Texas 2023 - 88th Regular

Texas House Bill HB3574 Compare Versions

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1	1	H.B. No. 3574
2	2
3	3
4	4	AN ACT
5	5	relating to the regulation of state banks.
6	6	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
7	7	SECTION 1. Section 31.002(a)(15), Finance Code, is amended
8	8	to read as follows:
9	9	(15) "Deposit" means the establishment of a
10	10	debtor-creditor relationship represented by the agreement of the
11	11	deposit debtor to act as a holding, paying, or disbursing agent for
12	12	the deposit creditor. The term:
13	13	(A) includes:
14	14	(i) an unpaid balance of money that is
15	15	received by the deposit debtor in the usual course of business in
16	16	exchange for conditional or unconditional credit to a commercial,
17	17	checking, savings, or time account of the deposit creditor or the
18	18	creditor's designee, or that is evidenced by a certificate of
19	19	deposit or similar instrument, a certified check or draft drawn
20	20	against a deposit account, or a letter of credit or traveler's check
21	21	on which the deposit debtor is primarily liable, but excluding an
22	22	obligation arising under Chapter 151 [152];
23	23	(ii) money or credit given for money
24	24	received by the deposit debtor in the usual course of business for a
25	25	special purpose, including money:
26	26	(a) held as escrow money, as security
27	27	for an obligation due to the deposit debtor or another person, or as
28	28	security for a loan;
29	29	(b) left with a deposit debtor by a
30	30	deposit creditor to meet maturing obligations that are not yet due;
31	31	and
32	32	(c) held by the deposit debtor to meet
33	33	an acceptance or letter of credit;
34	34	(iii) an outstanding draft, cashier's
35	35	check, money order, or other officer's check issued by the deposit
36	36	debtor in the usual course of business for any purpose, including
37	37	payment for services, dividends, or purchases; and
38	38	(iv) an obligation that the finance
39	39	commission by rule defines as a deposit liability, except that the
40	40	term may not include money received for immediate application to
41	41	reduction of an indebtedness; and
42	42	(B) does not include an obligation that this
43	43	subtitle or finance commission rule determines not to be a deposit
44	44	liability.
45	45	SECTION 2. Section 31.005(b), Finance Code, is amended to
46	46	read as follows:
47	47	(b) Subsection (a) does not apply to a federally insured
48	48	depository institution [or other entity] organized under the laws
49	49	of this state, another state, the United States, or a foreign
50	50	sovereign state to the extent that the depository institution or
51	51	other entity is:
52	52	(1) authorized under its charter or the laws of this
53	53	state or the United States to use a term, word, character, ideogram,
54	54	phonogram, or phrase prohibited by Subsection (a); and
55	55	(2) authorized by the laws of this state or the United
56	56	States to conduct the activities in which it is engaged in this
57	57	state.
58	58	SECTION 3. Section 31.105, Finance Code, is amended by
59	59	adding Subsection (c-2) to read as follows:
60	60	(c-2) If a person currently serving as an officer, director,
61	61	employee, controlling shareholder, or other position participating
62	62	in the affairs of a state bank refuses to comply with a subpoena,
63	63	the banking commissioner may issue an order on an emergency basis
64	64	removing the person from the person's position and prohibiting the
65	65	person from participating in the affairs of the state bank or any
66	66	other entity chartered, registered, permitted, or licensed by the
67	67	banking commissioner until the person complies with the subpoena.
68	68	SECTION 4. Section 33.005, Finance Code, is amended to read
69	69	as follows:
70	70	Sec. 33.005. EXEMPTIONS. The following acquisitions are
71	71	exempt from Section 33.001:
72	72	(1) an acquisition of securities in connection with
73	73	the exercise of a security interest or otherwise in full or partial
74	74	satisfaction of a debt previously contracted for in good faith and
75	75	the acquiring person files written notice of acquisition with the
76	76	banking commissioner before the person votes the securities
77	77	acquired;
78	78	(2) unless the banking commissioner provides
79	79	otherwise in writing, an acquisition of voting securities in any
80	80	class or series by a controlling person who:
81	81	(A) [has previously complied with and received
82	82	approval under this subchapter or who] was identified as a
83	83	controlling person in a state bank in a prior application filed with
84	84	and approved by the banking commissioner;
85	85	(B) has from the date of receipt of approval
86	86	under this subchapter continuously held power to vote 25 percent or
87	87	more of any class of voting securities of the state bank; or
88	88	(C) is considered to have from the date of
89	89	receipt of approval under this subchapter continuously controlled
90	90	the state bank under Section 33.001(b);
91	91	(3) an acquisition or transfer by operation of law,
92	92	will, or intestate succession and the acquiring person files
93	93	written notice of acquisition with the banking commissioner before
94	94	the person votes the securities acquired;
95	95	(4) a transaction subject to Chapter 202 if:
96	96	(A) the acquiring bank holding company currently
97	97	owns and controls a state bank; or
98	98	(B) the post-transaction controlling person[:
99	99	[(i) has previously complied with and
100	100	received approval as a controlling person under this subchapter; or
101	101	[(ii)] is identified as the controlling
102	102	person in a merger or other acquisition-related application filed
103	103	with the banking commissioner concurrently with the submission
104	104	required by Section 202.001; and
105	105	(5) a transaction exempted by the banking commissioner
106	106	or by rules adopted under this subtitle because the transaction is
107	107	not within the purposes of this subchapter or the regulation of the
108	108	transaction is not necessary or appropriate to achieve the
109	109	objectives of this subchapter.
110	110	SECTION 5. Section 34.103(c), Finance Code, is amended to
111	111	read as follows:
112	112	(c) A state bank may not establish or acquire a subsidiary
113	113	or a controlling interest in a subsidiary that engages in
114	114	activities as principal in which the bank is prohibited from
115	115	engaging directly unless:
116	116	(1) the state bank's investment in the subsidiary has
117	117	been allowed [approved] by the Federal Deposit Insurance
118	118	Corporation under Section 24, Federal Deposit Insurance Act (12
119	119	U.S.C. Section 1831a); or
120	120	(2) with respect to a subsidiary engaged in activities
121	121	as principal that a national bank may conduct only through a
122	122	financial subsidiary, including firm underwriting of equity
123	123	securities other than as permitted by Section 34.101, and not
124	124	otherwise engaged in activities as principal that are impermissible
125	125	for a state bank or a financial subsidiary of a national bank, the
126	126	subsidiary's activities and the bank's investment are in compliance
127	127	with the restrictions and requirements of Section 46, Federal
128	128	Deposit Insurance Act (12 U.S.C. Section 1831w).
129	129	SECTION 6. Section 35.002(a), Finance Code, is amended to
130	130	read as follows:
131	131	(a) The banking commissioner has grounds to issue a cease
132	132	and desist order to a current or former [an] officer, employee, or
133	133	director of a state bank, or the bank itself acting through an
134	134	authorized person, if the banking commissioner determines from
135	135	examination or other credible evidence that the bank or person
136	136	directly or indirectly has:
137	137	(1) violated this subtitle or another applicable law;
138	138	(2) engaged in a breach of trust or other fiduciary
139	139	duty;
140	140	(3) refused to submit to examination or examination
141	141	under oath;
142	142	(4) conducted business in an unsafe or unsound manner;
143	143	or
144	144	(5) violated a condition of the bank's charter or an
145	145	agreement between the bank or the person and the banking
146	146	commissioner or the department.
147	147	SECTION 7. Section 35.106, Finance Code, is amended to read
148	148	as follows:
149	149	Sec. 35.106. AUTHORITY OF SUPERVISOR. During a period of
150	150	supervision, a bank, without the prior approval of the banking
151	151	commissioner or the supervisor or as otherwise permitted or
152	152	restricted by the order of supervision, may not:
153	153	(1) dispose of, sell, transfer, convey, or encumber
154	154	the bank's assets;
155	155	(2) lend or invest the bank's money;
156	156	(3) incur a debt, obligation, or liability;
157	157	(4) pay a cash dividend to the bank's shareholders;
158	158	[or]
159	159	(5) remove an executive officer or director, change
160	160	the number of executive officers or directors, or have any other
161	161	change in the position of executive officer or director; or
162	162	(6) engage in any other activity determined by the
163	163	banking commissioner to threaten the safety and soundness of the
164	164	bank.
165	165	SECTION 8. Section 281.006, Finance Code, is amended to
166	166	read as follows:
167	167	Sec. 281.006. RECORDS. To the extent permitted by state or
168	168	federal law, a financial institution shall provide, on request,
169	169	access to or copies of records relevant to the suspected financial
170	170	exploitation of a vulnerable adult to the department, the
171	171	commissioner, a law enforcement agency, or a prosecuting attorney's
172	172	office, either as part of a report to the department, commissioner,
173	173	law enforcement agency, or prosecuting attorney's office or at the
174	174	request of the department, commissioner, law enforcement agency, or
175	175	prosecuting attorney's office in accordance with an investigation.
176	176	SECTION 9. Section 35.002(a), Finance Code, as amended by
177	177	this Act, applies only to a violation that occurs on or after the
178	178	effective date of this Act. A violation that occurs before the
179	179	effective date of this Act is governed by the law in effect when the
180	180	violation occurred, and the former law is continued in effect for
181	181	that purpose.
182	182	SECTION 10. To the extent of any conflict, this Act prevails
183	183	over another Act of the 88th Legislature, Regular Session, 2023,
184	184	relating to nonsubstantive additions to and corrections in enacted
185	185	codes.
186	186	SECTION 11. This Act takes effect immediately if it
187	187	receives a vote of two-thirds of all the members elected to each
188	188	house, as provided by Section 39, Article III, Texas Constitution.
189	189	If this Act does not receive the vote necessary for immediate
190	190	effect, this Act takes effect September 1, 2023.
191	191	______________________________ ______________________________
192	192	President of the Senate Speaker of the House
193	193	I certify that H.B. No. 3574 was passed by the House on April
194	194	27, 2023, by the following vote: Yeas 144, Nays 1, 1 present, not
195	195	voting.
196	196	______________________________
197	197	Chief Clerk of the House
198	198	I certify that H.B. No. 3574 was passed by the Senate on May
199	199	17, 2023, by the following vote: Yeas 31, Nays 0.
200	200	______________________________
201	201	Secretary of the Senate
202	202	APPROVED: _____________________
203	203	Date
204	204	_____________________
205	205	Governor