Identical Relating to the regulation of state banks.

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