S.B. No. 1646
AN ACT
relating to the regulation of state trust companies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 182.502(b), Finance Code, is amended to
read as follows:
(b) A trust institution applying to convert into a state
trust company may receive a certificate of authority to do business
as a state trust company if the banking commissioner finds that:
(1) the trust institution is not engaging in a pattern
or practice of unsafe and unsound fiduciary or banking practices;
(2) the trust institution has adequate capitalization
for a state trust company to act as a fiduciary at the same
locations as the trust institution is acting as a fiduciary before
the conversion;
(3) the trust institution can be expected to operate
profitably after the conversion;
(4) the officers and directors of the trust
institution as a group have sufficient fiduciary [banking]
experience, ability, standing, competence, trustworthiness, and
integrity to justify a belief that the trust institution will
operate as a state trust company in compliance with law; and
(5) each principal shareholder has sufficient
experience, ability, standing, competence, trustworthiness, and
integrity to justify a belief that the trust institution will be
free from improper or unlawful influence or interference with
respect to the trust institution's operation as a state trust
company in compliance with law.
SECTION 2. Section 184.002(c), Finance Code, is amended to
read as follows:
(c) A state trust company shall comply with regulatory
accounting principles in accounting for its investment in and
depreciation of trust company facilities, furniture, fixtures, and
equipment [dispose of any real property subject to Subsection (a)
not later than the fifth anniversary of the date the real property:
[(1) was acquired, except as otherwise provided by
rules adopted under this subtitle;
[(2) ceases to be used as a state trust company
facility; or
[(3) ceases to be a state trust company facility as
provided by Subsection (b)].
SECTION 3. Sections 184.003(a) and (c), Finance Code, are
amended to read as follows:
(a) A state trust company may not invest its restricted
capital in real property except:
(1) as permitted by this subtitle or rules adopted
under this subtitle; [or]
(2) with the prior written approval of the banking
commissioner; or
(3) as necessary to avoid or minimize a loss on a loan
or investment previously made in good faith.
(c) A state trust company shall dispose of any real property
subject to Subsection (a) not later than[:
[(1)] the fifth anniversary of the date the real
property:
(1) [(A)] was acquired, except as otherwise provided
by rules adopted under this subtitle; [or]
(2) [(B)] ceases to be used as a state trust company
facility; or
(3) [(2) the second anniversary of the date the real
property] ceases to be a state trust company facility as provided by
Section 184.002(b).
SECTION 4. Section 182.502(b), Finance Code, as amended by
this Act, applies only to an application for conversion filed on or
after the effective date of this Act. An application for conversion
filed before the effective date of this Act is governed by the law
in effect on the date the application was filed, and the former law
is continued in effect for that purpose.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2023.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1646 passed the Senate on
April 27, 2023, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1646 passed the House on
May 6, 2023, by the following vote: Yeas 127, Nays 7, two present
not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor