Texas 2023 - 88th Regular

Texas Senate Bill SB1644 Compare Versions

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1	1	By: Parker S.B. No. 1644
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the regulation of state banks.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Section 31.002(a)(15), Finance Code, is amended
9	9	to read as follows:
10	10	(15) "Deposit" means the establishment of a
11	11	debtor-creditor relationship represented by the agreement of the
12	12	deposit debtor to act as a holding, paying, or disbursing agent for
13	13	the deposit creditor. The term:
14	14	(A) includes:
15	15	(i) an unpaid balance of money that is
16	16	received by the deposit debtor in the usual course of business in
17	17	exchange for conditional or unconditional credit to a commercial,
18	18	checking, savings, or time account of the deposit creditor or the
19	19	creditor's designee, or that is evidenced by a certificate of
20	20	deposit or similar instrument, a certified check or draft drawn
21	21	against a deposit account, or a letter of credit or traveler's check
22	22	on which the deposit debtor is primarily liable, but excluding an
23	23	obligation arising under Chapter 151 [152];
24	24	(ii) money or credit given for money
25	25	received by the deposit debtor in the usual course of business for a
26	26	special purpose, including money:
27	27	(a) held as escrow money, as security
28	28	for an obligation due to the deposit debtor or another person, or as
29	29	security for a loan;
30	30	(b) left with a deposit debtor by a
31	31	deposit creditor to meet maturing obligations that are not yet due;
32	32	and
33	33	(c) held by the deposit debtor to meet
34	34	an acceptance or letter of credit;
35	35	(iii) an outstanding draft, cashier's
36	36	check, money order, or other officer's check issued by the deposit
37	37	debtor in the usual course of business for any purpose, including
38	38	payment for services, dividends, or purchases; and
39	39	(iv) an obligation that the finance
40	40	commission by rule defines as a deposit liability, except that the
41	41	term may not include money received for immediate application to
42	42	reduction of an indebtedness; and
43	43	(B) does not include an obligation that this
44	44	subtitle or finance commission rule determines not to be a deposit
45	45	liability.
46	46	SECTION 2. Section 31.005(b), Finance Code, is amended to
47	47	read as follows:
48	48	(b) Subsection (a) does not apply to a federally insured
49	49	depository institution [or other entity] organized under the laws
50	50	of this state, another state, the United States, or a foreign
51	51	sovereign state to the extent that the depository institution or
52	52	other entity is:
53	53	(1) authorized under its charter or the laws of this
54	54	state or the United States to use a term, word, character, ideogram,
55	55	phonogram, or phrase prohibited by Subsection (a); and
56	56	(2) authorized by the laws of this state or the United
57	57	States to conduct the activities in which it is engaged in this
58	58	state.
59	59	SECTION 3. Section 31.105, Finance Code, is amended by
60	60	adding Subsection (c-2) to read as follows:
61	61	(c-2) If a person currently serving as an officer, director,
62	62	employee, controlling shareholder, or other position participating
63	63	in the affairs of a state bank refuses to comply with a subpoena,
64	64	the banking commissioner may issue an order on an emergency basis
65	65	removing the person from the person's position and prohibiting the
66	66	person from participating in the affairs of the state bank or any
67	67	other entity chartered, registered, permitted, or licensed by the
68	68	banking commissioner until the person complies with the subpoena.
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) unless the banking commissioner provides
80	80	otherwise in writing, an acquisition of voting securities in any
81	81	class or series by a controlling person who:
82	82	(A) [has previously complied with and received
83	83	approval under this subchapter or who] was identified as a
84	84	controlling person in a state bank in a prior application filed with
85	85	and approved by the banking commissioner;
86	86	(B) has from the date of receipt of approval
87	87	under this subchapter continuously held power to vote 25 percent or
88	88	more of any class of voting securities of the state bank; or
89	89	(C) is considered to have from the date of
90	90	receipt of approval under this subchapter continuously controlled
91	91	the state bank under Section 33.001(b);
92	92	(3) an acquisition or transfer by operation of law,
93	93	will, or intestate succession and the acquiring person files
94	94	written notice of acquisition with the banking commissioner before
95	95	the person votes the securities acquired;
96	96	(4) a transaction subject to Chapter 202 if:
97	97	(A) the acquiring bank holding company currently
98	98	owns and controls a state bank; or
99	99	(B) the post-transaction controlling person[:
100	100	[(i) has previously complied with and
101	101	received approval as a controlling person under this subchapter; or
102	102	[(ii)] is identified as the controlling
103	103	person in a merger or other acquisition-related application filed
104	104	with the banking commissioner concurrently with the submission
105	105	required by Section 202.001; and
106	106	(5) a transaction exempted by the banking commissioner
107	107	or by rules adopted under this subtitle because the transaction is
108	108	not within the purposes of this subchapter or the regulation of the
109	109	transaction is not necessary or appropriate to achieve the
110	110	objectives of this subchapter.
111	111	SECTION 5. Section 34.103(c), Finance Code, is amended to
112	112	read as follows:
113	113	(c) A state bank may not establish or acquire a subsidiary
114	114	or a controlling interest in a subsidiary that engages in
115	115	activities as principal in which the bank is prohibited from
116	116	engaging directly unless:
117	117	(1) the state bank's investment in the subsidiary has
118	118	been allowed [approved] by the Federal Deposit Insurance
119	119	Corporation under Section 24, Federal Deposit Insurance Act (12
120	120	U.S.C. Section 1831a); or
121	121	(2) with respect to a subsidiary engaged in activities
122	122	as principal that a national bank may conduct only through a
123	123	financial subsidiary, including firm underwriting of equity
124	124	securities other than as permitted by Section 34.101, and not
125	125	otherwise engaged in activities as principal that are impermissible
126	126	for a state bank or a financial subsidiary of a national bank, the
127	127	subsidiary's activities and the bank's investment are in compliance
128	128	with the restrictions and requirements of Section 46, Federal
129	129	Deposit Insurance Act (12 U.S.C. Section 1831w).
130	130	SECTION 6. Section 35.002(a), Finance Code, is amended to
131	131	read as follows:
132	132	(a) The banking commissioner has grounds to issue a cease
133	133	and desist order to a current or former [an] officer, employee, or
134	134	director of a state bank, or the bank itself acting through an
135	135	authorized person, if the banking commissioner determines from
136	136	examination or other credible evidence that the bank or person
137	137	directly or indirectly has:
138	138	(1) violated this subtitle or another applicable law;
139	139	(2) engaged in a breach of trust or other fiduciary
140	140	duty;
141	141	(3) refused to submit to examination or examination
142	142	under oath;
143	143	(4) conducted business in an unsafe or unsound manner;
144	144	or
145	145	(5) violated a condition of the bank's charter or an
146	146	agreement between the bank or the person and the banking
147	147	commissioner or the department.
148	148	SECTION 7. Section 35.106, Finance Code, is amended to read
149	149	as follows:
150	150	Sec. 35.106. AUTHORITY OF SUPERVISOR. During a period of
151	151	supervision, a bank, without the prior approval of the banking
152	152	commissioner or the supervisor or as otherwise permitted or
153	153	restricted by the order of supervision, may not:
154	154	(1) dispose of, sell, transfer, convey, or encumber
155	155	the bank's assets;
156	156	(2) lend or invest the bank's money;
157	157	(3) incur a debt, obligation, or liability;
158	158	(4) pay a cash dividend to the bank's shareholders;
159	159	[or]
160	160	(5) remove an executive officer or director, change
161	161	the number of executive officers or directors, or have any other
162	162	change in the position of executive officer or director; or
163	163	(6) engage in any other activity determined by the
164	164	banking commissioner to threaten the safety and soundness of the
165	165	bank.
166	166	SECTION 8. Section 281.006, Finance Code, is amended to
167	167	read as follows:
168	168	Sec. 281.006. RECORDS. To the extent permitted by state or
169	169	federal law, a financial institution shall provide, on request,
170	170	access to or copies of records relevant to the suspected financial
171	171	exploitation of a vulnerable adult to the department, the
172	172	commissioner, a law enforcement agency, or a prosecuting attorney's
173	173	office, either as part of a report to the department, commissioner,
174	174	law enforcement agency, or prosecuting attorney's office or at the
175	175	request of the department, commissioner, law enforcement agency, or
176	176	prosecuting attorney's office in accordance with an investigation.
177	177	SECTION 9. Section 35.002(a), Finance Code, as amended by
178	178	this Act, applies only to a violation that occurs on or after the
179	179	effective date of this Act. A violation that occurs before the
180	180	effective date of this Act is governed by the law in effect when the
181	181	violation occurred, and the former law is continued in effect for
182	182	that purpose.
183	183	SECTION 10. To the extent of any conflict, this Act prevails
184	184	over another Act of the 88th Legislature, Regular Session, 2023,
185	185	relating to nonsubstantive additions to and corrections in enacted
186	186	codes.
187	187	SECTION 11. This Act takes effect immediately if it
188	188	receives a vote of two-thirds of all the members elected to each
189	189	house, as provided by Section 39, Article III, Texas Constitution.
190	190	If this Act does not receive the vote necessary for immediate
191	191	effect, this Act takes effect September 1, 2023.